Article Excerpt:
TWST: We would like to begin with a brief historical sketch of Interactive Systems and a picture of the things you're doing at the present time.Mr. Albanese: Interactive Systems Worldwide has developed, designed and patented the SportXction' System, which allows people to wager at fixed odds throughout the course of a sporting event, such as a football or a baseball game. The system accepts wagers not only on the final outcome of the game, but also play by play. For example, in football, a wager might be on whether a team will make the first down on the following play, or in baseball it might be whether the batter will get a hit. This type of wagering is unique in that it allows continuous betting while the game is going on, both on long-term and short-term events. When the bet is resolved, the winnings are paid back to players immediately so that the winnings can be reinvested. This is analogous to a slot machine or a blackjack game. The company's Founder, Barry Mindes, originally conceived of the SportXction System. In May 1995, we raised $1.7 million in equity capital, and we began operations shortly thereafter, in June 1995. We recruited software developers at that time, and by May 1996, we had a working system going through live trials. By the end of 1996, we went public and raised about $10 million in equity capital. The company was originally called International Sports Wagering; we changed the name in 2001.
TWST: Is there anybody attempting anything similar?
Mr. Albanese: No. One of the difficulties of taking wagers on a short-
term betting opportunity is that bookmakers don't want to take the risk
' they would prefer to be stockbrokers. They want to be able to pay off
the winners with the money that they've collected from the losers and
keep a small commission for themselves. Bookmakers in England ' where we
operate and where such gambling is legal ' do that quite effectively for
bets that they take before the game, or even some bets during the game,
on who is going to win the game. But when you are trying to take bets on
short-lived events that occur within a game, there isn't enough time for
a manual system to balance the book and manage the risk, and that's
where our system comes in. We have a patented, unique system in that we
have automated that risk-management aspect of the system through the use
of statistics and artificial intelligence. The system automatically and
dynamically changes the odds being offered to match the sentiment of the
betting public to try to bring the odds or the prices in line with this
sentiment and create a balanced book. This is really managed risk for
the bookmaker. The bookmaker is not currently able to do this on time-
sensitive, play-by-play types of bets. So, although there are bookmakers
in Europe taking in-run betting, none of them take it to the extent that
we have, and many of them welcome the integration of our product into
their own systems.
Tickers included in this excerpt: ISWI
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