Cryptologic In Big Troubles!- Kev Leyshon, The Director Of The Norfolk Island Gaming Authority Is Not A Happy Man.
Kev Leyshon, the Director of the Norfolk Island Gaming Authority is not a happy man. He sent us the e-mail reproduced below with some very interesting comments.
Over the next few days, we will publish plenty of answers for Mr. Leyshon, and will also publish some very interesting material he sent us. One thing at the time.
First of all, Mr. Leyshon, let’s set the record straight. There is nobody at Gambling Magazine by the name of "Mr Jules ****", and "Gaming Magazine" is a separate company from Gambling Magazine.
We are very pleased that "The Authority members themselves are presently considering the issues that emanate from the article."
As for the convicts in Norfolk Island, this is a fact, and even the government’s site explains it at:
http://www.dotrs.gov.au/terr/norfolk/history.htm
They are talking about the "worst convicts"
Your comment:
"Cryptologic do not 'share the profits' directly as seems to be the case in other arrangements" is totally inaccurate. In their standard license agreement they get 50% of the profits.
For today, we will let our readers, the SEC, and the authorities digest your e-mail. We are extremely pleased to hear that you have some very high standards in Norfolk Island, and Gambling Magazine will give you all the credit you deserve if this is true. If you stick to your promises and do the right thing, Gambling Magazine will list Norfolk Island as a top recommended gaming authority.
Cryptologic’s shareholders got badly cheated and mislead, and they are very upset that this company appears to get away with anything they do. 100% original and unedited e-mail, from the Director of the Norfolk Island Gaming Authority
From: "Kevin Leyshon"
To:
Cc:
Subject: Artile of Thursday 30th November
Date: Wed, 6 Dec 2000 18:26:17 +1000
Dear Editor/Publisher/Mr Jules ****, if involved,
Gaming Magazine.
The article circulated in Gambling Magazine dated 30th November 2000 has been brought to my attention.
I endeavoured to ring the number given at the close of the article but the response was a 'leave a message' one and so I send this e-mail.
I am the Director of the Norfolk Island Gaming Authority. I communicate as the Director. The Authority members themselves are presently considering the issues that emanate from the article.
It was disconcerting to read the comments about Norfolk Island and the Authority. The remarks were at least derogatory and may be viewed, perhaps, in a more serious light.
I should like to correct some comments where it is necessary to do so and to elucidate in respect of a couple of other matters mentioned in the article.
1. Norfolk Island is administered in accordance with the Norfolk Island Act of 1979. That Act is an Act of the Commonwealth of Australia. It is the latest in a series of Acts going back into history that relate to the Island. Norfolk Island is, in accordance with the Norfolk Island Act of 1979, a territory under the authority of the Commonwealth.
2. That Act provides the basis upon which the Island and its people are governed and administered. Under the Act, the Island has its own legislature, conducts its own elections, and has the authority to carry out certain activities of a governmental and administrative nature as are listed in Schedules to that Act. The particular culture of the Island people and their desire for independence of action is recognised in the legislation. Norfolk Island, whilst a Territory under the authority of the Commonwealth government is, in most respects, as independent as the States and other Territories of Australian and, in many ways, more so in so far as the Island legislature holds power in respect of customs, telecommunications, taxation to name a few powers more normally held by the central government.
3. Under Schedule 2 to the Act, the Norfolk Island legislature and executive council are entitled to conduct gaming. There is no question as to this authority. However, the Commonwealth government and the various States and Territories are in conflict as regards the introduction of interactive gaming and in this battle, the present Commonwealth government is pursuing a Moratorium Bill designed to stop or limit interactive gaming. Recent advice is that such legislation is before the Senate and likely to pass. That legislation relates to broadcasting and certain communications powers that reside with the Commonwealth. This action by the present Commonwealth government does not presuppose that the Commonwealth government will move to take over gaming activities from the various States and Territories. The position of the present Commonwealth government is that there is enough gaming activity available presently without adding to that availability.
4. The Norfolk Island legislature passed Norfolk Island gaming acts in 1998 that were designed to provide for internet/interactive and bookmaker type gambling and to establish a Gaming Authority. The Commonwealth government took no exception to that legislation at the time.
5. The Authority was duly established following the passage of the legislation. Its functions and powers are clearly enunciated in the Gaming Supervision Act of 1998 - A Norfolk Island Act. The Authority consists of three appointed persons. Presently the Chairman is an ex Supreme Court Judge and Court of Appeals Judge and an eminent member of the NSW judicial fraternity. Another is a senior partner of one of the largest legal firms in New Zealand. That member was Chairperson of the New Zealand Casino Control Authority until his retirement from that position very recently. The third member is a Barrister and educationalist who lives on the Island. As mentioned, I am the Director and report to the Authority. Prior to 1993, when I retired as a public servant of the State of Queensland, I held senior positions, with gaming responsibilities, within the Treasury Department of the Queensland government. Our Chief Technical Officer is regarded as one of the best technical persons in Australia when it comes to gaming. We have a Secretary/Administrator of standing and our day to day administrative functions are well handled. In full mode, we intend to have up to 12 licences in place and there will then be a further 7 persons appointed to provide full monitoring and regulation of all operations.
6. Perhaps of most significance, the Authority has developed both Technical Standards and Internal Control Standards that are at least the equal of any similar documents presented by other Australian State and Territory governments. These documents are available to you along with copies of legislation and other documents that are designed to give interested persons the correct and clear appreciation of what the Authority is about. It is a pity these were not sighted by you prior to the article. One would have thought any credible research into the activities of the Island or the Authority would have revealed the existence of these documents.
