WEB GAMING COMPANY CLOSES VEGAS DOORS

Wednesday, 31 Jan 2001

By KEVIN FERGUSON
lasvegas.com/GAMING WIRE

   LAS VEGAS - Financial troubles have forced an Internet business 
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 in 1999 
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 that 
gambles at one of the casinos after being lured by the Web site's 
comp packages.
    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 financing from 
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 and the 
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), advertising and 
salaries," Woolf said.
     Carl Burger, playsys.com chief operating officer, failed to 
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, because if 
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 is uncertain. 
People who gamble big bucks may not be Internet users."
    When the company closed its Las Vegas office, three full-time 
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 Internet companies 
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.
 

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