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WALL STREET RESEARCH GROUP HOME
Buy Recommendation June 29, 1999
Special Report
CASINOPIRATA.COM, LTD.
(OTC BB: CSIN)
Shares Outstanding: 6,143,000
Active Float: 1,200,000
Recent Price: $1.25
52 Week Bid Range: $.37-$1.57
Capitalization: $7,675,000 1999 EPS: $.44
2000 EPS: $1.21
P/E Ratio: 3/1
Debt: NONE
Dividend Yield: N/A
Year Ending December 31 1999 (E) 2000 (E) 2001 (E) 2002 (E) 2003 (E)
Revenues (wagering) Mil $18 $58 $128 $214 $310
Earnings (millions) $2.7 $8.7 $19.2 $32.1 $46.5
Shares Outstanding (millions) 6.14 7.2 7.9 8.4 9.0
Earnings per share $.44 $1.21 $2.43 $3.82 $5.17
Projected Price P/E Ratio of 20/1 $8.80 $24.20 $48.60 $76.40 $103.40
BUSINESS SUMMARY:
On March 15th, 1999, Casino Pirata.com, Ltd. (OTC BB: CSIN), formerly known as Simulator Systems, Inc, took advantage of an opportunity to become a participating member of the huge new growth industry of Internet-based gambling. By aligning itself with WorldNet Gaming, one of the leaders in this field, the Company has positioned itself to take full advantage of the tremendous potential offered through this affiliation. Casino Pirata.com, Ltd. is a theme-based Casino and Sportsbook gaming system offering Las Vegas odds and payoffs with the most advanced Internet sports wagering software offered anywhere.
Through exclusive Sportsbook software, a player can wager on Point Spreads, Overs, Unders, Money Lines, Run Lines, Puck Lines, Parlays, Round Robins and Teasers. Players can mix any sports and/or wager types desired in parlays and round robins; and also buy points on any football or basketball side or total. Additionally, players can play pitchers as Action, Listed, Selected, or Opposition. This exclusive Sportsbook software provides players with the versatility and excitement of Vegas-style gambling from the comfort of their home computer.
THE BOOMING ONLINE GAMING INDUSTRY
As the Internet steadfastly integrates into our daily lives and businesses, online gaming has lined up to become one of the biggest booming markets around. In fact, online gaming may be the next frontier. Casino Pirata.com, Ltd. is part of this ever-expanding industry. According to the Computer Industry Almanac, by the end of 1998, there were more than 147 million Internet uses worldwide. This number continues to increase. By the year 2000, approximately 327 million people around the world will have Internet access. The top 15 countries will account for nearly 82% of total Internet users. By the year 2000 there will be 25 countries where over 10% of the population will be tied to the Internet.
The outward expansion of the Internet has been fueled by a variety of contributing factors, including a growing number of personal computers in both the workplace and the home; advances in the performance and speed of personal computers and modems; improvements in network infrastructure; inexpensive and easy-to-use Internet access; and an increased awareness of the Internet among businesses and consumers.
Forrerster Research recently estimated that worldwide Internet commerce could reach as high as $3.2 trillion in 2003. The 1998 Casino & Gaming Business Market Research Handbook predicts that the Internet gaming market could reach U.S. $100 billion to U.S. $200 billion in annual revenues by 2005.
According to Datamonitor, online gambling turnovers have the potential to dwarf those of other interactive services, tapping into an existing traditional gambling network valued at over $700 billion in Europe and the U.S. alone. As operators seek to take advantage of the huge audience reach and potential cost savings of the Internet, the number and range of services available to the consumer continues to expand at a tremendous rate. Casinos, lotteries, and sports books dominate the new market, allowing customers with an Internet connection and credit card to gamble literally anywhere in the world.
As today's consumers utilize the Internet to simplify their lives in every means from conducting online research to online investing to making online reservations and even to ordering their daily necessities from online vendors, it is only appropriate that this trend continues well into the 21st century. The fact is that today's consumers want what they want when they want it! In that same respect, today's consumers are spending more money than ever before. The gambling and gaming industries are experiencing a surge of new casinos and channels from which to offer their services and to make their money. As these trends steadily move into the next century, it is expected that online gaming become the next big frontier for those consumers who desire the excitement of Vegas-style odds, but don't have the time to make the trek to the nearest casino.
STATE-OF-THE-ART TECHNOLOGY
Players can wager on their game of choice through a powerful and easy-to-use web interface that is compatible with all major browsers, including WebTV, AOL, MSN, Compuserve, and Prodigy. No additional plug-ins or software is required to play. For those seeking action parallel to that of a Vegas casino, Casino Pirata.com offers an enhanced Java version for an even more exciting and realistic gaming experience.
The games found at www.CasinoPirata.com. can be played virtually anywhere throughout the world. To enjoy the thrill of the dice, all that players need is an Internet hook-up and a credit card. Since the software accommodates for particular language barriers found throughout the world, players need only choose their language of preference when they are ready to begin playing.
