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Technology Stocks : Sportsline (SPLN) -- Ignore unavailable to you. Want to Upgrade?

To: James Fulop who wrote (637)	3/26/1999 2:45:00 PM
From: Magic212	Read Replies (2) \| Respond to of 858

Update: CBS to sever ties to Sportsbook By Tom Farrey ESPN.com Embarrassed by its link to a sports gambling website through its Internet partner, CBS television said Friday that it has received assurances from Sportsline USA that the Internet company will sell off its ownership of a web address used by an offshore sports book. "CBS Sports was unaware of Sportsline USA's relationship with Sportsbook.com," CBS said in a press release. "The network has taken immediate action. Sportsline USA has assured CBS Sports that the URL (uniform resource locator) currently leased to sportsbook.com will be sold." The company added, "CBS Sports will continue to support the NCAA's agressive anti-gambling efforts." The announcement comes in response to an ESPN.com report Thursday that Sportsline USA, which is 18-percent owned by CBS, makes money from Sportsbook.com, a popular web site headquartered in the Caribbean that takes bets on the NCAA Tournament. CBS television is the broadcast partner to the NCAA for the men's basketball tournament. Sportsline USA, based in Fort Lauderdale, Fla., also produces CBS Sportsline, owns the web address to Sportsbook.com. Michael Levy, Sportsline USA president, confirmed that the company leases that address out to the offshore sportsbook for a fixed fee. Levy had said he "can't remember" if he told his CBS, his corporate partner, about the relationship. NCAA executive director Cedric Dempsey said he learned of the year-old relationship in the past month. He said he had expressed concern about the relationship with CBS. "At this point, there's not much we can use other than persuasion," Dempsey said prior to the CBS announcement. "Maybe in the next go-round in our (television) negotiations we will be able to be a little stronger on that issue." Stung by point-shaving and gambling scandals at several colleges in recent years, the NCAA has identified online gambling as a direct threat to the integrity of its games. On Tuesday, the organization testified in favor of a U.S. Senate bill that would give law enforcement officials more tools to block Internet access to gambling sites. The Sportsbook.com address is registered to Sportsline USA but the gambling operation is run by Global Internet, a company based on Margarita Island, a territory belonging to Venezuela. Patrick Callahan, a 28-year-old Canadian who manages the site for Global Internet, said the company has about 50,000 customers and has become "very profitable." Levy declined to say how much money Sportsline USA gets from Sportsbook.com other than to say, "It's worth our while or we wouldn't go for it." No mention is made of Sportsbook.com, or the revenues it generates from the lease, in the company's most recent public financial statement. "We make money on it," Levy said. "It's a nice URL (universal resource locator)." Said Callahan: "A lot of people don't think the URL matters, but a couple of them do -- like books.com and computers.com." Sportsbook.com falls into that valuable category because it stands out as an obvious destination in the online gambling world, where more than 100 sportsbooks are now in business. Levy said he has received offers to buy the address but rejected them because over the long run he believes he can make more money by leasing it. Prior to the ESPN.com report, he said he has no plans to get rid of the web address, although Callahan said his company will make another bid for it in the next six months. "That's really when it becomes profitable to them," Callahan said. Beyond the lease agreement, Sportsbook.com uses some Sportsline USA personnel and equipment to manage the site. The gambling site also is a major advertiser on Vegas Insider, another Sportsline USA property and a guide for sports bettors. Sportsbook.com also uses design elements that are similar to Vegas Insider -- to better create a co-branded look, Callahan said. Dempsey said the NCAA is concerned about all media companies' relationships to gambling. ESPN, for instance, owns a company called SportsTicker that sells its news updates to oddsmaker Jim Feist. Feist repackages that news with his own information, including betting lines, and sells it through his own ticker service. Unlike Sportsline USA, however, SportsTicker receives no money from an offshore sportsbook. "I have been a little surprised that they (Sportsline-Sportsbook.com) have that sort of relationship," said Sue Schneider, chairman of the Interactive Gaming Council. "All you need is one hyperactive attorney general and it's a risky business."