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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: the dodger who wrote (3572)	8/10/2000 8:52:17 AM
From: LLLefty	Respond to of 6516

Dodger: Internet and telephone wagering takes its history from Alice in Wonderland. Briefly, TVG tested for about two or three years in Kentucky, where it is legal, and the results were excellent. It has since moved very slowly, covering its legal bases before it accepts subscribers in other states. Thus far, it has been able to comfortably (legally, that is) accept wagers as well only from Maryland, Oregon and, I believe, recently, Louisiana. With each state having its own laws governing off-track wagering, if they have at all, TVG has had to pick its way carefully amidst this jungle. (Another "closed circuit" internet racing firm, UBET, had been based in California and was fined for accepting bets from in-state residents.) Tulsa-based TVG works closely with the National Thoroughbred Racing Assn (NTRA) with the aim of increasing the dwindling racing audience with its live racing channel. The goal was to tie up all the major tracks with exclusive agreements. Great idea--but NTRA members and the major track owners are anything but unified. So, it's a mess. If I bet with TVG, for example, (I'm from MD) my account is handled out of Tulsa and my wager on a Saratoga race is processed in Oregon. If I'm a New Yorker, I can bet Saratoga at an off-track betting facilitiy but I can't do it via TVG. I can bet races at Gulfstream via simulcast if I am at the race track but I can't bet Gulfstream through TVG because the track opposes TVG exclusivity. While TVG threads its way through the web, it is bleeding losses--one estimate I've seen is about $30M a year--with little progress toward expanding its base. TVG's channel is available probably to some three million Dish subscribers (it is free) but I would guess that only a few thousand--of some 5-6 million regular horseplayers--use the service for wagering. This is far too small a base and unless it can crack California, Florida and New York, it's hard to see a viable future. footnote: And on top of that, even though I can use TVG since I'm a Marylander, it is available to me only for awkward telephone betting, not via internet or Dish, because TVG hasn't made the service available to Mac users.

To: the dodger who wrote (3572)	8/10/2000 11:16:02 AM
From: LLLefty	Respond to of 6516

Dodger: Sorry but I was so fascinated by your listing of tracks that I overlooked your good question of whether TVG's problems are unique to it. TVG has been extrordinarily cautious in interpreting the legal morass of on-line/telehone gambling--or "gaming" as the industry euphimistically calls it. There are now perhaps 200 or more so-called internet gambling sites, most of them, I would say, fly-by-nighters based in the Caribbean area. TVG has several serious competitors, all of which have run into legal problems. I mentioned UBET, a legitimate firm with about 14,000 members, which ran into trouble with the LA district attorney and, I believe, wound up moving out of California. There is something called Trackpower about which I know littlle but has done considerable advertising in racing publications. It was in the penny range the last time I looked. The biggest of all was a private venture run by Penn National, Ladbrokes (Britain's big betting shop operator) and the Ontario, Canada, Jockey Club. It handles Ubet's wagering for customers as well as its own subscribers. It,too, has run into legal difficulties. TVG has had no legal problems since it seeks to operate totally within Federal and the laws of the various states, few of which are crystal clear. Federal law, of course, bans interstate wagering transmission. But, still, it's going on all the time. If there is a crackdown, I would think TVG would be the last to be charged. Subscribers have to give their social security number, meaning of they hit a big one Uncle Sam would get his share right off the top. I think I've taken enough of the board's time on this little TVG pimple on GMST's otherwise bright and shining face.