THE WORLD SERIES

OF PAIGOW
Draft Business Plan

Note: Names and details from the original version of this document have been changed.

Revised May 10, 2014

Revised: 05/10/14, 11:18 PM Page 1

 TABLE OF CONTENTS
1.  EXECUTIVE SUMMARY .............................................................................................................................................. 3 
1.1.  COMPANY BACKGROUND ........................................................................................................................................ 3 
1.2.  MANAGEMENT & ADVISORY BOARD....................................................................................................................... 3 
1.3.  MARKET OPPORTUNITY .......................................................................................................................................... 3 
1.4.  PRODUCTS .............................................................................................................................................................. 4 
1.5.  LEGALITY OF WSP ................................................................................................................................................. 4 
1.6.  FINANCIAL OVERVIEW ........................................................................................................................................... 4 
2.  COMPANY ................................................................................................................................................................... 5 
2.1.  DESCRIPTION OF BUSINESS .................................................................................................................................... 5 
2.2.  INITIATIVES AND REVENUE STREAMS .................................................................................................................... 5 
2.3.  MANAGEMENT TEAM.............................................................................................................................................. 5 
2.4.  SOURCES AND USES OF FUNDS............................................................................................................................... 6 
2.5.  EXIT STRATEGY ...................................................................................................................................................... 6 
3.  INDUSTRY & MARKET ............................................................................................................................................... 7 
3.1.  GAMING PROLIFERATION ....................................................................................................................................... 7 
3.2.  ADDRESSABLE MARKET.......................................................................................................................................... 8 
4.  REGULATORY ENVIRONMENT ................................................................................................................................. 10 
4.1.  UNITED STATES .................................................................................................................................................... 10 
4.2.  RECENT TRENDS .................................................................................................................................................. 10 
4.3.  REGULATORY ENVIRONMENT IN ASIA .................................................................................................................. 11 
4.4.  LEGALITY OF WSP ............................................................................................................................................... 11 
5.  COMPANY’S LINES OF BUSINESS ............................................................................................................................. 12 
5.1.  ONLINE GAMBLING .............................................................................................................................................. 12 
5.2.  TOUR & TELEVISION ............................................................................................................................................ 12 
5.3.  AFFILIATE LICENSING ......................................................................................................................................... 12 
5.4.  SPONSORSHIP & MERCHANDISE .......................................................................................................................... 13 
5.5.  LAND-BASED EVENTS .......................................................................................................................................... 13 
6.  MARKETING STRATEGY .......................................................................................................................................... 14 
6.1.  PRIMARY INITIATIVES .......................................................................................................................................... 14 
6.2.  SALES & PROMOTION ........................................................................................................................................... 14 
6.3.  PUBLIC RELATIONS .............................................................................................................................................. 15 
6.4.  GEOGRAPHICAL STRATEGY .................................................................................................................................. 15 
7.  TIMELINE & MILESTONES....................................................................................................................................... 16 
8.  OBSTACLES & CHALLENGES ................................................................................................................................... 18 
8.1.  COMPETITIVE LANDSCAPE ................................................................................................................................... 18 
8.2.  BARRIERS TO ENTRY............................................................................................................................................. 19 
8.3.  RISK FACTORS ...................................................................................................................................................... 19 
9.  FINANCIAL OVERVIEW ............................................................................................................................................ 20 
APPENDIX A: GREATER CHINA OPPORTUNITY .................................................................................................................. 21 
APPENDIX B: REGULATORY ENVIRONMENT IN ASIA ......................................................................................................... 22 
APPENDIX C: CASINO TOUR PARTNER BENEFITS............................................................................................................... 23 

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1. EXECUTIVE SUMMARY
1.1. Company Background
The World Series of Paigow (WSP) is a U.S.-based gaming media company focused on expanding the popularity of
Asian gaming, particularly Paigow Poker, through regulatory-compliant operations.
WSP is the first company to build a sustainable, profitable online gaming business that complies with all laws and
regulations of every Asian country in which it operates. The company is focused on building a complementary set of
gaming-related products and services that, collectively, will serve as an attractive, regulation-compliant foundation
for larger movers in the fast-developing Asian gaming space.

1.2. Management & Advisory Board

Collectively, The World Series of Paigow’s managers and board members have over 40 years’ work experience and
an extensive network of contacts in gaming and media. The founders have served in senior-level roles developing
and catalyzing the online poker boom, and look to duplicate this success in Asia.
Co-founder Jake Han was a Vice President of the Poker Advisors’s internet division. Company president Evan Chou
co-founded an online social network for poker players that was sold to PartyGaming in 2006.
Supporting the founders are two highly respected Asian entrepreneurs: Leo Cheong owns the Industry Casino, and
Everly Ma is a former Chairman & CEO of Cloud Media Group, as well as a current and former board member for
several Fortune 500 companies:
Evan Chou- Founder
 Former Head of Backgammon and New Products at PartyGaming.
 Founder/CEO of DateAsia
 Former consultant to Poker Advisors, Industry Casino, PlaceYourBets.net
Jake Han- Founder
 Former Head of Strategic Marketing at PartyGaming.
 Former Vice President- Online of the Poker Advisors Corp.
 Former Co-founder and CEO of ChipChamp Inc.
Leo Cheong- Chairman of the Board
 Owner of Industry Casino and Metallic Park Casino
Everly Ma- Chairman of the Advisory Board
 Former Chairman and Chief Executive of StarTV Group
 Former President of Gaming Systems International and Airbus Asia

1.3. Market Opportunity

Gaming went mainstream in the late 1990s, with the explosion of interest in poker as a participation sport and media
spectacle. A “perfect storm” of factors led to the proliferation of poker, including the movie “Rounders”, internet
Poker websites, the televised Poker Advisors, and the victory in poker’s signature event, The World Series of Poker,
by an amateur who won his entry fees by playing online.
An independent estimate by Global Betting and Gaming Consultants (‘GBGC’) puts the global gaming market’s
gross gaming yield for 2006 at $279.0 billion, up from $265.5 billion in 2005. According to Datamonitor, Asia-
Pacific alone generated $163 billion for the casino and gaming industry in 2006, which was equivalent to 53.3% of
total global revenues.
The strength of the internet as a gaming medium and the growth in the popularity of poker as a leisure pursuit in
international markets have delivered strong growth in both the number of people playing online and the total amount
of revenue captured by the operators.

