STARNET - "At current levels, this could be an explosive stock ... - 500 Beiträge pro Seite

[investor_007]

INVESTools Tech Advisory, January 24-28, 2000
By John Brobst, Editorial Director, INVESTools.com

Three Internet Gambles (SNMM)

Every year, Dick Davis Digest asks investment newsletter
editors for their top pick of the coming year. This year`s
list contains three highly speculative Internet plays for the
online gambler. For instance, Donald Gloisten, Editor of the
Gloisten Investment Letter, is making a substantial bet on
Starnet Communications International (SNMM). Starnet develops,
produces and manages Internet technologies for the gambling
arena with a focus on horse racing and casino-style gaming.

"This stock is not for the faint at heart," Gloisten says.
Last year, shares rocketed from $2 to $29 but fell back to $2.
Gloisten cites "an endless series of problems, some based on
its seamy origins." Starnet was a early leader in Internet
adult entertainment, but Gloisten says Starnet sold off that
business "and the people associated with it have left the
company." He adds that the company "is still awaiting the
outcome of a Royal Canadian Mounties raid last year." Also
hanging over Starnet`s head is a class action lawsuit filed
by shareholders who were burned by the stock`s collapse in
1999.

"In spite of all these problems, the company has managed to
restructure," Gloisten says. He notes that revenues grew 377%
last quarter, and the firm now boasts six consecutive quarters
of growing revenues. "At current levels, this could be an
explosive stock if and when they get the numerous monkeys off
their corporate back," Gloisten says. He holds a substantial
position in Starnet and maintains a buy recommendation.

For more on Donald Gloisten`s advice see "Top Picks Special
Report," January 17, 2000, Dick Davis Digest. The digest culls
through over 400 leading investment publications and
highlights compelling and promising opportunities for growth.
Each issue also features top advisors giving the broad market
direction in non-technical language and a highlighted special
situation or outstanding group of stocks.

[investor_007]

By: PLG1
Reply To: None Wednesday, 26 Jan 2000 at 10:49 AM EST
Post # of 179911


Comments from John Dutton at Investrend.com...

RESEARCH NOTE
STARNET

(NASD BB: SNMM)

January 5, 2000


Starnet announced today it had concluded the first step to launching its thoroughbred racing pari-mutuel systems. Tote services will be provided by AmTote of Hunt Valley, MD.

The full system, minus the wagering module, will be available worldwide for customer familiarization within 60 days. The simulcast will include live video/audio, handicapping information, weather, news, and chat functionality. Full text of the release can be read at

http://biz.yahoo.com/bw/000105/starnet_co_1.html

This is a very significant roll out for SNMM, representing the addition of a major gaming venue, which should begin to significantly distinguish the Company from other industry competitors. As importantly, a successful roll out should help the Company to resume its momentum.

[M5_2011]

Und was sagen uns diese Zeilen ?

SNMM ist eine 2000% + x Chance für dieses Jahr.

PS: Nicht dass dann jemand jammert er hätte von dieser Chance nichts gewusst.

[Offi]

Alle News zu SNMM gibt es im OTC:BB Thread! Wird täglich aktualisiert!

Offi

[investor_007]

EXECUTIVE PROFILE
"Starnet Comes to SoftNetGaming"

An Interview With Meldon Ellis, CEO

By Laura Parker


--------------------------------------------------------------------------------


On Friday, January 14, 2000, president and CEO of Starnet Communications International, Meldon Ellis, visited the offices of SoftNetGaming, Inc. in Miami, Florida. In spite of a hectic schedule, Mr. Ellis was approachable and warm, and graciously agreed to an interview with editor-in-chief, Laura Parker.
Mr. Ellis, first of all, I want to thank you for the opportunity to speak with you this afternoon. I know you’ve had quite a busy day. You can be sure that we’re all happy to have you as our guest here at SoftNetGaming Publications in Miami.

I’m very pleased to be here. Thanks for inviting me.

You’ve been CEO of Starnet for only a few months now. What has been your biggest challenge so far?

Well, of course, the initial challenge has been dealing with the legal issues surrounding the investigation in Canada. And, of course, as a lawyer I was quite involved. Having already resolved a lot of those issues, my next project was restructuring Starnet in such a way as to avoid that kind of situation from happening again. That has involved relocating a lot of resources that were in Vancouver to Antigua. As you know, our head office now is in Antigua.

