Category: Egaming

  • Everybody has a plan until they get punched in the face.

    “You can’t have everything you want, but you can have the things that really matter to you.” —Marissa Mayer, former president and CEO of Yahoo.

    My career has been really important to me. And I’ve loved what I’ve been doing. But sometimes, to the detriment of the things that really matter. Kind of like punching myself in the face. For no good reason.

    I’ve spent a large part of my career both travelling or being away from my (growing) family. I’ve missed birthdays & days out & sickness and all the ups & downs that go with the greatest adventure of them all – bringing up a family.

    The bulk of my experience has been in an industry that is currently going through seismic changes. Consolidation, large M&A’s, re-organisations and regulators banging at the door, like never before.

    My plan was to leave the Stars Group and move into a Marketing leadership role in a (new to me) large blue-chip organisation. My leaving was accelerated by the business I was helping run, being folded into another part of the (Stars) Group – but the new job was offered, I met the people I’d be working with, plans put in place, and a window of a couple of months before the right structure put in place – to bring me on board. Happy days.

    But sometimes, time off can do funny things.

    For the first time in years, I was at home in Dublin for 7 days a week, taking on my share of the ups & downs and really appreciating the amazing job my wife has done, in doing the toughest job of them all – bringing up healthy, happy, well-balanced kids.

    During this very recent period, the right house, in the right place in Dublin became available. “NO – we won’t buy it because I’m going to be working overseas again, and we need to make other plans…” – was my first reaction. And it was the wrong reaction.

    It was typical of someone who was more focused on their own tunnel vision needs & wants around work & career – and less about making what should be the right long-term decision around the most important job of all. Being the best Dad & husband possible.

    So – fast forward 3 months, we’ve sold one house, bought a new dream house in an area where my kids have already spent more time in old-school, outside water fight, ‘don’t come in until we have to send out a search party’ play – than ever before. I’m at home. We are together. And my wife is….content.

    Me? I feel…brand new. And it’s great.

    Great, because I’ve got clarity in terms of what’s important. Great because my health is good, & great because instead of repeating the same pattern and disappearing out of Ireland again – I’m clear that this is where I want to stay.

    Being brand new sometimes means looking back, and making sure that you understand why you are, where you are.

    The gambling industry has given me a great living, I’ve worked with a lot of people a lot smarter than me, and learnt from them – and its given me the opportunity to travel all around the world. But – it’s currently facing into it’s most challenging period since it’s inception.

    The core challenge is clear – how do you operate a business that that has historically turned a blind eye to unhealthy behaviours that impact negatively on people’s lives? It may be a small % of customers / people – but that small % has historically over-indexed in terms of profits delivered.

    In an earlier part of my life, I had direct lived experience of the challenges of addiction. I’ve seen the damage that it can do – and I’ve seen good people familiar to me, losing a battle against life being unmanageable – and struggling to have the courage (or support) to change the things they could.

    I mention this, because this experience has probably given me a deeper insight into the more human side of the enterprise challenge, that is the online gambling industry attempting to change it’s own historical behaviours and genuinely put in place the right type of (both) internal attitude, and external safeguards – to protect the small % of people that are vulnerable to what the online gambling industry sells.

    The challenge (for the gambling industry) is not about designing & devising high-profile, media friendly, player facing support programs – but a deeper one. In my opinion, it’s about taking a value and human trait that’s been sorely missing – and making it core to every activity.

    The value and trait? Empathy.

    I’m not going to lecture on empathy. People and businesses have to be honest with themselves as to whether it’s a value that’s important to them. It’s difficult to prove or show, as it operates on many different levels – but it’s trait that I think that all businesses (particularly those with a heavy marketing focus) and gambling, in particular – need to ask themselves “is this core to our DNA?”. If not – you’re not putting your customers needs – truly at the heart of what you do.

    Empathy is something that I personally took my eye off the ball with, in terms of my own life – and I’m just working hard to reapply it to what’s important. If you keep it front and centre – you make more of an effort to understand (both) what’s important to other people andyou do your best to serve their needs before your own. For example, for me, if I look at the needs of the most important people around me – it’s about staying close to home, as much as I can – but balancing it with the type of work that gives me purpose and focus – so I can, personally, be happy – and spread that happiness around.

    I’m still a work in progress. I’m still working it all out – but I am proud of the work that I’ve done, with the companies I’ve done it with. I want to use that experience (and empathy) to help other people.

