Free market economy? Level playing field? I don’t think so:

• The US Trade Representative makes trade concessions to the European Union, related to internet gambling.
• The deal is not subject to Congressional scrutiny or approval.
• A US Congressman requests that the USTR disclose the concessions.
• USTR rejects the request, “claiming the agreement was classified for national security reasons.”

Congressman Calls for U.S. Trade Representative to Provide Details of WTO Internet Gambling Settlement

Congressman Peter DeFazio (D-OR) has requested the U.S. Trade Representative (USTR) disclose trade concessions made to foreign trading partners without Congressional approval. DeFazio’s inquiry raises the possibility of Congressional intervention to void new market access commitments granted by USTR to the European Union and other complainants as compensation for a United States trade violation regarding Internet gambling.

In a letter circulated to all members of Congress last week, DeFazio encouraged his colleagues to join him in calling for the USTR to provide a copy of the concession agreement between the United States and the European Union. The USTR had recently rejected a Freedom of Information Act request for the same document, claiming the agreement was classified for national security reasons. “There is a concern that the USTR may have been ambitious in its use of a ‘national security’ classification to avoid any publicity of which new business sectors are to be subject to the GATS (General Agreement on Trade in Services) treaty,” said DeFazio’s March 6 letter.

… The DeFazio request comes following a contentious trade dispute over Internet gambling, in which the Caribbean nation of Antigua successfully challenged the regulation of Internet gambling in the United States. The European Union announced earlier this week that it will open an investigation into a possible international trade violation by the US on this issue. The investigation is the result of a Trade Barriers Regulation complaint filed by the Remote Gambling Association (RGA), which represents the largest remote gambling companies in Europe. The RGA claims the US is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gaming operators, while allowing domestic U.S. online gaming operators, primarily horse betting, to flourish.

- @ Eye on Gambling: Link.

Office of the United States Trade Representative @ Wikipedia: Link.

“A prodigious amount of thought goes into the design and layout of a casino’s gambling floor. The layout of slot machines and card tables is carefully designed in order to maximize the casino’s profits and lure customers into the games.”

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Lottery game flop stirs school fund concerns
10:27 AM CDT on Wednesday, June 20, 2007
Brad Watson / WFAA-TV

As the Texas Lottery game the Texas Two Step appears to be going broke, some are concerned that may ultimately lead to dipping into school funds to pay the jackpots …. Not enough people are buying tickets to support the guaranteed jackpot of the Texas Two Step.

For the first time since 2002, the sales and reserve fund couldn’t cover Monday’s $225,000 jackpot, which had two winners.

One North Texas lottery watchdog, Dawn Nettles of Garland, said she calculates low Two Step sales will lead the state to look to school funds to dole out the winnings. Her numbers have been right before. Nettles tracks lottery games and money in an online newsletter called www.LottoReport.com.

“Well, somebody is going to be shorted, the schools in this case,” she said. “It’s just that simple.”

But officials at the Texas Lottery says winners still get their payouts and the school fund is never touched until reserves and an emergency lottery account are tapped out.

“We hope that it doesn’t happen,” said Bobby Heath, Texas Lottery, about any risk directed towards school funds. “And we hope that we can generate enough sales through making the games, fun and exciting.”

Nettles shook up the Texas Lottery in 2005 when she revealed it advertised Lotto Texas jackpots higher than ticket sales. She said she believes the lottery should scrap guaranteed jackpots since the Texas Two Step’s number is up.

[Link]

Via Fark.

Is the US economy based on gambling? Observations by Einar Stefferud:

The double taxing of dividends makes it stupid for any company to pay dividends to shareholders, because up to 60% of dividend money goes to the US Govt as income taxes. This provides a strong incentive for companies to not pay dividends. It hurts their stockholder inventors and it hurts their stock price too.

But, long term, since stocks do not pay dividends because doing so is stupid, how can anyone ever get any return on any stock investment. Any per share money payment is classed as a dividend in any case! And taxed both before and after disbursement.

Now, I ask: What is the incentive for buying any stock that does not pay a dividend?

Right! You got it! Buy low, sell high!

You have to sell it to get your return, and to get your capital back! You just bought a pseudo .com or tulip bulb lottery ticket.

This creates the Investment Rule that is called the “Greater Fool Theory“! “Buy at some price and later sell it to some fool who thinks it is worth more than you paid for it! This is the only way anyone can gain any return on non-dividend stocks. Some buyer has to buy it later AT A HIGHER price.

