Net Bet Blog

888.com today released an RNS about their next agreement with Ash Gaming.

The link about gives nothing away and is merely a landing page. What 888 are after I suspect are the fixed odds games based on racing. By signing agreements (with entirely unknown financial arrangements) 888 are effectively outsourcing their games design whereas others bring them in house.

I suspect 888 have got his spot on. The sign agreements (not exclusive as far as I can tell) with small and nimble companies and that are able to move quicker and are more inventive that the larger entities such as Cryptologic (CRP).

Another good and cost effective move.

888 Re Agreement [ADVFN]

888, one of the world's most popular online gaming entertainment companies, today announces the signing of a strategic agreement with Ash Gaming Limited, a leading provider of virtual horse and dog racing games, fixed odds games
and slot machines.

888 is expanding its games offering to fit the palate of online gaming audiences in sports destinations, whilst offering best-in-class white label services for strategic partners that include data mining and personalisation.

Ash Gaming's racing games as well as fixed odds, slots and table games will be integrated into 888's gaming arena, gaming history and shared wallet, and will be readily available to customers of 888sport and other 888 brands as well as to customers of 888's white label partners.

Ash Gaming is an up-and-coming provider of games to the most popular online sports
destinations, with unique content in the area of virtual races. Their portfolio also features sophisticated fixed odds games and slot machines.

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It is almost as if Cryptologic (CRP) read my previous 888 and Sportech post as they soon retorted with a "we didn't think Littlewoods was any good anyway".

Perhaps more interestingly, the post gives some numbers and it is clear that Littlewoods does OK as an online Casino making Sportech look more attractive than I had given them credit for.

What is also interesting is that this RNS reveals to a certain extent the quality of the management at Cryptologic (CRP). Whilst it's share price has fallen from highs they are clearly up for the fight. My personal problem is that the Poker software is a little on the dull side although I am sure it is fine for hardened players and not fish like me.

Look at not only the speed but the flag waving - this is clearly an attempt to cock a snoot to 888 and Sportech otherwise an RNS is simply not warranted for this level of announcement. Sportech's new online casino offering will need to be watched carefully.

In one sense, this rushed out release is to reassure CRP's existing customers and to stop them following Sportech over to the new man in town, the large and impressive 888.com. The bold shows the lengths CRP have gone to to convince customers and shareholders alike. I am not sure I buy it just yet.

On Track to Replace and Exceed Littlewoods Revenue [ADVFN]

CRYPTOLOGIC ON TRACK TO REPLACE AND EXCEED LITTLEWOODS REVENUE
At least five new customers launching this summer and fall, driving growth for e-gaming software leader

June 24, 2008 (Dublin, IRELAND) - CryptoLogic Limited, a world leader in Internet gaming software, today noted its significant revenue growth prospects for 2008 in the wake of today's announcement that one relatively small licensee, Sportech PLC, will use other gaming software starting in September. CryptoLogic will start earning revenue from at minimum five new customers this summer and fall.

"CryptoLogic is having a banner year in signing long-term contracts with leading gaming brands in both Europe and Asia, and that's why we remain so bullish about our growth prospects," said Brian Hadfield, CryptoLogic's President and CEO. "CryptoLogic's customer base has never been larger - and our customer pipeline has never been healthier."

Sportech currently licenses CryptoLogic software for its Littlewoods-branded gaming sites, representing approximately four per cent of the software provider's annual revenue. As Sportech has entered into a new relationship with 888 Holdings PLC, CryptoLogic expects to continue earning some revenue from Littlewoods players; 888 has signed an agreement to offer more than 10 of CryptoLogic's top games to its players and partners. CryptoLogic also expects some Littlewoods players to migrate to its other licensees' sites to find their favourite games that are not available on the 888 platform.

Sportech's move to a new provider will have no material impact on liquidity in the poker room shared by CryptoLogic licensees, as the vast majority of Littlewoods business comes from its casino site.

CryptoLogic will start earning revenue this week from the launches of sites for new
licensees Khel Galli (India), Maharajah Club (UK) and OPoker (Scandinavia). The company's top games will be available at 888.com later this summer, and the company will launch a site for Betjacks (Ireland) this fall. Further, CryptoLogic's new customer pipeline, not yet publicly announced, includes some of the largest and
most recognizable brands in online gaming.

In addition to adding new customers, CryptoLogic expects to earn new revenue by providing localized versions of its casino games and poker software to help its licensees penetrate key markets in Europe and Asia. The company is also promoting player acquisition and retention by rolling out new games and content more frequently, and by continuing to ramp up its business development and marketing
activities.

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If there is one thing to say about 888 it is that they are dynamic. I have high praise for 888's management. There is a land grab going on and 888 intend to be in the mix. This is evidenced by the continued signing of agreements.

Whilst today's deal with Sportech may appear at first glance to be fairly run of the mill it does represtent an impressive roll out of its B2B turnkey solutions and brings 888 into competition with other turnkey solutions e.g. Cyptologic who are also in the land grab area. This represents a loss to Cyptologic and is not a good development for them.

However, before we get too excited, the deal is only with Sportech which have some well established but unexciting brands - calling them "legendary" gets closer to the truth than even 888 may realise.

This deal is also the culmination of a lot of work behind the scenes and explains why 888 has been signing agreements and taking games from a lot of smaller dynamic online games providers. 888 is now able to go to Sportech and offer a wide and comprehensive range of products for a competitive price. 888 are to be applauded.

I would however mention that their affiliate system is poor to the extent that I have been unable to register or get set up due I think to filtering somewhere somewhere in the system. Also, their Poker offering is looking rather dated and unexciting.

For Sportech there are clear gains. I am not a fan due to the possible legacy issues and the demise in popularity of football pools. If anything will work, using 888 gives them a chance even if the cost in terms of revenue sharing is high.

Agreement [ADVFN]

24 June 2008

888 signs strategic partnership with Sportech PLC

888, one of the world's most popular gaming entertainment companies, announces a strategic partnership with Sportech PLC, one of the UK's leading gaming businesses, in what represents a step-change for 888 in its B2B operations.

Under the partnership, 888 will power Sportech's legendary brand and customer base with a turnkey online gaming operation including its market-leading gaming and back-end software, customer support and payments processing services. In addition, 888 will also provide knowledge services relating to Sportech's marketing, brand and customer base, aiming to extend the reach of Sportech's business.

888 will also provide Sportech with international distribution services for the New
Football Pools ("the Pools"). Leveraging Sportech's brand and the re-launch of the Pools, 888 will also actively assist in marketing Sportech's products to both 888's and Sportech's customers in the UK and worldwide, with a clear goal to achieve groundbreaking expansion.

