Part 1. Current business model

For over a year our company has offered a unique opportunity to investors to invest their money safely and profitably. However, it appears that not all our investors are satisfied with this perfect opportunity. Sadly, there's only one explanation for this - greed. It's greed that makes many investors employ hidden work schemes which harm our company and our honest investors.

We always try to explain all nuances of the company's work to our investors, as we believe that a transparent process is necessary for an online business. Here we provide as much detail as possible so that everybody can understand how harmful greed can be to a business such as ours.

The business model we have used for a year implies satisfaction of interests of all groups of investors, from newcomers to long-standing reputable people. If we consider this business model from an investor's point of view, it offers:

• instant deposit activation;
• instant deposition of referral commission;
• cashout within 24 hours after request.

Have you ever considered:

• How SportArbs can instantly activate a deposit and accrue interest in just a few hours?
• How a referral commission can be paid instantly after a deposit is made by an invited person if the company hasn't received a profit from this deposit yet?
• How is it possible to cashout in such short timeframes? Do you know that bookmakers cashout in 5–7 days?

It took us much effort to develop software ensuring that these three above statements are carried out. This software regulates the amount of funds active in bookmakers and reserves a sum that is anticipated will be required to transfer back to investors. Consequently, we apply an efficient distribution of funds between the e-wallets and bookmakers. In addition, the company shares a part of its profit with investors.

A simple example:
Let's suppose that USD 1M is actively invested with bookmakers (this amount includes 600K of investors' money and 400K of the company's). An additional USD 100K, which is inactive and not involved in the turnover, needs to be reserved and available for the e-currency accounts, to be used to meet immediate cashout requests by investors. However, every day the 100K in e-currency still accrues its investors' share of the gross profit made on that day. The interest accrued in this way is reimbursed from the profits returned by the company's stake of 400K.

The software mentioned above is adaptive, and determines the actual amount expected to be needed for cashouts on a daily basis, thereby revealing the amount that can be actively earning profit. In the simple example above, had the program calculated that we needed only USD 30K in e-currency for that day, we would have had an extra USD 70K to place with bookmakers.

Clearly, the opposite is also true. When we have to increase the amount of available e-currency, in order to avoid any delays to investors cashing out, we have to reallocate some funds that otherwise would have been actively generating a profit from bookmakers.

This business model was determined by many factors, one of them being a severe competition among online businesses for investors' capital. However, some companies use it for mutual benefit, the others for their own benefit only. It's very difficult to draw the attention of investors to a real business when various Ponzi-oriented projects are shining with motley interest rates and terms of deposits. We had to offer the terms no worse in order to draw away the investors from Ponzi-oriented projects to a serious business.

Now that we nearly achieved USD 3M we are trusted by many investors. Many of them understand that the success of the company is primarily their success.

But as we mentioned in the beginning of the article, some investors are not satisfied even by this splendid opportunity offered by us to invest money profitably. They don't care about the company's success, greed is deep in their souls and that is very sad.

Part 2. Sources of the problem

The matter of the problem is that many investors regularly open additional accounts using their referral link to achieve the following:

• getting 7% referral commission to the principal account while making a deposit to an additional;
• getting bonuses, as the bonus in a principal account is accrued just one time.

These actions result in additional figures at investors' accounts. These figures emerge from nowhere, but need to be secured by the profits of the company (remember the above case).

We don't use the word 'greed' here in vain. Many investors having thousands of dollars strip it up to the last cent by dropping their fee in and out.

On March 8, 2010, we made a notification where we expressed our hope that many investors just didn't understand what harm they caused the company by such actions:

Dear investors,

As you know, we offer our investors a unique option to invest money safely and profitably. We continue to develop and improve upon the success already achieved; however, all development needs funding.

We offer a highly advantageous referral program aimed at introducing new and interesting people. Unfortunately, some investors abuse our referral program, thus stripping the company of some profit.

