ONLINE GAMBLING: Kerzner gives up on Isle of Man Web site
Highly regulated climate blamed
Kerzner International Ltd., one of the two big league players in online gaming, announced Wednesday it is abandoning Internet gambling operations.
The company expressed doubts about the prospects for the profitability of Internet gaming in the short to medium term.
Isle of Man awarded both MGM Mirage and Kerzner (then Sun International) licenses to operate Internet casinos in September 2001.
Bahamas-based Kerzner began operating its online casino in December 2001 and MGM Mirage began operating in September.
Despite having a casino brand to market the online gaming site, Kerzner management indicated that the cost of running a highly regulated site put it at a competitive disadvantage to the vast majority of Internet gaming sites that were not strictly regulated.
“We believe there could be implications for MGM Mirage following Kerzner International’s announcement today that it is discontinuing its online gaming operations,” UBS Warburg analyst Robin Farley said.
“We believe that Kerzner’s shutdown of its online ป๊อกเด้ง ไฮโล gaming operation does not bode well for the profitability of Internet gaming operated from tightly regulated jurisdictions like the Isle of Man, and it could indicate that MGM Mirage’s Web site may not be able to achieve profitability in the near to medium term,” she said.
MGM Mirage, however, says for companies with long-term vision, online gaming will pay off and it is committed to its Isle of Man venture.
“We’ve known this is a long-term play and an investment in the future. We can show the technological model we’re developed is sound. If one is looking for short-term results, though, you’d have to come to the conclusion (Kerzner) came to today,” MGM spokesman Alan Feldman said.
The decision also will cost Station Casinos $5 million because of its acquisition late last year of the option to buy a 50 percent interest in the Kerzner online gaming operation.
“We most likely won’t be pursuing the (Isle of Man) venture,” Glenn Christenson, Station’s chief financial officer, said. “We expect to take a $5 million charge against earnings in the first quarter (of 2003, which ends March 31).
“It may be a difficult business model,” he said of highly regulated Web casinos that compete against less regulated Internet casinos based in the Caribbean and elsewhere.
Otherwise, Kerzner had “blowout earnings,” and it has other investment options that will pay higher returns, Bear, Stearns & Co. analyst Michael Tew said.
Those opportunities include Kerzner’s Ocean Club and The Atlantis luxury resorts in the Bahamas.
Dealer in $1.8m casino scam, court told
Dealer in $1.8m casino scam, court told
A Crown Casino baccarat dealer who helped defraud the casino of $1.8 million by incorrectly shuffling her cards was paid $20,000 for her part in the scam, a court heard yesterday.
Tiffany Moss, 32, of Bayswater, pleaded guilty in the County Court to conspiring to defraud Crown Casino of $1.8 million in July, 1998. The court heard that Moss had been approached in 1996 by a man she had seen at the casino’s Mahogany Room, but refused to meet him.
In 1997, the same man approached her again and she agreed to meet him because she was “curious” about what he had to say, the court heard. At a Box Hill cafe, the man allegedly showed Moss how to shuffle a deck of cards slowly and in such a way that the face side of the card could be seen.
The court heard that Moss carried out her part of the scam on July 26, 1998, and casino security cameras captured Moss incorrectly shuffling the cards twice during her shift.
Prosecutor T. P. Burke told the court that a woman had videotaped the cards with a camera hidden in her handbag, which she placed on the baccarat table. The video was then watched frame-by-frame in a hotel room nearby, so the offenders knew what order the cards were in, Mr Burke said.
“It’s pretty sophisticated if it happened in the way you say,” Judge Graeme Crossley told Mr Burke.
Baccarat, the court was told, was predominantly a game of chance. Two cards are dealt for the banker (or the house) and two for the player. Gamblers place bets on the hand they believe will be closest to nine.
“So if you know the order of the cards, you know the outcome of any game,” Mr Burke told the court.
Fifty minutes after Moss had incorrectly shuffled the cards, a well-known casino high roller, Ko Kon Tong, who was jailed in 2001 for his part in a heroin ring, sat at Moss’ table and won $1.4 million. Tong won 32 hands, lost 10 hands and tied at least three, the court heard.
A casino gaming supervisor later told police: “I remember this particular game because the play by Ko Kon Tong was inspirational . . . it was the most exciting game I have ever participated in.”
The balance of the $1.8 million was won by other gamblers at the table who began copying Tong’s bets after he was so successful.
The court heard that there was not enough evidence to charge anyone else over the fraud. Moss did not make a statement against the man who allegedly involved her in the scam. Geoffrey Steward, for Moss, told the court that his client was a “patsy”, used by others for their own ends.
“She was or is somewhat young and unsophisticated, prevailed upon by a manipulative, persistent, intimidatory villain,” Mr Steward said.
Judge Graeme Crossley said that from Moss’ reluctance to get involved in the scheme when she was first approached, it was apparent to her that there was “evil afoot”.
“We are dealing with a very substantial scam and she must have known that by co-operating she was enabling a scam of that magnitude to be perpetuated,” Judge Crossley said.
“Her criminality is to open the gate to commit a crime of that or even greater proportion,” the judge said. “As soon as she agrees to do it, the risk of enormous loss on behalf of the casino . . . should be immediately apparent.”
Judge Crossley refused Moss bail, but at a hearing late yesterday afternoon, Judge Leonard Ostrowski granted bail after being told that Moss’ five-month-old daughter, who is being breastfed, would not be able to join Moss in custody for at least two days.
Moss is due to be sentenced on Wednesday.