    I’m available for consultancy based out of Dublin, happy to travel but with some limits. Betting, gaming, ecommerce, brand, performance & growth marketing.

    Contact me here.

    Or Whatsapp / call on +353 87 1234 371.

    You get the empathy and experience at no extra charge.

  • Full text of my recent EGR article on the (betting & gaming) industry innovation struggle.

    Innovation – why & what’s next?

    Here is the full text of the recent EGR article that I was approached to write on “The industry innovation struggle…”. This was published in the year end EGR magazine (December Issue – link behind paywall here).

    The industry innovation struggle.

    Why & what’s next?

    1996 was a breakthrough for the betting & gaming industry. We saw both the first recognised online sportsbook (Intertops), and the first online casino (InterCasino). Interestingly – not related. Bingo appeared in late ’96 via Bingo Mania. The first recognised Poker Room product was Planet Poker in ’98.

    It took a leap of faith, investment, risk-taking, and significant innovation to get these products to (initial) market, and as the industry has grown and matured, we’ve seen other vertical additions that have included Virtual Sports, Live Casino, Financials & Lotteries.

    These verticals are between 15 and 20 years old. We’ve seen little that’s been adopted into the mainstream of the channel verticals since these eight.  Sample areas of (attempted) vertical product innovation that have had significant investment included Social Betting (PP + BetDash, 888+Magic888 and apps like BetYou and YouBetMe) and Financial Trading, yet neither of these areas command any significant real estate today on the bulk of mainstream Operators.

    I’ve at on boards & in meetings for companies that have products that they believe may be either “disruptive” or brand new for the betting & gaming industry. The first question from industry incumbents & Operators tends (without fail) to be “who are you live with?” – and if the answer is “no-one yet…” the reply in virtually every case tends to be “…come back to us when you are…”.

    If I look at my betonexperts experience, combined with conversations that I’ve had over the last few weeks and months – there is a consistent level of opinion (from Senior industry people) that the industry is really struggling with obvious innovation.

    Reasons? Primarily, the industry is used to clear & consistent ROI from the “easy money” of incumbent products and the industry has been slow to embrace people from outside the industry. We’ve been choosing people from inside the industry to oversee innovation – and that’s meant that the horizons being explored are potentially too inward-looking.

    Some opinions? William Mace, Head of Innovation for Unibet believes that one of the reasons that the industry has struggled with innovation is because “…the industry has simply taken an offline (betting) experience and simply moved it online…”. Carla Maree Vella, CEO of Optimizer Invest (who have invested in multiple start-ups) believes that “…aligning a gaming company to entertainment formats people are familiar with will be key (to innovation)…”. Ari Lewski, Director of Digital Sports Tech (who’s customisable prop bets product has recently been integrated by Coral) said “…the feedback to us (so far) is that Operators see a large untapped area for player betting as there is a disconnect between demand and supply (of markets)…”.

    From a wider industry perspective overall business innovation has been driven via two key areas. The first is the very public M&A environment that’s been prevalent over the last 2 years or so. The second has been the move whereby we’ve seen the powerful Affiliates move directly into the Operator space.

    The most obvious example of how M&A can drive business innovation is the Paddy Power / Betfair merger. The former Paddy Power CEO, Andy McCue was quoted as saying “…The combined company will have increased capacity to develop new betting products and to distribute them across more than four million active online customers in Europe, the US and Australia.” Having a core fixed odds brand (Paddy Power), combined with an exchange brand (Betfair) allows the combined entity to cover all the bases in terms of the gambling demographic. Without this merger, both companies would have been forced to stretch their core competencies to develop attractive product offerings that stretched far enough to cover both the more casual and/or exchange punter.

    One of the best known (and successful) examples of affiliates moving into the Operator space was the CasinoChoice / Costa Bingo family – which has ultimately morphed into BGO Entertainment.

    The move from owning individual portals, to a group of complementary portals, and then making the leap to monetising players directly – has accelerated significantly in the last 24 months. The affiliates that make the leap may not be innovating in terms of product, but the move sends a message to the larger Operators that customers will go to where the best content is – and it’s this content area that looks like a key battleground in the coming quarters.