I understand that many of the peripheral support functions that were in Vancouver have been moved out of Canada.

Yes, that’s right. Our core gaming servers always were in Antigua, and we have set up our business based on the laws of the government of Antigua, which is a licensing jurisdiction where Internet gaming is completely legal. We have our servers and our EFS [electronic funds transfer] system located there. However, we did have a number of peripheral support services located in Canada.

Was that the ‘gray area’ as far as Canada was concerned?

Yes, I think that’s true. We had Customer Support there, so that phones did terminate in Vancouver. But, of course, that’s not gaming. That’s peripheral support of a financial system. My view is that if it’s possible to move an activity out of a gray area into a black-and-white situation, then why not do it? So, what we’ve done is we’ve moved that customer support function to Antigua.

Another part of the work we did in Vancouver was the licensee accounting. Again, it wasn’t gaming, but it was something that was fairly easy to move to Antigua. And because it supports our licensees, all of whom are licensed and operating in Antigua, it made sense to move accounting there as well. So that’s some of the restructuring that’s gone on at Starnet in recent months.

Who knows? Maybe this will help to define some laws in the way of regulation for Canada, and maybe even for the United States.

And maybe for the world. I think it’s true that right now this whole industry operates in a gray area. There are no specific laws making it clear what can or cannot be done. Most operators in this business, and certainly every operator that’s involved with us, want to work within the law and in a legally compliant way.

It’s good for business.

It’s completely good for business. We favor the courts and regulators sorting out these issues as quickly as possible.

Speaking of good for business, I noticed that the suit brought by the Canadian government hasn’t hurt consumer confidence. Business Wire reported on December 15th that Starnet showed a 377% increase in revenue for the second quarter. That’s pretty impressive.

It really is. Let me clarify for your readers that there is no lawsuit. All there is right now is an investigation. No charges of any kind have been laid.

Are they still holding your two bank accounts?

They are holding the bank accounts under a temporary restraining order pending the outcome of the investigation, but no charges have been laid. Starnet’s focus has been on our core business, our core business being licensees like Atlantic West Gaming with WinCityCasino.com.

And as you correctly pointed out, revenues from our licensees have increased 377% in the last quarter over the same period last year, and increased 20% over the previous quarter. This is despite all of the challenges we’ve been facing with the authorities in Canada.

That is quite impressive. Given your experience in business and law, what do you see as the probable outcome of the investigation?

I think, realistically, from a legal standpoint, there will be some charges involved, but only because there is no law on this. This is a precedent-setting situation, and it is important for the Internet, as a whole, to establish some guidelines concerning e-commerce, gaming and otherwise. So I think there will be some charges, but they will not have any impact whatsoever on our core operations. They will not interrupt delivery of our services; they will not interrupt the business operations of our licensees.

It’s almost as if there have to be some charges brought to justify the tremendous expense the Canadian authorities have incurred with regard to this investigation.

That’s exactly right. They’re heavily invested. This investigation has been underway for a year-and-a-half and I think because of that one has to expect something will come out of it. The important thing to remember is that this area is uncharted. We set our business up based on our understanding of the law. If this case requires us to change our business operations-- guess what? We’ll change them.

The biggest thing is that we’ve identified one of the most profitable revenue-generating opportunities on the Internet today. And if it requires us to be at the forefront of the industry, to adapt our model to keep compliant with laws that change around the world-- well, that’s our business, and we’re ready for it. We’re well prepared.

The National Post recently published an article about Starnet based on outdated information. Have they issued a retraction or an apology for that?

No, they have not. And it’s just an example of ‘yellow journalism’ as far as we’re concerned. The press, the media, seem very interested in the sensational aspects of the investigation. But they’re missing out on a great story that they’re not publishing: The enormous development of our business model in the last few months, even since the raid last August; the ability of our company to adapt, to continue despite the challenges; the development of new technology and products. All of these things.

Starnet has a lot of integrity, but all they’re interested in reporting on is our previous involvement in adult entertainment and the sensational aspects surrounding the raid that took place several months ago. They haven’t issued a retraction and we’re very disappointed that the story ran the way it did.

I understand that no one from the National Post contacted you to verify any of the information.

