Deal Breaker’s John Carney interviewed Kynikos Associates’ Jim Chanos about Steve Roman’s Midas Oracle blog post. - by Chris Masse

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#1. Kynikos Associates’ Jim Chanos did not respond to my e-mail at the time.

#2. Nobody from Deal Breaker tipped me about this follow-up story.

#3. The Deal Breaker’s follow-up story did not mention “Midas Oracle” or “Steve Roman”.

#4. The Deal Breaker’s follow-up story did not link to the offending Midas Oracle blog post (written by Steve Roman).

#5. The Deal Breaker’s follow-up story did not link to the previous Deal Breaker blog post (which reported and commented on Steve Roman’s take).

#6. The original Deal Breaker blog post did not link (in an update) to the following Deal Breaker story (which sides with Kynikos Associates’ Jim Chanos, and puts the Midas Oracle story in the consipracy theory camp).

CONCLUSION: Deal Breaker, before you teach journalistic lessons to bloggers like us, try to learn Internet conviviality.

Anyway.

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DealBreaker: Jim Chanos: The Oracle of the End Of Online Gambling

Jim Chanos of New York’s Kynikos Associates was bearish on internet gambling sights long before Senate majority leader Bill Frist “ambushed” the industry with a bill making most internet gambling illegal. Contrary to claims detailed on a website [= Midas Oracle] yesterday, it didn’t take an elaborate scheme of inside information about the Senate’s legislative schedule to tip Chanos off on the dangers to internet gambling. For Chanos, the writing was on the wall, in the online gaming companies’ prospectuses and already built into various state laws. [...] In an interview today, Chanos described to DealBreaker three reasons, in addition to possible legal risks, that underlay his view of online gambling companies. “First off, we all believed that it was a cut-throat industry with no barriers to entry. Second, there was the faddish nature of poker. Television ratings were already down. Third, there was the silliness of the whole concept of Americans sending their money to off-shore companies with very little assurance about the way these operations were run,” Chanos said. [...] (The story on the website [= Midas Oracle] also made a big deal out of Chanos’ connection to former Nevada Attorney General George Chanos, Jim’s cousin. “I have never discussed internet stocks with my cousin,” George Chanos told DealBreaker. “And I never discussed the legislation with Senator Ensign.”) This seems more than decisive to us. Chanos didn’t need a conspiracy to tell him that online gambling was in trouble. He just needed to keep his eyes and ears open. So there you have the answer we asked in yesterday’s headline, “James Chanos: Genius Shortseller or Politically Well-Connected?”

None of the three reasons to be short on internet gambling stocks, stated by Jim Chanos, was a determining factor in the 2006 internet gambling crisis. Indeed, the determining factor was the unexpected passing of the Internet Gambling Prohibition and Enforcement Act of 2006. So maybe Kynikos Associates’ Jim Chanos was just… incredibly lucky.

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