    Organic search has historically driven much of the highest value customers, and global SEO is rapidly changing to focus much more heavily on quality content VS more traditional SEO tactics. I expect to see even more strong content driven affiliates moving into the Operator space in the back of this, as well as more acquisitions by Operators (of affiliates with strong content) to drive their own content innovation.

    My own work, research & experience has shown innovation movement in a number of key areas. I’ve already mentioned innovation in content – but I see player betting (performance, head to head markets, etc) also an area that’s easily understood and is a clear fit with current Sports markets. It also has a clear crossover with eSports.

    There are also clear opportunities for Operators to improve overall customer experience by studying how the Social Media giants curate and present content. Give people what they are familiar with from another channel and adapt & improve it for betting & gaming.

    AI trading & risk management via improved managed trading services is also an area that’s grown hugely in the last 12 months, and I believe is the future of trading in the industry.  Keith McDonnell (CEO, KMI gaming) made the point to me recently that “…truly innovative areas like DFS and eSports will always be compared to core revenue generators.” And maybe (in my opinion) it’s partly this attitude of “if we can’t generate similar revenues as fast, from something new, we’re not interested…” that this is where the challenge lies with Operators in terms of changing their thinking.

    Final thought and potentially the biggest challenge? Be prepared to embrace risk and make failure ok. Now – there’s an innovation challenge for the industry.

    Liam Casey consults with betonexperts and helps betting & gaming businesses tackle common challenges & help Senior Management get no bullshit answers when they need them. He’s available on a contract, project or long-term basis.

  • Betting and Gaming industry reaction (and opinion) to the Trump win.

    Trump not online gambling. In a Casino.

    So – what’s the betting & gaming industry’s initial reaction to the news that Donald Trump is the President elect?

    (Like most people – I’ve been consumed by the political media over the last 36 hours – and it got me to me drafting this, early this morning, when a Trump win started to look likely. Will be interesting to look back on this in 12-24 months time).

    • Social media is in meltdown over Trump presidency.
    • Betting exchanges (and pollsters) and me, got it badly wrong (again, post-Brexit).
    • Trump is a businessman that owns Casinos and his been vocal about support of gambling…

    …but what could a Trump presidency actually look like for the legalisation of online gambling in the US?

    3 sections here. 1) My opinion 2) Things that Trump has actually said 3) Some direct quotes this morning from betting & gaming industry people who have given me quotes. (ED NOTE: I will add more industry opinion, as people come directly back to me…)

    First. My opinion.

    1. I think that there will be little to no change in current (US federal) policies – and if there is any change – that it may actually result in a tightening up of current regulation as Trump (personally) looks to shore up revenues at B&M casinos.
    2. The legalisation of online gambling in the US is (interestingly) one of the few issues that unite the far-right (mainly evangelical + big Trump supporters) and the (loony) left (gambling is a social evil and access needs to be curtailed).
    3. Trump is light on policies in general and the general belief is that he’ll leave the operational detail on divisive issues under discussion to the House & Senate. Progress there has continued to be slow, and shows little sign of current deadlock being broken.

    Interestingly – it was reported back in 2011 that Trump was getting into a (minority-owned) online gambling business – and was quoted as saying ““This has to happen because many other countries are doing it and like usual the U.S. is just missing out…It seems inevitable, but with this country you never know if it’s inevitable.”

    …but crucially – the Forbes piece also reported that “…Trump has no plans to move forward without a federal or state regulatory regime in place.”

    Historically – Trump has been pro-gambling in general butcomments have tended to either been a) targeted towards legalisation (or at least. loosening up) of gambling frameworks in states that have B&M Casinos or b) been very general comments around the links between Sports & gambling.

    Two important things to remember.

    a) Sheldon Adelson donated $25M to the Trump campaign. And he’s not keen on online gambling in the US anytime soon.

    b) Trump has some previous around being obstructionist and protectionist around his (gambling) properties VS expansion.

