CasinoAOL's Spin on P2P Gambling

15 January 2002

It may not be exactly like the system that caught headlines and international attention in the music industry, but the person-to-person craze that was spurred by Napster has spread to the interactive gaming industry.

P2P gaming is nothing new. Betting sites have long been pairing up individuals who are looking for a new way to bet. But software developer Nsoftwiz Technology Inc. is taking P2P gaming to a whole a new level.

The company signed its first licensee this month and is hoping to increase that number as the year goes on. With its software, operators are able to offer a new gaming experience where players don't bet against the house in traditional casino games like poker, blackjack, baccarat, roulette, red dog, and let it ride.

Ace Online signed the first license with Nsoftwiz and has already launched its casino, Under the agreement, Nsoftwiz will assist CasinoAOL in marketing the casino.

"We kind of help them along," said Robert Szmigiel, marketing manager for Nsoftwiz. "It is kind of like they are a little baby. Once they are up and going we kind of let them go on their way."

Although Szmigiel compares his operation to other gaming companies like Chartwell and World Gaming, he admits Nsoftwiz has a unique approach.

"We have targeted the P2P industry and have gotten a great response," he said. "The online gaming industry lends itself to very elaborate and high-tech sites. The problem is (users) are always playing a computer."

With the Nsoftwiz program, players from all over the world can log on to a site and play a game against each other as if they were all sitting at the same card table in someone's living room.

The company makes money by taking a percentage of the rake of each winning pot.

"We work on critical mass and volume," he said. "If you get $2 here and $2 there, it all adds up."

CasinoAOL was created with Java and streaming Shockwave technology. Players can also chat in real time while they play. The site, and the Nsoftwiz facilitiy, is based in San Jose, Costa Rica.

Szmigiel said the system was designed to provide gamers with extremely secure technology to ensure legitimate and honest P2P skill and player ability to win. All the communication between the player and the casino server is encrypted and secured under Secure Socket Layer (SSL). Szmigiel said SSL is the most accepted communication security system for advanced e-commerce on the Internet. Online banks use the same kind of security system technology.

The plan for both parties, according to Szmigiel, is to do as much selling of the basic system as possible in both the P2P technology arena and the online gaming sector.

"Going after the technology market, we are creating awareness in the market and once we have captured that market we can move on to the casino market," he said. "Right now more people from the P2P market are intrigued by it, more so than the casino market place."

He said the only way the computer gets involved is in dealing the cards to the players. The cards are dealt out, but the players essentially play against each other.

The system will continue to evolve and new games will be added to the suite within the year, Szmigiel said. He said Nsoftwiz hasn't planned any intense marketing campaigns and will rely on word of mouth.

Giovanni Bruno Guzman, president of Ace Online Corporation, said that as more players experience the P2P platform, they may abandon traditional gaming sites they find cumbersome.

"Gamers come to CasinoAOL because they can actually win," he said. "They are tired of fancy sites that don't allow them to win. Our site provides honesty, a real chance of winning and a great, realistic graphic environment, that's what consumers want with online gaming for 2002."

He also said the system lends itself to less administrative work from prospective licensees since the system's backend doesn't need constant maintenance. Operators who choose to partner with the company, Szmigiel said, will have to focus more on marketing the site than anything else.

Szmigiel said Ace Online isn't worried if America Online tries to take action against it regarding the URL of the site.

"We weren't trying to hijack or infringe on their name," he said. "AOL is an acronym for Ace Online, so we feel we have a strong claim to that name."

He said the fact that the site is legitimate and in no way trying to give the perception of being connected with America Online should bode well for Ace if any complaint is raised.

Szmigiel said it will be tough for Nsoftwiz to succeed in an already crowded gaming market. But he is also confident that players will find room for the P2P system and eventually seek it out.

"We think over time people are going to get tired of playing computers," he said. "They are going to want to find people to play against."

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