Prov and All,
I came across this interview with Skinner that is from last November. This is a good introduction for all the new readers of this thread as well as a refresher for those of us who already own WINR. One thing that jumped out at me is Skinner's confidence that WINR would be operational by March of this year. This goes to show how tricky starting a new business is, especially own involving a new technology in a new industry. The rest of the information in here confirms what most of us already know.
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FDC CEO WINNERS INTERNET NETWORK> Sect: Business
Nov 21 1997 17:28
<Show: MSNBC BUSINESS VIDEO>
<Date: November 21, 1997>
<Tran: 112100cb.Y39>
<Type: INTERVIEW>
<Head: CEO WINNERS INTERNET NETWORK>
<Sect: Business>
<Byline: Christine Bushey>
<Guest: David Skinner >
<Spec: Business; Internet Industry; WINR (Nasdaq); SIC: 7379>
<Time: 00:00:00>
CHRISTINE BUSHEY, MSNBC BUSINESS VIDEO: We're pleased to be joined by
the CEO of Winners Internet (Company: Winners Internet Network,
Incorporated; Ticker: WINR; URL: N/A) David Skinner.
Thanks for joining us today.
DAVE SKINNER, CEO, WINNERS INTERNET NETWORK: Well, thank you.
BUSHEY: Now, you just signed an agreement this morning that is going to
bring the company into a whole new area in terms of being able to license the software.
Can you talk about that?
SKINNER: Yes, what we did this morning, we signed a contract with the
group TISS out of the Netherlands Antilles which is Telecommunications
Information Service Systems. What they do-they are licensed by the
government of Curacao, and they provide under their sub-licenses to
other individuals who can open their own individual casinos and/or sport
books.
What we did is we signed a contract with them, and with this contract,
it enables us to bring our proprietary software to them, which will be
the only and exclusive software they will use for a worldwide pay-out
systems for all of their gaming activities.
BUSHEY: And when are you expecting this all to begin?
SKINNER: We're expecting to actually be in full operation with them by
March 1st if not sooner. Our target date for us is actually by the end
of January, but we have a month leeway to work out all kinks and bugs to
make sure the system is fully operational.
BUSHEY: Give is an idea of what kind of - what this is going to mean in
terms of revenues for you.
SKINNER: In revenues, this is a huge, huge contract and bring revenues
into our corporation-on average right now we're looking at them to bring
approximately 12 to 15 million dollars into our corporation next year,
just with this one contract alone.
BUSHEY: Now, if we talk a little bit about the software in general, can
you explain how it works?
SKINNER: Yes, what it is, it's the only exclusive pay-out system for
gaming in the world. What we have done over the past 2 years is we have
developed the software with a Liechtenstein company which provides
banking software for banks worldwide. And where I got involved is I
spent the last 2 years on the island of Curacao and the island of Aruba.
I personally set up and founded a sports book on the island of Aruba and
in Curacao. And with that background, I took - I found out that with a
group of approximately 500 to 600 customers in an Internet - excuse me,
in a call-in sports book - you have - we had an average of about 6 to 8
employees which would actually handle the pay-outs for the customers
which was a 7 day a week job.
So, when you bring the Internet into the fact, you can have tens of
thousands of players playing around the world worldwide. You can have
players in Japan, in Hong Kong, in Germany, in London, in Jamaica, from
South America. And the problem came in is how do you pay all of these
customers worldwide? And that's where we found a need, and that's our
niche in the market-is we provide a service pay- out for all these
countries, for all these players worldwide to bring credibility to the
actual gaming sites and to the players.
BUSHEY: So, your strength is really in the pay-outs, from the banking
side.
SKINNER: Yes, we are not in the casino business. What we are is we act
as actually an agent for the player. We guarantee the player gets paid.
And with our system, normally it take anywhere between 7 to 10 days for a
player to get his money back in the mail. Usually, it's by a cashier's check or
a bank wire. What we do is we have a contract with the European Bank where
we are going to provide a debit card for our customers. With the debit card, the
business is opposed to a business, which means if you want to enter in to play a
casino site, youhave to put your money up forward.
What we do is then we issue you a debit card. And with that debit card,
the player, once he wins, he can - with the Winner's - only with the
Winner's system, he can do this. He can go in to the system to where he
won the money in the casino and request to be paid back by Winners which
can be done in a 24-hour period with a debit card which he can have
access to worldwide.
