The Board of betinternet, the global on-line gaming group, is updating shareholders on two recent developments.
Global Coresports Limited (‘Coresports’)
betinternet has reached agreement to take a 22.5% stake in Coresports for a consideration of £250,000. Coresports was formed to exploit artificial intelligence technology to create a unique virtual reality gaming experience that can be played in real-time and on-demand in a multi-player format. The first application, which has a working title of ‘coreFootball’ is an online football management game and is already in an advanced form of development with a global launch anticipated in mid 2005. Following ‘coreFootball’, other sports team games are expected to be developed.
The system architecture has been developed over the last 3 years by six leading Cambridge academics, all of whom have extensive experience of start-up ventures, particularly in the area of biotechnology. Specifically, use has been made of the technology involved in drug design applications to simulate ‘real-time’ reactions by the virtual reality team players. Individuals within the academic team have backgrounds of playing and coaching soccer at professional and amateur levels and the team is therefore able to match the theoretical scenarios with practical experience.
betinternet has negotiated an exclusive six month agreement to exploit the wagering opportunities presented by the game. In addition, through its equity stake in Coresports, betinternet will benefit from the global licencing of the wagering and skill-based applications provided by ‘coreFootball’ and the successor team games as they are rolled out.
International Players’ Association (‘IPA’)
Following its statement of 27 January 2005, the board of betinternet has become aware that two officers of IPA are being investigated by New York regulatory authorities. Accordingly, activities with IPA, which has provided Euro Off-Track, a subsidiary of betinternet, with player referral services for approximately two years, have been suspended, pending further clarification.
The business introduced by IPA brought large turnover, but low margins (less than 2%). Turnover in the second half of the year is likely therefore to be less than in the first half, but the margin percentage is expected to improve. In addition, the Company is taking steps to accelerate and find alternative sources of income. Specifically, encouraging progress is being made towards the launch of a similar high volume activity which, if successful, would be managed entirely by the Company, not requiring the assistance of a third party, such as IPA, thus enhancing future returns. If agreement is reached on this new activity, the Company expects that it will be launched, in full co-operation with the US tracks, around the start of betinternet’s new financial year. A further statement will be made regarding this, once terms have been agreed.
Commenting today Paul Doona, Managing Director of betinternet said: “We are constantly seeking new income streams to diversify our business, and are especially pleased at the potential new income stream which an interest in Coresports will provide us with. This, together with a re-vamped high volume wagering activity, is anticipated, in a relatively short period of time, to replace the business lost by the suspension of the IPA activity.”