Online gaming developer relocates to California

Thursday, Aug. 8, 2002 | 10:59 a.m.

A Las Vegas-based developer of online gambling systems has relocated to California to take advantage of new state regulations that allow residents to bet on horse races by telephone and computer.

The company, i2corp.com, also will be able to draw from a wider pool of technology developers in California that will be needed to create Internet gambling software, President and interim Chief Executive Officer Chris Almida said.

The small, family-run enterprise has lobbied Nevada legislators for years to develop rules to legalize Internet gambling in this country, which could open the door to relationships developing Internet gambling platforms for major U.S. casinos. Existing clients are involved in running Internet betting sites in countries where the practice is legal, Almida said.

The company has more recently made headlines for suing Internet operators that it claims have infringed on a patent held by its subsidiary, Home Gambling Network.

Home Gambling Network holds a patent on a gambling method that involves live remote betting events that utilize electronic financial transactions. The patent isn't specific to any particular technology, covering live wagering through a television, computer, wireless device or any other system in which live bets are paid for electronically, according to the company.

Home Gambling Network has successfully litigated three suits and is involved in a fourth against Macau casino magnate Stanley Ho and casino companies controlled by Ho, Almida said.

The company makes money by charging a licensing fee to companies that use its patented method to develop online betting sites. It has recently expanded its business to develop its own software platforms.

The company has not yet made a profit. For the first quarter of this year, i2corp.com reported a net loss of just over $1 million, compared to a net loss of $1.4 million a year ago, according to an annual report filed with the Securities and Exchange Commission. Revenues totaled $120,000, up from $2,000 a year ago.

It will continue to market its platform to major casinos in Nevada as well as in Atlantic City from the company's new headquarters in Solvang, Calif., located on California's central coast.

Nevada's medical malpractice problem, which has threatened the availability of quality health care, also factored into the company's decision to leave the state, Almida said. Almida's wife, i2corp.com Chief Executive Officer Deedee Molnick, is on maternity leave. The wife of another executive also is pregnant, he said.

Regulations adopted last year, aimed at boosting California's ailing horse racing industry, allow residents of any state to set up accounts in which they deposit money in advance before making long-distance bets. California is home to several major horse racing venues, including Santa Anita, Hollywood Park and Del Mar.