888 believes that the combination of Sportech's status as one of the most respected brands in global pools sports betting and 888's software, operations, internet marketing and online gaming capabilities will yield significant mutual benefits. As such, 888 expects this agreement to be material in terms of its earnings in 2009 and beyond.

Gigi Levy, Chief Executive Officer of 888, commented:

"888 is an outstanding consumer brand in itself, however it is part of our strategy to be the engine behind other great brands via our strategic partnership programme and the strategic consulting skills we can offer. This phenomenal partnership represents the full evolution of our B2B offering and is a milestone agreement."

Ian Penrose, Chief Executive Officer of Sportech, commented:

"This is a strong strategic partnership for Sportech. It offers an unparalleled
opportunity for all of our products to be effectively marketed online. Importantly this extends beyond the traditional online poker and casino offering and includes the Pools business which we believe will become an international online gaming brand. This fits exactly with our strategy of reinvigorating the pools business and
delivering an enhanced and modern product for today's gaming customers."

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888 hold their AGM today (21st May 2008). The fact that attending would involve a trip to Gibraltar means that even intrepid reporters such as your truly are unable to attend.

The AGM statement paints an interesting picture. Not surprisingly 888's growth is coming from its Online Casino and Online Bingo. Although late to the party, 888 has been aggressive in its Bingo launch and promotion.

888 have also been very busy signing agreements left and right with best of breed software providers. 888 is a dynamic company who appear to be managed astutely. I suspect that 888 will be one of the survivors once consolidation kicks in and could represent a good long term bet.

I intend to write a post entitled "What is 888 up to?" soon looking in more detail at the recent software deals it has signed. What are the motives and why now. This is clearly part of a bigger picture and given these deals will all involve revenue sharing will it increase overall profits or merely cannibalise on revenues that would previously have been kept in house. I suspect this may be a loss leader to start with in an attempt to grow market share.

However, a question mark remains on the poker revenues. 888 have a reputation for high roller tables. It is these tables that are under most threat from Pokerstars and I would not be surprised to see falling revenues from poker in the near future. Something to watch carefully.

AGM Statement [ADVFN]

"The first quarter of 2008 started well with 38% NGR growth year-on-year and 2.6% NGR
growth quarter-on-quarter following exceptionally
high Q4 2007 NGR. This momentum has continued into the second quarter where growth is being driven by Casino and Bingo as well as our clear business strategy, our continued innovation in game development and integration and successful strategic partnership deals.

These strategic deals involve opening our platform to easy integration with games from "best-of-breed" partners and are in addition to continuing development of our own core game development and technology infrastructure. We carefully select market leading partners to provide us with additional games, particularly those with a local flavour, enables us to penetrate local markets at low cost.

We recently announced deals with CryptoLogic Limited, Gaming Technology Solutions Plc, Electracade and Rival Powered and plan to continue this infrastructure investment and integration over the coming years.

2008 has also seen the successful launch of 888ladies, 888sport and Live Dealer. We expect our recent developments, particularly 888ladies and 888sport to continue driving our business as we move into the seasonally quieter second quarter and we therefore remain confident of delivering further growth in 2008."

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888.com issues a management statement earlier today. Revenue growth was healthy at 38% driven by 888ladies the Bingo offering as 888 attempt to diversify away from their core offerings.

888 is an interesting company with a great and well known brand. They also have a large war chest of over $100million to make acquisitions.

If I were advising the management I would suggest spending this sooner rather than later and could suggest a couple of excellent targets for around that price.

Here are the highlights:

Management Statement [ADVFN]

Highlights

* Net Gaming Revenue ("NGR") up 38% to US$64 million (Q1 2007: US$47 million)

* Total Operating Income up 41% to US$66 million (Q1 2007: US$47 million)

* NGR from casino up 35% to US$35 million (Q1 2007: US$26 million)

* NGR from poker up 5% to US$22 million (Q1 2007: US$21 million)

* 27% increase in real money registered customer accounts to 4.9 million
as at 31 March 2008

* Further growth at start of Q2 driven primarily by casino and bingo

Key performance Indicators

Q1 2008

* NGR up 38% to US$64 million (Q1 2007: US$47 million) and 3% above the
previous quarter

* Total Operating Income up 41% to US$66 million (Q1 2007: US$47
million), a 2% increase above previous quarter

* Net Gaming Revenue from casino up 35% to US$35 million (Q1 2007: US$26
million), in line with the previous quarter given the exceptionally high
Casino performance in Q4 2007

* Net Gaming Revenue from poker up 5% to US$22 million (Q1 2007: US$21
million) and 2% increase above previous quarter

* Net Gaming Revenue from Emerging Offering reached US$8 million (Q1 2007: nil)
and 23% increase above previous quarter

* Number of active customers in casino and poker reached 213,115 an increase
of 3.5% compared to Q1 2007 and 2% above previous quarter

* Number of Casino active customers reached 77,370 an increase of 9%
compared to Q1 2007 and 5% above previous quarter

* Number of Poker active customers reached 170,988 an increase of 2%
compared to Q1 2007 and 0.3% increase above previous quarter

* Quarterly NGR per active Casino and Poker customer reached US$267, an
increase of 17% compared to Q1 2007 a 1% decline from previous quarter as a
result of slightly faster increase in active players than NGR increase during
the period

* Casino quarterly NGR per active customer reached US$453, an increase of 23%
compared to Q1 2007 and a 5% decline from previous quarter as a result of
the exceptionally high Q4 2007

* Poker quarterly NGR per active customer reached US$128, an increase of
3% compared to Q1 2007 and 2% above previous quarter

* As at 31 March 2008, 888 had 4.9 million real money registered customer
accounts, representing an increase of 27% in real money customer
accounts since 31 March 2007

There are a number of interesting observations for sector watchers who I imagine regular readers of netbetblog must be.

This is the issue of declining or slowing Poker revenues. This is an issue we need to get to the bottom of. Is it just 888.com? No it isn't. PRTY have seen similar numbers.

True PKR are doing well (the favorite of this blog - search for Netbet on PKR and lets have a game of poker). Equally, Pokerstars and TitanPoker are using their US honed marketing intelligence to clean up (but they are also seeing slowing revenue growth).

Is the boom over? Have all the fish been cleaned out leaving only sharks to feed on each other?

I am still optimistic - internet penetration can only grow and poker is the best game in town.

I have set up a new PKR campaign for beginners. Remember it costs nothing to join and practice tables are completely free. If you do play for cash search for me as "netbet" and say hello when you find me. I am a big fish learning the game so I am sure you will have fun taking my money.

