E-MAIL  NEWSLETTER  OUR PICKS

 Date:  

 TOOLS

 Our Picks

 COMPANY

Disclaimer

NewsLetter

The Numbers

BOOKMARKS

INSTITUTIONAL

INSTITUTIONAL BUYING/SELLING

(Blue = Buy, Red = Sell) - Thomson I-Watch

HOT NEWS!

Feb. 25 (Bloomberg) -- ELOT Inc., which plans to sell lottery tickets on the Internet, agreed to buy Virtgame.com Corp. for about $17.4 million in stock to gain Virtgame.com's contract with a state lottery in Argentina. Read the release.

International Lottery & Totalizator Systems and eLottery Sign Agreement To Process Internet Bets for UK Charity Lottery!! Read the release.

• Conference Call - 3/7/00^NEW

• Thom Calandra's StockWatch - 3/9/00^NEW

• WSJ Article dated 3/2/200

• INVESTOR RELATIONS- INTERNET SLIDE SHOW  

• Thom Calandra's StockWatch - 1/13/00

• The Motley Fool - 1/13/00

• eLot IR Q&A   eLotteryFreeway.com

"Bullish on ELOT"      

eCommerce Solutions for the World's Lotteries

eLottery's Objective Using its past experience and market tested products, eLottery is committed to leading the governmental lottery industry into the eCommerce market. The Company has positioned itself to become a leader in the area by working hard to address the many complex legal, political and social issues facing governmental lotteries as they address the significant market changes signaled by the rapid growth in Internet sales. The Company has developed, installed and operated Internet, Intranet, telephone, communications, accounting, banking, database and other applications and services to facilitate the electronic sale of new and existing lottery products worldwide.

The Company has developed a new generation of proprietary lottery technologies designed to take advantage of the impact that the Company believes recent advances in telecommunications and computers will have on the nature and delivery of lottery products and the support systems necessary to administer them. eLottery has developed secure, integrated Internet, Intranet and telephone distribution systems for a variety of lottery products. These systems provide for electronic sales, customer support, accounting and auditing functions for both periodic and instant draw lottery games and instant electronic "scratch-off" games. Using these systems, eLottery can serve as a web based retailer to distribute lottery tickets for both instant and periodic draw lottery games over the Internet, or can distribute lottery products via an Intranet or through a telephonic voice response unit.

The Company believes that the electronic distribution of lottery tickets through these systems will increase sales for lotteries both because the systems make the purchase of tickets more easily accessible and because they make use of technology to enhance and enliven the lottery gaming experience. As a web based retail sales agent, eLottery will have the ability to remain open 24 hours a day, seven days a week without incurring additional overhead costs, and will be able to electronically distribute lottery products and offer lottery players convenient and timely product fulfillment, including the ability to play prize winnings immediately or receive cash credits on an overnight basis via electronic funds transfer. The Company believes that its convenient electronic lottery distribution systems will encourage lottery patrons to play more frequently and will also attract new lottery customers. In recent years, lottery authorities have recognized that by offering new games or products, they are often able to generate significant additional revenues. The Company believes that its systems provide lotteries with numerous advantages relative to traditional means of distribution including player tracking ability and the ability to support more entertaining games.

Improving the Distribution System eLottery was founded to take advantage of recent advances in personal computers and telecommunications to improve the way lottery tickets are distributed. The Company believes that its lottery distribution systems offer significant advantages over the traditional means of distribution. The Company has spent over $30 million designing, developing, operating and gaining customer acceptance of its lottery distribution systems since its formation in 1993. The Company has developed Year 2000 compliant electronic lottery products and distribution systems. Using its distribution systems, eLottery believes that lottery sponsors will be able to increase the availability of their products to their customers and broaden their customer base by tapping into the eCommerce market. Because its electronic distribution systems are flexible and more easily reconfigured than traditional distribution systems, eLottery believes that it can enhance both promotional opportunities and customer satisfaction. . In addition, instant lottery tickets are currently sold only in physical paper form and must be manually "scratched-off" to play the game. The Company believes that electronically delivered instant lottery games can be a superior product due to their (i) faster play, (ii) lower operating and product costs resulting from their virtual nature and (iii) greater entertainment value.