Now, this reminds me of an old basic idea from Economics. No one (in their right mind) ever pays more for anything than they believe it is worth at the time of buying. Buy High, Sell Low is a well known bad idea.

So, this is now the foundation of our stock market. Shades of the Tulip Bubble. The entire game is just an extension of Las Vegas and Atlantic City or our state lotteries or our vast array of Indian Casinos.

And this is the capital investment foundation of our economy! Who would have thought we could collectively be so stupid?

From: Einar Stefferud
Date: Fri, 07 Mar 2003 14:46:43 -0800

[Interesting People mailing list]

Stock Market as Big Con: “Enron even had show-rooms filled with fake traders that they staffed when the press came on tours” –

In traditional “Big Con” grifts, the roper and the inside man work to convince the mark that by participating in some bit of harmless larceny, he will become immensely wealthy. The mark gets sucked into the scam and is eventually fleeced of every cent he can lay hands on.

… Analysts, bankers, VCs and snake-oil salesmen created an enormous con — Enron even had show-rooms filled with fake traders that they staffed when the press came on tours — that led millions to believe that there really was money to be had in playing the markets. And there was — their money. They got had, and the grifters did the having.

[Boing Boing]

Steve Wynn in China: Wynn Macau.

Wikipedia asserts:

The Wynn Macau is owned by Wynn Resorts and will be a hotel and casino in Macao, People’s Republic of China. It will have 600 rooms, 100,000 square feet of gaming housing 200 table games and 350 slot machines, 7 restaurants, 28,000 square feet of retail space, a spa, and entertainment facilities. It is expected to open on September 5, 2006.

[Wikipedia: Link]

SeekingAlpha reports –

Casino magnate Steve Wynn is sending Jack Binion, a 69-year old casino management veteran from Las Vegas, to head up Wynn Resorts’ new operation in the Chinese gambling center of Macau. Wynn Macau, the second casino run by a U.S. company in the region after Las Vegas Sands’, is scheduled to open Sept. 5.

Comment on related stocks/ETFs: Enzio von Pfeil says Wynn and Sands will be big winners in Macau, but Sands has sold off recently after announcing they want to put another $8 billion into their Macau operation. David Riedel of Riedel Research Group thinks there may be oversupply in Macau.

[SeekingAlpha: Link]

The Las Vegas Sun reports on Steve Wynn, Jack Binion, and Macau –

Jeff Simpson talks to Steve Wynn and Jack Binion about their Macau relationship [July 30, 2006]

Steve Wynn … hired Jack Binion to run Wynn Resorts’ international operations.

Wynn said hiring his longtime friend as chairman of Wynn International is a coup for the company. Binion is widely considered to be the man who understands more about the gambling side of the casino business than any other.

“He’s the smartest inside gambler that ever was,” Wynn told me. “Jack had an interest in doing something on his own in Asia. He was fascinated by Asia. I told him: ‘Jack, I got a (Macau casino) concession. I got land. I got money. What I need is your brain. Come on, throw in with me.’ ”

Binion did just that. He’s already a significant owner of Wynn Resorts, with more than a million shares.

… Binion accompanied Wynn to Macau a couple of weeks ago and met Edmund Ho, the Chinese enclave’s top official, as well as casino kingpin Stanley Ho. Stanley Ho controls the lion’s share of the big-betting action that Wynn and Binion covet.

In addition to Wynn Macau, Binion’s responsibilities will include future development on Macau’s Cotai Strip. Wynn recently secured a 54-acre site from the government for about $100 million.

Wynn, 64, and Binion, 69, have known each other for about 40 years. When Wynn took over the Golden Nugget, Binion was running the Horseshoe across Fremont Street. The two became more than friendly competitors, Wynn said.

[Las Vegas Sun: Link]

Barron’s reports that Jack Binion put down thirty million –

GAMBLING ICON JACK BINION HAS WASTED NO time in betting on Wynn Resorts, putting down $30.2 million for the casino operator’s shares one month after he was appointed chairman of subsidiary Wynn International.

[Barron’s: Link]

Casino City news digest: Macau Casinos and Macau Gambling

Macau Casino World Blog
Photographs of casino construction in progress: link.

Dancing with dragons: Nevada courting Chinese tourists –

With gaming still illegal on the mainland, a reported 60 percent of visitors to Macau come from China. Las Vegas gaming property officials, many of whom are also developing projects in Macau, believe an opportunity exists to introduce the Chinese to gaming over there while enticing them to the Strip. The MGM Mirage, Wynn Resorts Ltd. and Las Vegas Sands all have plans to use its Macau properties to bring visitors to Las Vegas.

