BUSINESS

Stronach, betting and babes

Canada’s autoparts heir aims to bring horse race betting to the masses

LIANNE GEORGE January 23 2006
BUSINESS

Stronach, betting and babes

Canada’s autoparts heir aims to bring horse race betting to the masses

LIANNE GEORGE January 23 2006

Stronach, betting and babes

Canada’s autoparts heir aims to bring horse race betting to the masses

BUSINESS

LIANNE GEORGE

In Canada, the Stronach surname conjures nothing if not gritty determination and grandiose achievement. In recent weeks, Frank Stronach—the family patriarch and founder of auto-parts conglomerate Magna International Inc.—unveiled a multimillion-dollar housing project in central Louisiana for victims of hurricane Katrina, called Canadaville. His daughter, Liberal cabinet minister Belinda Stronach, is at this very moment out campaigning for re-election in the family’s home riding of NewmarketAurora. But though they may be the most high-profile members of the clan, they’re not the only ones with entrepreneurial vision.

Frank’s son Andrew Stronach, formerly an executive of Magna Entertainment Corp.—a spinoff that owns and operates licensed racetracks across North America—has left the family business to find new and innovative ways to encourage the masses to take an interest in his favourite pastime—horse racing. The younger Stronach is the inventor of a hightech parimutuel wagering system that allows unschooled bettors to gain 24-hour access to a database he says will help neophytes to make educated bets.

“I want to help the sport,” says Stronach. Gambling on horses, he points out, can be extremely complicated and intimidating, influenced by countless subtle variables, which can take years to master. The average Joe on the street, for instance, is unlikely to know the definition of a bull ring (a small racetrack less than one mile around). And he almost surely wouldn’t be able to identify a bobble (a bad step out of the starting gate). “When you’re betting,” says Stronach, “you have to bet against experts, jockeys, agents and owners of horses.” Without the advantage of upto-the-minute information, rookies generally don’t stand a chance. “I don’t think it’s fair that

new people just get slaughtered,” he says.

One application for his invention is a new gaming service targeting male players called SheTips (www.shetips.com). It invites users to contact one of a bevy of buxom SheTips girls standing by to provide them—via a central database that crunches over four million variables—with the kind of inside tipping information that has traditionally only been available to high-rollers. (Stronach denies ownership of SheTips—and he won’t disclose who the owner is, except to say that he also owns racetracks—but several workers say he’s the one who hired them and pays them.)

There are three ways to access SheTips— by phone, online, or betting machines. (The latter are described as video slot machines programmed to access the central database and calculate the best odds on horses. Instead of cherries, lemons and oranges, however, they feature blondes, brunettes and redheads.) “The girls are just hostesses and salespeople,” says Stronach. “By using girls, honestly, it’s better because it’s less threatening.”

As the website explains, the models also serve as “Runners.” In other words, users can transfer funds into an intermediary account from which designated SheTips girls can access the money and place bets on their behalf at licensed facilities. There are added incentives for repeat gaming. For instance, depending on how much they wager each month,

users can earn “Spirits and Sports Player Rewards Points,” which they can redeem for a chance to party with their favourite SheTips girls in person.

So far, however, SheTips workers say the service appears to be all promotion. The company began hiring models in North America several years ago, says Gord Scoular, a.k.a. “Bikini Gord,” an events promoter and former Toronto Sun and Playboy photographer, who says he helped Stronach to recruit Canadian models to photograph for the website, offtrack terminals and other promotional materials. “You should see the money he was throwing around on these photo shoots with the models,” says Scoular (Stronach says someone else paid for the shoots). “When they first started shooting the girls, there were seven different looks—swimwear, Western wear, evening gowns, lingerie, a picture with a racehorse. They would sedate the racehorse and bring it into the studio. I had to get the girls to Fargo, to Las Vegas, to France, wherever he needed me to get them. We did group photo shoots at the [Rogers Centre], on a jet airplane, on a yacht, in SUV limos. He was trying to captivate an image for his brochures.”

One Toronto-based SheTips girl who prefers to remain unnamed says she’s been with the company for about three years now. Her first promotional assignment was to travel down to Las Vegas with some of the other girls to

chat people up at bars and tell them about the product. “We basically did nothing much,” she says. “We just hung out at nightclubs and stuff. It was more of a social thing.” Each girl, she says, was given a stack of cards to hand out that featured her picture and ID number. Every time a guy keys in her number to use the service, that SheTips girl gets a commission. To date, however, she has yet to offer any tips or run any bets. “Maybe I’m not one of the chosen girls that the guys are logging in under,” she laughs. In fact, it’s unclear, even to employees, whether the site is even operational. (Multiple attempts to register kept producing error messages, and a recorded message on the toll-free number said, “we are currently upgrading our services and are unable to take your call.”)

Like all unlicensed Internet gaming sites, SheTips may be problematic from a legal standpoint. Online gambling by Canadians operates in something of a grey zone. Technically, Canada’s Criminal Code stipulates that it is an offence to place or offer to place a bet for another person for money or anything else of value. But in the case of SheTips, Stronach argues that since users are technically only paying for tips, they’re not doing anything illegal. “SheTips does not have a wagering licence or anything,” he says. “You can hire a SheTips agent to bet for you, but they bet with cash in a live facility. It’s nothing through the Internet or the phone.” Billions of dollars are bet through runners, he says. “There’s millions of people doing that and it’s legal because it’s been going on for years and it’s impossible to police. It’s gentlemen betting.” Even if a site like this were breaking the law by circumventing Canada’s gaming rules, legal experts say that when bets are being made over the Internet, tracking and prosecuting those who violate the law is almost im-

possible to do. “The problem becomes, where is the bet made? Is it offshore or in Canada? If it’s offshore, then it’s out of Canadian jurisdiction,” says Toronto lawyer Michael Lipton, an expert in gaming law.

According to the SheTips website, the company is “governed by the laws of the Province of Ontario, Canada.” And yet the mailing address and domain name for the company are registered in St. Kitts and Nevis in the Caribbean. “There are a whole set of issues here that are very slippery under the law,” says Colin Campbell, chairman of the criminology department at B.C.’s Douglas College who studies gaming law in Canada. “It certainly underscores how antiquated the criminal law is for many of these types of technological innovations that have occurred in respect to betting.”

Whoever does own SheTips, however, may have a more immediate problem on his hands. According to the site, proceeds from the use of SheTips services go “directly to select charities around the world.” The logo for the Special Olympics appears right beside the declaration. However, the Special Olympics says it

‘It’s legal because it’s been going on for years and it’s impossible to police,’ Stronach says.

never authorized SheTips to use its name and logo on their site, which they say is “inconsistent with the principles of Special Olympics, confusing, and offensive to Special Olympics athletes, volunteers, and supporters worldwide.” The organization has sent the owner a cease and desist letter. As Maclean’s went to press, the logo was still up. M