The lowest bonus on offer which is perfect for beginners is the $50 fixed. Trust me - this is all you need.

CODE: netbetpoker - enter this after downloading the software. Simply click below.



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888.com continues to go from strength to strength.

888.com also show that the key for the next few years to to get to critical mass. It is becoming increasingly clear that the entire online gaming market will eventually be cornered by 3 or 4 very large players and 888.com are clearly trying to be one of them.

Their most recent deal is with CTXM (a leading software provider to the online gaming and video games industries). A lot of their games will be familiar to Ladbrokes, Sportingbet and others under the "games" section.

CTXM develops and serves solutions for the on-line entertainment industries. We develop standalone and multiplayer games, on our innovative front-end and robust back-end platforms. Combining the fun of games with profitable business foundations our Fix-odds and Casino games are amongst the most profitable applications in the iGaming domain. CTXM is emerging as a leading game developer and producer, working with the world leading Casual Games market players. CTXM combines the solid foundation and processes of a financial applications developer with the innovation and enthusiasm of game creators.

CTXM focuses on the following business domains:

* Game development services
* Sourcing, producing and publishing of games content
* iGaming (Internet gambling)
* e-commerce solutions
* Business intelligence
* Systems and security

The final results were also fairly impressive in an increasingly competitive market.

888 FY profits from continuing operations more than doubled in 2007 UPDATE [ADVFN]

Online gaming company 888 Holdings more than doubled full year profits from continuing operations in 2007, its first full year of trading since abandoning its U.S.-facing operations. Pretax profit from continuing operations came in at $45.8 million, compared with $22.2 million the previous year. Market expectations had ranged between $40.8 and $47.4 million, with the consensus at $45 million.

The group said 2008 has started well and is confident about its prospects
for the year. Net gaming revenue increased by 36 percent in 2007 to $213.4 million. That included a 33 percent rise in casino net gaming revenue to $118 million and an
18 percent increase in poker net gaming revenue to $81 million.

Here are the financial highlights:

Financial Highlights

* Profit before tax4 from continuing operations up 106% to $46m (2006: $22m)

* EBITDA3,4 up 177% to $46m (2006: $16m)

* Net Gaming Revenue ("NGR") up 36% to US$213m (2006:US$157m), Total Operating Income up 38% to US$217m (2006: US$157m)

* Casino NGR up 33% to $118m (2006: $89m)

* Poker NGR up 18% to $81m (2006: $68m)

* EBITDA3,4 margin up to 21% (2006: 10%)

* Basic EPS4 up 121% to 12.6 cents (2006: 5.7 cents)

* Liquid resources US$104m (2006: US$114m)

* Final dividend 5.0 cents, above stated dividend policy

* Following a very strong Quarter 4 last year, 2008 started well with further growth and the group is confident about our prospects for 2008

These highlights are interesting for a number of reasons.

First, the dividend policy shows the maturation of the industry and that gaming companies will use the cash generated to reward shareholders. Whilst this can be considered an anti-growth move it should help keep institutions on board and attract a longer term investor.

Given the nature of this blog, covering all UK quoted companies it is always useful to get a regulatory update from the company perspective. This is 888's take on EU regulations.

Regulation

While the regulatory landscape remains unstable in some regions, 2007 saw some
positive developments. In Europe, the European Court of Justice's ruling in the
Placanica case restated the importance of EU regulations to our industry. This
decision, together with the recent infringement actions and position letters
from the European Commission, marks a very positive development enabling EU
licensed operators, such as 888, to provide their services throughout the
European Union. Moreover, we have seen a trend throughout the year of additional
European jurisdictions embarking on a path to license and regulate online
gaming, a route which we clearly welcome.

Outside of Europe we have seen initial signs of positive regulation both in Asia
Pacific and Latin America, where newly introduced regulations in some
jurisdictions could allow us to benefit from working in a locally licensed
environment. As previously stated, we see these to be very positive developments
as we continue to pursue a clear regulatory framework for all jurisdictions in
which we operate. We will continue to monitor the regulatory landscape and to
look for opportunities to operate in regulated markets.

As stated in our announcement dated 5th June 2007, we have initiated preliminary
discussions with the United States Attorney's Office for the Southern District
of New York relating to our activity in the US prior to the signing of the
UIGEA. It is too early to assess any particular outcome of these discussions.

The other notable result is 888's strong poker performance. Whilst not particularly attractive graphics 888 has managed to get a reputation for having high rollers which in turn attract other high rollers which are very good for revenues.

888 to appear to be well managed and should make for a good medium term investment. They have a good brand and will not be going anywhere soon.

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Today 888 (25/04/2008) announced that they had entered into an agreement with Nextgen gaming for them to supply 888 with their games.

Nextgen Gaming are described as "a leading game design studio specialising in developing and licensing interactive wagering games for use on the Internet and land based gaming."

Basically they provide the electronic fruit machine type games often found in Casinos and can found in their thousands in Australia. The games are standard, non technical and whilst they do appeal (and do well in Australia) this is not a groundbreaking agreement and better for Nextgen than for 888.com.

For full details of the agreement see:

Game Development agreement [ADVFN]

Matt Davey, CEO of Nextgen Gaming said:

"888 is renowned in the industry as the gold standard in online gaming
entertainment. Through this strategic agreement NextGen, as the world's premier
supplier of gaming content, is proud to offer some of its best performing titles
such as Eastern Dragon TM and Dr Love TM. We are excited by the opportunity to
work with such a professional and progressive company as 888 and look forward to
delivering an exciting entertainment package."

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Poker news today report on the decision of the Swedish government to halt prosecutions of online gaming advertising.

First and foremost this is good for Swedish media who stand to gain from considerable gaming ad revenues. This is also good for those firms already established in Sweden and Swedish speaking sites. The big boys with the revenues to fund big campaigns stand most to gain (PartyGaming, 888 etc.).


Swedish Decision Halts Net Gambling Media Prosecutions [Poker News]

A decision by an agency within Sweden's Prosecution Authority has been made to halt prosecutions against Swedish media companies who accept advertising from Internet gambling services. The new court order, issued by UC Malmö, means that Swedish media now stands to increase revenues.

The decision arises from an appeal made on behalf of Aftonbladet and Expressen, two Swedish newspapers who were previously found guilty of breaching Sweden's lottery laws by accepting such advertising. Following a public appeal by the the editors and publishers of Aftonbladet last month, in which the Swedish laws' incompatibility with European Union trade pacts was exposed, the Swedish Court of Appeals was directed to examine the verdict. The appeals court ruled that the Swedish lottery laws were possibly in contradiction with certain articles of the European Court pact.

