Very good update from the president....
stockhouse.ca
The formatting isn't exact here, you may want to go to the link to read it.......
GoldenGoals.com Ventures captured the market's imagination when it announced a 1-million British pound prize for its subsidiary's online soccer betting pool. The pool is up and running, though it remains to be seen how quickly it can build interest. Revenues are a mere trickle, but the Internet start-up says this is just the beginning. An as-yet undisclosed advertising deal with a free ISP in the UK will probably close within two to four weeks. In addition to developing and promoting its main betting site, the young company has inked a contract for a designer version of the game with giant British Sky Broadcasting, and is in talks to develop more designer versions for other companies.
Toronto, ONT, November 12 /SHfn/ -- On September 1, 1999, shares of GoldenGoals.com Ventures [V.BET], which through a subsidiary operates an online English soccer pool betting company, started trading on the VSE. A few months earlier, it was just another ailing mining issue called Contiki Resources. The new incarnation whipped up a frenzied following, and soon after its debut, the stock hit a high of $2.74, on raging volume. The idea of a 1-million British pound payout to winning players fed the imaginations of Internet hungry investors. But the chart shows a precipitous, razor-sharp drop to the $1 level, where the stock now hovers slightly below. Neil Briggs, Director and spokesman for the company, blames the excitement that initially pumped up the stock, for its poor performance lately. "A little bit of over enthusiasm in the early days," he says. Also, he points out, the deal with Sky Sports took so long to sign and seal, shareholders became frustrated.
Now, at least one of those hindrances has disappeared. The Sky Sports contract was officially inked and delivered Nov. 8. The market immediately showed approval, pushing BET up 25 cents, on more than a million shares traded in the session. Within two to four weeks, another major deal with a UK-based free ISP is expected to be announced, and the company is in talks with more. Will the coming contracts help BET regain its initial momentum? Or are investors waiting for further proof of its deal-making, revenue-generating ability?
"...Sky Sports broadcasts five sports channels to subscribers across the UK, and its web site is among the most popular in the region, with 16 million hits a month."
The partnership with British Sky Broadcasting, through the Sky Sports division, is a major boon to the company. Launched in 1991, Sky Sports broadcasts five sports channels to subscribers across the UK, and its web site is among the most popular in the region, with 16 million hits a month. Alternative Card Company (ACC), GoldenGoals.com Ventures' wholly-owned subsidiary, developed a designer version of the GoldenGoals game tailored specifically for Sky Sports.
The GoldenGoals pool is simple compared with the other pool betting systems in the UK. There is one pool per week. Each game consists of seven F.A. Premier League matches. For $3 per game, there is the chance to win 1 million pounds (close to $2.4 million CDN) if all seven guesses are correct. If there is no perfect game, the player with the most correct predictions wins only what is in the pool. The designer version, named Premier5-Pools, has only five matches to predict, and it costs $1.50 each game. (There is no one-million-pound prize.) The pool will have its own site, Premier5.com, and is set to launch November 15. Using the tag line "Premier5-Pools sponsored by Sky Sports," the site will be promoted and marketed through Sky Sports' media platforms.
"They think they're going to double the hits on their site in the next year with a bunch of different promotions," says Briggs, "and this is one of them." While Sky Sports hopes to attract more eyeballs with the pools betting site, GoldenGoals.com Ventures stands to benefit from the cross branding ("They have a huge audience and it will get our name better known."), as well as from sharing of advertising revenues. According to Briggs, the company is in discussion with several companies now to create more designer versions of the game, but he will only broadly indicate that it is either in the betting world or soccer realm.
The company is definitely aiming to score more contracts. Briggs briefly describes a new deal that will involve one of the free Internet Service Providers in the UK, to support the GoldenGoals.com site through an ad revenue sharing initiative. "We're talking with more than one," he says. "We're close to deals with them." But he expects one to be finalized within two to four weeks. It is difficult to guess how much the deal could potentially be worth because "it really depends on how many people play the game." Briggs admits that it will not be on the same level as the Sky Sports contract coup. But he stresses that the game is not reliant on ad revenue. "We purposely built it so we can make a profit without advertising, and anything we get from advertising would be gravy."
The GoldenGoals.com site is attracting more than 100,000 hits a month, but is only fielding a few hundred bets a week, at $3 a pop. Briggs says the average user will play two or three games, and the number of players is slowly growing, but as the company's only revenue stream to date, this plainly does not add up to much. To draw in more players and increase revenues, the company must throw major dollars at an ad campaign. "Marketing is going to be key," agrees Briggs. "Now that we're sure everything is working, we're at a marketing point." But BET needs the players and revenue to fund a marketing initiative. Enter the financing. A few months back, the company did raise about half a million dollars through a private placement. Of that, $350,000 is already in the pockets of the men behind ACC-the guys who developed the game. In the near future, Briggs says the company will probably do another offering, possibly a private placement, to raise around $1 or $2 million.
A cash infusion could also come from a number of large players in the UK market currently in talks with the company, says Briggs. "They're prepared to put money into the company provided it's put into advertising." Right now, the only advertising driving in players is a link on four soccer sites. As soon as the Premier5 site is up and running smoothly, BET will concentrate more fully on building traffic to GoldenGoals.com. Briggs is reassuringly certain that all the bugs have been worked out of the game, and is ready for promotion.
"We purposely built it so we can make a profit without advertising, and anything we get from advertising would be gravy."