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 Often referred to as "Chinese Poker", Paigow is the most widely played game in China, Japan, Taiwan, Korea and
other Asian countries with high levels of play in USA and Europe.
The opportunity in greater Asia is supported by significant trends:
 Nearly 300 million people worldwide play Paigow.
 Greater Asia is estimated to have 337 million internet users, a 235% compounded annual grown over the
last seven years.
 China now has 23 million online game players.
 There were 8 million Asian viewers in the “sports and games” category of StarTV in 2006.

1.4. Products
WSP is engaged in creation of internationally-branded content, online & offline games, entertainment, and
sponsorships. Specifically, the company is building a portfolio of 13 revenue-generating businesses centered on the
proliferation of online gaming in Asia. These businesses are grouped into several themes:
 Online Gambling
 Tour & Television
 Affiliate Licensing
 Sponsorship & Merchandise
 Land-Based Events
The World Series of Paigow focuses on Asia’s most popular game in Paigow. WSP will use that game as an entry
point into the marketplace but look to expand its operations and offerings into other popular Asian games, including:

 Traktor Poker “Tuo La Ji” (拖拉機)

 Fight the Landlord “Dou Di Zhu” (鬥地主)
 Pachinko (パチンコ)
 Big Two “Da Lao Er” (大老二)

1.5. Legality of WSP

WSP has developed various proprietary business processes that will ensure that the game play is 100% fair and
abides by the various regulations where WSP gaming transactions occur. Issues addressed include:
 Fraud Prevention
 Player Registration
 Customer Authentication
 Underground Gambling
Such precautions will enable The World Series of Paigow to attract large companies as strategic partners and
potential acquirers who seek 100% legal business models for their inevitable expansion into Asia.

1.6. Financial Overview

The World Series of Paigow derives its valuation from two sources: a discounted cash flow based on company
financials, and price-to-earnings ratios of similar companies.
DCF Valuation: $419,414
Range of Comps Valuations: $164,115 TO $724,014

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2. COMPANY
2.1. Description of Business
The World Series of Paigow (WSP) is a U.S.-based gaming media company focused on expanding the popularity of
Asian gaming, particularly Paigow. The company owns and operates a high-stakes televised Paigow tour to serve
mainly as a publicity tool for WSP’s online properties.
WSP is the first company to build a sustainable, profitable online gaming business that complies with all laws and
regulations of every Asian country in which it operates.

2.2. Initiatives and Revenue Streams

WSP is engaged in creation of internationally-branded content, online & offline games, entertainment, and
sponsorships. Specifically, the company is building a portfolio of 5 revenue-generating businesses centered on the
proliferation of online gaming in Asia:
 Online Gambling
 Tour & Television
 Affiliate Licensing
 Sponsorship & Merchandise
 Land-Based Events
In addition to Paigow, WSP will be offering online and offline products involving other major Asian games,
including Traktor Poker, Fight the Landlord, Pachinko, and Big Two.
Revenue Streams are discussed in more detail in Section 4: Company’s Products.

2.3. Management Team

Collectively, The World Series of Paigow’s managers and board members have over 40 years’ work experience and
an extensive network of contacts in gaming and media. The founders have served in senior-level roles developing
and catalyzing the online poker boom, and look to duplicate this success in Asia.
Co-founder Jake Han was a Vice President of the Poker Advisors’s internet division. Company president Evan Chou
co-founded ChipChamp, an online social network for poker players that was sold to PartyGaming in 2006.
Supporting the founders are two highly respected Asian entrepreneurs: Leo Cheong owns the Industry Casino, and
Everly Ma is a former Chairman & CEO of Cloud Media Group, as well as a current and former board member for
several Fortune 500 companies.
Evan Chou- Founder
 Former Head of Backgammon and New Products at PartyGaming. (London Stock Exchange: PRTY)
 Founder/CEO of DateAsia (Leading Asian online dating website) which raised over 20mm
 Former President of Amagazine (Leading Asian American print publication)
 Former Andersen Consulting manager
 Former consultant to Poker Advisors, Industry Casino, PlaceYourBets.net
 Graduate of Notre Dame University
Jake Han- Founder
 Currently Head of Strategic Marketing at PartyGaming. (London Stock Exchange: PGA)
 Former Vice President- Online of the Poker Advisors (Nasdaq: PADV)
 Executive Producer of WPT multimedia programs and WPT Behind the Scenes.
 Former Co-founder and CEO of ChipChamp Inc. (Leading online social network for poker players).
Acquired by PartyGaming in June 2006.

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  Former Corporate Development Advisor for Apple Inc. (NYSE: AAPL) a former Fortune 500 technology
company with $6 billion in sales.
 MBA Kellogg (Northwestern University)
Leo Cheong- Chairman of the Board
 Owner of Industry Casino and Metallic Park Casino.
 Sits on various boards including the Advisory Board Member of the Texas Gambling Control Commission,
California Problem Gambling Council as well as various Chinese charitable and benevolent associations.
Everly Ma- Chairman of the Advisory Board
 Former Chairman and Chief Executive of StarTV Group.
 Former President of Bolton Worldwide.
 Former board member of Apple Computers and Palm.
 Former President of Gaming Systems International and Airbus Asia
 Current Advisory Council member of Adidas Inc.