Swedish newspapers such as Aftonbladet continue to fight for needed revenue streams, such as that offered by online gambling advertising. The next step for Aftonbladet is an appeal of the massive fines it was assessed for accepting the online ads. Those fines --- in the amount of 150,000 Swedish krona (about US $25,000) per ad --- could amount to many tens of millions of dollars. Aftonbladet also accepts significant advertising from Svenska Spel, the Swedish state-run gambling service.

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Whilst 888's share price has hada good run of late it is not all good news as Online Casino News reports:

Lucky Ace Casino: winnings stolen in direct contravention of terms and conditions

Lucky Ace Casino, a white label casino of the 888.com brand and regulated by the Gibraltar Regulatory Authority, has generated an avalanche of player complaints on the back of large scale confiscation of winnings.

Lucky Ace Casino was launched in January 2008 - see news items Another white label for 888.com and Kamay and 888 launch online poker and casino sites, from the Casinomeister news service, for some background information.

As early as the end of that same month, Lucky Ace started generating player complaints: players were depositing, receiving the $200 sign up bonus, playing and then cashing out after fulfilling the casino's terms as required.

More information on the Online Casino News site. 888 need to be careful who they sign upwith for fear of denting the curreny high quality reputation.

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The 888.com trading statement seems to have caught the interest of the financial pages of the mainstream press. Nothing like FTSE 250 entry to spark a little interest. With the growth in online Bingo 888 remain well positioned.

We covered the trading statement here:

888 trading statement 12/2/2008: revenues up 35% and trading well

The FT and others also weigh in with some insightful comments:

888 gains from US online ban [FT]

888 Holdings is a far better company for having had to abandon the US online gambling market, its chief executive said as it reported fourth-quarter results beyond market expectations.

Gig Levy said on Tuesday 888 had “closed the circle” following the US clampdown on online gambling in October 2006, which forced the entire listed sector to withdraw to Europe and other markets and launch new gaming products such as bingo.

The FT's final comment is:

FT Comment

An outlook including a new sports betting site, plus more strategic partnerships, new casino games and technological upgrades demonstrate a company moving beyond post-US recovery mode.

Bingo is showing strong growth, and the regulatory outlook across Europe will evolve in the sector’s favour.

A forward p/e of about 15 times may be at a premium to peers, but few analysts would bet against it increasing its value.

The FT on the Ladbrokes proposed takeover.

It is increasingly clear to me that the bricks and motar businesses of William Hill and Ladbrokes are simply too slow and technically feeble. They are stuck in the old world and will eventually be snapped up on the cheap. I would avoid - the management is simply tooold fashioned - they need new blood and new advisors. Both have failed to gain a tractale online presence.

A year ago, 888 Holdings was in talks with Ladbrokes about a merger, as the Israeli brothers who founded the business accepted that the US clampdown on online gaming would force them to exit much earlier than expected, writes Roger Blitz.

One can presume that Aharon and Avi Shaked and Ron and Shay Ben-Yitzhak are now mightily relieved that the merger bit the dust, amid Ladbrokes’ legal concerns over liabilities that 888 potentially held in the US.

Ladbrokes originally viewed the fallout of the sector’s eviction from the US as an opportunity to break into the online territory it had hitherto largely ignored.

888, along with its peers in the sector, appeared vulnerable as they suffered dramatic share price falls and downgrades by analysts. By the time the proposed deal was revealed, 888 was struggling to maintain its share price above 100p, well below its mid-2006 peak of 253p. Ladbrokes was trading at about 410p.

On Tuesday, 888 was basking in some analysts’ share price targets above 170p while Ladbrokes’ price was only just rising above 300p. The deal price of the merger would have been about 140p.

A close escape for 888.com in my opinion. Even so,a forward PE of 15 is demanding.

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888.com shares have had a rather volatile last month or so with the shares falling from over £1.40 down to £1.15 and back to £1.40.

In the meantime that have reentered the FTSE 250, launched "888ladies" online BINGO and released new KPIs.

Here are the highlights:

Highlights*:

* Net Gaming Revenue for the 12 months ended 31 December 2007 - Up 36% at
US$213 million (2006: US$157 million)

* Net Gaming Revenue from Casino for the 12 months ended 31 December 2007 -
Up 33% to US$118 million (2006: US$89 million)

* Net Gaming Revenue from Poker for the 12 months ended 31 December 2007 -
Up 18% to US$81 million (2006: US$68 million)

* Net Gaming Revenue in Q4 2007 from Casino up 60% to US$35 million (Q4 2006:
US$22 million)

* Net Gaming Revenue in Q4 2007 from Poker up 17% to US$21 million (Q4 2006:
US$18 million)

* Strong Q4 2007 trading with 22% Casino NGR growth and 15% Poker NGR growth
above Q3 2007

* 30% increase in real money registered accounts to 4.7 million as at 31
December 2007 from 31 December 2006

* "888ladies", a new Bingo offering launched and already showing hundreds of
new customers recruited daily

* Launch of the World Poker Crown - the largest** online guaranteed prize
poker tournament of its kind with $3 million guaranteed prizes

* 888 returned to the FTSE250 index

With over 4.7 million cash accounts 888.com are one of the big boys of online gaming. I believe they still need to grow through aquistion and organically to be a true survivor but they do appear to have an effective marketing machine operating at full speed. 209,000 active customers is impressive but needs to be compared with other gaming companies - an 11% increase on 2006 is not great given the growth of the sector.

888.com's KPIs are as follows. Investors should look to compare 888 KPIs with other companies when they are released. I include them here for future analysis.

Key Performance Indicators*

Fourth quarter 2007

* Group Net Gaming Revenue up 55% to US$63 million (Q4 2006: US$40 million)

* Net Gaming Revenue from Casino and Poker up 40% to US$57 million (Q4 2006:
US$40 million)

* Net Gaming Revenue from Casino up 60% to US$35 million (Q4 2006: US$22
million)

* Net Gaming Revenue from Poker up 17% to US$21 million (Q4 2006: US$18
million)

* Number of active customers in Casino and Poker reached 209,918, an increase
of 11% compared to 2006

* Quarterly Net Gaming Revenue per active group member in Casino and Poker
was US$270, an increase of 26% compared to 2006

* Continued growth from Emerging Offering*** with Net Gaming Revenue at
US$6.2 million (Q4 2006: Nil)

* As at 31 December 2007, 888 had 4.7 million real money registered
customer accounts, representing an increase of 30% since 31 December 2006


12 months ended 31 December 2007

* Net Gaming Revenue up 36% to US$213 million (12 months to 31 December 2006:
US$157 million)

* Net Gaming Revenue from Casino and Poker up 27% to US$199 million (12
months to 31 December 2006: US$157 million)

* Net Gaming Revenue from Casino up 33% to US$118 million (12 months to 31
December 2006: US$89 million)

* Net Gaming Revenue from Poker up 18% to US$81 million (12 months to 31
December 2006: US$68 million)

* Net Gaming Revenue from Emerging Offering was US$14 million (12 months to
31 December 2006: Nil)

Given our support for 3D poker it is also interesting to note:

New Poker version 4.5 (2D and 3D) launched with an option for users to choose a classic "race track" 2D view, or 3D view with or without Avatars.