    Here are some of the things that he’s historically said around legalisation of sportsbetting (and gambling, in general):

    • “This has to happen because many other countries are doing it and like usual the U.S. is just missing out. It seems inevitable, but with this country you never know if it’s inevitable.” – Forbes Magazine.
    • “I like sports. I like gambling. The two obviously go hand in hand. And like I’ve said before “Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.” If everyone adopted that philosophy we’d all be better off. I like Adam Silver’s new stance on sports gambling. He realizes there’s a lot of money to be made for everyone including the leagues and players and as I’ve said before “if you’re going to be thinking anyways, then think big.” And sports betting can be big. We also need it in New York and New Jersey to help our horse racing tracks and casinos.”
    • We do polls that show that 82% are in favour (of legalising sportsbetting) – Youtube interview
      (On legalised sportbetting) – We have to do it, it’s vital to putting the bookies out of business. – Youtube interview
    • “(I’m) okay with it because it’s happening anyways… whether you have it or you don’t have it, you have it… you understand that better than anybody. It’s all over the place.” Breitbart

    Here are some direct quotes from experienced betting & gaming industry experts – that I’ve been in contact with this morning.

    “When it comes to Trump and the gambling industry, he’s made vocal statements in support of online gaming but I don’t think he’ll push for or against. He’s got trade wars to start….The big issue will be the lame duck Congress and Senate. Will they try to sneak some RAWA type bill through before the inauguration or perhaps the new Attorney General flip flop again on the wire act. I don’t think there will be movement on the federal level but with the Republicans controlling the Congress, the Senate and the Presidency what ever happens good or bad will happen unopposed.” – Bill Beatty – Editor in Chief – CalvinAyre.com

    “If anyone can predict his actions – they are a better gambler than me.” David Sargeant – Innovation Consultant and Startup Incubation at iGaming Ideas

    “I suppose there’s a chance his election might be advantageous for online gaming. Especially if Christie is AG. But Adelson’s influence can’t be discounted.” – Sue Schneider – Partner at iGaming America

    “…to think he will be in favour of online gambling just because he’s owned land based casinos may be a dangerous assumption. Sheldon Adelson owns casinos. He donated $25m to trump by the way. The idea that an openly economically protectionist president will create a land of opportunity for foreign egaming firms is likely a little naive…” – Alun Bowden – Senior Consultant at Eilers & Krejcik Gaming & Contributing Editor, eGaming Review

    “Selfishly, the election results are a disaster for iGaming in the US. Fully expect the NJ, NV and DE industries closed within a year. + DFS?” – Tom Galanis – Director, Tag Media / Co Founder, GameOn Affiliates. (ED NOTE: update from Tom – “Sure. It probably is a tad pessimistic, but I’ll stand by the fact it’s terrible for the industry.”)

    “Pretty sure he’s in Sheldon Adelson’s pocket. But I’m not really up on whether Adelson is against sports betting, or just poker and casino. But hard to see Adelson not being a kingmaker at this stage. He was the big republican bankroller, and owns the only paper in the US to endorse Trump. On the other hand, Chris Christie, who is going to have a big say in policy stuff, was the NJ Governor trying to push legal sports betting through for NJ. so interesting i think.” – Jesse May – Campaign Strategist at Matchbook.com / The Voice of Poker.

    “I think online gambling will be very far down the list of what Trump will be worried about for the next 12 months. Despite being a (former?) casino owner my assumption is he wont be a fan of online gambling as he is a bricks and mortar man.” – Fintan Costello – Founder & Managing Partner at Revenue Engineers.

    So – in conclusion – what will the future hold for a Trump presidency and online gambling?

    • Too early to tell what’s going to happen but…
    • Sheldon Adelson’s bankrolling of the Trump Super PAC points to significant influence (with Trump) from one of the biggest opponents of online gambling and…
    • Trump has been protectionist around shoring up revenues for his own B&M properties – and the perception is that online gambling takes revenue from those…
    • He’s light on policies in general, and the wider market opinion is that he’ll be leaning heavily on experts in the House & Senate to take the lead on more complicated issues (of which online gambling is considered one).
    • However – Chris Christie’s importance to Trump policy-making may open up a shorter near-term opportunity for legalised sportsbetting in New Jersey – which may have a knock-on effect into other states.

    (Liam consults with http://www.betonexperts.com – and advises a range of betting & gaming companies on commercial planning, product innovation & operational strategies.)

  • Ten betting & gaming industry predictions for the next 3+ years.

    I wrote a post nearly 5 years ago that gave some predictions around some of the areas where there would be growth in the betting & gaming industry.

    The summary from 5 years ago?

    • Operators would need to focus on real-time delivery of a data-based customer experience.
    • That there would be a huge focus on Operators focusing on the addition of more & more markets.
    • That “branded” content would be key to the growth in the egaming space.
    • That there would a struggle to harness Social properly.