2.4. Sources and Uses of Funds

The World Series of Paigow Series A Preferred stock is capitalized with $1 million at a $10 million post-money
valuation. Series A financing closed October 2, 2007.
Ownership is divided among three principals: Chairman Leo Cheong and founders Evan Chou and Jake Han.
The World Series of Paigow seeks $4-6 million in Series B financing at a $21 million pre-money valuation.
Funds will be used for the following:
 Production costs
 Marketing
 Capital expenditures and Technology licenses
 Acquisition for Growth
 General Staffing & Administration
 Office
 Legal
 Professional fees (legal and contractors)
 Expansion into Asia

2.5. Exit Strategy

Asia provides a major growth target for the current online and offline gaming markets, where few legal
merger/acquisition targets exist and talented and experienced management is scarce. For these reasons, The World
Series of Paigow will be best-positioned to succeed in this marketplace and will be a prime acquisition or merger
target by many of the world’s top Asian gaming, which include MegaMedia, PartyGaming, MGM, Harrah’s,
Pokerstars, Sportingbet, Encore, and Kongstream.
Online and offline gaming stocks have recently had an increase in overall value with solid returns, providing a solid
foundation for an eventual public offering for The World Series of Paigow either stateside or in Asia.
Additionally, as a successful tour franchise, coupled with profitable online and offline events, WSP could run as a
dividend-paying, cash flow-positive business in two to three years.

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3. INDUSTRY & MARKET
3.1. Gaming Proliferation
3.1.1. The Global Gaming Market
An independent estimate by Global Betting and Gaming Consultants (‘GBGC’) puts the global gaming
market’s gross gaming yield for 2006 at $279.0 billion, up from $265.5 billion in 2005.
Online gaming is estimated to represent just 5.4% of the total, or $15.2 billion, compared with 4.7% ($12.4
billion) in the previous year.
Historically, North America has been the largest single gaming market and its residents are estimated to have
generated approximately 35.3% of the total global gross gaming yield in 2006, followed closely by Europe
(35.0%) and then Asia and the Middle East (19.3%). 1
The underground Asian gaming market is estimated to generate $77 billion in revenue annually.
3.1.2. Gaming Proliferation
Gaming went mainstream in the late 1990s, with the explosion of interest in poker as a participation sport and
media spectacle. A “perfect storm” of factors led to the proliferation of poker:
 The 1998 movie “Rounders”, starring Matt Damon and Edward Norton, introduced the American
movie-going audience to the then-underground world of Texas Hold’em Poker.
 Internet websites, including PartyGaming and PokerStars, offering real-money gaming, sprung up in
2000 and 2001, created a highly lucrative online revenue model.
 The Travel Channel and ESPN began to televise Poker Advisors tournaments, offering viewers a new
insight into the game, including “lipstick” cameras displaying the unseen hole cards of players. In
2003, Chris Moneymaker, an amateur player from Texas, won a satellite internet tournament for a seat
at The World Series of Poker. He proceeded to win the tournament’s flagship event and created an
explosive interest in amateur participation at big-money events. Poker became a cool game among a
younger crowd.
3.1.3. Online poker
Poker is one of the world’s most popular card games.
The strength of the internet as a gaming medium and the growth in the popularity of poker as a leisure pursuit
in international markets have delivered strong growth in both the number of people playing the game online
and the total amount of revenue captured by the operators.
According to PartyGaming, an estimated three million people worldwide were playing poker online in 2006.
GBGC estimates that approximately $3.1 billion of global gross gaming yield was generated from online
poker in 2006, more than double the $1.4 billion estimated to have been generated in 2004.
Excluding the US, GBGC estimates that the online poker segment will grow at a CAGR of over 14% between
2006 and 2010. 2
3.1.4. Asia-Pacific Gaming
In mainland China, WSP’s largest target market, all forms of internet and casino gambling are illegal.
However, according to Richard Li, the Director of the Chinese development firm, Sino, the Mainland Chinese
gambling market turns over $100 billion, 95 percent illegally.
According to Datamonitor, Asia-Pacific alone generated $163 billion for the casino and gaming industry in
2006, which was equivalent to 53.3% of total global revenues.

1 2006 Party Gaming Annual Report

2 Global Betting and Gaming Consultants (GBGC)

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 The Economist states that Macau’s gambling receipts increased by 22% in 2006 placing it just ahead of the
Las Vegas strip, previously the global leader. The number of visitors to Macau has grown from 10 million in
2003 to 22m in 2006 and Goldman Sachs estimates the number will reach 45 million by 2009.

3.2. Addressable Market

3.2.1. Paigow as the Preferred Game in Asia
Asia is the target market for The World Series of Paigow.
Poker, in both its offline and online forms, is currently considered illegal in China. However, in January 1998,
the States Sports Commission of China officially recognized Paigow by designating it the 255th sport. As
such, Paigow has substantial upside as the next great gaming trend.
Like poker, Paigow is a “skill-based” game that broadcasters worldwide are open to televising. WSP intends
to offer “play for free” and/or subscription based entertainment during its first software release.
Often referred to as "Chinese Poker", Paigow is the most widely played game in China, Japan, Taiwan, Korea
and other Asian countries with high levels of play in USA and Europe. Nearly 300 million people worldwide
play Paigow.3
According to William Woodsley, founder and CEO of PaigowTime, Paigow has an estimated one billion
players worldwide, a player base ten times that of poker. Paigow is considered by many to be the most
popular wagered game in the world and more than 58% of the players are female.4
3.2.2. Other Games
The World Series of Paigow focuses on Asia’s most popular game in Paigow. WSP will use that game as an
entry point into the marketplace but look to expand its operations and offerings into other popular Asian
games, broken down to two additional tiers (Tier 1 being Paigow).
Tier 2:

