fluxx.com Looks to Build a Powerhouse

German company fluxx.com AG, a publicly reporting company with business activities ranging from e-gambling to e-production and new communications, has found success offering interactive gambling services to residents of hundreds of countries, particularly Germany.

For starters, it's also the only company to bring a German state's lottery ticket sales to players all around the world by utilizing the Internet. State-owned and operated lotteries in Germany cannot market ticket sales outside their licensed territory. The state of Schlefwig-Holstein is able to circumvent this rule, however, via the Internet lottery kiosk, www.jaxx.de. Each state is part of the same National Lottery, which boasts 30 million players, or about 14 million players a week. Schlefwig-Holstein, thanks in large part to its Internet ticket sales, boasts $US200,000 in weekly ticket sales to players from 100 nations, according to fluxx.com spokesman Stefan Zenker. Credit cards or direct debit can be used to pay for tickets.

While a few German states offer Internet ticket sales, only Schlefwig-Holstein is able to complete the entire transaction. Other state lottery sites require the player to print out the ticket and take it into a nearby lottery shop to complete the transaction. Plus, the jaxx platform facilitates a variety of games, including pools, class lottery, sports betting and RubbelJaxx, a virtual scratch card.

"We may be bringing other states' lotteries, other nations' lotteries onto the Internet," Zenker said. He wouldn't say which groups the company was in close negotiations with, although he admitted that South Korea was a potential client. The company has also introduced lottery ticket sales over WAP-enabled phones and is bidding with mobile telecommunications firms to offer various betting services over phones, WAP, UMTS and other third-generation (3G) devices.

To offer more extensive betting services, the company acquired a betting license in the Austrian state of Vorarlberg and launched a new sportsbook at www.interjockey.com, which allows them to accept bets from an international clientele. The site dovetails nicely with its German betting site, oddset.de, which offers fixed-odds betting on sports through the lottery.

Oddset, which launched early this year, targets German punters and offers what Zenker calls "very simple betting options" limited to win-lose-tie. According to Zenker, it's the first sportsbook in Germany. Its customer base has already risen to 4,000 players weekly and is rapidly increasing in number. Bettors are dropping 100,000 DM per week in wagers, roughly US$47,200.

Attracting horse fans is also an important part of the company's strategy of success for both jaxx.de and interjockey.com. Zenker points out that 85 percent of an estimated $85 billion will be spent off-track to wager on horseracing. fluxx officials view it as a $70 billion potential market they can reach through the Internet.

The company has two licenses in Germany to offer betting on horse races, one via the Internet and the other through the telephone. Plus, they recently launched "telebetting", a soon-to-be interactive television format for betting on horse races. For now, customers every Sunday can watch live horse racing for an hour through the telebet service and place bets over the telephone.

Next on the company's horizon is offering casino games over the Internet. While Zenker acknowledged that it would be very easy to purchase a license from Boss Media (one of the providers fluxx has considered) and launch a virtual casino from Antigua, fluxx is holding back from taking the step. Instead, the company has examined what it takes to have a successful e-casino, including the need for good marketing and a fantastic domain name, Zenker added.

What the company really aims to do is "bring a real casino to the Internet," Zenker said, meaning they want to show live casino action. "For example, we'll have a camera over the roulette table and transmit the action to the Internet around the world. This would have higher credibility than an offshore facility."

Fluxx has already worked out the technical side. "We did it; it works!" Zenker said, adding that "authorities are a little nervous. We're talking with officials now." If negotiations are successful, the company will act as a distributor for an official state casino. (Casinos in German are all state-owned.)

But, Zenker added, "We're focusing more on lotteries and sports betting."

The company's ultimate goal is licensing its software "It's an excellent online gambling platform open to many different applications. It's a multi-channel, multi-platform product," he added.

To turn the goals into a reality, Zenker says the company wants to "strengthen its market position in every field in Germany." From there it will look to taking on the world market.