Mr. Premier & ALL,
I hope everyone is enjoying a well deserved vacation with family and friends! Mr. Premier has asked some questions about exactly how WINR derives its revenue, and the issue of possible competition that I would like to address at this time.
Mr. Premier asks: A question on revenue sources: Winner will receive .50% of clients revenues. The very optimistic 5 year projection is $10B. Assuming WINR would have 50% penetration, we can derive $25m as total revenues from internet gaming transactions management in the fifth year.
Response: First of all, this is statement, not a question. And I am glad to inform you that it is a statement that is factually incorrect.
1). WINR derives its' revenues in three (3) ways:
a). Transaction fees: the current transaction fee both to, and from any casino site is 4%. The $10B you refer to is an estimate of revenues, not total cash flow. I might add that the estimates that this $10B figure was derived from are being blown away in the first year projections, so, rather than being optimistic they are more likely at this point in time to be pessimistic. I won't even get into the issue of the difference between revenue and cash flow. Lets just use your figures of $10B as total cash flow and assume your figure of 50% market coverage. 4% of $5B going in equals $200 million; then, 4% of $4.0B (this assumes the house take is 20%, just a guesstimate on my part) coming back out equals $160 million for a total of 360 million in revenues from transaction fees from gaming merchants alone by 2003 assuming 50% market coverage and $10B in total cash flow, not revenues. Using a 40% revenue margin (the very low end), you get net revenues of $144 million on 14.4 million shares by 2003. Thats $10/share in net earnings on just gaming transaction fees. Now apply a modest (by todays average S&P stock) 20 PE to this and you come up with a price tag of $200/share for WINR stock by 2003 on gaming transaction fee revenue alone! E-commerce transaction fees have been discussed between 1/2% - 1 1/2% but the last I heard these were still under negotiation.
b). License fees: The standard license fee is $100K/casino site/year.
If in the year 2003 WINR has say 150 sites, this would add an additional 15 Million in revenues/year. Again, E-commerce, who knows at this point how big it could be to WINR.
c). Interest income: WINRs will recieve a nominal percentage cut, as I understand it, from the CMS/CLT of all interest earned from funds in the trust account. I won't even try to attempt to put a number on this one, there is just no telling.
Mr. Premier asks: Shoppingdowntown is likely to compete in the CYCH turf. CYCH's revenue is $88m. What do you think WINR would have? Who are other competitors in this field? What is WINRs' competitive advantage?
Response: First CYCHs' trailing twelve month revenues are $8.8 million, not 88 million. They are a start up company also, that since IPO has lost a lot of money, diluted their stock in questionable acquisitions, and therefore at this point show huge losses. Their recent bundling agreement with MSFT is big and CYCH will be competition, without a doubt in the field of E-commerce, but have expressed no interest in the gaming arena. SNMM is currently trying to mimic WINR's system out of Australia, but at this time WINR is the only financial transaction entity representing the consumers interest, not the merchants, in the gaming arena. WINRs advantages include, but are not limited to....acceptance and conversion of the euro-dollar and all other major world currencies, service oriented to consumer rather than merchant, safest banking haven in the world, debit card for ATM payouts at over 3000 locations worlwide, and the only one up and doing all this RIGHT NOW! we are way ahead of the pack. If we don't stumble and break a leg we will surely be "winners"!
On a final note, some who are playing the WINR system through the TISS sites have written me and asked why they are being charged the 4% transaction fees by TISS as they were led to believe there would be no charge for using the WINR system. What follows is an E-mail from Mr. Skinner to a third party that presented this problem to him.....
Dear XXXXXX,
WINR does not charge the player any fees to deposit or withdraw any funds, we charge the casino. In the case of the Casinos located in Curacao...they have chosen to charge the player back for those fees. This is not the "norm" in the industry and I feel they will change their structure when there are more casinos on our site. There are other casinos who pay the fee on behalf of the player and these casinos are coming on line shortly. It is our policy that WINR does not charge the customer any fees for our service, we charge the casinos only but we have no control if the casino decides to pass these fees on to the player. The player is notified by the casino, as they are signing up, of any fees or cost involved.
We are also working with the casino sites and our own site to make it as informative and user friendly as possible. We want the player, shareholder and the casual browser to be able to understand the entire process from either the WINR site or any approved Casino site. I thank you for your comments and suggestions and please feel free to make them at any time.
Regards,
David C. Skinner, Jr CEO
Hope this clears up some misconceptions, and as always....
Best Wishes,
Swedelo |