Traktor Poker “Tuo La Ji” (拖拉機) is a Chinese card game similar to bridge, and was declared a sport in
China in 2002 by the China Leisure Sports Administrative Center (CLSAC). The Poker Advisors has an
agreement with CLSAC to conduct, film, and broadcast nationwide tournaments throughout China.
For game play there are four players in two fixed partnerships, partners sitting opposite each other. A double
deck of standard international cards is used, with four jokers - two red and two black. There are 108 cards in
the deck altogether. The object of the game is to win tricks containing kings, tens and fives.
Fight the Landlord “Dou Di Zhu” (鬥地主) is a Chinese climbing game primarily for three players, but also
playable by four. The game is said to have originated in Hubei province but is now popular all over China,
and is also extensively played online. In each hand one player, the "landlord", plays alone and the others form
a team. The landlord's aim is to be the first to play out all his cards in valid combinations, and the team wins if
any one of them manages to play all their cards before the landlord.
Tier 3:

Pachinko (パチンコ) is a Japanese pinball game played on a vertical board, in which a plunger launches
small ball bearings that fall down through tracks of pegs. Although originally strictly mechanical, modern
pachinko machines are a cross between a pinball machine and a video slot machine.
First built during the 1920s as a children's toy, then emerging as an adult pastime in Nagoya, Japan around
1930, the machines are widespread in establishments called "pachinko parlors".
Players buy metal balls, usually 10-20 balls for 100 yen, or larger amounts at incrementally discounted prices,
which are shot into the machine, with the chance of winning more balls.

3 Paigow News, 2003.

4 World Paigow Players Association, 2002

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 Big Two “Da Lao Er” (大老二) is a “shedding” card game similar President, Crazy Eights, and Winner. It is
sometimes mistakenly called "Chinese poker" because of its Chinese origin and its use of poker hands, and
goes by many names, including Big Deuce, Deuces, Thirteen, Da Lao Er (Mandarin Chinese), Choh Dai Di,
Dai Di (both Cantonese), and Pusoy Dos (a variant of the game).
Popular in East Asia, where it originated, it is played both casually and as a gambling game. It is usually
played with two to four players, the entire deck being dealt out in either case (or sometimes with only 13 cards
per player). The object of the game is to be the first to get rid of all of your cards.
3.2.3. Asia as a Target Market
The movie “God of Gamblers” (1989) is ranked as the highest grossing movie in Hong Kong history - a
gaming oriented entertainment is the Hong Kong “Titanic”
Macau has replaced the Las Vegas strip in gross gaming revenues, and Asian gamblers are the highest
yielding players in Las Vegas.
China now has 23 million online game players. Recognizing these trends, in 2007, the Poker Advisors cut a
deal with China Leisure Sport Administrative Center to launch National China Poker League, and the
PokerStars Asia Pacific Poker Tour (PSAPPT) was launched.

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4. REGULATORY ENVIRONMENT
4.1. United States
In the United States, legalized online gambling is a complicated issue at the federal level. The SAFE Port Act
currently outlaws internet gambling, but a number of efforts have been made to redefine Paigow and other games as
“skill games” that might change their status related to online play.
4.1.1. SAFE Port Act & UIGEA
The Security and Accountability For Every Port Act of 2006 (or SAFE Port Act) was passed by the U.S.
Congress at midnight on October, 2006. The Act prohibits the transfer of funds from a financial institution to
an Internet gambling site, with the notable exceptions of fantasy sports, online lotteries, and horse/harness
racing.
The SAFE Port Act included the Internet Gambling Enforcement Act (UIGEA), resulting in a seismic shift in
the structure of the online gaming industry as well as an immediate and substantial impact on online poker’s
business performance.
However, offline gambling continues to thrive in the United States and internationally, when buy-ins take
place on-site at casinos and card houses.
4.1.2. Company’s plans to address
As a result of the UIGEA, online poker revenue has taken a significant hit, as providers have scrambled to
find other markets to address, and other forms of gaming to offer. In particular, gaming companies are looking
towards Asia.
To address the UIGEA and international (e.g. Chinese) restrictions on real-money gambling, The World
Series of Paigow will be a 100% legal business model. The World Series of Paigow strongly supports the
Internet Gambling Regulation and Enforcement Act of 2007 which designates Paigow as a legal skill game.

4.2. Recent Trends

4.2.1. Congressman Robert Wexler Proposal: The Skill Game Protection Act
Under the Skill Game Protection Act, games of skill, such as, poker, mah-jong, bridge, chess, and others will
be classified by law as games of skill. So long as participants compete against one another, and not “against
the house,” these online games will be legal.
4.2.2. Senator Barney Frank Proposal: Internet Gambling Regulation and Enforcement Act of 2007
Massachusetts representative Barney Frank has unveiled sweeping legislation yesterday that would not only
repeal the unpopular Unlawful Internet Gambling Enforcement Act (UIGEA)
Heretofore there has been no generalized federal gambling law. The Internet Gambling Regulation and
Enforcement Act of 2007 covers all of its bases, with opt-outs for state jurisdictions that don’t want a
regulated online gaming environment and ample provision for containing the perceived social ills associated
with the gambling industry.
With the proposed legislation, at the very least, the online gambling industry is getting the open debate it
should have gotten last year when the UIGEA snuck through on the back of an unrelated port security bills.
4.2.3. WTO Opposition to the SAFE Port Act & UIGEA
The World Trade Organization is pushing back against Internet gambling restrictions passed by United States,
saying Friday it had ruled that the provision was illegal.
The WTO further ruled that the U.S. could not allow domestic companies to offer horse racing wagers and
lotteries over the Internet without giving companies from other countries an opportunity to provide those
services. Several countries, including the European Union, have filed compensation claims related to their
U.S. exclusion.

