World Sports Exchange is on its Final Legs

Posted by on 19 Apr 2013 | Tagged as: The Rumor Mill

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!

2013 OSGA NCAA Tournament Contest Winners

Posted by on 09 Apr 2013 | Tagged as: Promotions

The 12th Annual OSGA NCAA Tourney Bracket Challenge came down a handful of players vying for up to $500 bucks. Only three contestants picked Michigan to be crowned Champion and two of those were so far off the point total they would still not have hit the board with a Wolverine win. Ultimately, Louisville prevailed, giving hope to the 33 players who took them to win it all. However, ‘Donny’ edged out eight others who were separated by just 10 points and picked the Louisville Cardinals to win it all claiming the Grand Prize in the 2013 OSGA NCAA Tournament Contest.

Unfortunately for ‘Donny’, he was not an OSGA member prior to the start of the contest and thus only qualifies for a grand prize of $250.’jjlbtnj will receive the 2nd place prize of a $200 Free Play at Elite-rate Ucabet and ‘dallas12′ will also grab Free Play from Ucabet.

“We only had one player who picked Michigan for the National Championship and had a chance to win it all. It would have been cool to see him beat out ALL of those players that had the tourney favorite“, said Jim Quinn, OSGA president. “As it was ‘Bayonne’ still came in 7th, without having the tourney winner. Prettty Impressive.”

Contestants were awarded points in the bracket style contest and many were still alive going into the last weekend of the tourney, as the Final Four winners yielded 16 points and the tourney champion 24. The most points that could be accumulated were 184. ‘Donny’ finished with 118. Last year’s winner had a whopping 138 points while previous winners had over 150 total points. The contest was a wild ride for many players who saw crazy swings in the standings each week due to the stunning upsets of Gonzaga, Georgetown and Kansas State in the early rounds. In fact, heading into the Final Four, this was the first year ever that the National Champion might not have been picked, as no player had Witchita State beyond the 2nd round.

Here is the prize breakdown. All winners will be contacted via email.

Donny – $250 Cash Grand Prize
jjlbtnj - a $200 Free Play at Ucabet
dallas12 – a $100 Free Play at Ucabet
KimN – $75 Cash
tommyb – $50 Cash
Places 6-10 – a $25 Free Play at JustBet
jakesbombers
Bayonne
ddsmj
Danishwop
bosshoss

Congratulations to all who participated in the contest.

Look for great contests throughout the year and become a member today at osga.com, where ‘Members Get More’.

USTR Prepared to Impose Serious Sanctions on Antigua

Posted by on 01 Apr 2013 | Tagged as: The Rumor Mill

In January, Antigua announced that it was preparing to use the $21 million settlement the WTO gave it years ago and would apply it by suspending U.S. intellectual property rights (TRIPS).  Apparently the plan is to produce cheap versions of software, movies and music and sell it at a ridiculously low price with no reimbursement to U.S. companies who have trademarked and copyrighted those products. The hope is that doing so would cause such an outcry in the U.S. by companies like Sony and Microsoft to settle the dispute that the U.S. would either agree to allow Antiguan gambling companies access to the U.S. market or more likely that the U.S. would give Antigua a better deal in other areas of trade that would benefit their economy. The two sides apparently met in February and March to try and work out a settlement but neither side was close to what they believed was an equitable agreement. If Antigua does indeed proceed with the option it would likely be done through Slysoft, an Antiguan software company which would ensure it wouldn’t have to deal with countries that have tough anti-piracy laws.

I spoke to a former trade representative under the Bush administration who still has close ties to the current USTR and he informed me that if Antigua does indeed use TRIPS its method for retaliation that “Antigua would pay dearly.” Without going into great detail, the former representative said that the current government is prepared to go after the two industries that Antigua values most – high tech and tourism. Nkenge Harmon, a current U.S. Trade Representative has gone on record warning Antigua against using the TRIPS option.

“Government-authorized piracy would undermine chances for a settlement. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries,” Harmon stated.

But the threat against tourism is new and if applied would have devastating consequences to the Antiguan economy. Tourism accounts for half ofAntigua’s GDP and a large number of those visits are by Americans. In fact Antigua has boosted its efforts to attract American tourists by increasing the number of ads and promotions to get U.S.citizens to fly to the tiny island. But if the U.S. does indeed take actions to prevent that (possibly by stopping advertising from Antigua or even issuing a travel advisory), the ramifications could possibly lead the country into bankruptcy. At the same time, the Antiguan government has indicated that the U.S. actions have practically ruined their economy anyways, since most online gambling operators have left and since they invested so much into setting up remote gambling that these actions may be a last resort anyways to help save Antigua’s economy from collapse.