Business Strategy eLottery is currently working to capitalize on its proprietary Internet lottery distribution systems to become a direct sales agent for governmental lotteries and a leading provider of products and services for the lottery industry. The Company expects to earn revenues primarily from four recurring sources: (i) agent and sales commission fees; (ii) software and system licensing fees; (iii) banking or credit card clearing fees; and (iv) advertising fees. The Company plans to attain this goal through the following key strategies:

Enter into Agreements With Domestic and International Lotteries. The Company's strategy is to license its lottery distribution systems to lotteries worldwide. Since the Company's systems are configurable, it is able to offer numerous combinations of its products and services to meet the specific requirements of its customers. Further, the Company's systems will enable government lotteries to distribute their tickets across national borders, opening up significant markets that are currently inaccessible. The Company believes that government lotteries are widely viewed as fair and honest and are trusted by players. As a result, the Company believes that government lotteries will be the leaders in Internet lotteries. The Company is currently in various stages of negotiation with several U.S. and international lotteries to use its electronic lottery distribution systems. There can be no assurance that the Company will enter into any such agreements.

Enter into Strategic Alliances. The Company is actively pursuing strategic alliances with other companies in the Internet and lottery services industry. eLottery believes that by forming the appropriate strategic relationships, it can increase the penetration of its products and services. There can be no assurance that the Company will consummate such joint venture relationships.

As currently used in the lottery market, the term "on-line" does not refer to on-line sales. Rather, it refers to an inventory tacking system that involves the use of a network of special purpose lottery terminals connected through dedicated phone lines to a central lottery computer. It is not eLottery's intention to compete with these lottery service providers. Rather, in implementing of its electronic distribution systems, eLottery expects that governmental lotteries will require eLottery to interface with such a third party to independently track the status of electronic sales. Several of the larger "on-line" service providers have announced their intention to develop the capability to sell lottery tickets via the Internet. However, to the Company's knowledge, none of these providers have successfully developed and operated technology similar to that of the Company's systems.

Enhance Sales and Marketing. In order to realize the economic benefits of its proprietary lottery distribution systems, the Company plans to increase its sales and marketing efforts. The Company plans to hire additional sales and marketing professionals to promote eLottery's product line and services to lottery officials worldwide. The Company regularly engages public affairs and governmental relations advisors, including lobbyists, in various jurisdictions to advise legislators and the public in connection with lottery legislation, to monitor potential lottery legislation and to advise the Company in connection with the Company's lottery products and systems.

Maintain Technology Focus and Expertise. An interactive commerce platform is necessary to enhance the eLottery service offering, leverage the unique characteristics of the Company's products, and support lottery operations. The Company's development group has expended and will continue to expend substantial efforts developing, acquiring and implementing technology-driven enhancements to its systems.

Current Situation

Border Control ... A Key Piece of the puzzle 

This border control software that eLot inherits from VIRT will be important to the advancement of Internet based state lotteries. Although the states will WANT to sell tickets on-line, they do not want everyone in the US buying tickets in whatever state has the highest jackpot. The states will demand that the money stays at home (excluding PowerBall) and this software will give them a way to ensure that this happens. 

SALE OF EXECUTONE ASSETS

The Special Committee of the Executone Board of Directors has received multiple offers to purchase Executone's Computer Telephony and Healthcare Communications divisions and has retained Wasserstein Perella & Co. to assist in the evaluation, selection of and the negotiation with potential acquirers of the Company’s core businesses. Wasserstein Perella and the Special Committee are currently evaluating the offers and negotiating final terms. When the identity of the purchaser is finalized the Company will make a public announcement and a proxy statement will be mailed to shareholders explaining the transaction in detail and requesting approval. Once approved, Executone will change its name to eLottery, Inc. and will continue to trade under the ELOT symbol. Until the purchaser is determined, public disclosure of the specific status of negotiations with the various parties will only hurt the work of the Special Committee in its efforts to obtain the greatest value for the businesses. We expect to be complete a definitive agreement within the next 30 days.

STATUS OF GOVERMENTAL LOTTERY MARKETING

eLottery continues to market its web-based retail store concept to governmental lotteries both domestically and internationally. This is a complex marketing process and eLottery is currently addressing specific regulatory operational and security issues and has made substantial progress in addressing concerns about the expansion of gaming, border control, problem gaming and underage play. We are currently in discussions with prospects we believe will adopt the technology in the early market stages and feel we are closer than competitors to satisfying all the parties that need to be comfortable with our approach. Nevertheless, it is impossible to predict when a contract could be signed. We are taking the steps necessary to increase the probability and accelerate the timing of a contract and continue to be optimistic that we will be successful in securing clients.