7. The Island government and the Authority officials meet with Ministers and the gaming officials of the other Australian States and Territories and with Ministers and officials of the Commonwealth government. We are included in gaming discussions and considerations. Norfolk Island is, therefore, an integral part of the gaming initiatives taken in Australia as is any other State or Territory of Australia.
8. As mentioned, the powers in respect of gaming lie with the various sovereign States and the Territories of Australia. It should be observed that Australia is a federation and not a centralist entity such as England. All of the States and the Territories have their own parliament/legislature. In a federated state that occurred in 1901, the sovereign States passed on certain powers, such as defence, customs, emigration, coinage etc, to the newly federated Commonwealth government. The powers that were passed on did not include control over gaming. As mentioned, gaming regulation is not a Commonwealth power despite the recent interventions via the proposed Commonwealth government's Moratorium Bill. The States and Territories, needless to say, have consistently resisted this Commonwealth government intervention.
9. Neither the Norfolk Island legislature nor the Authority has any intention but to provide a well regulated environment within which persons and companies of good repute and standing can conduct internet gaming. It is precisely our commitment to integrity of gaming that causes anger when one reads articles of the type presented in Gambling Magazine. As mentioned, you should have researched the subject in better form. I am attaching a set of document and a couple of papers that may assist in explaining the intentions of Norfolk Island and the Authority.
I now turn to the article and comment on some specific references.
(a) The article quotes a Cryptologic press article that indicates - "Together, we will work to advance the certification of our software by Australian government authorities". Later the article reads " The fact remains that the gaming authority has nothing to do with the Australian authorities and the testing of the systems is not done by the Australian authorities".
Comment: If the inference in the article was that the Australian (of Commonwealth) government provides certification, that is incorrect. The Commonwealth government has no power in this area. Certifications of software/systems are done by the various Australian States and Territories. In our case, for example, the promoted system must not only meet our minimum standards as laid out in our Technical Functionality Requirements Standards document and in our Internal Control Outline document and our Conditions of Licence document (a copy of the documents are in the attachments), but the systems must be complianced tested on behalf of the Authority by qualified independent testing houses that are Australian based, being BMM, GGS and TST. In this regard, we are in the same position as other States and Territories and to infer that somehow an Island community of limit persons cannot present a well qualified and credible gaming enterprise to handle a limited number of licences is nonsense. Clearly your stated facts are wrong!
(b). The article highlights " A licence from Norfolk Island is NOT the same as a licence from the Australian Government".
Comment: For the reasons indicated above this is not correct. The fact of the matter is the Australian (or Commonwealth) government does not issue licences. It has no power in this area. It is the Australian States and Territories that issue licences and Norfolk Island is very much one of them.
Throughout the article it is incorrectly inferred that Norfolk Island and the Authority are not to be regarded as Australian. Norfolk Island has as much credibility in regard to interactive/internet gaming matters as any other State or Territory of Australia.
(c) The article makes disparaging remarks about the Island residents, referring to them as having "convicts for ancestors".
Comment: This is not only untrue, it is in exceeding bad taste. That is not to say that Australians generally have any qualms about our element of convict settlement, quite the opposite in fact. However, what the article tries to infer is something derogatory. There is a strong and very interesting historical connection between Norfolk Island and the Australian mainland if you would care to read/research it.
(d) The article mentions "There is competition with Australia to get some revenues for the Island.
Comment: Not so. Norfolk Island is not competing against its sister jurisdictions. Indeed, the very reason the Norfolk Island government determined it would not seek bets from persons with an Australian registered address was that it did not want to take revenue from its sister jurisdictions. You have chosen to put another spin entirely on that decision and again you do so in very derisive terms.
(e) The article infers that Cryptologic is or will be licensed by Norfolk Island Gaming Authority.
Comment: The Authority has not and will not be licensing Cryptologic. The licence in question is a licence granted to a Jupiters wholly owned subsidiary company. Jupiters hold the licence not Cryptologic. However, the indication from Jupiters is that they would like to use the Cryptologic system. For this to happen, the system has to meet our standards as laid down and the system has to be complianced tested against those standards by qualified and credible testing houses, as mentioned above. Also, in the process, not only will the Cryptologic systems will be thoroughly reviewed but Cryptologic directors and senior personnel will be reviewed by the Authority and by the Australian Federal Police. The Australian Federal Police conduct, on behalf of the Norfolk Island Gaming Authority, all probity investigations into applicants for a licence and into those in direct control of associated companies and, if necessary, into those indirectly associated with the proposed operation. The Authority supplements such investigations with enquires and investigations of its own into applicants and those associated in conformity with suitability criteria that is laid down in the governing legislation. I will leave it to Jupiters to raise with you any issues in the article that may cause them to consider their position. I will state, however, that Jupiters is a well-known and very reputable gaming company. You may not have much knowledge of them but they are a well-run and are a proven organisation of quality. I also state that the tax rate applied by Norfolk Island is comparable with the tax rates applied by a number of other States and Territories of Australia - so much for the tax avoidance reference.
The majority of the article is a barrage of accusations against Cryptologic. It is mentioned in the article that the SEC will make an investigation; that Cryptologic are cheating their licensees; that Cryptologic directors stole intercasino.com; and that Cryptologic are crooks in general.
However, we would be interested in any substantive material in your possession or knowledge concerning Cryptologic as would the Australian Federal Police. Obviously, such material/knowledge would have to be able to be substantiated and not be simply hearsay.
You have my e-mail address and other contact points are indicated in the attached material.
I hope this message advances the knowledge held in regard to Norfolk Island and the Authority and in view of the unfair, inaccurate and damaging inferences in the article as regards Norfolk Island and the Authority and its members, that retractions will be made.