It will be interesting to see how much of a take up the 3D offering gets. PKR will take some beating for free fun.

Deutsche Bank have moved from "hold" to "buy" on 888.com with a target of £1.60. Given the recent falls in 888 shares this is potentially good timing for 888 (a mere coincidence?).

888 will announce new KPI's on the 12th February.

I agree with DB to a certain extent but they have taken too long to get the Bingo offering up and running and my feeling is that 888 have taken their eye off the ball recently. They need some new advisors such as this blog's author :-)

Some recent bad publicity will not have helped either regarding Lucky Ace casino. See HERE.

LONDON (Thomson Financial) - Deutsche Bank has upgraded its recommendation on gaming company 888 Holdings PLC to 'buy' from 'hold' and raised its price target to 160 pence from 125 on valuation grounds, dealers said.

In a note to clients this morning, Deutsche Bank said it is pleased 888's management has been addressing its biggest concerns over the last 12 months with developments to the gaming platform.

During 2007, 888's agreement to offer sports betting and the acquisition of a bingo network leaves the major gaps plugged and removes what the broker considered a competitive disadvantage.

Therefore, the broker says it cannot justify keeping its forecasts materially below management's public targets, which would put the stock on circa 6 times 2010 price/earnings, if achieved.

It is now more confident that the targets are achievable and reflects this with material upgrades to its forecasts, albeit still well below public targets.

A number of quoted companies are trying to crack the Italian market in light of a recent loosening of the regulatory framework, in part, as a result of EU legislation.

Simon Banks has written a neat little summary. William Hill, Ladbrokes and Gala are all interested in Italy and with the opening up of betting shops. One small company already there is Leisure and Gaming (LNG) although they are making heavy weather of it so far with a market cap less that 6 million EURO.

The process in Italy is worth reading about as it might be a model for other EU countries. e.g. Germany.

Any shareholders in LNG should also read this and the conclusions are as follows:

1. Competition is fierce.

2. Red tape is everywhere.

3. LNG are very small and likely to remain so unless they can "do a deal".

888.com also get a mention as a new entrant.

ITALY — CONTINENTAL GAMING'S NEWEST FRONTIER [IGWB]

In 2002, an agent for the British sports betting firm Stanley Leisure, Piergiorgio Gambelli, was arrested and charged by the Italian police for breaching a law which prohibited non-Italy licensed companies from accepting bets from Italian residents. Stanley appealed to the ECJ, which ruled that the law was contrary to the Treaty of Rome and that a state monopoly could only be protected if it was in the public interest.

In 2004, Italian sports bookmaker Massimiliano Placanica, who was licensed by the state regulator the Amministrazione Autonoma Monopoli di Stato (AAMS), was arrested and charged with violating a law that prohibited licensees from conducting business with overseas bookmakers who were listed on a stock exchange. Placanica used Stanley Leisure to manage his liabilities and it was Stanley who again appealed to the ECJ and in early 2007 the court ruled that the Italian restriction was unlawful.

So in the light of the Gambelli and Placanica cases, the government has started the process of awarding 17,000 gambling licenses to both domestic and international operators. The licenses are available for betting shops and kiosks, slots arcades, bingo halls and online gambling. As yet there is no word about increasing the number of casinos in the country from the current four, although there is talk of allowing regional governments to issue local casino licenses.


Loosened strings

Gambling in Italy has been regulated by the AAMS, which also managed the state lottery and the state-owned tobacco brand MS. It is a measure of how much the regulatory climate has changed that the finance ministry has recently announced a name change, restructuring and rebranding of the body. The AAMS will in future be known as Agenzia Giochi and the ministry is inviting tenders from consultants to assist it with the creation of a new operating structure and image.

The AAMS' control of gambling was highly interventionist, to the extent that every wager had to be passed through a central government controlled database for tax and money laundering monitoring purposes. Additionally, the AAMS produced the palinsesto, a list of sports and bets that were permitted under law. The result was that there was little differentiation between licensed betting companies' offerings.

Innsbruck-based Goldbet has been operating in Italy for three years with an .it URL address. Online operators who were licensed by the AAMS were only permitted to use .it sites with all .com betting sites blocked by Italian ISPs. "It was hard to differentiate ourselves with the .it site as everyone was offering the same bets. We're hoping we will be able to offer our full product offering on the .com site, when it is authorized." Goldbet's Thomas Smallwood told IGWB.

Smallwood welcomes the liberalization of the Italian market. "Although there will obviously be increased competition we believe that because we are already known in the country we will be able to significantly increase our business. We have already run advertising and marketing campaigns so our brand is out there. New entrants will have start from scratch."

One such new entrant is www.888.com. The company has just launched an Italian sports book, in partnership with Italian gambling software company Cogetech, after gaining a license. The company does not have a horserace betting license and will not be offering its casino and poker products to the Italian market, although it is monitoring the regulatory situation closely. There is a feeling that Italy will classify poker as a game of skill but that it will only allow peer-to-peer playing online.


Opportunities on land

While the Italian online gambling market undoubtedly has potential, it is the land-based opportunities that have attracted the interest of Europe's biggest gaming companies. For example, the United Kingdom's big three bookmakers Gala Coral, Ladbrokes and William Hill have all recently been awarded licenses.

Formed by a group of expatriate Italian businessmen in the UK in the early 1990s, Eurobet started life offering sports bets to Italians via the telephone and later over the Internet. It was later acquired by Coral bookmakers, which itself was acquired by Gala group. Earlier this year Eurobet was awarded 358 licenses to operate sports betting outlets and 45 for horseracing and is therefore set to become Italy's largest operator.

Interestingly, Nico Giovando, one of the founders of Eurobet who runs the company's operations in Italy, sees the prospect of longer term profits not from bookmaking but from gaming. "In my opinion there is still great potential for growth in the Italian betting market, not to mention the gaming market which has still to be launched, and which will be even greater than that of the sports and horseracing market," Giovando said.

It is notable that of the big three UK operators, Gala Coral that is only one that has casinos in its portfolio.