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 4.3. Regulatory Environment in Asia
Gambling holds a special place in the heart of many Asians, as is evident by the proliferation of both legal and
illegal gambling on sports, races, cockfights, and table games in Asian countries and among Asian nationals in the
United States.
WSP’s target Asian audience presents a unique challenge due to the multitude of gambling regulations and
restrictions across countries.
Few Asian countries have systematic and well-regulated legal gambling. Increasingly, countries are realizing that
regulated gambling is good social policy and enormously lucrative. License fees, taxes and increased tourist traffic
are tempting legislators throughout the region.
Macau is Asia's unrivalled casino center. A growing market in neighbouring China, where gambling is still illegal,
means that the high rollers are now Chinese rather than Southeast Asians.

4.4. Legality of WSP

WSP has developed various proprietary business processes that will ensure that the game play is 100% fair and
abides by the various regulations where WSP gaming transactions occur:
Fraud Prevention
WSP has developed extensive processes to review IP addresses and automatically block those that are
associated with known fraudulent transactions. This includes analysis of patterns indicating potential fraud,
including when domain associated with a public Internet access point has extensive uplift in transactions;
mismatches between customers’ IP locations and their home addresses; and detailed review of specific IP
address elements for every transaction.
Player Registration
WSP has developed proprietary business rules to determine if the users’ IP address matches the home address
provided. Mismatches can be investigated before the approval of the registration. If there are any issues that
cause alarm, a registration will be flagged and its principal contacted directly by the company to complete or
reject the transaction.
Customer Authentication
WSP practices IP geo-location, a recommended FFIEC-compliant multi-layered authentication solution that
measures the fraud potential of each principal. Identified information includes:
 Physical location at the city, state or country level
 Connection and routing type
 Domain - at the top and second level
 Proxies, including AOL and anonymous proxy servers
 Mobile gateways
Underground Gambling
The underground gaming industry has grown tremendously over the past years. The China Centre for Lottery
Studies at Beijing University estimates that in 2006, up to $77 billion was wagered on such overseas internet
betting sites, which equates to $59 per capita or $566 per Internet user.
WSP seeks to avoid any transactions or involvement in this sector.

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5. COMPANY’S LINES OF BUSINESS
The World Series of Paigow envisions several product lines, many of which involve partnering with third parties who
license the WSP brand.

5.1. Online Gambling

Subscription Paigow: In countries that do not allow real-money gambling, WSP will follow a subscription-based
revenue model whose payoffs for players include prizes and leaderboard rankings. Examples of successful online
subscription models include:
Massively Multiple Online Games (MMOGs): Examples of virtual online worlds with no endings
include GIGM’s Funtown, Netease, Giant Interactive’s ZT, and The9’s World of Warcraft. All require
upfront software downloads and continual monthly payments for active users.
Come-Stay-Pay (CSP): Shanda Interaction Entertainment, a China-based interactive gaming company,
provides an environment where gamers play for free, and revenue is derived from selling privileges and
added powers for online avatars. QQ is the most popular free instant messaging program in China. Within
the chat model, users can participate in free online games and gain privileges for additional fees.
Virtual Currency: QQ created the “QQ coin”, which are purchased for real money or earned through
usage. QQ coins became so popular that an offline black market emerged trading in the virtual currency.
Additional Games: Following Paigow, WSP will roll out additional “Tier 2” and “Tier 3” games popular in the
Asian and East Asian Markets, including Traktor Poker, Fight the Landlord, Pachinko, and Big Two. A description
of these games can be found in Section 3.
White-Labeled Technology Licensing: WSP will have technology that offers “White Labeling” of game software,
similar to Cryptologic, Boss Media and Chartwell.
Online Advertisements on a Community Portal: The World Series of Paigow plans to create a MySpace or
Facebook-like social community for Asian gamblers. The site will feature members-only benefits such as discounts
on travel and accommodations at casino hotels. Targeted advertising to the community will generate a revenue
stream.

5.2. Tour & Television

A key component is the eponymous The World Series of Paigow. Tour stops will generate a 3% commission of
player buy-in fees. Partner casinos will be pay a lump-sum (approximately) $25,000 sponsorship fee and provide
logistics and venue support.
Similar to the Poker Advisors, WPT will generate TV licensing fees from various broadcasters for content rights to a
gaming show following The World Series of Paigow. Season One will have approximately 15 one-hour episodes of
tour stops. There will also be three specials: Celebrity Invitational, Legends of Paigow, and Ladies Night.
WSP will sell sponsorships for the show, in conjunction with an on-site presence that includes signage and other
branding.
The estimated worldwide potential market for WSP broadcasts includes 50 million viewers worldwide in 20 million
households5, for a minimum 12 episode Season 1.

5.3. Affiliate Licensing

Player Database: A key benefit of creating a successful online community, via both a gaming website and social
network, is the accumulation of data on users and demographics. Components of this database can be licensed out to
third parties looking to create their own properties for gamblers.
Tour Junkets of Land Based Gaming: Junkets consist of organizing high-end gaming “trips” for wealthy and
esteemed Paigow players. Already a large business in Macau and other land-based casinos in Asia and North
America, generate revenue from a commission or “theoretical loss” based on expected total wagers for each player.

5 Paigow Market Study by Cofa Tsui

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 5.4. Sponsorship & Merchandise
Magazine Subscriptions and Print Advertisement Sales: WSP will print a magazine in partnership with a current
gaming magazine, such as Card Player.
License and Branded Merchandise: WPT will sell and license its logo for branded Paigow sets, clothing, and
other products.
Mobile Games: A later-phase initiative with revenue potential includes a Paigow game application available on
mobile devices.
Player Representation: The Poker Advisors made celebrities out of prominent poker players. WSP envisions a
similar phenomenon for top Paigow professionals who will seek representation on endorsements and appearances.