    I’ll let you, the reader decide if those predictions were on the money or not…comments welcome.

    So – what does the future hold?

    It’d be too easy to predict further super-mergers, or a loosening up of the regulatory regime in the USA, instead I’m going to focus on some more esoteric and/or short / medium & long term outcomes I predict.

    Short-term (12 months):

    • William Hill & Amaya deal to huff & puff for a relatively short period – but ultimately a deal that doesn’t get done. (Too much grey market exposure for WH. Kentucky lawsuit still hanging over Amaya. Technology integration being a barrier.)
    • PokerStars to announce that they are moving to NYX / OpenBet as their core sportsbetting platform.
    • Fortuna Entertainment Group to gobble up market share on the back of their Playtech deal. (Only if they have the in-house capability & experience to execute though…).

    Medium Term (12 – 36 months):

    • Trading floors (and direct trading of sports volume) to be wound down by many online gambling operators and customer volume to be run through managed trading solutions from 3rd parties. {Trading is a) volatile and material to bottom line results b) expensive & requires highly paid trading floors and c) pricing is getting commoditised as Operators compete with a race to the bottom around “Best Price Guaranteed”.} Offerings like 3ET to disrupt the market. (Ed note: I have done some consultancy work for 3ET.)
    • Skybet to IPO. Their recent results are a clear indication of that. And they are owned by a private equity firm (CVC) that will want to cash out.
    • Matchbook.com to emerge from “mid-tier” Exchange status and start to challenge market leaders via industry leading tech & customer experience (Ed note: I have done some consultancy work for Matchbook).
    • Companies that understand the importance of full vertical integration in the online gambling space will start to dominate across regional markets. (Vertical integration = own the traffic via owning affiliates, own the brands that you send the traffic to, own the software & IP that sits behind the brand, own the payment processing.) Optimizer Invest are probably the best example here.
    • Big national brands that have attempted to build regional profit centres around their core brand – will potentially move to more local facing brands. Paddy Power’s experience with Sportsbet is an excellent example. Betsson Group’s multi-brand strategy will pay off in the long term too.

    Long Term (36 months+):

    • Blockchain to directly contribute to regulation in the online gambling space. (Who needs regulators when you’ve got a globally recognised standard of financial record? There’s a good piece that explains it here.)
    • AI & chatbots to start doing much of the heavy-lifting around basic customer interactions in the betting & gaming space – this reducing pretty large cost-bases (and OPEX) from companies. It’ll take at least this long for current technology to transition to these capabilities.

    What do you think about these predictions? On track? Way off beam? What am I missing?

    If you need to know more about me – you can find out here.

  • Is social gaming the future of online gambling?

    I’m still waiting to see how the US shakes out with its ongoing struggle to work out what it wants to do with online gambling. It’ll happen.

    My take is that poker will be first and it’ll regulated on a state by state basis. It’ll be for US companies, and as each state regulates, the company will require infrastructure in each state that it gets a licence in. That’s going to put barriers up for companies that are undercapitalised or who can’t get some type of top-end deal with a regulated network provider. See ipoker.it or pokerstars.fr for what I’m talking about here.

    Online casino games will be next, following a similar path, with sportsbetting being a very distant last. Could be a long time before the NFL / NBA / etc are happy to see it happen.

    However, whatever the DOJ in the US thinks, there’s huge appetite for online games, that have gambling elements attached to them.

    The massive continued growth of Zynga et al, is showing that the social gaming experience is becoming part of the standard online experience for the average Joe. Social gaming companies are big fans of publicising growth metrics and stats, primarily because many are marching on VC money, with IPO being the ultimate aim. The better the numbers, the better the bottom line. It’s not quite the same as many of the online gambling behemoths that are still privately held – so hard & fast numbers are difficult to pin down there.

    Personally, I think that the low barrier to entry and trial for social games combined with their natural brand associations with social networks (and Facebook in particular), are introducing a casual segment of the market to a type of low cost competitive gambling.

    One of the drivers of gamblers in particular, is the belief that they’ve got a more informed or more valid opinion than you, or the house. Why else would you stake your hard-earned cash otherwise? Social gaming is pushing the commoditisation of the gaming transaction. I think this will ultimately lower some of the barriers that stand in the way of online gambling brands, in particular for the US, when regulation happens.

