On-line newsletter has interview with Barry Shafran. The newsletter writer uses the old exchange and ticker symbol (very big groan):
Subject:
INTERNET GAMING PERSPECTIVE~ March 16, 1999
Date:
Tue, 16 Mar 1999 22:11:34 EST
From:
BHLYND@aol.com
To:
mlist@igp.nu
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INTERNET GAMING PERSPECTIVE
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Tuesday, March 16, 1999
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WHAT'S IN THIS ISSUE:
1. Global Entertainment (GAMM) to appear on CNNfn.
2. Starnet (SNMM) soars: Reports $.04 EPS
3. Interview with Barry Shafran of Cryptologic
4. GGNC up $.53 on news of Price Waterhouse audit
**Global Entertainment (GAMM) will be featured on the show, Digital Jam,
on CNNfn next Thursday, March 25, at 7:30PM. Featured that night will be
an overview of their up and coming company and Global's software. Don't
miss it!
**Starnet (SNMM) has seen its stock go from $4 a share to an incredible $11.93
per share since last week. Starnet released its earnings that show revenues
for
the third quarter totaling $2,665,559. An increase of 228.2% over the same
period last year of revenues of $812,177. The latest revenues boasted an
increase of 49.6% over the previous quarter before this!
Starnet's Earnings per share (EPS) for the third quarter were $.04, compared
To $.01 for the preceding quarter. The same quarter last year reported a loss
Of $.03 per share.
Starnet closed today at $11.93, up an incredible $2.43 per share (25.65%), on
Volume of 2,541,900. We have been touting Starnet for a long, long time and
Believe that this is only the beginning for this great company. Internet
stocks that
are yet to show a profit have traded in the hundreds of dollars per share.
Starnet
has already shown earnings, and there is no reason to doubt that it should
prove
to be a winning Internet Stock very soon! NO REASON! Let's go Starnet!
Last week, IGP interviewed Barry Shafran, Director of Business Development
for Cryptologic, Inc. which is a Canadian based publicly owned company.
It trades on the Canadian Dealing Network (CDN) under the symbol CRYP.
CryptoLogic is one of the forerunners of the Internet Gaming Industry. They
Develop proprietary Internet applications that utilize real-time crytographic
Technology that has been developed by the company. Due the size of this
issue of IGP, we will feature a full report on Cryptologic in a later issue
that
we hope to have out by weeks end. For now, here is the interview with
Barry Shafran as he shares his thoughts and insights into the Internet Gaming
Industry.
Q. There are many experts making estimates as to the size of the Internet
Gaming industry within the next 5 years. Some say it will be a 10 Billion-
dollar industry, some says a 20 Billion-dollar industry while others go on a
limb and say a 100 Billion-dollar industry. What do you feel is an accurate
estimate- based upon your experience and standing within this industry?
A.. We are comfortable with the $20 billion estimate of Bear Stearns for the
year 2000, while recognizing that such estimates are difficult at best.
Q. One of the most important issues at hand in determining the future of
Internet Gaming is the legal issue. Many countries are embracing Internet
Gaming and foresee the tremendous revenues that can be made. Others are
concerned with the moral aspects with regard to underage gambling as well as
those becoming gambling addicts due to the availability of gambling on the
web. What are your views concerning these and other legislative issues, and
do you believe that Internet Gaming will one day be legal in the United
States?
Also, what other first-world countries do you foresee legalizing Internet
Gaming?
A. We believe, as do many others, that the day will come when Internet
Gaming will be legal and regulated, including in the United States. In fact
we are ardent supporters of regulation. The road map to arriving at that
point however, is extremely difficult to foresee. The sheer critical mass
of the Internet and its lack of borders makes this an eventuality, we
believe. Add to this the fact that 48 States in the U.S. allow some form of
wagering and that approximately 26 states have casino gambling, and it seems
difficult to imagine a different outcome, in the long run.
A commitment to, and continued development of, a system that is highly
effective in ensuring that there is no "underage" gambling is an important
aspect of the current operations of Cryptologic's licensees (through our
subsidiary www.IOLL.com), and of the evolution to regulation in the United
States. As in land based casinos, all operators of casinos have an
obligation to address the issue of problem gamblers and to do what can be
done to block, limit or control their activities.
We have heard "rumors" of other first world countries, other than Australia
of which most people are aware, considering licensing, but we do not know
first hand of the truthfulness of these rumors.