5.5. Land-Based Events

Paigow Camps: Modeled after the Poker Advisors Bootcamp6 and The World Series of Poker Academy,7 licensed
camps run by capable Paigow experts will provide live instructions, coaching, and tournaments.
Asia Based Gaming Conferences and Cruises: Another later-phase initiative will include cruises for Paigow
enthusiasts.8

6 www.wptbootcamp.com
7 www.WSPacademy.com
8 See www.cardplayercruises.com and www.classicgamingcruises.com

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6. MARKETING STRATEGY
6.1. Primary Initiatives
In contrast to a focus on sponsoring preexisting third-party events and properties, The World Series of Paigow’s
marketing plan centers around a vertical strategy of building proprietary assets and strategic partnerships, including:
WSP-branded high stakes televised tournaments. The company will have six Season One tour stops,
consisting of eight shows, developed in some of the world’s most reputable casinos in Season 1. Televised
tournaments will capture the excitement of Paigow with “lipstick” or hole cameras (showing the players’ hidden
tiles), educating players with brief tutorials, and player features. Shows will be licensed and distributed in key
territories around the world in an effort to convert viewers into online players.
Casino-hosted marketing partnerships. WSP’s casino partners (those hosting Tour events) will be some of the
world’s largest and most reputable. Host casinos will hold annual events promoting The World Series of Paigow
and its brand to gaming enthusiasts. Marketing promotions will include, but are not limited to, banners and
branded paraphernalia, event information and ads on casinos’ websites, and casino newsletters and online &
offline advertising.
Branded licensed products. WSP will license its brands to create products for sale such as hats, shirts, DVDs,
collectibles, Paigow sets etc., which will be distributed in major retail outlets throughout the world.
WSP community. The World Series of Paigow is developing an online social community, along the lines of a
MySpace or Facebook, which will aggregate Paigow enthusiasts throughout the world and will grow virally via
an “invite a friend” feature. Users will sign up to read about, discuss, and blog the latest events, their favorite
WSP Paigow hands, and celebrity players. The site will have direct links to the WSP subscription-based site.9
Sponsor partnerships. Category-exclusive sponsors will be branded throughout the tour. Sponsorship will be
associated with myriad consumer products, such as “The official beer of the MWT”, or “The exclusive airline of
the WSP”. In addition to monetary payment, sponsors may be obligated to cross-market WSP products and
services on their labels and marketing materials.
Viral marketing. WSP will utilize content from its tour show and public relations campaigns to develop
numerous low-cost viral and guerilla marketing campaigns to be spread across leading sites with large user bases.
In addition, WSP is building various Paigow applications to be imbedded via APIs in existing online social
networks with large user bases, such as Facebook and OpenSocial.
Business Development Relationships. Asian sites such as Baidu.com, Sina.com, Netease.com, and Sohu.com
will be solicited for business development relationships with a cross-marketing focus to assist in taking WSP
products and services to a much larger audience.

6.2. Sales & Promotion

WSP’s executives have extensive marketing experience from some of the most successful online gaming companies
in the industry and will apply their proven successes in order to grow users.
The company also has a variety of player-retention initiatives that seek to encourage existing players to continue to
play, as well as to ensure that they remain loyal and are not lured to competing sites.
WSP will opportunistically look for traditional marketing opportunities to gain the most optimal ROI, since its
primary marketing initiative will be centered on its Vertical strategy of developing internal marketing assets.
Key marketing strategies include:
 Online- WSP will purchase various email lists from third parties and partner with various companies with
available inventory in order to describe the WSP website’s offering.
 Offline- WSP will rely primarily on its vertical strategy for off line marketing initiatives. However, when
appropriate, WSP will explore various print, event sponsorship, and direct mail initiatives.

9 Real-money gaming where permitted.

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  Affiliate- Affiliate marketing is one of the best mechanisms for acquiring new users and being able to scale
out quickly by incentivizing third-parties to drive traffic to WSP’s online properties in return for a fee or
“bounty”. The company plans on developing WSPPartners.com, a self-service site where webmasters may
access banners ads and promotion codes. Their visitors who click on the banners or type in the codes will
be identified as having been referred by the affiliate.
WSP will also build an internal affiliate sales and management group whereby WSP sales professionals
will contact and recruit affiliates to promote the companies products as well as manage the day to day
needs of the affiliates.
 Telemarketing- WSP plans to develop an in-house call center to promote customer acquisition and
retention. Sales professionals will contact prospective new users via phone, describe any promotional
offerings, and walk them through how they can register, deposit money and start playing. Additionally,
these professionals will monitor users’ play and incentivize inactive users with incentives to prompt them
to resume playing.

6.3. Public Relations

Due to the nature of WSP’s event-focused business model, its brand will get significant and unique public relations
exposure in broadcast and print media. WSP’s “push” strategy to generate ongoing publicity will include three
elements:
 Press Conference: A formal press conference will be held at the start of the campaign to announce the event
to the public.
 Press Releases: A series of worldwide press releases will be issued throughout the duration of the campaign
to all key target markets.
 Media Center: A media center will be constructed on site, at the tournament venue and will be staffed by
WSP media professionals.

6.4. Geographical Strategy

WSP plans to focus its Asian marketing with a strong emphasis on Greater China10, as well as those Asian
countries in which online gaming is regulated. Furthermore, WSP plans on partnering with leading
broadcasters throughout the world to further extend its brand and reach.
Seen as a proxy for Paigow viewership, StarTV produced a 2006 demographic estimate of the Asian cable
audience for sports and games, as follows:

Asian Viewers for StarTV Sports & Games, 2006

(millions of viewers)
Region All Male 15+
China 2.7 2.0
Other Northern Asia 0.9 0.7
Taiwan 0.7 0.5
Malaysia 1.4 0.2
Singapore 0.2 0.1
Other Southeast Asia 2.1 0.3
Total, Asia 8.0 3.9

Source: StarTV
Notes: North Asia includes Macao; Other SE Asia includes Philippines, Thailand, Malaysia, Indonesia,
Brunei, PNG, New Caledonia, Vietnam and Guam.