BUSHEY: So, in addition to the contract that you signed this morning,
who else are you going to be targeting in terms of licensing this
software?
SKINNER: Well, we just spend last weekend at a gaming symposium in
Washington, D.C. And there are many other countries in the world which
are stressing to bring the Internet to their play and to their
individuals. Another big group right now is the island of Australia/New
Zealand. They right now are the front runners along with the Dutch. And
we are working with different European governments to bring our process
to them, so they can all share in tax revenues and bring credibility to
their governments and to their players.
BUSHEY: As a player going on to any kind of a gaming site, how would I
know that Winners Internet Network is involved in terms of lending
credibility to the site?
SKINNER: What we do is we have a Website. It's www.winr.net, and a
player can come into there, and the player will register with us. And
the availability we have - if you are a player and you want to play, if
you want to go play 10 different casino sites, you must post up your
money with ten different casino sites. But with us, you just post up
your money one time. We hold your money, therefore you know your money
and your funds are guaranteed.
But with our system, we allow you go play multiple sites, which no one
else can do that. We let you go. We have 10 different casino sites on
our software. You can go pick and choose which you want to play without
having to post up each individual casino.
BUSHEY: Can you go beyond those ten sites?
SKINNER: Oh, yes. If we sign up 45 casinos, we will have all 45 casinos
on our site. It's kind of like that we've been called the AOL (Company:
America Online ; Ticker: AOL ; URL: aol.com of the gaming
industry. You pull up our Website and you will see all of our casinos
that participate, all the sports books that participate, and there'll be
multiples of each on - and you can pick and choose from those which you
would like to play with.
BUSHEY: Can you describe your relationship with the Bank of
Liechtenstein?
SKINNER: I really can't go in to great detail with that right now,
because the contracts are in final negotiations. But what we have with
them is they - we have a 10-year exclusive contract with them. They -
the Liechtenstein company has written the software which is used by
banks worldwide. We have a 10-year exclusive agreement with them to only
use their software, and they are the only - we are the proprietary
owners of that software.
And once we have that, once we have all the final negotiations with
that, we will be giving the bank name and the other company names.
BUSHEY: So, what are we going to be seeing you doing in terms of getting
players to come to your site, in terms of advertising promotions, etc.?
SKINNER: We are working right now and doing different shows such as
this. We are out on the Net. We also have a public relations firm which
is bringing our name and our product out to the public market. And with
that and with the contract we signed with TISS, there's literally
hundreds of thousands of players that hit their Website weekly and that
we will be a part of their Website now that we have signed the contract
with them.
BUSHEY: Describe for us your business model. As I understand, there are
two different streams of revenue.
SKINNER: Actually, we have three different streams of revenue. What it
is is our revenue comes in from initial deposits which the customer
makes.
SKINNER: Right now if a customer goes to deposit money in casino he has
to pay a fee for that. He doesn't pay the fee for that with us. The
casino actually picks up the fee and pays us that and we also have
revenue stream, which is the money going out back to the player.
We take a percentage of that from the casino. So it doesn't cost the
player anything to play with us, which right now if the player wins $500
in casino he wants to get his money back. He's going to have to pay for
the cashiers check, which can be anywhere from $25 to $50.
He's also got to pay for the mailing, which is anywhere from $50 for a
three day express or $35 for a FedEx (FDX) and the player does not pay
that with us. Our revenues for that come from the casino.
BUSHEY: So are you somewhat dependent on the players actually winning
money though?
SKINNER: Yes. The whole gaming industry is based on the players winning
money. If a player doesn't win then no one will be in business.
BUSHEY: Well,you have to pay to play, but, I mean, you're depending on
them actually winning because you're going to take a percentage of the
winnings.
SKINNER: Correct.
BUSHEY: OK, and they would...
SKINNER: Everything is based on volume. In an actual casino, a casino
only holds so much percent of what is wagered and the same thing with
sports betting. So if there is already a fixed figure that we know is
based on mass volume and the more volume you have we know what the
amount of winnings should be and what they will be.
BUSHEY: So what are you predicting going out let's say the next three
years in terms of revenues, since part of it is fixed?
SKINNER: That's why we say like in the next year just for this one
contract alone we're estimating 10, excuse me, between 12 and 15 million
and the more and more contracts we sign there's more and more revenue
coming into our company.