Ironically the USTR won a case against China at the WTO around the same time that Antigua won their case against the U.S., where the WTO agreed that China wasn’t doing enough to protect intellectual property rights and ordered China to do more to protect the TRIPS agreement. China in turn has hinted at the Antigua case (namely the U.S.ignoring the ruling) as a reason not to comply. The fact that Antigua is prepared to use TRIPS as its retaliation measure just makes China’s argument more compelling.

Antigua has done everything in its power to get the U.S. to come to the table with a reasonable offer to settle the dispute but by all accounts the USTR refuses to cooperate fully because they believe the WTO ruling was wrong. So far there has been no harm nor foul on the USTR’s parts but if they actually use Antigua’s tourism industry to hit back at the Caribbean island, then all gloves are off and any sympathy or support internationally for the U.S. in this dispute will quickly disappear.

 

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!

Pope Vote Created a Great Betting Frenzy

Posted by on 19 Mar 2013 | Tagged as: Bets and More

When white smoke finally rose from the Vatican, many people around me were ecstatic. They really didn’t care who was made the head of the Catholic Church on a philosophical level, they simply wanted to cash a bet. 6 people in the room had over $1,000 in wagers on the pope including Marc Ouellet at 8/1, Pedro Scherer at the same odds, Sean O’Malley at 25/1, Joao Braz de Aviz and Timothy Dolan and 66/1 and one brave soul went for a 250/1 outsider. As the bells rang and the camera panned to close ups of the curtained room, everyone in the room was trying to see if there was any sign of who the pope was, thinking they could still get down that last second bet. No one in the room really seemed to care about the blessings that were being iterated or about the history of the papacy which ABC and CNN were espousing, but the tension itself was exciting nonetheless, particularly since it seemed that the announcement was really being dragged out.

“This is better than a Super Bowl game tied with less than 2 minutes to play,” a colleague said to me, “and it’s definitely more exciting than the Academy Awards.”

Then when the Cardinal Protodeacon finally announced in Italian that Argentina’s Jorge Mario Bergoglio was the new pope, the room completely broke out into a series of groans and expletives. Actually it wasn’t at the time of the announcement that the words were uttered, since no one understood a word of what the cardinal was saying, but rather when the new Pope’s name was flashed on the screen. It was as if the home team threw an interception in the dying minutes of the game while driving for a score. “Oh well better luck next time,” one of my colleagues said as he turned off his live stream of CNN and went back to work.

Sportsbooks throughout the world wrote over $2 million in “pope bets,” including Paddy Power which wrote about $750,000 in bets, Betfair which had over $500,000 in bets and William Hill which was over $100,000. Unfortunately for those books it appears that there was some last minute inside information since the odds on Bergoglio fell from 50/1 to 25/1 in a day likely eating into most of their profits.

While many who heard about the betting likely thought that the activity was restricted to a bunch of degenerates, the truth is that the Vatican was aware of the betting as well. As many probably heard this year the Vatican put in descramblers at the conclave to disable cell phones and PDA devices and one of the reasons, according to some websites was as a result of the betting. While the papal candidates themselves may not have placed a bet (although a dime at 50/1 would certainly help a struggling parish), there were concerns that others in the room were prepared to send text messages or make phone calls to friends who could use the information anyway they wanted, including getting a bet down. Apparently it happened in the election of Pope Benedict which was a reason for the choice to descramble signals at the Vatican.

“The popes vowed to secrecy,” a priest told a reporter on the web, “but others in the room wouldn’t have had the same requirements.” And without outright saying it the priest hinted that in the last papal election insiders were relaying the information by various methods to friends who used the online sportsbooks to win a papal wager. Benedict was always the favorite in the last election but his odds drifted to 5/1 before settling at 3/2 odds just before the announcement – a clear indication of insider betting.

This probably shouldn’t be too surprising though. Betting after all is human nature. It’s existed forever and is seen as a noble way of settling disputes. In the Old Testament, lots are cast to decide issues on 70 occasions and they are cast 5 times in the New Testament. And on only one occasion, John 19, where the Roman soldiers cast lots, was gambling seen as negative. And really it’s only the new evangelical churches that are so strongly opposed to gambling. Of course most of the evangelical preachers are also opposed to drinking, smoking, partying, dancing etc. In the Catholic Church, on the other hand, gambling is accepted and many churches exist as a result of bingo nights and raffle tickets. In fact it’s probably a safe assumption that around 250,000 years ago some caveman wagered 2 rocks with another caveman that he could spear the mastodon faster than the other caveman could.

It’s that reason that I and so many others in the gambling industry get upset when politicians spew nonsense about the dangers of gambling and suggest that they are trying to ban gambling expansion for our own good. The truth is that Catholics gamble, Jews gamble, Muslims gamble, Hindus gamble, and Atheists gamble and yes even some Protestants gamble. And there’s nothing anyone can or should do about it. In the Western world we live in a democracy and as part of that freedom we can spend our income as we like including betting on awards shows, the presidency and even the pope. And for those who profited from the insider information and got their bets down on Pope Francis, God Bless them and well done. While they probably enjoyed a huge steak dinner to celebrate their winnings on Friday, my colleagues and I had macaroni and cheese. But that’s what gambling is all about – you win some and you lose some but there’s nothing more enjoyable than at least having a chance.

