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WWTS is Acquired by Australian Group; Merged Gaming Company to be Traded on ASE

Emerging industries are particularly sensitive to cyclical ups and downs, and the volatility of the offshore gaming industry, since it first started making inroads as a global activity to be reckoned with back in the early 1990s, provides a classic illustration of growing pains.

Despite its attractiveness to an enormous market of willing customers, early projections for unlimited offshore growth have been blunted by a small but vocal minority of anti-gaming zealots, and surprisingly by the downside of explosive growth made possible with the implementation of the Internet as a gaming medium.

U.S.-based opposition to gaming in the form of legislation essentially designed to eliminate one of the industry’s richest markets has been an ongoing issue. Of more recent vintage is the proliferation of online casinos and sportsbooks clamoring for customers, but lacking the gaming expertise, capitalization and marketing savvy to make a go of it unless the customers never win. Every slow paying or non-paying shop, along with those that simply go belly up, is an industry black eye that inhibits growth.

Despite that cautionary preamble, offshore sports betting is most emphatically a concept which has proven itself, and whose future still has humongous upside. The addition of virtual casinos into the mix only adds to the attractiveness of offshore gaming.

These rosy prospects are due in large part to the efforts of a few key companies who have persevered, and through sound business practices, quality customer service and reliability have established both themselves and the industry.

One of those leaders, Antigua-based World Wide Tele Sports (WWTS) has just become a publicly traded company through its acquisition by Consolidated Gaming Corporation Limited (CGC), an Australian company.

Created by Bill Scott, WWTS (www.betwwts.com) is one of the original offshore sportsbooks which grew and prospered.

As a pioneer betting organization, it earned the public's trust at a time when players were skeptical of posting up money with companies in the Caribbean. Under Scott's leadership, WWTS was not simply an offshore bookmaker, but also a company that operated like a corporation and added credibility to the industry.

We first spoke with Bill Scott in 1995, when we interviewed him for the premier national edition of Players' Guide to Las Vegas Sports Books. At that time, offshore handled action over the phone. He was optimistic, candid and willing to discuss in detail how he planned to grow the business, including the possibility of someday going public. Despite the phenomenal success WWTS enjoyed, Scott was never too busy to talk about the business, including its problems as they surfaced over the years.

One story we wrote had the headline,” WWTS, the Off Shore Book That Ate the Caribbean.” When we spoke with Scott about this transaction, and mentioned the old characterization, he joked that we had slightly underestimated his vision.

"My focus has always been to make WWTS a public company," Scott stressed. He looks beyond the U.S. market and sees a global business.

Under the merger, Scott will serve as chairman of WWTS, and still has a percentage of the publicly traded company "I’m not involved now nor do I plan to be in the day to day operation of the company," he asserted. "But if I can be of help by answering a question, I’m always available for that," he added.

Running day-to-day operations of the company will be Simon Noble, former CEO and co-founder of Intertops. It is something of a coup for CGC to have such strong managerial talent as Scott and Noble at the top. Noble spent 10 years with Intertops, including six years in Antigua where he was deeply immersed in all phases of off shore sports betting, especially the online gaming aspect. He has a thorough understanding of the nuances of the business and will also sit on the company’s board of directors.

We were happy to hear that Jessica Davis, who has served WWTS in a variety of executive capacities, would remain with the company as Chief Operating Officer. She earned her stripes helping WWTS navigate through some of the turbulence it encountered during its rise to the top.

According to papers filed with the Australian Stock Exchange Limited, WWTS services a customer base of more than 14,000 active clients. "The business primarily provides non-credit transactions and is focused on a number of sporting events."

We wondered why the business reference was to non-credit transactions rather than post-up clients. Noble explained that the term post up wasn't as common in Australia as in the U.S., whereas the term non-credit transactions eliminates any ambiguity.

Word of Scott's intention to sell had been rumored for quite some time. We asked Noble why the transaction had been pending for so long. "Originally there was going to be a merger between four different companies," he explained. "But last September, one of the partners wanted more money, so the original group split and went their separate ways.

But when the opportunity to merge WWTS and CGC presented itself, it was eagerly pursued by the concerned parties. "It is basically a reverse takeover," said Noble, noting that there were no illusions that it was an equal partnership.

"Our license to operate in Australia will serve as a springboard into the burgeoning Asian marketplace, where Bill has a lot of contacts," Noble pointed out. With the completion of the acquisition, CGC claims to be the third largest wagering company, by handle, listed on the Australian Stock Exchange (ASE).

There are many issues that make the sports wagering business a challenge. We asked Scott about two of them.

(1) Policy towards wiseguys, in which many books simply throw them out or don't permit them entry in the first place. Scott emphasized that WWTS books action of wiseguys, but makes them post up funds. "Otherwise, you’re allowing them an unlimited bankroll," he explained. "Remember, they get in line like everyone else, and only the first one gets the number".

(2) Problems in transferring funds, since credit cards and banks have virtually eliminated gaming as an area in which money can be sent to a company.

Scott said that only about 10 percent of WWTS's business came in through credit cards. This also greatly reduced the potential for fraud through chargebacks, he added.

We also asked Noble how WWTS would handle the increasingly ruthless competition for new business. He said WWTS would be competitive but emphasize benefits other than outrageous signup incentives and reload bonuses. "I don’t know how some of them stay in business," he said referring to shops that offer imprudent stimulants to bettors. "Of course, some of them don’t stay in business" he noted.

One item that needs to be acknowledged: prior to acquiring WWTS, CGC's license was terminated by the Northern Territory Racing Commission due to non payment of a disputed turnover tax and an outstanding customer account balance. Noble said that both issues have been resolved.

According to a letter from CGC to the ASE, "All existing customer requests for payment, and the disputed turnover tax, have been paid in full today."

With a solid citizen like WWTS going public, it is another positive chapter in the ongoing saga of the burgeoning offshore gaming industry.

The passing of the mantle of leadership from an icon like Bill Scott to a youthful veteran like Simon Noble is a healthy sign for a business that needs energetic, savvy and aggressive leaders.


Please send comments, questions, etc. to buzzdaly@aol.com.

 

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