UK-based retail sports betting giant William Hill has partnered Spanish multinational gambling company Cordere to gain a foothold in the Italian market. The joint venture has been awarded 20 concessions to operate horseracing betting shops, seven concessions to operate sports betting shops and 28 concessions to operate betting corners in bars, cafés and shops.

Hills' UK rival Ladbrokes is also entering the Italian market via a joint venture and has paid €1.3 million for a 51 percent stake in a new company with Pianeta Scommesse to provide technical services to the country's 770 betting shops. Although the venture may appear quite modest, Ladbrokes is very much viewing the move as a way to gain a toe hold in the market.

"With the process of liberalization of the market now under way we believe Italy offers significant potential for the world's biggest betting brand," said Ladbrokes' Chief Executive Chris Bell. "The proposed new licensing framework will see an expansion of the market and the combination of Ladbrokes' expertise in marketing, technology and operations and Pianeta Scommesse's local knowledge will be well placed to benefit from the reforms."

Ladbrokes' has actually allocated €100 million for investment in the Italian market and will no doubt be looking to operate some of the 1,400 new betting shops that are going to be licensed. To put that figure into context, there are currently 770 betting shops in Italy, compared with over 8,000 in the UK, of which Ladbrokes owns around 2,150, so although there is obviously potential in Italy, the market will still be considerably smaller than in the UK.


Local understanding

What is interesting about the three companies cited above is that all are using local partners; Gala Goral having acquired one and Ladbrokes and William Hill forming partnerships. Other smaller companies are also using consultants with knowledge of the local market.

One such consultant is Graham Wood, director of iGaming Consultancy Limited. Wood advised Ladbrokes on the Pianeta Scommesse deal and told IGWB that local knowledge is key to cracking the Italian market. "The Italian authorities have indeed opened up the market to non-Italian operators, but have made the process of obtaining Italian licenses extremely difficult for non-Italians," he said. "The tender documents were all in Italian and the communication protocols with AAMS, which are unique in the world, required the services of Italian software specialists."

The fact that William Hill was only awarded 55 concessions while Eurobet, with its Italian management, were awarded 403 highlights how Italian operators are favored over foreign ones, Wood added. "In Italy it is still very much a case of 'it's not what you know but who you know,' although many foreign operators underestimated how much to bid for the licenses."

Apart from the opportunities afforded by liberalization, there is another reason why Italy appeals as a new market: the betting habits of Italians. As in Spain and most other countries that have been starved of legal sports betting, Italian gamblers adopt the "small stakes for a big return" attitude of lottery gamblers. Meanwhile, in the deregulated British market where there is a tradition of sports betting going back for nearly 300 years, punters have become acutely aware of the concept of value and tend to bet with high stakes but for relatively small, regular returns.

"When you have a market that is used to having to predict the result of 13 different football matches in order to win, offering them the chance to predict just six or seven matches appears to massively increase the chance of winning," Wood said.

This mindset is good news for operator margins, according to Smallwood. "There has been little competition on odds and serious high-stakes punters usually bet either offshore or illegally, so the small- stakes punter isn't really value aware," he said. "How long that will last we don't know but I should imagine that it will take a while for the average Italian punter to reach the same level of sophistication as his English counterpart."

With a relaxation of the regulatory regime thanks to pressure from Brussels, the Italian market would appear ripe for exploitation. However, an understanding of the Italian market and sports betting culture will be crucial for any operator seeking to take advantage of developments. While European operators, with their sports betting expertise, are leading the first wave of new entrants to the Italian market, it will probably be casino companies that will profit in the long term if, as expected, Italy eventually opens up its gaming market as it has its wagering market.

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As 888 launch more white labels under the Kamay brand one has to worry that they are purchuing growth at the expense of quality. This is a dangerous strategy and whilst it might be true that there is to some extent a "land grab" going on getting into bed with all and sundry might not be the best long term strategy.

Online-Casinos seem to have their doubts.

KAMAY AND 888 LAUNCH ONLINE POKER AND CASINO SITES [Online Casinos]

It is to be hoped that this will not herald an increase in spamming activity: "Kamay Holdings Ltd." is reputed to own some 271 other domains, including Chinaloft (source: Domain Tools), a resource site for antique hunters registered by one “Gazit Bingaman” of Kamay Holdings. Googling the name to obtain more information on the little known Kamay reveals a controversial figure accused of blog-spamming and supplying a false address which resulted in an investigation by Cypriot authorities!

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Whilst the stockmarket enters a potentially severe bear market with stockmarkets round the world experiencing record falls it is time to give a little thought to the position of online gaming stocks as part of a balanced portfolio.

In recent weeks gaming stocks have held up remarkably well. Why might that be?

The classic argument is that in market turmoil that there is run to safety (usually gold or bonds). However, within equities money tends to head to the so-called "defensive stocks". These might include utilities and cigarette manufacturers.

Many are now proposing that online gaming stocks now represent a good defensive stock. The argument being that:

1. Gambling is addictive (like fags) and therefore this is one of the last things consumers will cut back on.

2. If consumers are not going out to the pub or for so many meals that they are more likely to stay in and play the occasional hand of poker for entertainment. This is arguably very cheap entertainment.

3. In a recession people feel low and want to at least experience the thrill of potentially winning a large amount of money.

The counter arguments to the above and fairly straight-forward. Arguably, gambling is something consumers use extra disposable income on. When times are tough it is this sort of discretionary spending that is the first to be cut back on fairly easily. Food and heating comes first after all.

Overall, I believe shares such as 888, PRTY, SBT, 32RED should provide at least some element of safety in today's choppy markets.

For those that like risk, some of the smaller AIM stocks can still provide all the excitement you could want from owning a potential multi-bagger share. For example, LNG, BETB, GVC and others.

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Internet gaming company 888.com today announced that they have signed an agreement with Daub Limited for the provision of a Bingo Licence Agreement entending the online bingo offering.

888 will provide all the backroom operations whilst Daub will operate WinkBingo.

The market is becoming crowded quickly. This remains a good move for 888 as it represents further diversification building on existing expertise.

888 Re Agreement [ADVFN]

888 Holdings plc, one of the world's most popular online gaming entertainment
companies, today announces that it has entered into an agreement with Daub
Limited ("Daub") for the provision of a Bingo Licence Agreement.

Under the terms of the agreement 888 will provide Daub with its Bingo game
software, Instant Games, Back Office systems and Chat Moderators services. Daub
will develop and market the website www.winkbingo.com which will go live later
this month with a focus on Western Europe.

Daub is owned and operated by a group with substantial experience in the online
gaming world including knowledge of online bingo, casino and poker.

