Interactive Race Wagering in North America - Starnet

30 March 2000
Starnet Communications International, having weathered a stormy year, is setting course into new territory; this year, the company is rolling out an interactive horseracing service. Unlike most competitors, punters at Starnet sets will be able to wager on the ponies and dogs, casino games, sporting events, lotteries, and bingo through one customer account.

Starnet's horseracing suite is a unique, live Java-based interface to tote and live track pools. The first phase of the interactive horseracing included the implementation of live audio/video streaming; up-to-the-minute handicapping information; statistics and analysis from the Daily Racing Form and BRISnet; the latest racing and sporting news; and weather from around the world. The service, currently available exclusively at, launched March 6. Starnet plans to launch the software at 500 licensee sites over the next two weeks. Paul Nyzuk, director of business development and live events for Inphinity Interactive Inc., a subsidiary of Starnet, says over 250,000 bettors at Starnet-licensed sites have access to pari-mutuel wagering.

"As the sportsbook is the largest single component of our business, to date, we are excited that the demographics of the pari-mutuel bettor closely mirror those of the sports bettor," Nyzuk said. "Thus, not only will current players stay with a site that can offer them pari-mutuels; other players will be drawn to our sites because of the pari-mutuels and place sports wagers as well."

A sister-portal,, will show racing also, but is really intended to drive traffic back to Starnet sites.

The second phase, expected to commence in the spring, will be the introduction of real-time pari-mutuel race wagering, instant access to worldwide racetrack tote boards, and secure online transactions with fast payouts. Eventually, Nyzuk said, the wagering services would expand to include pari-mutuel sports wagering and jai alai also.

The interactive horseracing services, of course, are just a small part of Starnet's offering. The company additionally provides turnkey solutions to clients wanting to operate virtual sportsbooks and casinos.

Starnet is one of the older; more established online gambling software developers. Last year, the company saw its share of scandal and disillusionment. Last summer, the company's Vancouver offices were raided by law enforcement authorities and the ensuing plunge of its stock value resulted in a bevy of class-action lawsuits filed by stockholders. The plaintiffs alleged that company insiders inflated the company's stock price in order to reap illicit profits, and that company officers misled investors regarding risks in Starnet's business model. While neither the investigation nor the lawsuits have been settled, Starnet officials have been working hard to rebuild the company and repair its image. So far, it appears to be working.

Following is a run-down on Starnet's pari-mutuel wagering services:


Contact Information:

Starnet Communications International
Starnet Place - Newgate Street
P.O. Box 1589
St. John's Antigua West Indies
Tel: 268-480-1650
Fax: 268-480-1656


System is PC based, while the interface is delivered in a Java platform allowing real-time interaction with no download required.

"Our strategy is to focus on developing products for those platforms that have the greatest installed base among our customers, and that offer the capabilities necessary to produce high quality interactive wagering content," Nyzuk explained.

"We have targeted the Java platform for product development and this product is easily expandable to the addition of an 800/900 number with telephone account wagering. There are also potential opportunities to integrate this technology with non-gaming technology suppliers."

"As additional platforms which are suitable for the expansion of this product, such as interactive television, hand held digital assistants and WAP, gain momentum, we expect to port our existing interface for these platforms as commercial acceptance dictates."


Nyzuk provided the following numbers:
Unique hits on (since March 6 - March 30) - 3031
Unique hits on (last 7 days) - 1121
Total hits (since March 6 - March 30) - 88,340
Total hits (last 7 days) - 27,444
Total accounts:
WorldGaming - 280,821
Licensees - 188,939
Active accounts:
WorldGaming - 178,305
Licensees - 160,800.


There is no access fee charged to customers, simply open one account and bet on any Starnet or licensee casino, sportsbook, racing, lottery or bingo product.


Wagers take place on servers in Antigua, where Starnet and its licensees are licensed. Customers set up an account using credit card, check, wire transfer or money order. Payment can be made to account, via check or back to credit card (up to the amount originally deposited from the credit card.)

Wagers are common-pooled back into the host track's pool. Exotic wagering is possible, but not parlay wagers, such as twin-trifecta.


Stage One
Live audio/video streaming;
Up-to-the-minute handicapping, statistics and analysis;
Latest racing and sporting news;
Weather from around the world.

Stage Two: (expected to roll out sometime this spring)
Instant access to worldwide racetrack tote boards;
Real-time wagering into live track pools;
Customers can review their complete betting history;
Account balances can be easily checked upon logging on;
Secure online transactions with payouts.

Tracks available:

Currently - Delta Downs, Northfield Park, Tucson Greyhound and Phoenix Greyhound Park.

Nyzuk added, "We will also be making a massive push closer to our launch time and we would expect to launch with an excellent selection of tracks and make additions to that list monthly."


Customers must be 18 or older. North American punters cannot bet on North American races. Additionally, World Gaming takes no bets from North Americans, and especially not from Canadians, Nyzuk stressed.

Partners: for net-casting services;
AmTote International Inc. for tote services;
Information providers:
Daily Racing Form;

Stock Activity:

Starnet is traded OTC BB under the symbol "SNMM."

On March 30, analyst John Dutton released an updated report that set a 6-month price target for Starnet's stock to hit $10 from its current $4. Dutton's report, distributed by Investrend Research, acknowledges that some risks remains until the Canadian gaming investigation of Starnet is finally settled. At the same time, Dutton praised the company's new direction, especially under the leadership of Meldon Ellis, who assumed the CEO role on October 25, 1999.


The company reported financial results for three-month and nine-month periods ending January 31, 2000 that reveal some dismal numbers.

Operating expenses, including $3.8 million in one-time expense adjustments and provisions, increased to $7.4 million, resulting in a net loss from operations for the quarter of $4.7 million.

On the bright side, the company recorded a 157 percent increase in third quarter revenues to $4.4 million, compared to $1.7 million in the quarter ended January 31, 1999. Net sales for the nine months ended January 31, 2000 increased 267 percent to $12.4 million from the same period last year.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at