YouBet Suspends Charges

[Eric]

Interesting development at YouBet.com. They've temporarily (at least thru Feb/Mar 2002) suspended Credit Card charges for deposits and the $.25 per race charge for bets. Detailed info at:

http://www.youbet.com/membersonly/newsletters/RowlandHoyt/Rowland.htm

[Carl]

Yeah, I got that e-mail too.

Guess my boycott worked hehe.
=====================
Hurrikane,

Thanks for the e-mail. Will respond in depth in a day or two.

[Glen]

Good news. Ok, I'm back on the Youbet wagon. Long live YBET!

[MikeDee]

They have also added a feature where you can switch between your total access and call a bet account on line. Now you really can bet and watch all of the tracks at either hub. Still have to have 2 accounts, a minor inconvience! In addition they added a voice responce automated teller so you can bet over the phone.

Looks like they are going to go all out in the battle for CA!!

[hurrikane]

Wow..nice developement there...no I may go back online. That will certainly make life easier.

[MikeDee]

This is not really a feature of UBET, but there is a cheap and dirty way you can keep a record of your wagers via UBET.

The wager log on the express version is exportable to a word processor or a spread sheet. This only works in the express version but you can click on the account tab, then wager log. click on any of the tabs there, say last month and click on update. You should see all of your wagers for the month.

Scroll down to the last entry and with your mouse point and click on the last entry and move the mouse up to the first entry. This will highlight all of the entries. Now do a ctrl C, open a excel spreadsheet and in the first cell do a ctrl V. This will paste the wager log contents into a spread sheet where you can slice, dice or otherwise keep you own ongoing wager record.

[Bernie]

Maybe I'm the only one thinks the emperor isn't wearing any clothes, but I would be very reluctant to have a sizeable balance with Youbet at this time. For the first 9 months of the year, they lost $9.3 million. They have sustained sugnificant losses every since they have been in business. They also don't have any kind of revenue other than their parimutual earnings to support their operations. Winticket, Philly Phonebet, OJC, and eBet are all owned by track operators who have lots of other revenue. The offshores can be supported by their profitable sports revenue.

Youbet's cash is around $5 million, down from around $31 million a year ago. The way they've been burning cash, this may not last too long. They gave away 20% of their company to form an alliance with TVG (with an option for TVG to buy controlling interest in Youbet ), but TVG is owned by Gemstar which has also been losing money hand over fist for years and has a lot of debt. Youbet stock is 59 cents a share, down from $1.73 in September.

If you want to see one indication of why Youbet continues to lose so much $, check out
http://www.irish-architecture.com/onsite/loh/youbet.html

As for myself, I'd prefer to do business with someone in a cigar smoke filled room named Sal or Tony.

[MikeDee]

As a general rule I don't think it's a good idea to leave large sums of money in any wagering accounts.

But lets see if I got this right....Berine you adivse extreme caution with a publicly held company...that is losing money, that publishes their quarterly results so you can pretty well predict their demise....good advice, while at the same time opening up any number of accounts with sports books with unknown owners, no public books, and no legal recourse should they close in the next 15 min. Not the model of consistency:)

[Eric]

Hmmmmm ... I don't know anything about the finances of YouBet.com but based on the architecture photos shown at

http://www.irish-architecture.com/onsite/loh/youbet.html

and noted earlier, I would say they certainly did NOT go overboard with their facility. Take a CLOSE look at the right hand photo - particularly the floor - and note the tar strips still remaining on a concrete floor of what looks to be a converted warehouse. The "glowing" write-up impressed me as nothing more than a bunch of marketing mumbo-jumbo trying to make something big out of a few plastic panels and enclosures from an architectural firm trying to promote their services.

[tbrown]

I particiularly like the "rafter" look for the ceiling.
At least they can say they are frugal.

[Bernie]

Sorry but they are anything but frugal. Their operating expenses are 3 times their revenue, with the largest expense being administrative overhead. I hope I am wrong about Youbet. They have a nice product. But they are in a very bad financial condition right now. Their losses have exceeded analysts expectations, and their cash on hand during the past year or so has fallen from $62 to $31 to $12 and now to $5 million. They have $3 million in accrued expenses and expenses payable. Their agreement to give away over half the company to TVG (itself financially troubled) and now their "temporary" waiving of transaction fees are a last ditch survival effort.