10 See Appendix A for a list of countries defined as “Greater China”

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7. TIMELINE & MILESTONES
Significant milestones through the fourth quarter of 2008 can be categorized as follows:
Sponsorship & Merchandise: Season One sponsors for the Tour, as well as a magazine partner either branded or
co-branded with the WSP imprint, are forecasted to be in place by the middle of Q2, 2008.
Financing: Series B financing is set to close by the end of the second quarter of 2008 at the latest. This round of
financing seeks to raise $4-6 million for a $21 million valuation.
Tour: Season One tour stops are to be secured by the middle of January, 2008. Stops will occur approximately
every 3-4 weeks, from March to October.
Online Properties: The two primary online efforts for WSP include a (free) software launch, to be available at the
start of the second quarter, and a launch of an Asian gambling social network approximately 6 weeks thereafter.
Offline Events: By the third quarter of 2008, agreements for both a Paigow Boot Camp partner and a WSP cruise
partner are expected to be in place.

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 Timeline

Q1 2008 Q2 2008 Q3 2008 Q4 2008

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sponsorship & Merchandise

All Season One sponsors signed 15th
WSP Magazine partner signed 1st

Financing
Series B closing (latest) 1st

Tour
Season One tour stops secured 15th
Event Stop 1 31st
Event Stop 2 5th
Event Stop 3 16th
Event Stop 4 4th
Event Stop 5 8th
Event Stop 6 20th

Online
Free Paigow software launch 15th
Asian gambling social network launch 30th

Offline
Paigow boot camp partner signed 1st
WSP cruise partner signed 1st

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8. OBSTACLES & CHALLENGES

8.1. Competitive Landscape
WSP has a unique comprehensive business model with an emphasis in televising high-stakes tournaments as well as
licensing/operating software.
Throughout the competitive landscape, there are no entities that operate with a regulatory-compliant model that is as
comprehensive as that of WSP.
However, there are a number of businesses that operate in areas of WSP involvement:
8.1.1. Events
The World Series of Paigow: An event-based company that held their first event in June of 2007 in Macau.
Former ESPN-based event coordinators are working there. It is a once a year event with no sustaining tours.
World Paigow Championships: Based in Beijing, they stage preliminary games in Japan with no more than
4 stops. Finals in 2007 were held in ChengDu, China. These events were not televised; this illustrates the
relative absence of Paigow as an organized wide-scale community, and the opportunity for WSP to capitalize
on its burgeoning popularity.
8.1.2. Operators-Real Money
MegaMedia (GIGM): Operates the website www.funtown.com.tv, which is also a leading subscription-based
Mahgong site in Taiwan.
MJhero: An online Paigow website, based in San Francisco. MJhero recently completed a Series A round of
funding with plans to operate in the real-money landscape.
PaigowTime: An operator of online Paigow games with proprietary software that is very American-centric
and is not considered strong. PaigowTime currently has a limited management team.
8.1.3. Operators-Subscription/Virtual Currency
3Q1: Based in China and owned by Carmet Media, 3Q1 has a casual gaming component to their website.
They have developed their own proprietary software, but appear be struggling with finances.
QQ: A publicly-traded in Hong Kong owned by a holding company named Ten Cent. QQ has the largest user
base for Paigow. Their virtual currency, called “QQ coins”, is extremely popular in China.
Massively Multiplayer Online Games (MMOGs): Leaders include Netease, Giant Interactive (ZT game)
and The9 (World of Warcraft), and Shanda Interactive.
8.1.4. Operators- Casual
Ourgame: The early adoptor for China-based casual game portal, Ourgame provides online versions of Dou
Di Zhu, Chinese Chess, Traktor Poker and other Chinese-influenced games.
8.1.5. Software Providers
Playtech: The leader in gaming software licensing with a strong emphasis in developing Asian games. As yet,
Playtech has not developed a major Majong product.
Paigow Logic: A newly-developed software provider with a Paigow prototype. Paigow Logic has no players
and is seeking licensees.
One company, AsianLogic, is a pre-IPO enterprise that has business components in each of the above categories.
They currently run 10 Asian gaming Web sites and provides casino and poker sites with Asian software. However,
the company is not compliant with all regulations as they are taking illegal bets in many markets.
AsianLogic was set up as ESL in 2002 by former Playtech Chief Executive Hall and has offices in Hong Kong and
Manila. The company seeks to raise capital in the public markets (LSX) at a $145m - $165 pre-money valuation, and
are planning to launch Paigow World Tour which should be directly competitive to WSP. However, WSP is familiar
with the executive team at AsianLogic and believes it could serve as a potential exit strategy down the road.

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8.2. Barriers to Entry

The World Series of Paigow faces certain challenges which are being addressed:
 Software development and true understanding of Paigow and other Asian games
 Legal understanding and compliance with all market countries
 Marketing and player liquidity for the online game
 Building an experienced and qualified team
 Forming key industry contacts
 Payment processing solutions to partner with

8.3. Risk Factors

 Online Gaming Regulation: There is uncertainty as to the legality of online gaming in most countries
throughout the world. While we intend to be 100% legally compliant there are unclear areas that if made
illegal will significantly affect our overall business.
 Technology Risks: WSP sees online gaming as a major part of its future revenue stream. Any failure or
interruption of these systems could harm WSP’s ability to operate its business. Cybercrime and hacking is a
constant threat to any internet-based business.
 Competition: New businesses are continuously entering the nascent online/offline Asian gaming sector.
 Short Operating History: WSP has a short operating history in a new marketplace. Our success is based
upon the continued popularity of online gaming in general, and Paigow in particular.