A PLETHORIA OF GAMES
Casino Pirata.com, Ltd.'s affiliation with WorldNet Casinos will provide the Company with a fine complement of games. This initial list of games currently includes the following: Blackjack
Roulette
Jacks or Better
Deuces Wild
Slot Machines Baccarat
Pai-Gow
Bingo
Super 6 Lotto
Two additional attractions will be following, including:
1. Stud Poker with Progressive Jackpot
2. Interactive Casino
Casino Pirata.com games are not only fun, but simulate in a realistic way the speed and quality of play found in casino resorts around the world. Only the most advanced and user friendly casino software is used. Games have the look, feel, and interactivity of an actual Las Vegas casino.
STATE-OF-THE ART WEBSITE
The Company's website is located at www.casinopirata.com. The site is welcoming to novice and veteran users alike. Upon entering the website, players may choose from the following: Sportsbook, Casino, Rules, Open Account, Links, Account Options, or Feedback. For the novice, the site includes a complete listing of games and a detailed description of game rules and strategies. For the veteran player, the site offers Vegas-style action all from the comfort of the home computer.
When players earn winnings from outside bets, the dealer will lay the winning chips just beside the original bet. If players do not wish to have their winnings put into their next bet, then they should collect them. On inside bets, the dealer pays directly to the player.
MOST ADVANCED USER SAFEGUARDS & SECURITY
When a player registers with Casino Pirata.com, he/she is issued a Personal Identification Code (PIN). It is not just an issue of allowing play, but also a unique PIN is a further step in securing that only that player can access funds in their account.
The Company will be using the most advanced Internet propriety encoding and processing technologies, which allow for complete security for financial transactions via the Internet. The technology acts as an international currency converter and a secure Internet transaction gateway to financial institutions.
SSL Internet Protocol is used to provide privacy and reliability between two communicating applications. SSL uses 128 bit encryption, which ensures server and client authentication through encrypted algorithms and cryptographic keys. This, coupled with WorldNet Gaming proprietary software, ensures the best possible security for all electronic transactions.
MARKETING STRATEGY
The Company's goal is to become a premier online site for those individuals seeking the thrill of Vegas-style gambling and gaming from the ease and comfort of their personal computers. The Company's marketing strategy is designed to strengthen the Casino Pirata.com name, increase traffic to the Company's web-site, build strong player loyalty, and maximize increased visits to the Company's web-site. Casino Pirata.com employs a variety of media, program and product development, business development and promotional activities to achieve these goals.
With the Internet steadily becoming a household entity, the Company plans to optimize regularly visited web-sites and links in order to attract viewers and potential players to its web-site. The Company will take full advantage of its ability to reach virtually millions of viewers per day from virtually every country around the globe. The Company realizes that the Internet never rests and that at any given moment, there are millions of potential users waiting to hear the Company's marketing message and be directed to the Company's web-site.
WorldNet Casinos has entered into a strategic alliance with SiteAds, a leader in Internet marketing campaigns. This allows Casino Pirata.com, Ltd. the ability to take advantage of the marketing and promotional talents and expertise of the SiteAds affiliation.
Casino Pirata.com, Ltd. is aggressively moving ahead to participate in this exciting new industry. The technology is already in place, and both the structure and the Internet security are ready to make Casino Pirata.com a leader in Internet gaming.
EXPERIENCED MANAGEMENT
Paul Stringer, President and Director
Mr. Stringer has served as President of the Company since its inception as Simulator Systems, Inc. His background includes serving as President of Consumer Data Corp., General Manger of Rainbow Glacier, Inc., and President of Trans Datanet, Inc. He also has been involved in the management, sales, and financing aspects of the automotive industry as well as a registered representative in the securities brokerage industry. He attended the University of Oregon.
Steve Amdahl, Vice President and Director
Mr. Amdahl has been Vice President and Secretary of the Company since its inception as Simulator Systems, inc. His background includes 12 years as a Registered Representative in the securities brokerage industry and five years as a marketing consultant with two merchant banking firms specializing in private placements of developing companies. He received an MBA from the University of Southern California.
RECENT DEVELOPMENTS
Casino Pirata.com has begun discussions to acquire a company that has developed unique proprietary, turn key Internet gaming software that will enhance any current gaming site. This new software creates virtual reality horse racing, where a player can train their own horse, then race that virtual horse at the virtual track. Horse wagering on a global basis is a multi-billion dollar industry. The Company feels this software will take online gaming to a whole new dimension and help CSIN become an industry leader in the fast growing horse wagering business
RECORD NUMBER OF HITS TO WEBSITE
Among the more significant figures, June 1st established a single day high of 31,154 hits, while June 6th produced 27,286 hits, a record total for a weekend day. In addition, June 1st through 4th marked the first time that CSIN received in excess of 100,000 hits in a four-day period. Total hits for the month of June so far are 425,683, more than double the number for the same time in May.
''I am very pleased to see more and more people visiting our casino and playing the many games it has to offer,'' said CSIN President Paul Stringer. ''As a direct result, we are seeing an increase in revenues.''
CSIN's marketing campaign is working very well. The Company's casino is ranked in the top 10 on both GOTO.COM INC and MICROSOFT CORP search engines. Other search engines are being brought on line rapidly.