In addition to operating its own brands, 888's bingo business includes a network
of 45 online bingo sites or "skins" including bingoballroom.com, poshbingo.com,
bingofabulous.com and twofatladies.co.uk. In addition 888 provide bingo
solutions to business partners operating their own networks and other third
party sites. These include some of the most prominent in the UK such as
thinkbingo.com, thinkbingoplus.com and bingoscotland.com as well as
mirrorbingo.com and foxybingo.com which are operated and owned respectively by
Cashcade Ltd.

Gigi Levy, CEO of 888, said:

"The agreement with Daub, is a further progression in 888's diversified strategy
to grow our customer reach and appeal and to broaden our potential audience
significantly through innovative partnerships. The combination of 888's global
gaming experience and Daub's expert knowledge will help the partnership achieve
significant market share."

888's new UK advertising policy is beginning to hit the streets (literally).

The management of 888 appear to be no slouches when it comes to publicity. Their poker numbers are still not great compared to the competition but I am sure they are working on that also.

Effectively 888 have made cab drivers affiliates. Whatever next.

Getting a NY Times article also shows the PR department knows its job.



Full New York Times article:

Taxi Drivers in London Take a Turn as Pitchmen [NY Times]

LONDON — Taxi drivers here have never been shy about sharing their views. George W. Bush? The royals? Cabbies are sure to have an opinion. But what if they start talking about Texas Hold ’em or a royal flush?

In a promotional campaign for 888.com, an online gambling business, 375 London taxis have been decked out with advertisements for the company’s Web site. Most cabs are simply moving billboards for 888, which provides online poker and other kinds of gambling.

But in 10 cabs, the marketing pitch goes further. The drivers may seek to engage passengers in conversation about poker. If customers take the bait, the drivers try to steer the conversation gently toward 888.com. Those who show particular interest may be given coupons offering free hands of virtual cards — worth as much as $10 — on the poker site.

Taxi Promotions UK, the agency that set up the 888.com campaign, calls its roving pitchmen ambassador drivers. Since the program was set up more than a decade ago, the drivers have served as informal representatives for a variety of tourism destinations and charities.

Now Taxi Promotions is trying to expand the ambassador program, creating a unit called Womad Taxis, short for “word of mouth.” It aims to capitalize on the growing interest in word-of-mouth advertising, which is based on the notion that consumers place more trust in something they hear directly from another person, rather than something they learn through the media.

PQ Media, a research firm in Stamford, Conn., estimates that marketers in the United States alone spent $1.35 billion on word-of-mouth marketing last year, up 38 percent from a year earlier.

The fastest growth in word-of-mouth advertising has been on the Internet, where marketers are working with blogs, social networking sites and other forms of communication to try to get ordinary consumers to spread the word about their products and services. Web-based buzz is easier to track than offline word of mouth.

A taxi ride gives marketers something they find increasingly elusive — a captive audience — at a time when consumers are bombarded with commercial messages and when digital technology gives them the power to skip TV ads.

The average London taxi ride lasts 16 minutes, said Asher Moses, managing director of Taxi Promotions. In a normal day, a driver picks up 40 to 60 fares; multiply that by 10 drivers, for the 888 campaign, and the audience that can be reached is sizable.

Taxi Promotions is training more drivers; Mr. Moses said he wanted to have as many as 300 involved within a year. Already, 888 has signed up for a bigger campaign, involving 20 drivers, for the introduction of a bingo Web site next month.

Matt Robinson, the marketing director of 888, said the company was paying about half a million dollars for the campaign. Online gambling, which is banned in the United States, Germany and other countries, is legal in Britain, as is advertising of such sites.

Mr. Moses said drivers generally had not been given formal training.

Sometimes they have received free trips to destinations promoted on the exteriors of their cabs — to acquaint them with the hotels, restaurants and beaches at tourist hot spots in Thailand, for instance.

“The driver can choose what he wants to point out,” Mr. Moses said. “It’s not a hard-core sales talk; it’s sort of a subliminal talk.”

But now Taxi Promotions is fine-tuning the program, bringing drivers together with advertisers so they can discuss ways to promote the product, service or destination.

Marketing specialists are working with the drivers to explain the best ways to engage different audiences in conversation.

Mr. Robinson said the 888 campaign had been successful, but he acknowledged that it was difficult to measure its effects.

And then there is another problem with relying on taxi drivers: Some people would rather spend their cab rides speaking on their cellphones, reading the newspaper or looking out the window in silence.

“There are two kinds of passengers,” said Mr. Moses, a former cabby who set up Taxi Promotions in 1995. “There are those who interact with the driver and those who don’t.”

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B4Playing which offer "a free smart tool that presents filtered and relevant real-time information from more than 100 online casinos and poker rooms to its users."

B4Playing today issues a press release describing there strengthened relationship with 888.com.

What this tells me as an economist and as an investor is that 888.com appear to be efficiently run by a management team with high ambitions. 888.com has been bucking the downward trend in sector share prices and was up again today.

888.com although at recent highs is beginning to look attractive.

B4Playing to Strengthen Business Relationship with 888.com[PR Web release]

Isle of Man (PRWEB via PRWebDirect) January 13, 2008 -- B4Playing, the developer and marketer of the online casino and poker room smart tool, and 888.com, the worldwide online casino leader and Pacific Poker operator, plans to enhance their corporation during 2008.

"Now, three months after B4Playing has started its live operation, having a live community of over 30,000 users and after receiving 10s of depositors in December, it is time to enhance the cooperation between both companies," says Ms. Sharon Argov, VIP Affiliates Manager at 888.com. "Our actual financial results with the B4Playing players proves our initial analysis. Players who are using the B4Playing client are the ones who look for unbiased, comparable information in order to take decision where to play. As a market leader our offering stands ahead of the pack and we believe that we get our fair share of the B4Playing community. As a large operator we strive to work with large suppliers. B4Playing, as a front end of many affiliates who promote their tool, is a preferred supplier to us. We will tailor numerous special offers to the B4Playing community during 2008 as it already proved economical during 2007," adds Ms. Sharon.

"888.com's attitude, professionalism and superb support make it a natural partner. Just on time statistics, transparency and superb human interaction is a key in our industry. We share the same high standards and business ethics and as such we have a strong business relationship," says Mr. Itay Paz, b4Playing's CEO and founder. "Our corporation will be further enhanced with our coming VIP Client. Large, selected affiliates will finally be able to use a revenue sharing model with us," adds Mr. Paz.

