New York (Platts)--9Jul2008

A company that specializes in online casinos announced this week it was
taking a gamble on the US biofuels industry by launching a new web site
devoted to the buying and selling of ethanol and biodiesel.

USBiofuelsExchange.com (US-BX) opened Tuesday to "pre-register"
producers, resellers and buyers, according to a statement from Diamond I, a
development-stage company seeking to change its name to US BioFuels Exchange
Inc.

The official launch will probably take place later this summer after
beta-testing, said James Kaufman, managing director of US-BX, in an interview.

The site will seek to level the playing field for biofuels producers in
the US, he said, noting "long-standing arrangements" between big producers and
buyers have posed "constraints" for smaller players without the clout to lock
in those sorts of deals.

The company plans to charge an undisclosed transaction fee for trades
completed on its site. Kaufman stressed the transaction fees will be
"extremely affordable," adding that "we don't want to price the small producer
out."

The idea for the US-BX exchange is attributed to Tom Gray, a director of
the Colorado Wyoming Petroleum Marketers and Convenience Store Association,
who is billed as US-BX's newest director.

Gray said in a statement that "the response to the US-BX has been greater
than even our most optimistic projections," adding US-BX hopes to bring the
"chaotic biofuels marketplace an orderly and efficient matching of producers
and other sellers with buyers" by using a model similar to eBay, the Internet
merchandise exchange.

Kaufman said buyers and sellers will be anonymous, but other deal details
will be revealed for price discovery purposes. Players will be rated by the
number of completed transactions and on customer satisfaction, he said.

"Biofuels in the US is a multi-billion dollar industry, growing at over
25% per year, with no national exchange or marketplace," said Gray. He said
the industry is "rife with, and hampered by, its own inefficiencies."

Ethanol makers say most of their production is traded on a spot basis
these days, with few long-term deals getting done. There are thinly traded
futures contracts in Chicago via the CME Group and in New York on the New York
Mercantile Exchange.

Matt Hartwig, spokesman for ethanol lobbyist the Renewable Fuels
Association, had no comment on US-BX, but did say via email that "if the
industry needs it, it will take off."

"Ethanol is still developing as a true commodity, and as such makes
trading a little more difficult," said Hartwig.

Diamond needs the endeavor to work. The company reported a $77,265 net
loss for the first quarter and has limited working capital, according to
securities filings. For now, its revenue is based on "click-through
advertising" from online gambling sites called IslandBlueCasino.com and
VegasBetLive.com that offer play in Texas Hold'em and Omaha poker.

"We're coming from a small space with great aspirations," said Kaufman.

--Beth Evans, beth_evans@platts.com