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How Web-based casinos are beating the odds -

Gun-toting local police also watch the premises 12 hours a day. So far, he’s collected $6 million to $7 million in license fees from the 32 online casinos and sports-betting sites he has sanctioned. That’s different from Amazon.com, where “one customer buys two books, and it may [take] two or three weeks to deliver,” added Weltman, a former lottery company manager.

Each of the 14 gambling executives interviewed by Computerworld claimed to be bringing a businessman’s order to the largely untested world of Internet wagering.

ST. Online gambling is a $535 million industry worldwide that’s expected to grow to $10 billion in three years, according to Datamonitor PLC, a market researcher in London.

“We gotta be fast. We’re MBAs.”

There’s just one problem: U.S. Nash

The four information technology people at Boss Casinos all are transplanted Swedes. JOHN’S, Antigua (IDG) — Here among the storefronts made of plywood

and painted ice-pop colors, there grows a strain of electronic commerce

that faces obstacles even Amazon.com couldn’t imagine. The company, which has headquarters in Sweden, employs 30 people locally, mostly in telephone support and risk analysis. servers, one for each of the gambling sites he runs for other companies.

More than 1,200 registered players placed $3.1 million worth of wagers in GalaxiWorld’s first month in action. We’re sticking to a marketing strategy and a business plan,” said Bowering, a 38-year-old former stock broker and financial consultant.

Starnet wouldn’t mind being a takeover candidate for land-based casinos: “Once the smoke clears, they will look at a company like us to get them online,” Bowering said.

Hiring programmers well-versed in Sun’s Java language is expensive but worth it, according to Weltman, 37.

For example, some companies have hired Big 5 accounting firms to sign off on their business plans and certify, as best they can, that the software is fair to players.

So gambling entrepreneurs from the U.S., Canada, the U.K., Israel and other countries have set down roots on Caribbean islands, particularly this one.

Hitting the jackpot

“Security we take quite seriously,” Bengtsson said.

And Amazon.com doesn’t have to worry about how to pay out $50,000 jackpots. Internet gambling

operators must gird their sites for multiple simultaneous users who pound

through rounds of blackjack and online roulette — at 40, 50 and 60 clicks

per minute. We’re the future. There are too many other choices out there for players,” he said.

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But as usual, the house is raking in the cash. Kitts, has spent $20 million in the past three years to set up its GalaxiWorld online casino, said Larry Weltman, chief financial officer at the company in Gibraltar, U.K.

“We’re pioneers.

COMPUTING

From…

Computerworld

March

4, 1999

Webposted at 8:08 am EDT

by Kim S.

“You play my game, and it’s a real live transaction taking place,” he said. Moreover, the U.S.

Nash is a Computerworld senior editor. Her E-mail address is kim_nash@cw.com.

In the new locale, Bengtsson plans to set up a locked and guarded server room in which to house six Sun Microsystems Inc. police action.

Murphy says he sees himself as something of a cybercop, enforcing licensing laws and chasing away lawbreakers. servers running Microsoft Corp.’s Windows NT process bettor payments. All staff is cleared by Interpol,” he said. Congress is expected to outlaw Internet casinos outright.

Boss Casinos moved into a snow-white, five-story building — one of the tallest in this capital city — after Hurricane Georges blew the roof off its former quarters in September. Page hits totaled 3.2 million. Bengtsson, a 30-year-old ex-blackjack dealer in banker’s clothes, runs Boss Casinos, which is one of the biggest online gambling operations here.

Last year, Starnet’s casinos group saw 6 million hits daily; the average spent per bettor visit was $200, he said. in San Diego, which runs three online casinos, like to point out that they’re publicly traded firms that must report detailed company data. An estimated 200 Web sites currently lure surfers to virtual slot machines, craps and other Las Vegas-style games. Operations were down for more than two days.

Even so, Starnet, which is based in Vancouver, B.C., is careful to do all bet-processing and money transactions on servers here to guard against Canadian and U.S. In fact, Antigua invites it. The credit card, passport and other data requested of players “never leaves this building.

Software development costs are the biggest expense for Internet gambling firms. Antigua is one of just a few countries to legalize online gambling.

They also must support many languages besides English to attract players in Europe and Asia, where online betting isn’t so legally iffy.

Managing risks — financial, legal and security — is what the business is all about.

Cost of doing business

Playing by the rules

Terry Bowering has paid his $100,000 annual license fee to Antigua and scoffs at the idea that online casino executives run a crooked business, hide from the law or fleece naive Internet users. It’s almost a bank.”

For Bowering, vice president of offshore operations at Starnet Communications International Inc., Internet gambling is a legitimate form of electronic commerce that lawmakers just don’t understand.

Perhaps most nettlesome are the financial transactions. GLC Ltd., which does business on the nearby island of St. English Harbour Casino Ltd., on the southern tip of the island, uses Deloitte & Touche LLP, while Boss Casinos employs PricewaterhouseCoopers.

“We don’t sit here drinking umbrella drinks,” said Peter Bengtsson, managing director of Boss Casinos Ltd. Wire transfers, credit cards, bank drafts, personal checks, electronic currency, even cash: They all are forms of payment acceptable at one gambling site or another. Inland isn’t profitable yet. (Boss Casinos charges maintenance fees and takes an additional cut of the revenue from each client.)

Meanwhile, Starnet and rival Inland Entertainment Corp. “We’re not typical bookies.

Starnet, for example, posted $1.8 million in sales for its most recent quarter and showed $248,000 in profit.

“Gambling provides revenue to the country but also employment and indirect economic benefits,” said Vere Murphy, commissioner of the Free Trade and Processing Zone, which licenses and regulates Internet gambling companies here. Instead of having to download fat software files before playing, users spend one to three minutes installing various Java applets, he said. “We tried to recruit from locals but they don’t have the skills,” Bengtsson said.

. “We deal with other people’s money and must have backup procedures and a fire-safe area and strict rules.

Two Compaq Computer Corp. police say online gambling is illegal under a 38-year-old law — and they’re starting to prosecute

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