The Billion-Dollar Sure Thing

Bob Moriarty
Archives
Jan 8, 2015

In most of the world, soccer or football as they term it, is a really big deal. The last World Cup was held in Brazil in 2014. The next will be held in Russia in 2018.

Imagine for a moment that Brazil, a five time World Cup Winner plays the United Kingdom, a one time World Cup Winner in the final. The entire world is watching.

You have an application on your iPad where you can place a bet. You can make bets in increments of £1 that your team scores the first goal in the next five minutes of the match. You can place the bet when your team is running down the field kicking the ball back and forth while the whole British team is watching as Miss Brazil falls out of her string bikini top. The entire British team is wondering if those magnificent teats are going to hit the floor or not. Your iPad doesn’t care; you can place the bet at any time. The Brazilians don’t care; they are the ones who cut the tie on her top. They have seen it all before.

If you win your bet, you are entered into a pool at the end of the match. Everyone who bet correctly during the entire match on either team to kick the first goal in the next five minutes gets a pro rata share of the total pool. The total pool is 65% of all the bets placed.

With 250 million fans in the world in 200 different countries, can you imagine there being 1 billion £1 bets in total? Me too. That’s why I called it the Billion-Dollar sure thing. It’s a bet on a match that is going to happen one day.

I’m not sure what the odds would be of making a winning bet. According to Wikipedia, the 2005-2006 season of the English Premier League produced an average of 2.48 goals per match. That’s total. So on average each team has only 1.24 goals per match. That’s over two 45-minute periods each, naturally, called a half. Not only might your team not score in the next five minutes of the 90 minutes total, it might not score first. I can see a situation with a 0-0 game going into the last five minutes where everyone in the world is betting on both sides. You might have $100 million in bets per minute.

The application exists today and no doubt by the time of the next World Cup in Russia, you will be able to place such a bet on your wrist watch, you won’t even need an iPad.

Now if you like the idea of such a betting pool on one game, how would you like to own the company that holds the rights to the program for Pari-mutuel betting they named Goal Time? That company gets 10.4% of the total amount of wagers. I wouldn’t mind getting a piece of a Billion dollar market. On one silly football game.

I have some interesting phone calls now and again that my readers know nothing about. On the 6th of January I had an early morning conference call with Charles Shin, Chairman of Contagious Gaming (CNS-V). I was sort of so-so about the call in advance because it sounded a lot like one of those technology companies with a great idea that claims to be better than the 12,563 other technology companies out there with a great idea.

After the phone call, I realized that not even the Chairman of the company understood the full Blue Sky potential. Really, I see a $1 billion game down the road. One flipping game, $1 billion in bets. And I happen to think that soccer is a really stupid game.

The total concept and how CNS fits into the market confused me for a little while. I had to ask a lot of questions. If you go to their site and look at the sample bet for Goal Time, it’s even more confusing. I would tell Charles Shin to redo the website entirely. It looks and feels like a site written by a 25 year old who wants to show how much Dancing Baloney he can fit onto one page. But the page utterly fails to communicate and isn’t that the real purpose of a website? In any case, the way Charles explained Goal Time to me isn’t the way it is explained on their site.

Contagious Gaming is the software link between the match being bet on and the bookie or bookmaking establishment. This is also called B to B for business to business. The bookie or bookmaking company has the only contact with the customer or B to C for business to customer.

Every sport or lottery and every different country or state has different laws regarding bets. Naturally there might be hundreds of millions of people in different countries that would like to make a bet today on such a soccer match in Russia in 2018 but cannot because of the laws. You can expect that to change. The Internet knows no boundaries but it’s a fact of life today that there are a myriad of laws regarding who can bet on what from where. For now CNS has an agreement with a bookmaker in the UK where they can offer the software and betting platform to legal punters in the UK. CNS has no connection of any form directly with the bettor other than providing the software. They do not collect the money or vet the bettor, that’s the function of the bookmaker.

Taking the example of the people betting on the Brazil-UK soccer final in the World Cup in 2018, I said the betting pool was 65% of the take. Naturally the government of whatever country allows such bets wants their piece of the remaining 35% and the bookie wants his slice of the 35% and CNS is left with 10.4% for their software platform. That could be a very big slice coming in 2018.

Great ideas are cheap, a penny for a hundred. I have never met anyone who didn’t have a good idea to make money using your money. It’s simple, you take the risk, they make the money. Works every time. I am bored silly by great ideas, they mostly cost me money. But the more Charles talked to me about Contagious Gaming, the more I liked it.

The company went public by completing a RTO in September of 2014. Since then they have showed excellent liquidity but that’s mostly because the shareholders of the original company finally had a liquidity event and could bail out.

As of the anticipated closing of the acquisition of a UK based Bingo company in early 2015, CNS will be mostly cash flow neutral. CNS is paying about $4 million plus 2 years profit to acquire a Bingo company that earned $2.3 million in 2013. Think of it as being about 4 times earnings. That’s a pretty good deal. CNS intends to acquire as many small gaming companies as possible and put them in their stable. They have to because of the myriad of laws regarding betting. On the other hand, the small gaming companies don’t have any other natural suitors so it’s a good deal for each of them.

Another interesting partnership is getting into bed with the Georgia lottery. CNS is a first-to-market entry in the instant lottery market by establishing a partnership with the state of Georgia. It’s simple, instead of buying a paper instant lottery ticket in Georgia, the bettor can place bets online from anywhere legal. Like the printers of current paper lottery tickets, Contagious will receive 1% of the lottery ticket price. That doesn’t sound like much. That’s the same deal the printers get today and the US total lottery sales are $36 billion. 1% of that is $360 million. For writing the software and having a website that takes bets.

Contagious Gaming is staking their claim on the online gambling gold mine. It will be very big. There will come a time where $1 billion is bet on one game. It could be the World Cup in 2018 or the Super Bowl in 2016, I don’t know when, I just know there will be a Billion-Dollar sure thing sometime. The software from CNS will be driving it.

With just over 70 million shares selling for just over $.50, the company is worth just over $35 million today. I expect them to be earning that much in a couple of years. This is a very big arena they are playing in. Right now they are the leaders. When they get big enough, someone will throw them a check with a lot of zeros on it and take them out. They are a natural for one of the casinos to own or the existing big bookmaking companies to desire under their umbrella.

The race is not always to the swiftest, nor the battle to the brave.

But that’s the way to bet.

Contagious Gaming is not an advertiser. Do your own due diligence.

Contagious Gaming Inc.
CNS-V $.53 (Jan 07, 2015)
KSMRF-OTCBB 70.6 million shares
Contagious Gaming website

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Bob Moriarty
President: 321gold
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