Q. At the present time, most of the people who regularly gamble say that
they are "hesitant" to place wagers over the Internet. Due to some
unscrupulous
operators that have failed to pay out on their losses, there is a credibility
problem that exists- removing confidence from gamblers that Internet Gaming
is a new, safe alternative to traveling to an actual casino. As one of the
pioneers of this industry, what kind of accountability system and safeguards
does Cryptologic offer to your clients, and what measures are the industry
taking to alleviate this concern?
A. This often heard concern about game fairness is in many ways related to
the issue of regulation. In the absence of regulation, players rely on their
actual experiences to determine when and where they are actually being
treated fairly. Our licensees utilize a random number generator that is
programmed in accordance with the New Jersey Gaming Commission's standards
and odds, and the licensees do NOT have access to it. Therefore IOLL's(our
subsidiary)licensees can only offer fair games. Furthermore their ecash
provider facilitates prompt payment, and not the actual operator, therefore
payment is handled by professionals that are separate from the casino
operators themselves. Lastly statistical results are monitored regularly to
ensure that game fairness is always maintained.
As you are aware the IGC has a Seal of Compliance which is a voluntary "code
of conduct". We are not aware of any other process for game fairness at
present, other than Australia's stated intention to audit game fairness as
part of their licensing process and administration.
Q. Presently, there are over 200 Internet Gaming companies in operation on
the web. Not all are publicly owned, but some of those that are have been
accused of "hyping" their press releases and not addressing the questions and
concerns of both shareholders and prospective investors. Furthermore, few are
fully
reporting and thus difficult to gage as a safe and credible long-term
investment. Because those that read this publication are targeted investors
within this industry, and have suffered the result of some of those
less-than- safe investments, please give our readers a little description of
the
investment opportunity that you feel your company affords, as well as where
you see your company headed as this industry grows.
A. Firstly, CryptoLogic does not issue regular pronouncements or press
releases regarding total bet information, which is what many of the other
"Internet Gaming" companies often do, thus creating the less than
appropriate "hype" you refer to. As we are software developers and our
subsidiary is a licensing company, we feel this is not appropriate.
Furthermore an examination of land based casino operators will show that
this is not the type of information they disseminate in this way, either.
As to where CrytpoLogic is headed:
We currently have in excess of U.S.$20 million on our balance sheet and
world leading software now in its third version, out in the marketplace for
our licensees to utilize. In fact we noted the press release of a competitor
last week announcing that their new software would offer the EXACT
functionality that our new software (now 5 months old) offers. Imitation is
the truest form of flattery, and we look forward to continuing to lead the
market with the best gaming software in the world...version 4 is already in
the early stages, and we have proven over these last three years that we can
continuously lead the innovation in this industry.
Our ecash software is a truly remarkable product that has processed more
than $1 billion and enjoys an extremely efficient cost structure and
flexibility. We are actively pursuing development of this application to an
even wider functionality and application.
We are utilizing our very talented web development and financial resources
to expand our Internet presence. Our recent acquisition of Gamesmania
(www.gamesmania.com)is the second step in this process, and follows the
investment we made in a third party credit card processor, in December.
Gamesmania has over 3,000,000 visits per month. The credit card processor
provides services to a great many on line merchants, and offers a great
platform for our ecash products.
So, we believe that CryptoLogic is in a truly unique position. We are one of
the very few Internet companies that is profitable, we have incredible
development talent equal to anyone's, we have financial resources that allow
us to take advantage of opportunities as we encounter them, and we have
visionary senior management that has already demonstrated the ability to
identify and capitalize on growth opportunities. From a staff of three to
what is now sixty, we are all very optimistic about our future.
Q. Should Internet Gaming be banned in the U.S., what effect do you feel it
will have on the future Investment potential that exists? Until there is some
type of regulation in the U.S. regarding Internet Gaming, do you feel that
there are enough markets around the world to offset revenues that would have
been otherwise made in the U.S.?
A. It would be inaccurate to suggest that a U.S. ban on Internet Gaming
would have no impact on investments in this industry. Several of our
licensees do not now accept wagers from Americans as a core strategy of
their operations, so in this regard we have some mitigation on the effect of
a U.S. ban. In addition we have our ecash applications and Gamesmania that
are two products that have no dependence on the regulatory environment in
the United States as it relates to Internet Gaming, and we continue to look
at additional opportunities.