“As long as Las Vegas continues to reinvest in itself, and as long as the market remains vibrant and exciting, the expansion of gaming in Asia will, likely, only increase the number of people who might have an interest in coming to Las Vegas,” MGM Mirage spokesman Alan Feldman said. “The question still remains, how will they get here?”

To develop a direct flight from China to Las Vegas, McCarran International Airport officials and the LVCVA must rely on politicking, trying to land one of the very few air-service destinations between the two countries. Air routes between China and the United States are negotiated by each country’s government.

[Business Press: Link]

Looking back: June 14, 2002 — Regulators leery of problems in Macau

Nevada gaming regulators are concerned that Strip developers Steve Wynn and Sheldon Adelson could enter a troubled business, political and legal climate in Macau.

The Desert Inn and Venetian owners head two of the three groups that were chosen as semifinalists by Macau officials to build casinos in the $2 billion gambling market that is controlled by mainland China.

The former Portuguese colony, which borders southeastern China and juts into the South China Sea, is a popular destination for Asian gamblers and has a centuries-old reputation for lawlessness that is reflected in reputed links between organized crime and government officials.

Macau’s gaming properties are money makers for prostitutes and loan sharks, who openly conduct business in the casinos. Law enforcement officials believe protection money is often paid to organized crime triads and political leaders to ensure peaceful operations, although Chinese government officials have said that is all about to change.

“I’m concerned because the history of Macau is somewhat jaded in respect to regulated-type activities,” Nevada Gaming Control Board Chairman Dennis Neilander said. “You have to do a substantial amount of due diligence (or background research on people and businesses) to reach some comfort level.”

But it is difficult, Neilander noted, to guarantee the accuracy of the information gathered on potential Chinese and Macau-based partners.

“The whole political and cultural environment for doing due diligence is far different from in the United States,” Neilander noted.

Macau is a one-hour, high-speed boat ride from Hong Kong. Like the former British colony, it was returned to Chinese rule in 1999 when it was given the semi-independent status of special administrative region.

The city of 438,000 people attracted 10.3 million visitors last year, or more than a quarter of the total that came to Las Vegas.

Last year, the Chinese government opened the casino bidding process to wrest control of the peninsula’s 11 small casinos from 40-year casino operator Stanley Ho as mainland leaders attempt to break the hold of criminals on the gambling market, which is a popular destination for Asians throughout the region.

Wynn, Adelson, MGM Mirage and a joint effort of Park Place Entertainment and Mandalay Resort Group were among the 21 bidders to seek approval to receive Macau licenses.

Wynn declined to comment Wednesday while Adelson’s Venetian lawyer, David Friedman, failed to return a phone message seeking comment.

In 1991, Nevada gaming regulators altered the state’s regulations, which required Nevada-licensed casino companies to seek approval from the control board and gaming commission before they could open new casinos elsewhere in the country or overseas.

The change came as legalized gambling began its decade-long spread throughout the country.

… Nevada-licensed gaming operators Hilton Hotels and Station Casinos ran into legal troubles in Missouri, leading to hefty financial fines for the two companies.

Bally Gaming was the subject of Florida and New Jersey investigations in connection with questionable political payments made before Bally was purchased by Hilton spinoff Park Place Entertainment. The company was scolded by New Jersey gaming regulators but never fined.

[Las Vegas Review-Journal: Link]

Side trip: Steve Wynn, Las Vegas, boxing –

Short jabs
Promoter Bob Arum has said that if [Hasim] Rahman defeats [Oleg] Maskaev, he hopes to take him to Macau, an island off the coast of mainland China, to defend the WBC title Nov. 4 on Showtime. Arum has developed a close connection with Las Vegas casino king Steve Wynn, whose Wynn Las Vegas is co-hosting Rahman-Maskaev with Caesars Palace. Wynn is opening Wynn Macau next month, and Arum is hoping to stage the first boxing show there.

[Boston Globe: Link]

Bringing it all back home –

Pachinko machine maker wins Nevada license

LAS VEGAS — July 13, 2006 — The slot machine maker headed by Japanese billionaire Kazuo Okada was awarded a permanent license to manufacture, distribute and operate gambling devices by Nevada regulators on Wednesday.