Results from the first quarter, ended October 31, will show the performance of the new operations. (Though, the company's mining property will still incongruously loom among the gaming assets, with a buyer yet to be found.) Briggs says it will be a very different financial portrait from its previous reports, but the revamped company is still young, freshly out of its beta testing stage, and entering a growth phase. Despite softness in revenues, BET will probably have a relatively healthy balance sheet for its first quarter. As Briggs points out, the company's burn rate is low compared with other Internet start-ups. Basically, GoldenGoals.com Ventures takes in approximately 20% of revenues, with more than half to come from Premier5. The remainder is dispersed among the various elements essential to the company's operations. This includes the web site operators, Sky Sports, the games' winners, the accountants, the credit card company--the list goes on. "Everybody gets a percentage," laughs Briggs magnanimously. This revenue sharing means that GoldenGoals.com Ventures will, at the end of the day, get a piece of something, and its only expenses are corporate ones. "We're not under big financial pressure," Briggs says.
Neither is he feeling pressure on the competition front. The UK could be considered a haven for sports betting, where sportsbooks are legal and aboveboard, and have practically been an institution for the past 70 years. There are regulated betting shops, and even the Scottish boys clubs have pool licenses. But GoldenGoals.com Ventures doesn't see that much direct competition, yet. There are plenty of online sports betting sites, but Briggs, who is originally from England, says most of the venues, such as the venerable British gaming giant William Hill, only offer fixed odds betting. The paper pools offered in brick and mortar stores are complicated, and only the older segment of the population still play them. GoldenGoals.com Ventures is targeting a younger demographic, and is hoping to win back some of the players who abandoned sports pools for the national lottery, which siphoned off half the pool gambling industry.
There are a bunch of offshore betting pools cropping up, based in the Channel Islands, where there are no taxes to pass on to the player. But Briggs isn't worried about growing competition on that end either. "We think people in the UK are nervous about betting online," he says. "We've tried to set up our game to alleviate concerns by being fully registered there." First among the worries, Briggs claims, is the difficulty in determining if one's really won, and if the cash payout will be realized. With pools betting, the outcomes of the matches are published in the newspaper, and GoldenGoals.com has taken out insurance to cover the 1 million pound prize. "Ultimately, we think it's the ones that are regulated that will survive," says Briggs.
While the company is fully regulated in the UK, the online gaming industry could be in for some tough times ahead as various US bills are brought to outlaw any online gaming by American residents. There are many gray areas that have yet to be defined in legal terms, but Briggs claims GoldenGoals.com Ventures is adhering as best it knows how to the murky rules.
The company's wholly owned subsidiary, ACC, is based in the UK and handles all the operations. The servers are based in Germany, and the raw data from the site is collected and sent to a firm of chartered accountants in the UK each week. The accountants then analyze the information, and determine the winners and the payouts. All cash is filtered through the UK, and GoldenGoal.com Ventures' Vancouver office remains strictly a corporate entity. GoldenGoal.com Ventures doesn't market the game, only the company. While the gaming software was developed by ACC, the company employs a Canadian company to provide the e-commerce transaction capability. For competitive reasons, Briggs refuses to name the Canadian company, but he explains that its servers are based in Bermuda, and all transaction information is forwarded from there to the UK.
"There are many gray areas that have yet to be defined in legal terms, but Briggs claims GoldenGoals.com Ventures is adhering as best it knows how to the murky rules. "
He is attuned to the stigma surrounding the industry. "It's a real perception that people have, and we have to deal with it," he says. But as proof of BET's integrity and legality, he points to the deal with Sky Sports, where serious due diligence was one of the reasons for the delay in closing.
Very little of the company's current business comes from the US, possibly lessening its leverage to the whims of the American legal system. Less than 20% of the company's revenue originates outside the UK, and it expects it to stay that way for a while, although it would like to ultimately expand to the Far East and South America. Briggs doesn't see big opportunities in the US, unless BET starts to offer betting on sports more widely embraced in North America. "We're going to grow the soccer, while looking at other sports," he says.
Right now, the European market is BET's focus, and where it believes it could grow a strong investor base. "We have started looking at the possibility of European listings," Briggs says. "If that's where most of the market for the product is, maybe it makes sense to be there." But that's in the future. "In the near term, we'll be in Vancouver." He says a US listing is not on the company's agenda.
In the UK, "the beautiful game" is bigger than blood pudding, and the soccer betting market is estimated at more than $1.2 billion annually. GoldenGoals.com Ventures may not have much of that market right now, but it's wagering that an imminent boom in UK Internet use will kick-start online pools betting. "Over the next two or three years," says Briggs, "Internet growth in the UK is going to be huge." The UK has been slow to go wired because local phone use is still billed by the minute. Briggs expects fixed rate phone bills to arrive "pretty soon", and the proliferation of free ISPs are now helping to offset the cost. "Penetration is low, but increasing," he says.
If you ask the typical North American what the most popular sport in the world is, he'd probably say baseball. But, as the majority of the globe's inhabitants know, the answer is soccer, or as it is more commonly called, football. In fact, more stadium brawls and riots have probably been caused in the name of football rivalry than any other sporting event. GoldenGoals.com Ventures is staking its success on the wellspring of this emotion, and Briggs is intent on capitalizing on what he sees as the future for soccer pools. "We're not in this for the short term," he says confidently, "we're in this for the long haul."
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