Man its lonely over here...LOL. Have a good weekend everyone.
BORDER CAPITAL
1998/99 Business Development Activities:
Due to the extensive popularity and social acceptance of bingo, the Corporation has been developing systems for an Internet
web site in connection with the registered trade name Power Bingo© as means to enter the approximate US$2 Billion dollar
global Internet advertising market. Similar web sites will be established to address different cultures and languages for
international Power Bingo© games in specific countries to be developed by the Corporation. Each site will enable players to
register to play bingo in connection with a "live telecast" of each mechanical draw in front of a live studio audience, for no
purchase necessary. Each interactive game/show will provide registered players with the chance to win prizes supplied by Web
advertisers as a part of the television web TV broadcast. The "live telecast" aspect of the mechanical draw helps prove the
integrity of the game, which is lacking in current unregulated forms of Internet gaming that use only electronic random number
generators. Moreover, the Corporation will market it's interactive bingo game/shows to government lotteries, and enter the
US$126.8 Billion world lottery industry by providing "real time" interactive television game shows broadcast over cable and/or
national television networks.
Upon the basis of turn-key technology packages licensed for a percentage fee to existing lottery printers, and government
lotteries, the Power Bingo© game will be offered to lottery players as a legal interactive lottery and sold through existing lotto
retail distribution agencies. The Power Bingo© concept represents the next generation of lottery product because it
incorporates retail game card sales and enables "at home" audience participation for "real money prizes at stake."
More people around the world regularly play Bingo than any other game. The Corporation will enjoy a competitive advantage
derived from its exclusive rights to certain proprietary software, copyrights and registered patents that apply to interactive bingo
and pattern recognition games of chance played over a wide geographic area. The patented methods and apparatus allow
players to participate in a bingo game without having to attend a specific location or bingo hall. We can demonstrate to lottery
officials how the interactive game/show will be an extremely effective marketing tool, increasing sales by providing "at home"
game show participation utilising interactive entertainment technologies and national television advertising. Additionally, the
Corporation expects to achieve above average Internet and television advertising revenue from the interactive game/shows, by
being the first to incorporate "at home" game play for lottery size prizes. The brand recognition created by national broadcasting
and lottery sales will position the Corporation to capitalise on Internet bingo opportunities, which are also subject to certain
Patent Rights as discussed above.
The Corporation's expectations of long-term profitability from its interactive Internet/television games are based upon strong
consumer demand for both television game shows and games of chance. Throughout the world, consumer demand for lottery
products is not constant and lottery officials in most jurisdictions must continually search for new ways to attract consumer
spending on lottery products. High impact advertising, such as television commercials or lotto draws, helps to maintain brand
recognition of lottery products with most players. However, even though marketing studies conclude that advertising drive
sales, but there is a limit to the returns to be gained from current lottery advertising expenditures.
The Corporation plans to demonstrate that a properly designed television game show format will attract new players and
increase lottery sales more effectively than conventional advertising. In addition, offering "at home" audience participation will
provide the opportunity to increase network viewer-ship and ratings and further drive advertising revenue. Following this
strategic approach, the Corporation has identified significant domestic and international marketing opportunities to enter the
US$126.8 Billion world lottery industry by providing an interactive television game show that incorporates retail game card
sales enabling "at home" audience participation.
Due to its extensive popularity and social acceptance, we have developed Power Bingo©, an interactive bingo game that
incorporates an entertaining television/web TV format, as the first in a series of interactive pattern recognition games. As stated
above, more people around the world regularly play bingo than any other game. Additionally, the Corporation will enjoy a
competitive advantage derived from its exclusive rights to certain proprietary software, copyrights and registered patents that
apply to interactive bingo and pattern recognition games of chance played over a wide geographic area. (a) Products and
Services: The Corporation's package of products and services offered on behalf of the Joint Venture consists of providing the
following:
ú Game and Ticket Design ú Television Game Show Design ú Production Consulting ú Software Design and License ú Systems
Hardware ú Patent Rights License ú Financial Services ú Administrative Services
Depending upon their respective policies and resources, the Corporation will provide a customer with some or all of the above
in order to allow them to launch interactive televised bingo. (b) Market Description. (1) The Internet and Internet Service
Providers: Size of the Internet Market
In September 1998, Computer Industry Almanac Inc. reported that there are going to be 327 million accessing the Internet in
the World. This is up from 100 million Internet users at year-end 1997. The U.S. is projected to have over 130 million Internet
users or 40% of the total in year 2000. The top 15 countries shown in the following table account for nearly 82% of the
worldwide Internet users in year 2000. Country Internet Users (M) U.S. 132.3 Germany 22.9 Japan 21.9 United Kingdom
17.0 France 12.6 Canada 11.6 Italy 10.6 Australia 8.0 Netherlands 5.4 Brazil 5.2 Russia 5.0 Spain 4.4 China 3.8 Sweden 3.7
South Korea 3.2 Top 15 Countries: 267.5 Million Europe: 102 Million Worldwide: 327 Million
These numbers include business, educational and home Internet users. At year-end 1997 there were 11 countries with over one
million Internet users, which will grow to 38 countries in year 2000. In 1997 there were also 11 countries where over 10% of
the populations were Internet users. By year 2000 there will be 25 countries where over 10% of the population will be Internet
users. The Internet Industry Almanac has projected that there will be 579 million computers in use worldwide at year-end
2000. The U.S. will grow to over 164 million computers in use at that time or 28% of the world's total computers. MIDS has
estimated that the total number of worldwide Internet users will grow to 707 million by 2001.