    If you want to get some decent flavour of what’s happening in the social space, there are some good sources worth checking out – and you can make up your own mind about whether social gaming could be the future of online gambling.

    It’s either that, or does someone want to buy my 5 million Zynga Poker credits?

    Here are some good sources to form your own opinion on what Social Gaming’s impact for online gambling may be:

    http://www.insidesocialgames.com/

    http://socialtimes.com/category/social-games

    http://blog.games.com/

    It’s also worth keeping an eye on what Bruce Everiss is talking about – he predated social gaming, but as the guy who took both Imagine and Codemasters to being #1 in the market, he knows his games marketing – check out his blog at: http://www.bruceongames.com/

  • It’s not all champange supernovas and money-pit online marketing.

    It’s not all champange supernovas and money-pit online marketing in the online gambling/gaming business.

    For every high-profile brand that’s splashed over the front and back pages of your local media – there’s many other online gambling businesses that (while household names in their own territories) aren’t as well known on the world stage.

    Some examples that come to mind here would include Unibet, Interwetten, Sports Interaction, Titan Poker, Casino Tropez. Low-key heavyweights across Sportsbook, Casino and Poker – and all online marketing experts.

    Many of these businessses have quietly built exceptional online success stories by either being online marketing innovators, or delivering product or customer experience that is best in class. To do this, they have to recognise trends early, or commit to driving new trends that they believe in.

    So, what have I seen in terms of online marketing trends that may have come out of some of the operators above – or in the space in general?

    Real time delivery of marketing collateral based on transactional activity: Ok, so ad networks and some of the larger ecommerce sites have been doing this for years, but the rise of Live/In Play Betting (in particular) has allowed online gaming companies to identify new channels that customers haven’t accessed (or channels that they may have tried historically) and serve (or re-serve) these in real-time.

    For example, if a customer is on the site, logged in, and betting in-play on a tennis match, a query can be run at the time of log in to see has the customer ever bet on a Casino game or played poker. If they’ve played Casino in the past, serving a banner that launches a “single click to play” game (eg: blackjack), is a low cost, medium impact message with a potentially solid financial upside.

    Due to the fantastic functionality now available through using AJAX, multiple queries can be run on a single page – and then if a marketing message, isn’t working, another relevant message can be served. This is becoming more and more sophisticated, with companies that have core control over their own data and database, able to add custom fields to their databases which can allow greater micro-targeting (of the customer) with the most relevant marketing messages.

    Great examples of solid in-play offerings include: BWIN, Sports Interaction and Betfair (but I’m not sure about Betfair’s new splash page, it’s reduces the consumer’s ability to see multiple options, on multiple markets, at a glance.)

    The continued rise of the “long tail” of products: Internet technology has really driven the commoditisation of information. The delivery of the online betting experience has been augmented by service providers ability to deliver (historically) esoteric and hard to find information. For example, as I write this, BWIN has 8513 markets available to bet on, or would you like to bet on Paraguayan 3rd division football in real time at Paddy Power?

    3rd party service providers like Bet Genius now shoulder most of the hard work in terms of aggregating content and delivering it to online betting operators. The more markets that they can provide, the more the operators will take – and I can assure you, that people will bet on them. In similar fashion, online casinos began with 30-40 games, and today, Playtech’s core download casino and Microgaming’s Quickfire platform – both have over 200 games. And they all get played. I can tell you that, again, from experience. That brings me on to…

    The rise of branded game/content:

    This has probably been one of the biggest growth areas in terms for egaming software providers, and by extension, their licensees and customers.

    It’s actually quite a simple equation. How do you build confidence in a product that’s virtual, and (often) for a brand that has little market penetration? Or, how do you entice a casual sports-bettor to play Casino games, when they a have little interest?

    Simple. Find a well-known and naturally trusted brand that resonates with a certain demographic – and use it as a theme for an already developed game. And then put that game in front of that demographic.

    Biggest examples incude the first ever branded slot, Tomb Raider (from Microgaming in 2004), Gladiator (Playtech) and X-Men (Cryptologic). There’s a good showreel of Playtech’s branded slots here.

    The trusted brand helps overcome some of the inherent mistrust of remote games presented by lesser brands – and it drives cross-sell and adoption for more established egaming operators, for a customer base that may have little interest in more traditional casino games. I can tell you from experience that it’s  win/win for everyone.