 

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

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

New Jersey Online Betting Examined for Players

Posted by on 01 Mar 2013 | Tagged as: US Legislation

We have been getting bombarded ever since New Jersey Governor Chris Christie signed an online gambling bill into law for residents and visitors to the Garden State. Everyone wants to know what this all means and when can they start betting online. The belief in New Jersey is that an online wager takes places where the wager is accepted, so most of the answers revolve around the Jersey Shore gambling mecca. Below we answer some of the frequently asked questions regarding the New Jersey online betting law.

Q: The top question has been “When?”, as in “When can I start betting legally online in New Jersey?”

A: Not for some time. Some analysts have said that it will take 18 months to 2 years  to get online gambling up to its full potential. However, there are revenue figures in the budget that starts in July and some operators, like Poker Stars should be able to get ready very quickly. However, there need to be rules and regulations in place, vendors found and tests run. Look for online gambling in some form this year, but limited and not until after the summer tourist season ends.

Q: “Do I need to live in New Jersey or can I just just play in New Jersey?”

A: Players need to be physically located within the borders of New Jersey to play online. In addition,as it stands right now, players will have to physically go to Atlantic City to  open accounts.

Q: “What games are there going to be?”

A: The law is written so that anything offered at brick and mortar casinos in AC is allowed to be offered online. This includes casino games, as well as poker.

Its companion question is usually, “Can I bet on sports online in NJ?”

The answer is No. You can’t bet on sports, yet, in casinos or racetracks in the state, so you cannot bet sports online either.

Q: “So now I am allowed to play online with a place in Costa Rica or England, right?”

A: Again, No. NJ residents are only allowed to play at casinos based in Atlantic City.

Keep in mind that many of the smaller operational questions have yet to be figured out by lawmakers and the industry. There is speculation that accounts will be able to be funded with ACH payments, debit cards and credit cards, but these have not been clearly outlined yet. Nor have any limits, initial games or registration information been given. From what we have been able to tell, they don’t even know how much a license is going to cost yet! So clearly, this is a HUGE victory in a state with 9 million residents, but online gambling will take some time to unfold in New Jersey.

Oscar Winners Revealed

Posted by on 25 Feb 2013 | Tagged as: Bets and More

Each year Hartley Henderson breaks down the Academy Awards in conjunction with our popular Academy Awards Betting Odds page. This year Hartley struck gold by going 10 for 10 with his Oscar predictions. Had bettors been able to find a sportsbook that would allow a 10-team parlay, these bets is would have paid over 500-1!

He identified the odds-on favorites that would win, but most likely would be a bad value to wager on. He also looked for Value at the Oscars in several categories, including Best Director, Best Adapted Screenplay and his best bet in the Best Hairstyle and Makeup category. The heavy favorite for Best Director was Steven Spielberg for Lincoln but Hartley was able to identify the decline in popularity amongst that various film industry groups and picked Ang Lee at 4-1 odds for his work in Life of Pi. In his handicapping of the categories that included Lincoln Hartley also noticed The odds on Argo creeping up in the Best Adapted Screenplay category. He picked Argo which unfortunately, lost some value as the awards approached, but won at better than 1-1 in a category where the favorite is usually -200 or worse.

The smaller category of Best Hairstyle and Makeup was the best bet of the night. Hartley noted, “The best bet at the Oscars is always to wager against movies like The Hobbit, Star Trek, Harry Potter, Xmen etc. in minor categories when going against a best picture nominee; hence my pick of Les Mis for best makeup.” This year Hartley’s angle proved profitable as the huge favorite, The Hobbit: An Unexpected Journey got beaten out by Les Miserables at favorable odds of 5/2.

On his sweeping the board last night Hartley said, “It seemed clear from other awards that the Academy loved Argo and didn’t care for Lincoln (save for Daniel Day Lewis). When making my picks I assumed they would thus award Argo at every chance and avoid Lincoln. The odds on Argo and Django for screenplay were way too high given the director shuns of both Affleck and Tarantino and there was no way the Academy was going to give the award to Spielberg for one of his poorer directing jobs. It thus made sense for the Academy to award Lee for his other works as well as Life of Pi. That said, I was told that a large number of voters chose to leave that category blank in protest of Affleck’s shun.”

For a complete breakdown of Hartley’s ten for ten run in the 85th Oscars read his article, Looking for Value at the Oscars, which was posted on Wednesday before the Oscars and gave bettors and office pool players plenty of time to get the top Oscar picks at the best prices. Look for Hartley again next year at the 86th Oscar awards and read his Insider column every week for betting industry insights.

 

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