Revenue Sources for Internet Advertising The volume of consumers viewing the Internet content attracts advertisers wanting to
communicate with end-consumers. Content providers sell space to advertisers via brokers and advertising agencies to generate
revenue. The value of the advertising space is based primarily on the demographic of interest of the web page and the number
of times the information is viewed and/or "clicked." The Internet is particularly suited to interactive bingo game/shows as a
source of entertainment products and services that require no physical exchange. The Corporation will be able to sell the
opportunity to provide information to consumers directly on behalf of owners of other web sites wishing to increase the amount
of traffic viewing their web pages and thus increase their value for web advertising.
(2) Television Game Show Markets:
The two most popular prime time television shows rated by Nielsen are game shows, Wheel of Fortune©, with a network
rating of 11.6, and Jeopardy©, with a network rating of 9.7, are distributed by Kingworld Productions, which recently sold to
CBS for approximately $2.5 Billion. These shows have enjoyed success based upon their ability to inspire audiences to
"play-along" at home to "out guess" studio contestants. In daytime television, The Price is Right©, continues to enjoy
phenomenal popularity. National networks in the U.S. such as NBC offer distribution of shows to a universe of 62,340,000
households, which is now less than the projected number of Internet users within the U.S. as set forth above.
(3)Lottery Markets:
The first recorded lottery was sponsored by Augustus Caesar to finance public projects in Rome. "El Gordo", Spain's popular
lotto game, was established in 1763 and remains the oldest continually operated lottery in the world. It was automated into an
on-line game in 1990. Lotteries have experienced explosive growth in the United States and other countries worldwide since
the mid-1980s. Governments have turned to this industry as an alternative to tax related sources of revenue. For every $1 of
revenue generated from a lottery, the state or jurisdictions keep an average of approximately 33%. Recent marketing studies
have shown revenue generated from lotteries does not detract from other established revenue sources (sales tax, state fees) and
can be considered to be a standalone revenue source. However, despite their apparent longevity, there is a debate that
conventional lotto games have tended to run their course, with sales declining.
Types of Lotteries
There are many types of lotteries in the world, however, they fall basically into one of two types: on-line lotteries and off-line
lotteries. An on-line lottery is conducted through a computerized lottery system in which lottery terminals are connected to a
central computer system, typically by dedicated telephone lines or closed radio frequency transmissions. This type of system is
generally utilized for conducting games such as lotto, sports pools, keno and numbers in which players may make their own
selections. Off-line lotteries feature lottery games that are not computerized, including traditional off-line lottery games that use a
preprinted paper ticket and "scratch-off" instant ticket. Traditional games (in which players purchase tickets manually processed
for a drawing) generally are conducted only in international jurisdictions. Instant ticket games are conducted in the United States
and internationally.
Approximately 50% of the gross revenues of an on-line lottery in the United States is returned to the public in the form of
prizes. Approximately 35% is used by the state to support specific public programs or as a contribution to the state's general
funds. The remaining 15% is generally used to fund operations of the lottery agency, including the cost of advertising, sales
commissions to point-of-purchase retailers and service fees to vendors, such as the Corporation.