    Licensing deals with popular culture media rights owners (Marvel, Eidos, Paramount, etc) are where the software suppliers are concentrating much of their business and market product development focus.

    There’s a struggle with social media:

    The struggle is that a lot of online marketers are scratching their heads around the tipping point where COO’s etc, are looking for solid quantifiable returns from what some of them are seeing as a black hole that funds are being poured into with little of same KPI’s being hit, as more tried & trusted online marketing channels.

    In simple terms, the more traditional metrics of click-through, conversion percentages, sign-ups, etc – are being used in the same way to validate social media spend. And the numbers aren’t looking good. The challenge is for management teams to take a longer term view, as social media seems (so far) to support increased brand engagement, consumer dialogue, brand recall and deeper level customer interactions.

    It’s about extracting the value from these things, that proves more difficult to quantify, and thus more difficult put hard & fast numbers in front of people making budgetary decisions.

    My next post will look at social media, online marketing and the egaming industry, in more detail.

  • Microgaming pulls out of the US. Great product, will be missed.

    Microgaming announced today that its pulling its software from US facing operators and the US market “for the time being”.

    They’ve driven the online casino market for many years now, and I’ve recently had a commercial presentation from them, when looking at some of their products. Their casino and flash products are still top-notch, and I’m a big fan of their ability to deliver from a technical and product point of view. Their Quickfire product is excellent.

    Is it a knee-jerk reaction to the “Black Friday” events? Possibly.

    Will it be permanent? Probably.

    Will it open up opportunities for other software vendors that will provide US-facing software? Yes, but you can be sure that MG’s top US-facing licensees know where they are going, and where they are moving to next.

    I know of various software providers that will be forming a (dis)orderly queue to step into the breach here, here’s hoping that they can keep licensee and player standards high.

    Who do you think will step up?

  • My take on the Full Tilt / PokerStars / Absolute Poker ban for US players.

    If Pokerstars and Full Tilt Poker (in particular) weren’t so focused on world domination, and trying to one-up each other in terms of player volumes, I think that the events of Friday the 15th of April may not have happened.

    Why?

    In the race to keep maintaining player deposits from US customers, and given that credit cards are not an option, (particuarly for new customers), ACH transactions became much more important. ACH transactions are bank transfers where the player gives their bank details to the gaming company, and a transfer is inititiated through a payment processor, from the bank, to the player’s gaming account.

    Why was this important and how did it impact on Full Tilt, Pokerstars and Ultimate Bet?

    It became important because it allowed these companies to bypass credit card blocks, as the system that’s set up to monitor bank transfer payment types (in the ACH system) isn’t as robust as what the credit card companies have available. It’s also a system that requires a lot more monitoring, but is much more fragmented as (in the US) it is populated by the diaspora of small, local US banks.

    The banking system in itself in the US is a lot more fragmented than in other parts of the world. This means that  you’d need to have checks & balances in place, at a local level at every single bank that has the ability to send or receive funds from/to any 3rd party. Currently, the US banking system (and individual banks) conduct due diligence into the business of any merchant when the account is opened, but if the nature of that business changes (ie: from buying & selling coffee and having 1000’s of individual transactions from individuals buying coffee > overnight 10,000+ transactions which may or may not be related to online gaming) , the bank don’t necessarily have the resources (or the interest) to look deeper into it. Also, let’s face it, fees are now being generated on the 10,000+ transactions. Money talks.

    Now, if you are a big enough online gambling business, and have:

    a) enough cash at your disposal to buy a bank

    b) difficulty in getting payments from US players

    …why not buy a bank, where you can set up as many merchant accounts as you like – to process as many transactions as possible? Or, at least buy the companies/people that can do that for you?

    That’s what these guys did – and it came back to bite them on the ass. When one of their payment processors (a middle man) got caught, it looks like that in exchange for doing a deal with the DoJ in the New York – he reverse engineered a lot of the transactions and the money trail – thus allowing the DoJ to work out who was getting money from where, and where was it ending up.

    Read about Daniel Tzvetkoff’s story here.

    How does it impact on the companies indicted?

    If you combine that fact that it’s relatively easy to take a guess about the player volumes (and therefore revenues) that are being generated at these sites, because of poker aggregating sites like Poker Scout – and the feds could now reverse engineer the money trail due to Tzvetkoff. A perfect opportunity was presented to allow the DoJ to indict the owners of the largest online gambling companies out there. The Full Tilt owners (in particular) probably didn’t need to flaunt their market position so openly – three words. Red rag, bull.

