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Gambling gets out of house: It's a U.S. site, but Americans must stay away
by Scott Van Voorhis and Doug Levy
Wednesday, June 5, 2002
Internet gambling fever could hit overdrive thanks to a Napster-style, bettor-to-bettor wagering system for World Cup Soccer fans launched yesterday by a Cambridge online gaming company.
With its WagerCity Web offering, Grand Virtual Inc. says it eliminates the role of the ``house'' to let sports enthusiasts and others with an itch to roll the dice bet against each other directly.
Nor is the system limited to World Cup soccer. Grand Virtual plans to start overseeing bettor-to-bettor wagering on the upcoming Tyson-Lewis prize fight and other marquee events as well.
Grand Virtual expects a multimillion-dollar revenue boost over the next few years. But that growth won't be coming from the U.S. market, where online gambling, except for a few exceptions, is illegal.
Rather, Grand Virtual expects to make money on legal betting action in the United Kingdom and other wagering hot spots throughout the world. And the company says it is poised to make a run at the U.S. Internet gaming market as well if various states eventually approve it as a legal market.
``It is eBay for betting,'' said Sebastian Sinclair, president of Christiansen Capital Advisors in New York.
Grand Virtual is betting on the World Cup and the Tyson-Lewis fight to draw hundreds of thousands of gamblers worldwide who are eager to bet against each other.
But Grand Virtual doesn't plan to make the bulk of its money running an online gaming service. Rather the company hopes the bettor-to-bettor action will act as a live demonstration that its system works - to help the company license its software to casinos and gaming companies.
With its software, companies in the gaming and entertainment business will be able to let gamblers bet against each other on just about anything, from the weather to major sporting events, said David Solomont, president of Grand Virtual.
``WagerCity gives people the only thing better than watching their team win - winning real money from the opposing team's fans,'' Solomont said.
However, growth in Internet gaming technology is sparking some concern among gambling critics.
Grand Virtual says it will make every effort to stop gamblers in the United States from using its system illegally. But skeptics question whether the company's screening system - which does not bar bettors logging on from anywhere - will be enough to dam a flood of eager American gamblers.
One gaming expert said the most effective way to stop Americans from using the Web site would be to bar them from logging on. By not doing so, it could be more difficult for Grand Virtual to weed them out later, said Jason Pawlina, an analyst with Chirstiansen Capital.
And gaming critics, such as Keith Whyte, executive director of the National Council on Problem Gambling, said they worry about the continued leaps in technology that make gambling an ever-present, 24-hour-a-day option.
``It is pretty easy to create a picture of a guy at 4 a.m in his underwear banging away at his computer,'' Whyte said.
But Solomont said Grand Virtual has a number of technological defenses it will employ to keep American bettors from using the system.
``We will get 99.99 percent of those people who are trying to get into there,'' Solomont said
by Scott Van Voorhis and Doug Levy
Wednesday, June 5, 2002
Internet gambling fever could hit overdrive thanks to a Napster-style, bettor-to-bettor wagering system for World Cup Soccer fans launched yesterday by a Cambridge online gaming company.
With its WagerCity Web offering, Grand Virtual Inc. says it eliminates the role of the ``house'' to let sports enthusiasts and others with an itch to roll the dice bet against each other directly.
Nor is the system limited to World Cup soccer. Grand Virtual plans to start overseeing bettor-to-bettor wagering on the upcoming Tyson-Lewis prize fight and other marquee events as well.
Grand Virtual expects a multimillion-dollar revenue boost over the next few years. But that growth won't be coming from the U.S. market, where online gambling, except for a few exceptions, is illegal.
Rather, Grand Virtual expects to make money on legal betting action in the United Kingdom and other wagering hot spots throughout the world. And the company says it is poised to make a run at the U.S. Internet gaming market as well if various states eventually approve it as a legal market.
``It is eBay for betting,'' said Sebastian Sinclair, president of Christiansen Capital Advisors in New York.
Grand Virtual is betting on the World Cup and the Tyson-Lewis fight to draw hundreds of thousands of gamblers worldwide who are eager to bet against each other.
But Grand Virtual doesn't plan to make the bulk of its money running an online gaming service. Rather the company hopes the bettor-to-bettor action will act as a live demonstration that its system works - to help the company license its software to casinos and gaming companies.
With its software, companies in the gaming and entertainment business will be able to let gamblers bet against each other on just about anything, from the weather to major sporting events, said David Solomont, president of Grand Virtual.
``WagerCity gives people the only thing better than watching their team win - winning real money from the opposing team's fans,'' Solomont said.
However, growth in Internet gaming technology is sparking some concern among gambling critics.
Grand Virtual says it will make every effort to stop gamblers in the United States from using its system illegally. But skeptics question whether the company's screening system - which does not bar bettors logging on from anywhere - will be enough to dam a flood of eager American gamblers.
One gaming expert said the most effective way to stop Americans from using the Web site would be to bar them from logging on. By not doing so, it could be more difficult for Grand Virtual to weed them out later, said Jason Pawlina, an analyst with Chirstiansen Capital.
And gaming critics, such as Keith Whyte, executive director of the National Council on Problem Gambling, said they worry about the continued leaps in technology that make gambling an ever-present, 24-hour-a-day option.
``It is pretty easy to create a picture of a guy at 4 a.m in his underwear banging away at his computer,'' Whyte said.
But Solomont said Grand Virtual has a number of technological defenses it will employ to keep American bettors from using the system.
``We will get 99.99 percent of those people who are trying to get into there,'' Solomont said
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