BUSHEY: Beyond just those contracts though do you have any expectations
of terms of revenues?
SKINNER: I'd say based on the next three years we're looking at
approximately going about 10 percent a year and with that our cost are
very minimal because everything is based with casinos, with the Internet
and with cyberspace, which is the demand for employees is virtually
none.
We have a small office with us in St. Augustine. We're also opening up
an office in Liechtenstein, which is all the players management and
accounting will be held for confidentiality and credibility to the
players.
BUSHEY: How are you financed right now as this contract hasn't -- won't
start until march?
SKINNER: We are self financing. We are raising money through IPs and
private investors.
BUSHEY: In terms of your stock, how do you get the word out to analyst
and increase the coverage that you have right now?
SKINNER: What we're doing, we have an investment relations firm, which
is providing information for us and putting our name out and putting us
in touch with different individuals in ways of advertising our name and
our company and putting what we have, which is an exclusive business and
which we virtually have no competition in the world.
No one else is providing or we believe can provide the services that we
have -- that we can offer to the gaming industry.
BUSHEY: That actually led me to the next question. In terms of the
competition what are you seeing?
SKINNER: None. There is none. The contract that we signed with the group
TISS out of the Netherlands--they have searched many revenues to find
ways to pay customers worldwide and they always came back to us. They
said we are the only group that has anything like this whatsoever in the
world and, in fact, as we left the meeting one of the principles called
us -- basically called us a genius. He said this is just genius and he
is an investment banker known around the world and he has tried many
different ways to put something like this together and they haven't been
able to do what we've done.
BUSHEY: What are the barriers to entry to this industry? I mean in order
for another company as Internet gaming grows. This seems like it's an
idea now it's out there and others might be coming in and...
SKINNER: Others can try and come in, but no one else can ever get into
Liechtenstein the way we have. We have an exclusive agreement that
actual government and from the banking systems there. So no one else can
come in with the same credibility that we have and with the same
safeguards that we have and the same unanimity that we have for our
players.
Other people, I assume, would come up and try a similar process, but
we've spent over the past two almost three years and literally had 15 years
of contacts over in Europe to get this done. So it is not a
very -- it seems like a simple process, but it is very time consuming
and very tedious and it's a very hard process to actually get down to
work.
BUSHEY: let's take a step back and look at the industry in general. Give
us an idea of the growth going forward.
SKINNER: Right now they are estimating that the Internet gaming industry
-- at first it came out and they said it was going to be a $10 billion
industry in the -- by the year 2000.
SKINNER: Last week at the Washington Symposium on Internet Gaming they
said it was going to be over a $25 billion industry by the year 2000.
Right now gaming is actually a $500 billion industry world wide and just
in the European market alone there's over $250 billion a year spent in
actual gaming and when our company was formed it was all based on the
premise that the United States would not be allowing gaming.
So our company was formed knowing the United States if it's eliminated
would not hurt us anyway because our target market is the rest of the
world.
BUSHEY: Actually that brings up a good point. What does the regulatory
environment look like now?
SKINNER: There is no regulatory environment. They are trying to work on
a regulatory environment where we bring to the table, which we were
recognized by the National Gaming Regulatory Authority, about three
weeks ago they contacted us and they had a meeting and they liked our
software. They like our product. They liked it because we're a third
party to this. We're not a casino. We're not a bank. We're a third party
managing the accounting information, which they are giving us their
letter of approval. BUSHEY: As CEO of the company, what do you bring to
the table?
SKINNER: I bring the vast gaming knowledge to the table, which is very
important. If I know how the casino industry works, I know how the
sports betting industry works, which is a vital key to this and the
other information is the banking information, which I've been in the tax
business for the past seven years, so I know the financial world also
and we bring that to the table with the European banking, which is, I
believe the finest banking in the world.
You merge these two tougher and we also have another principle in our
company, Mr. Charles Scott, who develops casino software. He's a
computer engineer and he's been developing casino software for some
time. So we bring all this knowledge to the table with the banking
knowledge that we have and the contacts we've had for the past 15 years
and we interface these worldwide.
BUSHEY: OK. Well, we're going to have to leave it there, but we thank
you for joining us today.
SKINNER: Thank you very much.
BUSHEY: We've been speaking with the CEO of Winners Internet Network,
David Skinner.
I'm Christine Bushey for MSNBC BUSINESS VIDEO.
END |