    Personally, I think that it’s a perfect storm for these companies only. They’ve backed themselves into a corner with payment processing, market share and profile.

    My take?

    US players that have money on PS / FTP / UB are probably trying to get their EU based buddies to log into their accounts and chip dump to other EU accounts so that they can get their money out. Alternatively, if they want to get their cash, they’ll ned to relocate outside of the US. Otherwise, they are in for a long wait for their cash.

    Interesting times for the industry. I’d bet they’ll get more interesting.

    NB: it might slow up (in some cases) some recruitment – as people wait to see if there’s fallout (ie: good people) from the biggest companies in the space. It may actually accelerate it in other companies – as those at certain companies jump ship (wrongly) as a knee jerk reaction to this. My take? Wait and see. The sky’s not falling in, and in a month’s time, it’ll be business as usual for most people.

  • Full Tilt, PokerStars and Absolute Poker owners arrested & charged by feds

    Big news.

    On Friday, two (as yet unnamed) owners, out of 11, from PokerStars, Full Tilt and Absolute Poker were arrested and  all 11 charged with violating U.S. anti-Internet gambling laws, according to charges filed by federal prosecutors in Manhattan. One of the others is due to turn himself in later today.

    The domain names were also seized.

    Individuals named included Raymond Bitar, 39, of Full Tilt Poker, Isai Scheinberg, 64, of PokerStars and Brent Beckley, 31, and Scott Tom, 31 Absolute Poker. They were all were charged with violating the Unlawful Internet Gambling Enforcement Act and other laws.

    The charges outlined a scheme by the company owners and some of their employees to direct the gambling profits to online shell companies that would appear legitimate to banks processing payments.

    The story was breaking on Friday when I’m writing about this. But it’s telling that 2+2 has gone down, it wouldn’t surpise me if it’s gone from weight of news traffic.

    What’s going to happen on the short term?

    There’ll be a savage run on withdrawals, particularly from US players, and already overloaded processors are going to go wallop. It’ll have an knock on effect across any US facing sites too.

    Watch this space…

    UPDATE: Here’s the 2+2 thread if you want to see what the Poker community is saying.

    UPDATE 2: Better in-depth piece from Pokernews – here.

    UPDATE 3: Mainstream news stories from:

    ABC News,

    CBS News

    CNN.com

  • Back in the saddle of blogging. Some online gambling thoughts first.

    It’s been too long.

    Blogging about the business of internet gaming / marketing /  gambling has just felt like extra work – and god knows, I’ve got enough real work to be going on with.

    What’s happening on the day-to-day business of online gaming front for me?

    I’m overseeing 2 x casinos, 2 x poker rooms, 3 sets of fixed odds games, our overall Partner function as well as heading up our Business Development function. It means that my time gets split between current egaming partnerships, what may be future ones, general business development – and managing a team of people.

    I’m going to have to get my sh*t together and get down some thoughts on the business of online gaming and in particular, what are the industry trends and my thoughts on them.

    Social Media – Macro Trends:

    * Social media will still not be monetised properly this year by brands.

    * Advertising on Facebook will get more expensive but click through rates will drop, and marketers will still spend shed-loads of money there, for little or no return

    * Overall email engagement will continue to drop for brands looking to engage customers through that channel. There’s too much email clutter, and social networks are cutting out the commercials by allowing P2P communication.

    * Twitter will block a bunch of aggregators that are currently piggy-backing their content, put them out of business, and try to work out their own business model (it’s got to be sponsored tweets + brand pages at a premium).

    Gaming Industry – Macro Trends:
    * B2B infrastructure deals between operators (who are now taking on the role of platform partners) – what’s going to be successful?
    * Growth in regulated markets – what markets are going to open and how tough will they be to enter?
    * Poker revenues falling off a cliff (for multi-platform operators) – why? Is it terminal?
    * Super affiliates becoming Operators (particularly Poker & Bingo) – do they have a future?
    * Live Betting is THE growth area for Sportsbooks – what sports and where’s the incremental revenue?
    * The growth of financial betting platforms – do they have a future with multi-platform operators?

    One final thing. I’d be amazed if online poker doesn’t get legalised on a state by state basis within the next two years. That’s a bonanza for online marketers in the US. Gird your loins…