Consequently, as of March 8, 2010, all abuses in referral programs will be considered to be a violation of our policy, particularly:

• use of your referral link to open an account for yourself and/or for your relatives;
• a confederacy between the inviting and invited party with the intention of withdrawing funds and depositing them again in order to get a referral fee by the inviting party.

We have chosen not to introduce any punitive measures. We hope that our investors are forward-looking people of good sense, who are mindful of tomorrow and don't live just for today.

If this notification does not put an end to the abuse, we will be compelled to adopt more severe measures to protect the interests of the company.

The effect of this announcement shocked us. Instead of the expected decrease we faced a rapid increase of additional accounts. We have no idea how to explain that..

Unfortunately, the problem persisted to the extent that we had to resort to the stabilization fund, and that alone is a troubling sign. No investor suffered a negative impact on their returns, as that's why the stabilization fund was established and it played its role well. But it became obvious, that things can't go on in such a way. The 8th March announcement convinced us that any prohibitions have no effect. We have to make the opening of any additional accounts pointless to these greedy investors.

We have therefore decided to change the business model we have used for the past year.

Part 3. New business model

The new business mode will work as follows:

• We accept money from an investor;
• We send this money to bookmakers (the investor waits for 4–5 business days);
• We activate the deposit of an investor as soon as his/her money is deposited at bookmakers;
• We make stakes for arbitrage situations for a period not more than 42 days for 42-days deposits and for a period not more 210 days for 210-days deposits;
• If an investor requests a money withdrawal upon expiration of 42/210 days we withdraw it from bookmakers (an investor has to wait 10–12 days);
• We transfer the money to investor.

Thus, we solve major problems and simplify the work. The main goal is that opening new accounts will have no sense for the abusers, as deposit/withdrawal will take up to three weeks on average.

The change of the business model will have the following effect to all investors:

• the deposit activation will take 4–5 business days; and
• a withdrawal will take 10–12 business days and will be made to SportArbs debit cards only.

The debit cards are not virtual, they will be real plastic cards with a logo of our company. With these SportArbs debit cards investors can withdraw cash at any ATM accepting VISA/Mastercard.

The money withdrawal to debit cards only is determined by some factors:

• it's a requirement of the bank, which is in turn forced to do it by the relevant authorities;
• we have to detect the real names of abusers in order to pay special attention to these persons.

Part 4. 'Pause'

Any change of business model is impossible under an intensive period of work. That's why we decided, until May 10, to suspend the part of the workload that prevents us from making a reform: We decided to suspend all cashouts temporarily. All money from e-currency accounts will be transferred to bookmakers for the period of reform, because the business works and makes profit, particularly:

• the global computing network is working and detecting arbitrage situations;
• we keep making stakes at bookmakers for arbitrage situations;
• the support service is working, which will require additional financing during the reform, as a huge number of requests is expected;
• software of SportArbs.com is being updated;
• our new service Betlines.net is working.

All that involves a lot of people and there's no need or sense to stop all activity.

The investors can reinvest money in their accounts without any limitations and keep receiving profits as before. All profit is secured for 100%. After implementation of the reform, every investor can withdraw their money to SportArbs debit card.

We plan to finish the reform by May 10. The debit card and its delivery can be paid from your balance at SportArbs.com immediately after the website update.

Part 5. Consequences

We clearly understand that this situation will be efficiently employed by Ponzi-oriented projects chasing their goals, which will hit the nerves of some investors through their agents. However, it won't change anything, as we are able to fulfil all undertaken liabilities.

Our company always respects its promises to its investors:

• translation of the website and support service into eight languages – completed;
• video about our company and our business – completed;
• service with arbitrage situations at Betlines.net – completed;
• learning material – partially completed and still in the process of completion;
• and many other things.

That's why you can rest assured that we will do everything described in this article.

Thanks for your vote!

In order to evaluate the work of our employees, please take part in this anonymous poll:

I'm am glad that the company makes efforts to provide more reliability of work and I completely understand the necessity of this reform.
I don't understand the matter of the reform, but I welcome the actions of the company as I think, that the success of the company is my success too.
I completely disagree with the actions of the company.