Aruze Gaming America Inc., a subsidiary of Tokyo-based pachinko machine maker Aruze Corp., won the license at the end of a two-year limited license period in which it had to prove it could respond effectively to inquiries by the Gaming Control Board.

A unanimous approval by the three-member board puts Aruze one step closer to selling slot machines in the United States, in which it would face competitors like Reno-based International Game Technology and Waukegan, Illinois-based WMS Industries Inc.

The company this week submitted its slot machine platform to a regulatory lab for testing, which normally takes six to nine months.

“Hopefully in 2007, we’ll get all our approvals and start selling nationwide,” said Sandra Placak, director of Las Vegas-based Aruze Gaming. The company also has gambling manufacturing licenses in New Jersey and Mississippi, she said.

Okada, listed by Forbes magazine as having a net worth of $1.2 billion with his family, also controls some 24.5 percent of shares in Wynn Resorts Ltd., where he is vice chairman of the board.

Aruze slots will be used in Wynn’s new casino resort in Macau set to open in September. (AP)

[Link]

What if your corner bar operated like a stock exchange? Well now it can, thanks to The Unstabalizer:

The Unstabalizer is an interactive, social application system, to be used in bars, clubs or any other location or event which sells different types of alcohol. Unlike regular bars where the prices of drinks are static, the Unstabalizer can turn a bar into a dynamic, self-organizing system similar to a stock exchange – The price of a drink (a “stock”) is set based on demand – The more people buy a certain drink, its price will rise, causing the prices of other drinks in this alcoholic stock market to fall. The owners and organizers use the system to set the initial prices and can also set minimum prices, to avoid loss due to “market dynamics”. But it is during the bar’s activity period that the real drinking interaction occurs as prices fluctuate based on alcohol consumption – Sometimes beer will be low and Whiskey high, but then as people rush to buy beer, it’s price will rise, causing the price of Whiskey to drop.

The system is built as a distributed Flash application. It consists of one central “Exchange” component, which centralizes the price dynamics, and several “Broker” components, which are placed next to the registers. The “Exchange” component’s Flash interface is used to input the initial prices and later to display the dynamic alcoholic stock market using engaging graphics and Flash animations. The “Broker” components’ Flash interface is used to accept requests based on people’s alcoholic desires. The requests are sent to the “Exchange”, which in turn recalculates all alcohol prices, refreshes the stock market screen and sends back the current price, which is then printed on a receipt. The receipts are handed at the bar in exchange for drinks and the dynamic price on the receipt is the one punched in the real register. Then money is collected and change is returned. The “Exchange” component can handle simultaneous “Broker” updates and synchronize prices accordingly.
[Link]

Via We Make Money, Not Art

Question — what is steam-chasing?

Large betting syndicates will make a bet at numerous “outs” (offshore books). There are a couple of services, DonBest.com being the most prominent, that sell real-time information on line movements. When these big bets come down the line moves everywhere, pretty much at once. Then small individual bettors, known as steam-chasers (similar to bottom-feeder I would say) come along after seeing the line moves online and make the same bet, but now at a poorer price. The syndicates win over the long haul so the chasers try to win by following their plays.
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Jail time for high-flying fixers. CNN reports:

U.S. District Judge Paul C. Huck sentenced [Jack] Abramoff and a former business partner to five years and 10 months in prison and ordered them to pay restitution of more than $21 million. Abramoff, 47, and Adam Kidan, 41, both pleaded guilty to conspiracy and wire fraud.

They won’t start their sentences for at least 90 days so they can continue cooperating in a Washington corruption investigation and a Florida probe into the murder of Konstantinos “Gus” Boulis, owner of the SunCruz Casinos fleet they bought.

The two admitted concocting a fake $23 million wire transfer to make it appear they had made a large cash contribution to the $147.5 million SunCruz purchase. Based on that fake transfer, lenders provided the pair with $60 million in financing.

Abramoff and Kidan are expected to give statements in the investigation into the February 6, 2001, slaying of Boulis, who was gunned down at the wheel of his car amid a power struggle over the gambling fleet.

Meanwhile, three men face murder charges, including one who worked for Kidan as a consultant at SunCruz and who allegedly has ties to New York’s Gambino crime family.

Both Abramoff and Kidan have repeatedly denied any role in or knowledge of the Boulis murder.

But prosecutors say Kidan has not been ruled out as a suspect and defense attorneys say Abramoff could provide critical inside information about the dispute with Boulis, who also founded the Miami Subs restaurant chain.

See also:
SunCruz @ Wikipedia