CEO resigns

Dec 4, 2007 5:16 AM Inc. (UBET) an innovative online wagering company, was on the verge of collapse five years ago when the company hired a new CEO, Charles Champion.

After setting up a new management team, Champion set about improving the company’s operation, particularly by engineering a dramatic turnaround in the company’s core advance deposit wagering system.

During the next four years, the company grew solidly, increasing its wagering processes from $110 million to $750 million and garnering a 45% market share of the ADW industry.

The company’s success was noted by the national firm, Deloitte, which named it one of the country’s 50 fastest growing company’s in each of the five years after Champion was placed at the company’s helm.

But problems for the company developed early this year when Churchill Downs Inc. (CHDN) instituted its own ADW system and joined forces with Magna Entertainment Corp. (MECA) and its ADW system to squeeze out competitors such as UBET by barring them from utilizing their content. The two companies control the content on many of North American racetracks.

Revenues declined following the Kentucky Derby and the more recent Breeders’ Cup. And then, acquired International Racing Group, a phone-based advanced deposit wagering company that offered volume discounts to high-end wagering customers. The company was based in Curacao and was licensed to operate out of an Oregon dissemination hub.

In October, the federal government alleged wrongdoing involving the former owner of IRG and froze all of the IRG accounts in the U.S. Among the accounts involved were a reported $1.5 million in Nevada accounts.

With the months of problems dogging the company, the company’s share price fell to a $1 level, threatening the company’s viability.

On Friday, Champion announced that he was leaving the company on Dec. 11. He will be replaced on an interim basis by COO Gary Sproule.