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Non-Tech : Starnet (SNMM)Online gaming, sexsites, lottery, Sportsbook -- Ignore unavailable to you. Want to Upgrade?

To: THOMAS GOODRICH who wrote (1334)	1/3/1999 7:58:00 PM
From: Doug (Htfd,CT)	Read Replies (2) \| Respond to of 8858

Tom, you make an important distinction between a "licensee" and a "partner" under SNMM's business plan. From reading SNMM's filings, a license from SNMM to use the casino operating system (which would also call for an online gaming license from the domiciliary jurisdiction, such as Antigua) costs a five-figure sum paid to SNMM in advance (held as client funds until satisfactory installation). This software license enables the licensee to operate a casino using SNMM's operating system. We read that SNMM is signing two such licenses a month right now, and expects to continue to do so for a while. That five-figure license fee from each new casino provides SNMM with an important source of cash and capital for development, supplemented by the monthly share of the take. If its competitors are unable to get comparable fees, their cost of capital will be significantly higher, putting them at a competitive disadvantage. To become a "partner" no investment is required, and one merely acts as a marketer, not a casino operator. The marketer invests his/her own intellectual capital and sweat equity into promoting the casino, at no cost to the casino until it has a profit off of a particular bettor. Unless I misunderstand, the licensee pays SNMM a share of the take each month, and may also choose to use the SNMM software to reward its "partners" with shares of profits in return for the partners' efforts and creativity and contacts promoting the site. Because SNMM has its own Antigua casino, it also pays some "partners" for such promotion. As I understand it, SNMM's software automatically blocks would-be bettors coming from US or Canadian IP addresses, so that no "partner" would be rewarded for promoting use from US or Canada. I'm sure that there are artful techniques to "redirect" the apparent IP source of a bettor, but this blocking method helps to keep SNMM and its licensees on the legal side of the "straight face" test. I suspect that flooding US magazine subscribers with free software CDs and invitations to gamble from the US (as another poster suggested) would make it much harder for SNMM to pass that "straight face" test in front of stock analysts and the SEC. My view (however milquetoast it may seem to some) is that it is in SNMM's best interest NOT to have the United States of America and the Dominion of Canada as its legal adversaries, particularly when there is a whole world of bettors to serve outside of North America. Doug (no position in SNMM)