More than US$2 billion will be wagered online this year, but for Internet casino owner Nicholas Murphy there’s not enough left on the table for him.
The Toronto businessman says there’s little profit for owners after the fees are paid to software firms that create games and operate the sites.
So he has created a new cyber-gambling game that combines sports betting with the stock market. Murphy announced at an annual online gambling summit in Toronto this week that ProSports Trade Exchange will go live next month, giving jocks a chance to think they’re on Bay Street. Instead of betting on games, players buy and sell team “shares” called tickets and bet which will finish in the top five at various points through the season, when they’ll be eligible for dividends.
Only five years old, the Internet gambling industry — often claimed to be one of two profitable e-commerce sectors (the other is pornography) — is already getting crowded, the summit was told.
Sebastian Sinclair, vice-president of Christiansen Capital Advisors of Newfield, Maine, an industry analyst firm, told the summit that cyber-gambling is a growth industry which will see $6 billion wagered in 2003. But the market isn’t growing fast enough to support everyone who wants to get in.
Finding new markets and niches — like Murphy’s new game — are the future, he said.
Sinclair, for example, is a partner in a U.S. company building an application to help online gaming sites detect problem players.
The summit, run by the River City Group, a St. Louis, Mo, online gaming marketing and consulting company, drew some 800 people and 47 vendors to the two-day event, which closed Thursday.
Dozens of Canadian companies are heavily involved in the industry.
They include publicly-traded CrypoLogic Inc. and Chartwell Technology Inc. of Toronto, who develop and licence online games; Mohawk Internet Technologies of the Kahnawake reserve, which is the only North American service provider allowed to host online gambling sites; a Halifax Web site which assembles volumes of data daily for sports betting junkies; and firms in Vancouver and Montreal specializing in media buying for Internet casinos.
Murphy said ProSports Trade Exchange is financed by $1 million raised from angel investors. While product development is done in Toronto, its servers are located in Malta, where the operation is regulated.