STRATEGIC RELATIONSHIPS

eLottery has executed strategic partnership agreements with two traditional lottery service providers; Autotote and International Lottery and Totalizer Systems (ILTS). Work proceeds on developing an eLottery Internet interface to their systems. Our objective is to capitalize on their relationships with their lottery customers and leverage our marketing capability. The Company is currently pursuing additional strategic relationships of this type and expects to eventually develop secure interfaces with most of the world’s current lottery system providers. eLottery is also developing relationships and pursuing partnerships with well-recognized entertainment companies and other providers who have the proven capability to develop content for our site.

THE ELOTTERY BUSINESS MODEL

A cornerstone feature of eLottery's web based retailing will be the opportunity for a patron to legally purchase his or her state's or nation's lottery tickets on our web site. To better understand how eLottery will sell lottery tickets on the Internet, it is important to understand our retail model."

As we mentioned during our quarterly conference call, in order to best serve its governmental lottery clients, eLottery is building the a web-based equivalent of how tickets are conventionally sold. In the bricks and mortar world, lottery tickets are sold at stores that offer a variety of items such as milk, bread, candy, etc. Our plan in cyberspace is much the same, however instead of selling convenience items, we will offer those who come to our web site another value proposition.

Having processed over 10 million eCommerce transactions on the web, eLottery knows quite well what is necessary to attract the lottery player to the web. Our experience has taught us that "game play" entertainment helps attract and keep a patron who will also purchase a web based lottery product. Consequently, the company is in the process of buying and creating the entertainment game components. Examples of the entertainment that will ultimately be on our web site include: trivia games, match games, crossword puzzles, sports games, lottery information, news, contests, sweepstakes and lottery and other "for fun" game play. The games we offered as part of the US Lottery web site were very "sticky". The average player spent 4.1 hours per month with heavy players spending close to 30 hours per month.

The company then expects to derive revenue in four primary ways: a percentage of lottery tickets sales that pass through the company's web based retailer store, the sale of advertising, fees earned from data based marketing and license fees.

KYL BILL

11/22/99 - State Lotteries exempt from Kyl legislation!!!!!!! This is a significant step in eLot's business and the stock should show improvement near term.

The bill (S-694) being proposed by Senator Jon Kyl, R-AZ would ban Internet gambling and is focused on shutting down unregulated off-shore operations. In its current form the bill permits state lotteries to sell lottery tickets only on Internet terminals that are in stores or other public places. eLottery in conjunction with lottery associations and state governments are lobbying the Senate to change the language of the Bill and allow the broad intrastate sale of lottery tickets over the Internet. The states feel it is a states rights issue and the federal government does not have the authority to regulate state lotteries. The bill has moved out of the Judiciary Committee and is expected to be debated by the Senate this fall and we believe that the concerns of the state lotteries will be addressed in any final bill should it move toward enactment.

NATIONAL GAMING IMPACT COMMISSION

The Commission report is expected to contain areas of concern that can be eliminated or mitigated by eLottery's web based retailing system. For example:

Our view is using the Internet allows states to market their lottery products to those who are most able to afford it.

Outlook

You are encouraged to visit the eLottery site and view the FAQ’s, videos and background @ http://www.elottery.com

Company Management

Alan Kessman served as Chairman of the Board and Chief Executive Officer of Executone from 1988 until June 1998. He currently serves as Chief Executive Officer and a director of Vion Pharmaceuticals, Inc., a biopharmaceutical company, and as a director of Castelle Corporation, a networking faxing product company.

Prior to 1988, he served as President and Chief Executive Officer of ISOETEC Communications, Inc., a telephone and information systems developer and a predecessor of Executone, since 1983. From 1978 to 1983, Mr. Kessman served as President of three operating subsidiaries of Rolm Corporation, which sells telecommunications equipment, and from 1981 to 1983, he served as a Corporate Vice President of Rolm Corporation, responsible for sales and service in the eastern United States.

After graduating from Lehigh University Mr. Kessman earned a CPA certificate. He is presently living in Greenwich, Connecticut with his family and is active in charitable organizations. He is also actively involved in youth-oriented community activities, committing both time and resources to encourage youth participation in athletic activities.

Disclaimer

In order to be in full compliance with the Securities Act of 1933, Section 17(b), WrightStock advises the readers of this document that it has  received no compensation of any form for its efforts in researching, writing, presenting and disseminating the information contained herein.