About B4Playing
B4Playing is a free smart tool that presents filtered and relevant real-time information from more than 100 online casinos and poker rooms to its users. B4Playing aims at saving search time and providing the most extensive data available in the gambling industry to its users (information such as: casino bonuses, poker bonuses, slots tournaments, progressive slots and poker tournaments). B4Playing operates an innovative casino affiliates and poker affiliates programs known as the Multiple CPA commission affiliate program. Exclusive bonuses tailored to B4Playing community are provided through the tool. B4Playing runs a player's gambling.

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It is interesting to see that 888.com are leveraging there expertise to enter the Asian markets so aggressively. This is a wise move - the online gaming land grab has to continue and 888 will be putting pressure on Asian incumbents.

The Entertasia deal is for a live Casino which marks a change in direction for 888 but a potentially profitably one. The Asian sportsbook deal is also a good strategic fit allowing the 888 marketing machine to move into action spreading the 888 brand across Asia.

This deal might be an explanation for the recent robust performance of 888's share price.

888 Asian Agreement [ADVFN]

888, one of the world's most popular online gaming entertainment companies,
announces that it has signed a partnership agreement with Entertasia, one of the
leading providers of gaming solutions for Asian operations to develop a live
casino service across Asia.

Under the terms of the agreement, a Philippines based operating company will
manage operations for the live casino, while 888 will leverage its robust
multi-channel marketing abilities to acquire new customers in the region.

The agreement also includes the provision of an Asian-focused sportsbook product
in partnership with E-Sky, a specialised Asian sportsbook,

888 plans to launch the new service in multiple Asian territories and languages
in Q1 2008.

By offering a gaming format with a proven widespread Asian appeal the
partnership will provide an opportunity to expand penetration of the 888 brand
into the Asia Pacific region, one of the fastest growing markets for online
gaming.

Gigi Levy, CEO of 888, said:

"We have been providing the very best in-class online gaming and excellent
customer service for Asian customers at 888 for 10 years now. We are always
looking to extend new innovative services to our customers and increasing our
presence in Asia is one of our key strategic goals. We see Entertasia as the
best partner to achieve this goal and exploit this exciting opportunity."

Jason Chan, CEO of Entertasia added:

"We are one of the leading gaming solution providers in Asia because we
understand exactly what Asian customers want. 888 have chosen three of our most
innovative products and we look forward to helping them achieve significant
success in Asia."

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The Financial Times reports on China's roll out of a lottery in Beijing.

This article is interesting for the signal that China is giving that it is moving to liberalise gambling. This has potential benefits to all but Asian facing firms may benefit the most. AsianLogic (ALOG), 888.com and Neteller (NLR) may be in the front line.

China poised for new lottery network roll-out [FT]

Beijing plans after the Lunar New Year holiday next month to begin a nationwide roll-out of a new lottery network, according to the joint-venture company contracted to build the system.

Chinese lottery revenues rose about 22 per cent to more than Rmb100bn ($13.8bn) last year and Citigroup expects the country, which banned gambling after the 1949 revolution, to become the world’s second largest lottery market by 2010 as regulators authorise more types of betting.

Nearly half the growth last year came from a new network of video lottery terminals (VLTs), slot machine-type games provided to China’s welfare lottery by a joint venture between US-based International Game Technology , the largest US gambling systems maker, and Hong Kong-listed China LotSynergy.

Daniel Liao, deputy chief executive of CLS, expects the lottery’s next growth engine to be keno, a bingo-like game that traces its origins to ancient China.

CLS first announced its contract with the welfare lottery for a national keno network three years ago. But the roll-out has been delayed as local governments, some of which had set up keno games with other foreign suppliers, sought to put their imprint on the system.

Australia’s Tabcorp, CLS’s original keno partner, withdrew last month after losing patience and was replaced by GTech, the US-based lottery unit of Italy’s Lottomatica. Mr Liao told the Financial Times on Wednesday that bureaucratic hurdles had been cleared: “The whole system has passed verification by every province. Different provinces have different ideas about what would be the most attractive to their customers,” he said. “It was a very tedious process.”

The initial roll-out will involve 2,000 terminals being set up in eight provinces, with another 2,000 to follow.

“My personal view is that keno definitely will be bigger than VLT,” Mr Liao said. ”In two years or three years, keno will definitely be bigger.”

China’s VLT network has expanded rapidly since 2005 to 22,077 machines, with an average of 1.5 VLT halls opening each day. Last quarter it generated Rmb4.5bn, a quarter of sales for the welfare lottery, the larger of China’s two operators. Mr Liao expects VLT sales to grow 50 per cent in 2008.

Mr Liao is more optimistic for keno as the game will not just be offered in dedicated gaming halls, but also karaoke lounges, coffee shops and foot massage parlours and the network will be able to support other games as well.

The CLS ventures collect 2 per cent of VLT sales and about 1 per cent of keno revenues.

Analysts impressed with the success of the VLT network are more cautious on the outlook for keno. “This game is still not proven in China,” Deutsche Bank commented in a research report: “It will take at least six to nine months for [the] new game to be successful.”

In a second article from China View the write about hints that China will also legislate on horse racing.

China hints at legalization of gambling on horse racing [China View]

BEIJING, Jan. 10 (Xinhua) -- The Chinese mainland could see its first official bet placed on a horse race since the Communist Party came to power in 1949 as early as next year.

The central government has approved the establishment of regular horse racing in Wuhan, capital of central China's Hubei Province, and is mulling over the introduction of gambling on the races in 2009.

The races would be held at the Orient Lucky City racecourse in Wuhan in September this year, according to a senior manager with the Orient Lucky Horse Group Cooperation, who did not want to be named.

The announcement is being seen as the beginning of gambling on horse racing on the Chinese mainland.

The Changjiang Times newspaper in Wuhan reported that betting will be launched alongside horse racing in September.

However, the manager told Xinhua betting on the races would probably not be introduced on a trial basis until 2009.

"Initially about 250 horses from different jockey clubs around the country will participate in the races," said the manager, "but betting can only be officially launched when the races draw at least 2,000 horses."

"The proposal of betting on horse racing is being reviewed and discussed but there is no concrete information on when or whether it will begin," a spokeswoman with the China Sports Lottery Administration Center (CSLC) surnamed Fang told Xinhua by telephone.

Qin Zunwen, an expert in the study of horse racing betting, said the business, once fully operational nationwide, could create three million jobs a year.

He told the Changjiang Times that annual lottery sales could reach a staggering 100 billion yuan (13.7 billion U.S. dollars), yielding 40 billion yuan in tax revenues,

"Offering a legal venue to bet on horse races could drive out illegal online gambling," he added.

Wuhan started to study the feasibility of introducing betting on horse racing in 2005 and has since submitted several reports to the Chinese People's Political Consultative Conference (CPPCC).

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