Types of Lottery Games
The three major types of lottery games are numbers, instant, and lotto games. Numbers games are daily-computerized versions
of the early sweepstakes games (i.e. pick 2, 3 or 5 etc). Numbers games have had moderate sales increases in the world from
$11.7 Billion U.S. to $13.1 Billion U.S. for 1997. Sales of instant ticket games have grown at a faster pace since 1990 than
on-line or conventional lotto draw games. Instant ticket sales in the world in FY1997 were $27.1672 Billion U.S., up more
than 300% from 1993 sales of $8 Billion U.S. In addition, instant tickets comprise 23.3% of total world sales, compared with
22.8% in 1995. Instant games, which are available in every state offering a lottery, differ from numbers games in two important
respects. First, consumers obtain immediate knowledge on their winning status and second, the odds of winning are more
favorable. The introduction of instant lottery games quickly boosted sagging lottery revenues, and brought about a change in the
way lottery products were marketed. In an effort to maintain consumer appeal, a variety of instant tickets are routinely
introduced, each with their own distinctive theme. Instant games with names such as "Twenty-one," "Baseball," and "Lone Star
Millions" are introduced to capture market interest, and are then replaced by games with other themes. The third popular type
of lottery game currently offered is lotto, which allows players to select several numbers from a larger field. Varying prize
amounts are offered by matching typically three to six numbers drawn. One distinctive feature of lotto is the rollover amount.
The jackpot continues to accumulate from drawing to drawing until someone matches each of the numbers selected, generating
several jackpots of over $100 million dollars in the last five years. The large potential winnings in lotto games relative to other
games contribute to their popularity. Another more recent trend in the lottery industry is the introduction of multi-state lotteries
in which participants from several states purchase lotto tickets for a single jackpot. Single states are often unable to generate the
volume of sales needed to have multi-million dollar jackpots. Therefore, states join a lottery consortium through which large
jackpots can be achieved.
Legislation and Regulations
In the United States, lotteries are not permitted in a particular jurisdiction unless expressly authorized by law in the jurisdiction.
Once authorized, the ongoing operation of a lottery is highly regulated. Lottery authorities generally conduct an intensive
investigation of the company and its employees before and after the award of a lottery contract and may require removal of
employees deemed to be unsuitable. Certain jurisdictions also require extensive personal disclosure, financial disclosure,
background checks from persons and entities beneficially owing a specified percentage of (typically 5% or more) of a
company's securities. The failure of such beneficial owners to submit to background checks and provide disclosure could result
in the imposition of penalties upon the beneficial owners and jeopardize the award of a lottery contract to a company or
provide grounds for termination of an existing lottery contract.
Some international jurisdictions usually have national legislation and regulations governing lottery operations. The regulation of
lotteries in international jurisdictions typically varies from regulation of lotteries in the United States. In addition, regulations are
often imposed on foreign corporations seeking to do business in such jurisdictions. It usually recommended that a company ally
itself as a subcontractor or Joint Venture partner with a local company in international lottery contracts.
(4) Marketing Plan: The Corporation is seeking to ally itself with individuals of proven leadership, insight and hands-on
experience of in the gaming industry, and recognized entities in the lottery industry to market the Power Bingo© game/show
package worldwide.
(5) Market Trends: The Corporation has identified that the market trend, which is more apparent in Europe than in North
America, is moving in the direction of its game plan as several states have initiated or allowed bingo halls to be linked to create
large jackpot progressive games or TV games such as The Big Spin. In North America and other developed lottery markets
the need for this sort of growth and change in the mix of lottery products offered to consumers is increasing. At present, lottery
officials have moved into "play along" types of games that range from mainstream products that attempt to imitate interactive
such as bingo and pattern recognition games based upon well-known trade names from a variety of Hollywood television
themes. This most recent trend has created new business opportunities for the private sector to supply licensed products, such
as those based upon the Power Bingo© patents, and theme games being sought from the private sector by lottery
organizations. As specific lotteries reach maturity, the aggressive introduction of a lottery system that deals directly with the
marketing objectives of traditional lotteries, will position the Corporation as a leader in the new era of consumer driven
interactive lottery products. The Corporation's proprietary Power Bingo© systems will bring the exciting play action of bingo to
the lottery markets where players may compete for lottery size prizes. In lottery markets where government is already
committed to use on-line equipment, software is now available from a variety of reliable sources to enable bingo to be played
using conventional on-line lottery equipment with no significant additional equipment cost. Lotteries have turned to both
television advertising and introduction of new lottery products to increase or in some cases to maintain sales. As illustrated in
Figure 1 below, sales for each type of lottery product have increased over the past five years. Initially the lottery market was
dominated by lotto sales. However, in recent years the market mix has become more equally divided among each product type
Source: The 1995, 1998 and 1999 LaFleur's World Lottery Almanacs In the future, the trend to offer new products is
expected to result in the possible use of televised game shows that enable home viewers to play games along with the
televisionbroadcast of the draw for lottery size prizes. In this respect, the play action of bingo is well known and more appealing
to players by reason that each game is played until winners are declared for each bingo prize offered. The Corporation is in a
unique position to license and supply these types of exciting interactive products to lotteries. These products are based upon the
patented game concepts of bingo and similar pattern recognition games of chance that are designed for play over a wide
geographic area rather than at one or more predetermined location |