No. In fact, we tried to contact them to make a contribution to the story. I’m willing to talk to anyone about what we’re doing. I’m excited about what we’re doing. No one was interested in that.

They wouldn’t speak with you?

No. Actually, our PR company tried to intervene after we found out that the story was coming out and so far, no one at the National Post has talked to me. I’m happy to talk to them at any time and to give our side of the story--along with some correct information.

Well, maybe down the line they’ll issue an apology or retraction, but I don’t think they will, do you?

I don’t think they will either, but guess what-- it doesn’t really matter.

I understand that Starnet has recently branched out into bingo, lottery and pari-mutuels.

Yes. I’ll just explain a little bit about that. Basically, our business model is to develop software and tools for our licensees. As you know, our licensees are the ones who have the marketing expertise, the ones who deliver the services to the customer. We believe that the more products we can make available to our licensees and the more diverse entertainment opportunities there are for our licensee’s customers, the better our licensees will do. And the better we will do as a result.

Sure. That makes sense.

A strategic priority for us is to get those new products rolled out as soon as possible. On the pari-mutuel side we’ve been working for some time on developing an interface between the tote machine that is present at the tracks and the Internet. We’re in the final stage of developing an interface and are working with our development partner, Am Tote International, who is the manufacturer.

How would that work?

Basically, it would work a lot like existing off-track betting equipment. Through this interface, customers on the Internet, players from anywhere outside North America, will be able to access the betting pool at the track where the race is taking place. The Internet will facilitate that bet. Their bet becomes part of the pool, just as if they were right there at the track or at any other licensed off-track betting establishment.

What about nose-to-nose finishes? Would they be able to see them on the Internet?

Yes. The other part of it is that we will also deliver simulcast video streaming of the actual races, so they’ll be able to watch the race and place their wager right on the computer, in real time.

At what tracks will this take place?

Currently, we have simulcast agreements with 12 tracks around North America and we’re working to develop more relationships with tracks throughout the world.

Where is racing most prevalent? In the U.S.?

It’s huge in the U.S., huge in Asia. Hong Kong is a huge betting market, too.

That’s a largely untapped market as far as Internet gaming goes, isn’t it?

It is. As well, the real advantage of horse racing on the Internet is the credibility factor. It’s in real time, right on your computer screen, and I think that will lend more credibility to the Internet gaming industry as a whole plus generate a lot of excitement from players. In a few weeks we hope to have the video streaming broadcast center set up so that our licensee’s customers will be able to see the races. It will be a few months after that to complete development of the tote-wagering interface.

Will your video streaming be served in North America?

Yes. There’s really no gray area around that. The latest version of our gaming software, WorldGaming 2000, will be released soon. Let me just say that to reinforce our credibility, Starnet has retained Tech Systems Testing to evaluate all aspects of the software for fairness and random number generation. This is the same company used by the Northern Territory of Australia, where online gaming is government-licensed and regulated.

My next question was going to be What do you think the future holds for Starnet?, but it sounds like you’re already there.

It’s a very exciting future. What you have to keep in mind is the size of the industry. Take the size of the Internet which, by some estimates, is doubling every 100 days or so. There are 200 million-plus people on the Internet. And we’ve got the Internet gaming industry, which in 1999 was a $1.2 billion dollar industry. Many experts and analysts expect it to grow to a $2- or $3-billion industry by 2002.

We’re talking numbers that are difficult to even imagine.

It is difficult to imagine. But we’re a leader in terms of providing software to this industry. One of our more well-known licensees, Atlantic West Gaming, is a leader in terms of attracting customers. They host a numbet of sites, including WinCityCasino.com. We fully expect that Starnet, and our licensees, will continue to be leaders as this industry grows three-fold, four-fold, five-fold in the next few years.

Mr. Ellis, I’m very glad you took the time to visit us here at SoftNetGaming and that we’ve had a chance to talk. Thanks so much for your time.

Laura, it’s been a pleasure. Thank you. I’ve certainly enjoyed my visit.



Copyright SoftNetGaming, Inc.™ 2000

For more information, please contact:
Laura Parker, Editor-in-Chief
SoftNetGaming, Inc.
11601 Biscayne Blvd., Suite 101
Miami, FL 33181
[phone]
[e-mail]

[investor_007]

http://softnetgaming.com/profiles/executive_profile/meldon_e…