by Jeremy Martin
For Nevada sportsbooks, there haven't been many options in the past when it came to choosing an operating system or upgrading their current one. Most sportsbook managers were pigeonholed into working with one company and forced to buy proprietary hardware from them or their partners. But now a San Diego-based technology company, VirtGame Corp., has created a sportsbook software solution it believes will be the wave of the future in Nevada. PrimeLine SportsBook is a Windows-based operating system that runs on any computer as a server and offers bookies ease of use and full-functionality.
VirtGame, which was founded in 1995, went through the lengthy process of filing for a gaming license from the state of Nevada. It is currently operating under a temporary 18-month license, but company CEO and CFO Bruce Merati is confident the company will be granted a full license in April 2004. He expects that, in the future, any sportsbook in Nevada that purchases a new operating system will do it through VirtGame. While the corporation could have taken their business offshore and had an instantly deep customer pool from which to sell its product, it instead chose the more stable route of Nevada Gaming Commission approval. The publicly traded company (VGTI), which has been limiting its revenues and customer base to comply with gaming regulations, received $3 million in private equity funding in July. Merati expects VirtGame to be "very profitable" in the future.
"We are really a bridge between Silicon Valley and Nevada," said Merati. "The way I describe (the business) is that we are like a pharmaceutical company. When you are developing a drug it takes you four or five years and it costs you millions of dollars. You can go out and sell your drug before your FDA approval and make a lot of money, but then you get shut down and you can't be around long term. We did not choose to go that route. We chose to go through licensing and approval. Now Wall Street is looking at us as basically a unique company to bring the power of Windows, the power of browsers, the power of TCPIP, the power of Java communications, the power of Multimedia Flash and the power of servers (to Nevada). Microsoft, Oracle and IBM are not going to file for a gaming license in Nevada. So we are unique in the way we are bringing the best of technology to gaming."
Terrible Herbst Casinos, Casino MonteLago and the Las Vegas Club are all now using the PrimeLine software, which costs anywhere from $150,000 to $200,000 per casino to get up and running, according to Merati. Sportsbook managers have raved about the operating system because of its ease of use and its ability to be modified according to the vision of the bookmaker. It can also print out approximately 65 daily reports for sportsbook and racebook managers. Most sportsbooks in Nevada currently use the Computerized Bookmaking System (CBS), which was developed by American Wagering, Inc. Merati states that system is outdated and does not adapt to new technology as it is developed. Through its Southern Nevada distributor, Las Vegas Dissemination Company (LVDC), VirtGame expects more sportsbooks to come on board as their equipment becomes obsolete.
"(CBS) is not as versatile and it doesn't talk to today's technology," commented Merati. "We have made our system to (work with) old technology. So we are riding on existing technology. With (CBS) you have to buy specific hardware from a specific company, often times from them. With ours you can buy any hardware or make it yourself with commodity computer hardware. It will work on any PC or server. A sportsbook is a low-margin business with a small capital expenditure from the casino. (Many sportsbooks) are waiting for their systems to get truly depreciated. It's just a matter of time before we become the dominant player in the business."
Early this year, Terrible's Hotel/Casino needed a new system for their sportsbook because the old one they were using was so outdated. They had the choice of upgrading their CBS system, which would have been costly and would have forced them to replace their ticket writing machines at their main hub as well as two Pahrump satellite sportsbooks. They were contacted by an LVDC representative and opted to purchase the VirtGame system because it was more cost effective and functional than upgrading their old CBS system. Race and Sportsbook Manager Doug Beil couldn't be happier. A 14-year veteran of the sportsbook industry, he has worked with both systems and states that PrimeLine is the clear winner.
"The technology is more modern, it's easier to use and it's Windows-based," said Beil. "It's an excellent system and it's getting better and better. If you have experience in the industry, it's almost a system where you can just look at it and it teaches itself. We have full support and training (from VirtGame), but it really is that easy. My main admin, who is here full-time, was doing everything she needed to do with the system within an hour. It's my opinion that if there is a sportsbook that is in the market for a new system and they have the two to chose from, I would think VirtGame is better. (The software) can change and adapt to what you want. They can design the software to your needs."
One example of the functionality of the software is the fact that Beil ran a football contest yet the PrimeLine software didn't have any options for such a contest. VirtGame designed a contest into the software exactly how the sportsbook manager wanted it. "I can't really think of any drawbacks at all," said Beil. "I'm very happy with the system."
VirtGame has also developed PrimeLineRaceBook software, which is in the approval process at this time.
Another option for sportsbooks using the PrimeLine software is to run a closed-loop system in which customers could bet on sports from their home computers within Nevada. This system has been approved by the Gaming Commission and was used for two years by Coast Casinos (although it was not marketed and wasn't widely used). The system is not considered Internet gambling, however, because it runs on an intranet within the state. Customers are required to open an account physically at the casino in order to use the system. Although no sportsbooks are currently using the technology, Merati believes that some will in the future.
The CEO also has a bold vision of the future in which federal laws would be passed that would allow interactive gaming across the U.S. via the main gaming states as well as lottery ticket purchases within U.S. states. The Nevada Legislature passed the Interactive Gaming Bill in June 2001, opening some doors for that possibility. But nothing could be done until a federal law is adopted. VirtGame has created VirtBorderControl technology that could ban individuals from certain states that do not allow gambling. He thinks state lotteries and horse racing have the best chance to get approval. Sports betting and casino games may come along a bit further down the line.
"There is pressure on the states to deliver something that will combat the offshore casinos," said Merati. "The states have deficit issues and this can be a voluntary tax that they can bring to the table to cover their deficit. So both technology wise and politics wise, everything is in place to start getting things done. However, it is going to be gradual. The casinos have reached their limit as far as how much they have spent on a casino. You can't get more beautiful and expensive then the Bellagio. Now Nevada needs something else so technology will be their driving force. That's my prediction."
Jeremy Martin is the newest member of the Doc's Sports team. His work has been widely published in both print and online media. For more information or to contact Jeremy visit www.docsports.com/contactus.html.