Add CES to the P2P Mix

With a major licensee under its belt and shares trading on London's Alternative Investment Market, Columbia Exchange Systems (CES) Software Ltd. looks to be in a good position to impact the increasingly crowded person-to-person betting market.

CES bills itself as a leading software solutions provider for the industry. Its principle technology is "WagerMatch," exchange software designed for online bookmakers.

The company's biggest challenge is separating itself from the rest of a growing list of companies seeking P2P contracts with big-name operators. TradingSports Ltd., for example, has already landed the likes of BetOnSports.com, Sportingbet.com, BetCRIS.com and BetWWTS.com as white-label clients.

But CES answered impressively in the early going by inking a deal with BetAndWin.com in September, making the popular Austria-based online betting operator the CES's marquee licensee. That deal resulted in Ebexx, a joint venture between the two companies.

CES CFO James Lanthier said BetandWin.com is just the start.

"We are working on other relationships with other operators to build out our business development," Lanthier said, "We are in good position to grow our business with the listing on AIM."

The company is also stressing integrity and is only partnering with operators based in licensed and regulated jurisdictions.

Lanthier is confident this will put them in good position to partner with U.K. operators after a gambling bill aimed at expanding gambling services in England is passed. That could happen as early as late this year.

Until then, CES will focus on operators who are in "tier-one" jurisdictions.

"We accept no North American bets," Lanthier said. "We are looking for partners with strong brands and ties to their customers. We think this is the right model for the P2P industry."

Lanthier also stressed that exchanges have a big future in the sports betting landscape.

"The P2P market is just starting to get realized," Lanthier explained. "There is plenty of room for growth and operators who have a strong brand and a good understanding of the marketplace are in good position to capitalize on the future of P2P."

The company raised more than £4.3 for its AIM float in December, which CFO James Lanthier said attracted institutional investors from North America, Continental Europe and all over England. Shares were traded at 68p and have since gone up to 75p.

Its chief executive, Lorne Abony, said the IPO gave them, and the P2P industry, a vote of confidence.

Abony said the company is "well positioned to further build and strengthen our position in the explosive growth market of person-to-person exchange betting."

CES is led by a pair of executives known for their leadership in the Internet world, both in and out of gaming.

Chairman Andrew Rivkin joins Abony, who founded and ran Petopia.com, an online pet food and supply destination, prior to its sale to Petco. Rivkin was the founder and former president and CEO of CryptoLogic.

With that leadership, and the brightness of the P2P sector, Lanthier sees big things in the future.

"The message we got from the finance community, and we are getting right now from the gaming world, is clear," he said. "The acceptance of P2P betting as a viable business model has increased, and this is a segment of sports betting that is going to be around and could come to dominate the marketplace in the future."