Volume 91, Issue 83

Friday, March 6, 1998

100 bottles of beer


Stake a gamble on an online casino

By Ron Tarter
Gazette Staff

The Internet domain name cybercasino.com is for sale – for the cool price of $150,000 US or $25,000 US per year. If this is any indication of the potential market size of online gaming then watch out Las Vegas.

PC Computing magazine estimates online gaming revenues will reach $20 billion US by the year 2000. Currently, the number of online gaming operations hovers around 150, but can be expected to double during the next few years.

Corporations which develop online gaming software and licence it out to eligible third-party license holders in exchange for a percentage of the casino's revenues have the most to gain in this market.

While Internet gaming laws are not clearly defined in North America, several nations licence and regulate online gambling. Many offshore islands in the Caribbean are a haven for legitimate online operations. Antigua alone is the home to more than 25 online gaming services taking international wagers on casino-style games, horse races, international lotteries and sports.

Although it is not legal to gamble from North America using offshore sites, the government can do little to effectively deter North Americans from participating in such games. The laws in most of these nations prohibit organizations from disclosing gaming profits and gains are not taxed.

So how can the small investor cash in on this lucrative market? Simple. Stake a gamble on a casino. Several online casinos are publicly traded in North American stock markets. One such corporation is Starnet Communications International, which trades on the NASDAQ over-the-counter bulletin board market under the symbol SNMM.

Starnet International is a well-diversified firm. Starnet Canada has profited from several successful 'adult' sites. Starnet U.S.A. in Seattle, Washington, provides network services to a developed corporate client base. Softec Systems Caribbean, a wholly owned subsidiary of Starnet, develops and licences online gaming software to eligible offshore licensees. World Gaming Incorporated, located in Antigua, is a fully functional online gaming site accepting real wagers on everything from horse races to pai-gow poker.

Perhaps the most promising subsidiary is Softec Systems Caribbean. Softec licenses its online gaming software to other license holders in the Caribbean. A basic software package includes a $100,00 US set up fee, plus anywhere from a 15 to 40 per cent royalty on the net profits the licensee earns.

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Copyright The Gazette 1998