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Microcap & Penny Stocks : DD Central on ECNC (formerly BETT)

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To: Jorjenzak who wrote ()5/26/1999 11:36:00 AM
From: Jorjenzak   of 266
 
To: ComVest Research (164 )
From: hammer Sunday, Jun 14 1998 8:41AM ET
Reply # of 2300

Bill - the whole concept of internet gambling/wagering is still unregulated and open to many interpretations about U.S. legality. You can find many articles arguing both sides of the issue but it seems to me that the ultimate outcome will be a tightly defined internet gaming association with self regulating rules. Example - restricted use, must have cash in bank (ATM style Pay Master like BETTS for access), membership sign on with plenty of written warnings and disclaimers, etc.

Remember that for now BETT is not involved in the gaming itself, just the ATM style pay machines for sports accounts.

As the U.S. defines it's opinion other countries are accepting online gambling and there are big opportunities. Posted below is an article you may find interesting - it points out the risks as well as the potential rewards. (sounds like pennie stocks) I think the article balances both perspectives well but clearly points out the current U.S. hesitancy.

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msnbc.com

Risky bottom line
for cyber casinos

You could make a fortune, but lotto might be better play

By Barton Crockett
MSNBC

You might as well buy a lotto ticket. That's probably the best answer to the question:
Can you make money running an online gambling site?

'There is no way (major U.S. casinos) would take the risk with online gambling.'
- KATHLEEN SCHIPPERS
American Gaming Association spokeswoman THE REASON? Legal questions make this a long-shot business at best. But the economics show a jackpot could be waiting for some lucky sharpie able to beat the casino cops. Such odds have convinced dozens to take the chance. Newsletter Rolling Good Times Online, which covers gaming, counts 32 Web sites that handle wagering with real money, according to editor Sue Schneider, who also is head of industry group the Interactive Gaming Council.
Web site www.gambling.com lists 20 Web casino and game sites that take real money, and there are more than three dozen entries in the online casino category in the Yahoo search engine. Who's operating these sites? First, understand who isn't - big U.S. casinos. "There is no way they would take the risk with online gambling," said Kathleen Schippers, communications director for the American Gaming Association, an industry trade group. Because of the legal uncertainties, they would risk losing their casino licenses by participating in online gambling, she explained. Who does that leave? An odd-lot of gamesters that aren't exactly household names. Among them - the government of Liechtenstein, a 62-square-mile country sandwiched between Austria and Switzerland. Through a state-sanctioned charitable foundation, Liechtenstein started selling lottery tickets online in August 1995. In April of this year, the International Federation of Red Cross and Red Crescent Societies became a sponsor for the games, which are being moved from the old InterLotto Web site to the new PlusLotto site. The federation is to receive 25 percent of all wagers. Right now the lottery is generating only about $68,000 in sales per week. But the Red Cross federation's director of revenue generation, Dwight Mihalicz, said wagers are expected to reach about $3.4 million a week by the spring of 1998, and give the federation a valuable new source of revenue. Bettors from Finnish, Austrian, and Swiss Internet addresses aren't allowed to play because of legal restrictions. Elsewhere, Mihalicz said, local Red Cross societies and citizens must decide for themselves if it's legal to promote the lotto or play in it. (The U.S. Red Cross isn't promoting the game.) Other government-sanctioned gambling operations include two games licensed by the government of Gibraltar - InterKeno and BingoExpress - both of which donate a portion of their proceeds to the New World Foundation charity.

Another site you could put in the government-run category is the U.S. Lottery, launched this year by the Coeur d'Alene Indians in Idaho. This site is embroiled in the debate over the legality of online gaming in the United States. On May 28, the attorney general in Missouri filed suit against the tribe, and the Milford, Conn.-based telecommunications company operating the site, Executone Information Systems Inc., contending that the lottery violates Missouri law. The tribe and Executone, which had revenues of $184 million in 1996, say their site is legal. Indian tribes also are behind MegaBingo, played simultaneously via closed-circuit television on 50 Indian reservations. Through the Web, you can sign up to have someone play for you, then find out how your proxy did by e-mail. The Web site and the television link is run by Tulsa, Okla.-based Multimedia Games Inc. Finland also offers its citizens Web access to its national lottery.

SMALL COMPANIES DOMINATE THE FIELD
Otherwise, the Internet gambling field is dominated by small companies running Web casinos and sports books out of places like Dominica, the Cook Islands, Antigua and Grenada, where the legal environment is more hospitable than in the United States. It is difficult to say with any certainty how much is being wagered online. One company, Interactive Gaming and Communications Corp., of Blue Bell, Pa., has issued financial statements showing total wagers of $17.9 million for the three months ending in March, net revenue from bettor losses and membership fees of $675,000, and a net loss to the company of $184,000.

Based on what he knows of Lichtenstein and IGC, Whittier Law School professor and online gambling expert I. Nelson Rose estimates that the current level of online wagering is less than $300 million per year, although he says the rate of wagering could rise to $500 million by year's end. That's a minuscule portion of the $586 billion wagered in the United States in 1996, according to gambling consultancy Christansen/Cummings Associates Inc., in New York.