While internet usage statistics show that Americans make up the largest
single user group by country, the rate of penetration in non US usage is
accelerating. There is increasing demand for foreign language content, and
the applications continue to get broader in appeal and offerings. So the
long term future is excellent, even in the event of a U.S. ban. We are still
facing a doubling of growth in users in the next 18 months at least, and
this means, by any standards, massive growth in the market.
Q. Because you have been so kind as to take this time to answer our
questions, please feel free to use this time to expound upon the opportunity
for investors that exists with Cryptologic- as well as any other comments
you would like to offer regarding the industry as a whole.
A. We feel that in many ways we are a true Canadian success story - world
leaders in a high technology field, but largely unknown in comparison to our
success. We are very optimistic about the future, and encourage anyone who
would like investor information, to contact us either at 416-545-1455, or by
contacting Investor Information at our web site (soon to be updated!)
www.cryptologic.com. We are traded on the Toronto Stock Exchange under the
symbol: CRY
Barry Shafran
Director Of Business Development
CryptoLogic Inc.
Toronto, Canada
416-545-1455
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GGNC Press release-
GGNC Sports Book and Internet Casino Show a
Continuing Rise in Combined On-Line Wagering Revenues
The Price Waterhouse audit of the Second Acquisition of an
established, operating and profitable operation is expected to
finish within this month......
LAS VEGAS--(BUSINESS WIRE)--March 16, 1999-- GIC Global Intertainment
Corporation -- (OTC BB:GGNC) (located and licensed in the Commonwealth of
Dominica), today announced that its month-over-month Internet casino wagering
revenues increased last month over the previous month.
The combined February 1999 volume of transactions placed through the Company's
on-line Sports Book at www.cyberbetz.com/index2.html (US $2,346,879) and its
casino at www.cyberbetz.com (US $5,538,572) was a total of US $7,885,451,
compared to US $6.7 million for January. Cyberbetz recently emailed to their
shareholder list an update announcing the Sports Book's availability on the
internet.
James Chu, president and CEO of GGNC, stated, ''We are excited about the
continuous growth that is taking place on our site and with our aggressive
advertising campaign in Asia kicking off this month in all major television
networks (including cable & satellite networks) across Asia to raise awareness
of www.cyberbetz.com. We can expect continuous exponential growth trend and
daily traffic increase for our site during this year. The Company is
progressing as planned and the results of the operation are better than
expected. Regarding the acquisition of the second casino and sports book
operation that currently has been in business for a 3-year period is now
producing U.S. $100 million in wagering revenues. The Company is also moving
forward as planned with Price Waterhouse, (the world's largest accountant
firm) expected to finish their audit of this operation within this month. Once
this acquisition is completed, it will give our Company an established and
profitable second operation with excellent goodwill immediately, which means
an immediate dramatic increase of wagering revenues and healthier bottom line
for the Company and our existing and future shareholders.''
*******************************The above is a company press release. This news
release may contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, and is subject to the safe harbor provisions of these sections.
Actual results may differ materially from the expectations and estimates of
GIC Global Intertainment Corporation****************
COMMENT~
As a result of that news, GGNC rose $.53 per share, up 22.07% for the day
on volume of 1,378,200 to close at $2.93 per share. This is long awaited good
news
to weary investors who have faithfully held their shares. As many know, GGNC's
credibility was tarnished somewhat by the daily release of news that many felt
"hyped" their stock price to over $6 a share the first week of December of
last year. The release of company news has wained to a normal amount, and
GGNC, having learned from this lesson, has been slow to release news. This is
a GOOD RELEASE; the kind that means something to investors. There is no doubt
that GGNC is a good aggressive company. If all continues, and their audit is
satisfactory, GGNC is still a great investment. However, don't be so quick to
buy it. It has developed a regular trading behavior. It bottoms out around
$2.40- $2.50- always to bounce back. Today was a great move, but lets wait to
see what happens the rest of the week. If you still own it. HOLD IT!
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THE INFORMATION CONTAINED WITHIN THIS REPORT IS BELIEVED TO BE RELIABLE,
HOWEVER NO GUARANTEES CAN BE MADE AS TO ITS ACCURACY. PLEASE CONSULT WITH A
LICENSED FINANCIAL ADVISOR BEFORE INVESTING INTO ANY OF THESE HIGHLY
SPECULATIVE STOCKS.
Until Next Time- HAPPY INVESTING!
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