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9. FINANCIAL OVERVIEW
The World Series of Paigow derives its valuation from two sources: a discounted cash flow based on company
financials, and price-to-earnings ratios of similar companies in the same industry (i.e. “comps”).
Three relevant industry comps and their top-line financials are as follows:
 Party Gaming- The world’s leading online gaming company
 Playtech- A leading Asian online gaming operator
 MegaMedia- A leading Asian online gaming software provider
 Perfect World- A leading MMORPG (multi-player online role-playing game)

Stock Market Market Cap ($m) P/E x FY 1 P/E x FY 2

Party Gaming LSE 2,371 31.2 16.0
Playtech AIM 1,640 25.2 17.3
MegaMedia NASDAQ 2,211 33.6 22.6
Perfect World NASDAQ 1,046 49.7 24.1

DCF Valuation $419,414

Year Used in Earnings

Earnings Multiple, Party Gaming 31 3 4 5
Valuation $145,359 $390,506 $641,269

Earnings Multiple B, Playtech 25

Valuation $117,225 $314,924 $517,153

Earnings Multiple C, Giga 34

Valuation $159,426 $428,297 $703,328

Earnings Multiple C, Perfect World 50

Valuation $234,449 $629,848 $1,034,305

Comp Valuation, Average $164,115 $440,894 $724,014

Source: Bloomberg

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APPENDIX A: GREATER CHINA OPPORTUNITY

Greater Asia: Population & Internet Usage

Population Penetration Internet Users Internet Users User Growth

2007 (est.) (% population) 2000 2007 ( 2000-2007)
Greater China
China 1,317,431,495 12% 22,500,000 162,000,000 620%
Singapore 3,654,103 66% 1,200,000 2,421,800 102%
Hong Kong 7,150,254 68% 2,283,000 4,878,713 114%
Macao 500,631 40% 60,000 201,000 235%
Taiwan 23,001,442 63% 6,260,000 14,500,000 132%
Total, Greater China 1,351,737,925 14% 32,303,000 184,001,513 470%

Other Asia
Japan 128,646,345 68% 47,080,000 87,540,000 86%
Korea, South 51,300,989 67% 19,040,000 34,120,000 79%
Philippines 87,236,532 16% 2,000,000 14,000,000 600%
Vietnam 85,031,436 20% 200,000 17,220,812 8510%
Total, Other Asia 352,215,302 43% 68,320,000 152,880,812 124%

TOTAL, GREATER ASIA 1,703,953,227 20% 100,623,000 336,882,325 235%

Source: InternetWorldStats.com

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APPENDIX B: REGULATORY ENVIRONMENT IN ASIA

Territory Land Based Online Opportunities
Gambling market turns over $100 billion, 95
Mainland China Not Allowed Not Allowed
percent illegally. 5% are state run lotteries.
Only has one land based gambling facility
Pari-mutuel named Singapore Racecourse. Encore is
Singapore Controversial
Horseracing expected to open a casino resort at Marina Bay
in 2009.
Amazing Holdings PLC are currently trying to
Taiwan Not Allowed Not Allowed
develop a casino resort on the island of Penghu.

The Macau SAR does not currently grant

Not Allowed concessions for online casinos. The current
Macao Regulated
(Not addressed by law) casino concessions only cover land-based
gaming, not online gaming.
Pari-mutuel The Hong Kong Jockey Club is the only
Hong Kong Horseracing Not Allowed authorized entity to offer betting on lotteries,
Paigow parlors horseracing, and football over the Internet.
Cagayan Freeport zone is the first Asian
Regulated- certain games Not Allowed outside
Philippines jurisdiction to legalize online casinos
11 casinos operating Cagayan Freeport
Government setting up online casino
Casinos in major hotels
"Gambling Arcades" loophole facilitates more
South Korea Slots and pachinco parlours are Not Allowed
widespread cash gambling activities.
common.
Racing, lotteries, pachinco
Japan Not Allowed
Casinos not allowed.
Horseracing exists and the government is
One casino in Haiphong considering a lottery. the country has one
Vietnam Not Allowed
2 more casinos planned casino in Haiphong and there are plans for two
more.
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APPENDIX C: CASINO TOUR PARTNER BENEFITS

1. Advertising Exposure: The casino partners name/logo will be included in all tournament advertising and
promotional campaigns conducted by The World Series of Paigow.
2. Promotional Rights: $20,000 (Value)- The official casino partners will have the right to conduct pre-
approved promotional programs utilizing The World Series of Paigow’s name and logo, and all such
programs will be promoted on the tournament website, publications, and in all related tournament
advertisements and press activities.
3. Public Relations: $20,000- The sponsor’s name and logo will be used in the tournament PR campaign. No
less than 3 press releases will be issued throughout the campaign, and formal press activities will be
conducted on-site, during the tournament.
4. Print Materials: $15,000- The sponsor’s name and logo will be included in all event print materials,
including advertisements, posters, brochures, badges and etc.
5. Venue Branding: $50,000- Sponsor’s logo will be included on the following:
6. Main TV Table Top (2 logos)
7. Main TV Table Surround Boards (3 boards)
8. General venue sign boards (2 boards)
9. Referee and Staff Uniforms: sleeve logo
10. Television: $40,000- The sponsor will receive extensive coverage during the television broadcasts and a
full 2 minute casino feature in each of 2 episodes.
11. VIP Tournament Invitations: $12,500- The official casino partner will receive five (5) VIP invitations to
the WSP Invitational (Celebrity Event) to be used for promotional purposes, or as the venue sees fit to use
them. Estimated value is $2,500 per seat.
12. Internet and Website: $40,000- The official casino partners name and logo will be used extensively year
round on the tournament’s official website, and in all internet promotions and advertising including emails,
website banners, and logo exposure.

Total Tour Stop Casino Benefit:

Promotional Rights: $20,000
Public Relations: $20,000
Public Relations: $20,000
Print Materials: $15,000
Venue Branding: $50,000
Television: $40,000
VIP Tournament Invitations: $12,500
Internet and Website: $40,000
Grand Total Casino Benefit: $217,500

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