|WEB GAMING COMPANY CLOSES VEGAS DOORS
Wednesday, 31 Jan 2001
By KEVIN FERGUSON
LAS VEGAS - Financial troubles have forced an Internet
that caters to the casino industry to shut its Las Vegas office,
while leading to the departure of Chief Executive Officer Larry
Woolf, who once held the same post with MGM Grand.
Israeli entrepreneur Zvika Greenboim started playsys.com
as a Web-based business that offers gamblers information about casino
comp packages around the world for an annual $100 membership fee.
The company, which opened its Las Vegas branch in
early 2000, also
has contracts with 60 casinos worldwide.
Playsys.com receives a percentage-based fee for each customer
gambles at one of the casinos after being lured by the Web site's
Woolf said the company tried to run the business
from a Las Vegas
headquarters, but he noted it was too expensive because the software
and the financial backers were in Israel.
"I had a large salary and I couldn't reduce my salary
and work for
them," said Woolf, who left playsys.com on Jan. 15.
The company was started with a $6 million round of
Israeli venture capital firm STI Ventures. Those funds have nearly
been depleted on company salaries, software, advertising costs and
travel expenses, Woolf said.
The privately held company is still not profitable
expected second-round of financing will be much smaller, said Woolf,
who no longer has any ties to playsys.com.
"The company had to reduce traveling (expenses),
salaries," Woolf said.
Carl Burger, playsys.com chief operating officer,
return Wednesday phone messages seeking comment.
One Internet research analyst said playsys.com's
path-to-profitability relies on a number of factors.
"First it depends on how many hotels are participating,
a customer's favorite hotel isn't participating, then he probably
won't be willing to join," said Andrew Bartels, an analyst with
Cambridge, Mass.-based Giga Information Group.
"Second, if gamblers in general are Internet users
People who gamble big bucks may not be Internet users."
When the company closed its Las Vegas office, three
employees lost their jobs. Woolf was uncertain how many part-timers
worked in the Las Vegas call center. The company's South Africa
office also was closed. The company is keeping its offices in London
and Israel, which serves as the headquarters.
The company now has about 12 employees, most of
whom are based in Israel.
STI Ventures, which focuses on jump-starting
with first-round financing, is not assisting with the next round of
funds. Woolf said the financing is expected to come from two or three
other sources, but declined to release the investors.
Woolf said he now plans to turn most of his effort
toward his Las
Vegas consulting company, Navegante Group, which helps develop and
market casinos worldwide.
Phone: (702) 383-0478
Fax: (702) 380-4590