World Sports Exchange is on its Final Legs

It’s been known for some time that World Sports Exchange was having payment issues but they always seemed to find a way to get financing to keep the company in business. Since its inception, the website was always stock full of betting options, particular in game markets for major games and tournaments but lately that

It’s been known for some time that World Sports Exchange was having payment issues but they always seemed to find a way to get financing to keep the company in business. Since its inception, the website was always stock full of betting options, particular in game markets for major games and tournaments but lately that changed. Starting about 2010, long term markets were discontinued for many sports and in game markets were becoming less available. Still major events always had markets open. It thus seemed quite odd when there was no Masters market last week. Looking into it I also determined that there were other issues as well. The live support is no longer functional and upon calling the company on the 1-888 numbers I received a message “your call is now first in line and will be answered by the next available representative.” After 20 minutes it became quite clear that no one was going to pick up the phone. Emails also went unanswered. I spoke to numerous other WSEX customers who have had the same experience lately and by all accounts no payouts are being sent. As a result the only logical conclusion is that the company is probably in the process of closing shop.

WSEX began operation in 1997 when three members of the Pacific Stock Exchange joined forces and decided that a sports betting website could offer the same type of day trading and long term markets that a traditional stock market could. Setting up shop on the island of Antigua, World Sports Exchange became an immediate favorite for remote bettors who loved to bet on long term markets for events like the NFL and NCAA championship or live betting on events like football games and golf tournaments. Traditional betting options were also available with competitive lines. Moreover, the company offered betting on the next at bat for select baseball games. I recall one of the owners telling me that someone had bet $100 on Brett Boone to hit a triple at 100/1 odds for a Sunday night game and they probably soiled themselves when Boone hit the ball to the wall in his first at bat and despite considering going for 3rd decided to hold up at second base. WSEX advertised at all the big U.S. based posting forums and in newspapers and was a favorite of almost all bettors who had an account with them. Their customer service was among the best and payouts were immediate. The company made headlines in the late 1990s when the company’s CEO, Jay Cohen, returned to the U.S. to face charges that he was violating the Wire Act. Cohen hired the best attorneys and made the case that as a company licensed in Antigua, WSEX was not violating the law since bets were received and processed on the small island so the laws of Antigua should apply. By all accounts the jury was prepared to side with Cohen but instead found him guilty after the judge told the jury that the evidence he presented was without foundation. Cohen spent 3 years in prison and returned to Antigua after his release.

WSEX continued to operate successfully but was under the watchful eye of the DoJ as a result of Cohen’s decision to challenge them as well as the company’s involvement in the WTO case where Antigua took the USTR to the WTO courts and won. It was a major victory for the country but it also clearly upset the U.S. government who put the country’s banking system on its rogue list.

WSEX first found itself in financial trouble after the passing of the UIGEA. It’s not quite certain what precipitated the cash flow issues although there is no question that the shutting down of NETeller to American customers was a major reason. After NETeller cut off American and Canadians, customers found it difficult to get payments to the company and more importantly found it very difficult to get payments from the company. Almost all of WSEX’s clients were located in North America so NETeller was the preferred method for payments in and out. But after NETeller no longer became an option, U.S. customers were essentially left with checks as the only option for withdrawals. WSEX’s real financial woes started in 2009 when Antiguan banks were targeted by many U.S. institutions for various reasons (the Stanford Bank scandal and the UIGEA implementation being the main ones). So U.S. banks started to refuse checks and bank wires from Antiguan banks leaving WSEX to rely on 3rd party processors to process the payments. And many in the industry told me that some of those processors were less than reputable likely stealing money from the company before they disappeared. As well, WSEX’s ventures into a fantasy sports exchange, their no commission poker room, and their partnership in a P2P betting exchange all cost the company dearly. As a result the company ended up with cash flow issues and a backlog of payment requests since processors couldn’t keep up with the payment requests. WSEX was quickly downgraded by sports betting rating companies precipitating more clients to request payouts and the cycle continued. By many accounts WSEX still owes somewhere north of $250,000 to clients.

At some point WSEX was saved from bankruptcy by investors who changed the structure of the company somewhat but it never fully got WSEX out of debt. The company gave up its Antiguan betting license (likely due to the $100,000 annual licensing fee) and got a license in Cyprus instead although their physical location is still in Antigua. According to the website the company is incorporated in Nicosia, Cyprus and is owned and operated by Euro Sports Exchange Limited in London England.

OSGA continues to contact owners of WSEX and we hope that this once proud and reputable sportsbook can still provide proof that the company is a going concern. But for us to believe that we need some proof, like actually picking up the phone and offering markets on major events . . . and paying customers.

—- UPDATE —-

About four hours after this was posted, WSEX updated their website. It now has a statement where their home page had been for over 15 years.

Dear WSEX customer,
We have been forced to halt business activities at this time due to inadequate capitol resources.   The financial position of the company is currently under review and we will keep you informed as to the future plans for WSEX and the repayment or transfer of your balances.

We sincerly apologize for this unfortunate situation and will be doing everything we can to rectify it as soon as possible.

-WSEX Management
———————

Contact Hartley via email at Hartley[at]osga[dot]com.

Read insights from Hartley Henderson every week here at OSGA and check out more from Hartley’s RUMOR MILL!

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  • […] wrote this a few hours before they put up the notice. Explains a lot. World Sports Exchange (WSEX) could be on its Final Legs | Off Shore Gaming Association It’s been known for some time that World Sports Exchange was having payment issues but they […]

    REPLY
  • Gary Cosgrove
    April 22, 2013, 2:45 am

    I am a Canadian who has been with the world sports exchange since 1996. I never put more than $200 in the account and my typical bet was $10.00. although for major events such as the World Series I would go up to $100.00or $150.00.

    At this point they owe me $260 but if I have to write off this amount it is not the end of the world as I’ve had a number of years of enjoyment over the past 18 years. However I am curious to know if there is some kind of proceedings in Antigua that would enable customers to get so many cents on the dollar.

    REPLY
  • Mike F
    April 23, 2013, 1:38 am

    My story is a little different from Gary’s. I used WSEX for years after seeing a story about them on 60 Minutes. I never had a problem with payouts until after the 2011 NFL season. I asked for a $3,000 payout and never received anything always got “the payment will go out next month”.
    I did get $500 in December 2012. OSGA was very helpful and informative.
    Assuming my money was dead, I made some bold plays in the NFL playoffs and futures and “won” another $3,000.
    So, all in all I got beat for $5,500.

    REPLY
  • j r stone
    April 23, 2013, 1:53 pm

    i enjoyed wsex for years, probably starting as soon as the doors opened. i loved the stock market type atmosphere, the software, and being paid on time. great book. very sad that in a free country i am not allowed to wager on sports, or transfer funds safely. i am a viet nam veteran.

    i was owed 2000.00, in 2011 and surpised that it never showed. after contacting sbr they where able to secure my funds. i thank them for helping. i wish i could help all who were scamed.

    wsex knowing the situtation kept the doors open far too long, thus costing many– funds that wsex knew they would never receive. this is unforgiveible.

    REPLY
  • mike
    April 27, 2013, 1:20 pm

    Wsex owes me 70,000 dollars right now.
    Its everytihng to me..
    i’m about flat broke compared to that amount.

    I won it all in poker room tooo! So won money off depositors!! not even site directly!!

    REPLY

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