FROST & SULLIVAN: Online gambling companies prosper asas market thrives under fire.

M2 PRESSWIRE-12 October 1999-FROST & SULLIVAN: Online gambling companies prosper as market thrives under fire (C)1994-99 M2 COMMUNICATIONS LTD

RDATE:121099

SAN ANTONIO -- Despite the debates over the legal status of Internet gambling, software developers and online gambling operators continue to churn out more games and features to satiate their customers? appetites.

Frost & Sullivan?s latest strategic research, World Online Gambling Markets, examines this exciting market, which generated $834.5 million in 1998'an increase of more than 100 percent over 1997. Analysts expect the Internet gambling software and operations markets to continue experiencing exponential growth up to 2005, when the market will be worth $10.95 billion.

Frost & Sullivan researchers report that software developers and operators maintain that laws prohibiting online gambling will be effectively unenforceable and that people who wish to gamble online will do so regardless. Consequently, market participants march forward despite legal uncertainties engulfing the market.

Key market opportunities revolve around the Internet. As the number of Internet users swells, the pool of potential online gamblers will expand as well. To power growth, gambling software developers and operators are focusing on international markets such as Europe and Asia, where the fastest Internet user growth is occurring.

Improving technology is attracting new gamblers. The development of Java-based software enables players to gamble directly from a Web browser without having to wait for a lengthy download. The widespread availability of graphic accelerators and increasing bandwidth raises the sophistication of graphics on browser-based games to a whole new level. Online companies will have to withstand several threats to stay viable. Enforcement of laws prohibiting online gambling in the United States could become a major stumbling block. The absence of a formal regulatory body has led to a lack of credibility for the industry. The possible entrance of land-based casinos into the market also poses a threat.

'If the U.S. government opts to regulate Internet gambling, this will open the floodgates to the Harrah's and Caesar's of the world to establish online operations and essentially drive the lesser-known operations out of the market,' says the author of the report.

However, market participants able to compete on the basis of reputation, quality, price, features, available games, available sportsbook bets, foreign language sites, payout rate, 'comp' programs and timely payouts will be winners.

World Online Gambling Markets analyzes the online gambling operations market by geography, sportsbook versus casino wagers and net revenues and gives forecasts and percentages of revenues derived from revenue-sharing contracts for software developers. By discussing key industry trends, drivers and restraints, this research provides readers a privileged industry overview.

Frost & Sullivan is an international marketing consulting and training company that monitors the information technology industry for market trends, market measurements and strategies. This ongoing research is used to complement a series of research publications and to support participants with customized consulting needs. Free executive summaries are available to the press through our media relations department.

Report: 7168-70 Publication Date: October 1999 Price: $3,450

CONTACT: Frost & Sullivan's Public Relations Department Tel: +44 (0)171 915 7824 Fax: +44 (0)171 730 3343 e-mail: kristina.menzefricke@fs-europe.com WWW: http://www.frost.com

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