On the other hand, Mike, the other offtrack wagering companies are all on sound financial ground. eBet is owned by Penn Gaming, which owns casinos, slots, off track and on track wagering operations. OJC (now Woodbine Entertainment) has slot machines and 2 race tracks. Both of these are publicly held with annual reports and financial statements. Both are highly profitable. Also new on the scene is the Fairgrounds with their Net Bet and phone bet programs using Autotote. They even give modest rewards based on wagering activity, as does OJC and Philly Phonebet, which has not only that racetrack, but 6 OTB facilities. Finally, Winticket is owned by Beulah Park and River Downs. Tracks themselves have always been financially stable operations that generate substantial revenues and are highly appreciated by each state they are in.

For those with small wagering accounts, none of this is very important. It won't alter your lifestyle if Youbet goes under taking your account with them. But for others, IMO, there are better places to keep one's $ and to wager.

[Bruce]

No need to worry.
if You Bet goes away, TVG will pickup their online business, although TVG will likely
full price for its product. Remember TVG is supported by Gemstar/TV Guide, a huge
corporation. California will make or break TVG: If it can get enough business
out there -- as it expects -- the company will start making inroads.

next step: New York, which is complicated by the OTB-NYRA problem.


bruce

[Carl]

Bernie,

I am an "old style YOUBET customer", in that they won't give me the Total Access package (no Canucks allowed).

And my account is with Ladbroke, my checks to and from are with Ladbroke. YOUBET just gets a commission check on my bets made online from them (5% I believe).

So they go under, don't go under, doesn't effect my account at all.....

[MikeDee]

Bernie- wasn't referring to the other on shore wagering companies like winticket, but the off shore ones. I thought I saw some postings that you werr tring out some of Carls favorites, the ones that match your first $50, etc.

There are a number of other online wagering companies in this country, like you mentioned. but none of them have the software, the number of tracks available or have video for all of the tracks like UBET does. As far as I am concerned, now that they have dropped the fees there is no comparsion, UBET is the best. I'm not a UBET stockholder, so I don't have any hidden agenda, just a customer. I'm a fan. I like to watch the races I bet on, I'm a ex-TRN customer and wish they were still around. The only place you can watch all of the races you can wager on is UBET. If Ubet goes under, then I will be sitting here jumping from web site to web site tring to find a video feed for some race I want to watch or heading back to TDN, like commuting to and from a job.

I won't argue that UBet management has or has not done the right things. There are alot of start up companies where the expenses are out of line with the revenues in the early years. But there are a number of reasons why UBET revenues forecast have not materalized. They have been denied access to cutomers in CA, NJ and MI, three of the largest states. For along time couldn't get contracts with tracks because of the TVG, Magna, NTRA, NYRA fights.

One of the main reasons they moved was becasue they couldn't get the bandwidth they needed where they used to be and the video quality has improved considerably since the move. The picture of the office doesn't prove or disprove anything. How much did the move cost and were these coast above, below or average for a move of this type? They were losing money and tring to curb cost when they moved.

I agree with Bruce, UBET will be around for a few more months and they should pick up a number of CA customers. I would think that TVG/Gemstar will put up some money or take them over, so I don't believe my wager account with them will disappear anytime soon.

But IMO you can decide that you will punish management and take your business to someone with an inferior product. Sorta the cut off your nose to spite your face approach. OR you can go with the good product, and only keep enough money in your Total Access account that you are comfortable with.

[Bernie]

Mike,

I certainly see nothing wrong with having a SMALL Youbet account in order to gain video access. I may even do that myself after it becomes legal in CA. Not giving them much business has nothing to do with punishing management. I could care less about that. What I do care about is the safety of my funds. TVG was given 20% of Youbet and a share of their handle. They have nothing invested in the company yet and are in no position themselves to bail out anyone. At least if you have $ directly with TVG, your $ are protected by a surety bond, which they felt was important given their own financial condition. I was told this bond does not apply to Youbet customers.

There are other reasons for me to go light on Youbet:

The transaction fee waiver (only for Total Access, not MEC, tracks) is only good through March.
Credit card charges are put through as cash advances which result in bank charges.
There is no ability to cancel or change a wager after it has been placed.
IRS reporting

Many or all of these drawbacks do not exist at other places, such as OJC in Canada. Anyway, to each their own...

[Frank N]

I recently bought 2,000 shares of YouBet at 62 cents per share.

[Bernie]

Statement made by Youbet in a report recently filed with the SEC:

"In order to continue its operations as presently constituted and to fulfill its business plan, management believes that the Company will need to obtain additional working capital either in the form of debt, equity or a combination thereof. No assurance can be given, however, that the Company will be successful in raising capital."