SUMMARY
The online population is expected to dramatically increase to approximately 327 million users by the turn of the century, as more people turn to Cyberspace for information, commerce and entertainment. By combining one of the world's most profitable and oldest industries, gaming, with one of the world's fastest growing and newest industries, the Internet, the growth possibilities are astounding. Casino Pirata.com expects to be one of the dominant leaders in this huge growth industry, as their site will be offered in multiple languages and will be "state-of-the-art"in all respects!
RECOMMENDATION: STRONG BUY
BASED ON CSIN's PROJECTED HIGH GROWTH RATE IN A HIGHLY PROFITABLE, DYNAMIC INDUSTRY AND ESTIMATED EARNINGS PER SHARE OF $ .44 IN FISCAL 1999 AND $1.21 IN YEAR 2000, WE ANTICIPATE THESE SHARES WILL APPRECIATE SUBSTANTIALLY FROM THEIR CURRENT LEVELS. WE BELIEVE THE SHARES WILL TRADE IN THE $7.00 TO $10.00 RANGE BY MARCH, 2000 AND $21 TO $25 BY MARCH , 2001.
Company is very well structured with no debt, 6.2 million shares outstanding and an exceptionally talented and capable management team.
Company should be a leader in online gaming, which is expected to be one of the world's biggest and fastest growth areas in the coming years.
Company offers multiple games and Sportsbook with Las Vegas odds & payoffs and the most advanced Internet sports wagering software offered anywhere.
CSIN's strategic alliance with SiteAds, a leader in Internet marketing campaigns, will contribute greatly to the Company's success.
Casino Pirata.com is using the most advanced Internet propriety encoding and processing technologies, which allows for complete security of all Internet transactions.
Company is developing the site to accommodate multiple languages and countries.
Internet gaming market is expected to be in excess of $100 billion annualized by 2005.
THIS IS A PUBLICATION OF WALL STREET RESEARCH GROUP, A FINANCIAL COMMUNICATIONS AND INVESTOR RELATIONS COMPANY. WALL STREET RESEARCH GROUP, A DIVISION OF WALL STREET FINANCIAL GROUP, INC., SERVES AS SPECIAL ADVISOR TO THE FEATURED COMPANY AND HAS RECEIVED A FEE OF $4995 FOR WRITING AND DISTRIBUTING THIS REPORT. MORE DETAILED DISCLOSURE REGARDING FEES PAID IS AVAILABLE UPON REQUEST. THIS IS NOT AN OFFER TO BUY OR SELL SECURITIES. .INFORMATION OR OPINIONS IN THIS REPORT ARE PRESENTED SOLELY FOR INFORMATIVE PURPOSES, AND ARE NOT INTENDED NOR SHOULD THEY BE CONSTRUED AS INVESTMENT ADVICE. COMPANIES MENTIONED HEREIN MAY CARRY A HIGH INVESTMENT RISK; READERS SHOULD CAREFULLY REVIEW THE COMPANIES THOROUGHLY WITH THEIR REGISTERED INVESTMENT ADVISOR OR REGISTERED STOCKBROKER. THE ANALYSIS CONTAINED HEREIN DOES NOT PURPORT TO BE A COMPLETE STUDY OF THE FEATURED COMPANY OR OTHER COMPANIES MENTIONED. INFORMATION USED AND STATEMENTS OF FACT HAVE BEEN OBTAINED FROM THE FEATURED COMPANY AND OTHER SOURCES, BUT NOT VERIFIED NOR GUARANTEED BY WALL STREET RESEARCH GROUP AS TO COMPLETENESS OR ACCURACY. SUCH INFORMATION IS SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS STATED HEREIN MAY BE SOLELY WALL STREET RESEARCH GROUP'S OR THE INDICATED SOURCES, AND NOT NECESSARILY THOSE OF THE FEATURED COMPANY. YOU SHOULD ASSUME THAT OFFICERS, DIRECTORS, AND EMPLOYEES OF WALL STREET RESEARCH GROUP OR OTC COMMUNICATIONS AND FINANCIAL ANALYSTS MENTIONED, AND MEMBERS OF THEIR FAMILIES HOLD A POSITION AND MAY FROM TIME TO TIME TRADE IN THESE SECURITIES FOR THEIR OWN ACCOUNTS. SPECIFIC INFORMATION IN THIS REGARD WILL BE FURNISHED UPON REQUEST. TRADEMARKS ARE THE PROPERTY OF THEIR RESPECTIVE OWNERS. © 1999 WALL STREET RESEARCH GROUP. ALL RIGHTS RESERVED. DUPLICATION OF THIS REPORT WITHOUT THE EXPRESSED WRITTEN PERMISSION OF WALL STREET RESEARCH GROUP IS STRICTLY PROHIBITED. FOR FREE REPRINTS OR TO BE PLACED ON WALL STREET RESEARCH GROUP'S MAILING LIST, CALL: IN THE U.S.: 877-660-1932 OR OUTSIDE OF THE U.S., CALL: 714-664-1472.
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