But there's potential for the Web cut to grow. Sebastian Sinclair, a free-lance researcher for gambling consultant Christiansen/Cummings, has projected that Web casinos could generate up to $8.7 billion of revenue from gambling losses by 2000, while pari-mutuel betting could take in $490 million and sports betting $760 million. Sinclair acknowledges that these projections are a "complete shot in the dark," based on the unsubstantiated assumption that Web surfers will endure about a third of their total casino gambling losses online, and all of their pari-mutuel and sports betting losses. But other experts agree that Net wagers will grow, along with other forms of electronic commerce. And those revenues could have a fat-bottom line, since cyber casinos don't have to spend billions on the trappings of physical casinos, like free drinks, dance girls and hotels that look like pyramids or sphinxes. How fat? United Casino Corp., an over-the-counter listed Web casino company operating from Irvine, Calif., gave a notable perspective in a self-published "researchreport" distributed to stock brokers in January.In the paper, the company estimated that the Cook Islands-based Web casino it "advises" has the potential to generate revenue of $103.7 million per year. This assumes that the Casinos of the South Pacific gets just 0.2 percent to 0.5 percent of wagers by Web surfers in Europe and Asia. United Casino estimated that that the Cook Island-based casino's operating and equipment costs would total $37 million, leaving it with more than $66 million in net income and a profit margin of 64 percent. United Casinos owns stakes in two companies entitled to most of the Casinos of the South Pacific's earnings. This complicated ownership structure gives United Casino rights to 42 percent of Casinos of the South Pacific's profits, according to the report. Of course, the Casinos of the South Pacific is only in test mode, and currently isn't getting significant revenue, said United Casino Chief Financial Officer James Brewer. Brewer explained the company's operations in a May 23 interview with MSNBC Business Video. But, hey, United Casino is a stock you can buy, under the ticker "UCNO." And it's not the only one. IGC also is listed, as are in-development Web casino companies Playstar Corp., a Delaware-registered company operating from Toronto, and VentureTech Inc., of Reston, Va. Another Web casino in the making, World Wide Web Casinos of Santa Ana, Calif., plans to go public soon through a reverse merger. Christansen/Cummings Associates Inc., in New York.

But there's potential for the Web cut to grow. Sebastian Sinclair, a free-lance researcher for gambling consultant Christiansen/Cummings, has projected that Web casinos could generate up to $8.7 billion of revenue from gambling losses by 2000, while pari-mutuel betting could take in $490 million and sports betting $760 million. Sinclair acknowledges that these projections are a "complete shot in the dark,"
based on the unsubstantiated assumption that Web surfers will endure about a third of their total casino gambling losses online, and all of their pari-mutuel and sports betting losses. But other experts agree that Net wagers will grow, along with other forms of electronic commerce. And those revenues could have a fat-bottom line, since cyber casinos don't have to spend billions on the trappings of physical casinos, like free drinks, dance girls and hotels that look like pyramids or sphinxes. How fat? United Casino Corp., over-the-counter listed Web casino company operating from Irvine, Calif., gave a notable perspective in a self-published "research report" distributed to stock brokers in January. In the paper, the company estimated that the Cook Islands-based Web casino it "advises" has the potential to generate revenue of $103.7 million per year. This assumes that the Casinos of the South Pacific gets just 0.2 percent to 0.5 percent of wagers by Web surfers in Europe and Asia. United Casino estimated that that the Cook Island-based casino's operating and equipment costs would total $37 million, leaving it with more than $66 million in net income and a profit margin of 64 percent. United Casinos owns stakes in two companies entitled to most of the Casinos of the South Pacific's earnings. This complicated ownership structure gives United Casino rights to 42 percent of Casinos of the South Pacific's profits, according to the report. Of course, the Casinos of the South Pacific is only in test mode, and currently isn't getting significant revenue, said United Casino Chief Financial Officer James Brewer. Brewer explained the company's operations in a May 23 interview with MSNBC Business Video. But, hey, United Casino is a stock you can buy, under the ticker "UCNO." And it's not the only one. IGC also is listed, as are in-development Web casino companies Playstar Corp., a Delaware-registered company operating from Toronto, and VentureTech Inc., of Reston, Va. Another Web casino in the making, World Wide Web Casinos of Santa Ana, Calif., plans to go public soon through a reverse merger.

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Again - I don't want this article to appear as a negative - just wanted to point out a couple perspectives. I think the article is positive and I don't see the U.S. being able to regulate internet gambling - if internet gambling can't be done on U.S. soil it can be easily accessed in other countries.

BETT is not focusing on internet gaming, their recent press releases focus on another huge industry - sports wagering. BETT's ATM style Pay Master - it simply allows current sports betters to replenish their accounts from home. (March 26th P.R.)

Having said that - I would not be surprised to hear of BETT's Paymaster as having online gambling potential in the future.

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