betonliamcasey

Category: Liam Casey

  • EGR OP ED: Will ‘Stutter’ be Peter Jackson’s next blockbuster?

    @betonliamcasey

    (NOTE: This Op Ed was first published in EGR Intel. I’ve put interesting links & other opinions in from people, at the bottom of this piece).

    (I’m currently available for consulting or interesting work / jobs / projects – focused on Marketing, engagement, structures & culture & general business performance).

    “Deeds will no be less valiant, because they are unpraised.” JRR Tolkien. The Lord of the Rings.

    I loved Peter Jackson’s early work. The scale of the Lord of the Rings was truly epic – but is a Flutter / The Stars Group – a blockbuster too far? Or will US box-office be the new, new thing?

    This is the deal that puts the rest of the industry on the back foot.  The headlines we’re all used to seeing in terms of industry mega deals can summed up by “bigger is better & scale trumps all…”. But IS bigger better? And what happens to culture? I spoke to mid-senior people in both organisations and the general reaction was big picture positive, but followed with a biiiig sigh and observations around “more of the same battles to the death for people & teams.”

    There are some areas that I think are really interesting here.

    DOES SCALE & REACH SUPPORT POSITIVE CULTURE? The merger of (TSG & Flutter) cultures will be both a) fascinating and b) something that will drag on the culture for the next 2 years. Both companies have been there & done that (in terms of mergers) – but it’s the foot-soldiers / middle management that will both bear the brunt of the cuts and have to struggle through whilst “synergies” get negotiated. High level costs & targets will already be known (in terms of synergies / 140M) – but (I know from experience) that Steering Groups will be kicked off / egos will surface & Game of Thrones will have nothing on internal meetings over the next 12 months. Flutter is the boss here. Dublin is now the head office. Dublin has tended to be more of an historical (Full Tilt related) outlier for TSG, and they only introduced a site CEO this year. Scale & reach seems to be the new paradigm for the online gambling industry butthere is a big (unanswered) question – can positive culture or habits be scaled? Particularly in an industry that has struggled with negative newsflow + lots of M&A + uncertainty over the last few years.

    WHO MATTERS IN M&A? NOT THE END-USER: Speaking of Culture, IF “Culture =’s Brand” then this new organisation will be…diffuse. The reality is that 99% of consumers of Stutter brands will have no idea of any corporate change – or won’t care. This is a bigger news story in Ireland, due to Paddy Power’s brand heritage there – than it is in any other territory. The overall brand portfolio now stretches across Paddy Power, Betfair, Adjarabet, Pokerstars, Skybet, Full Tilt, BetEazy, FanDuel, Foxbet – as well as various sub-brands that sit within verticals in the brands. The best brands that I’ve worked on & with are aligned around a common purpose and mission to do XXX for the customer.

    The sheer scale, weight, technical & budget challenges (and overall integration) means that brand alignment & resource allocation will be a power game as to who can get what, based on their ability to navigate the organisational power structures in a way that puts their brand needs highest. My own experience is that when people are a) concerned for their jobs b) having to compete for shared resources and c) having to navigate new relationships and comms structures – that the focus gets taken off the customer. Only time will tell here – but you feel that there are opportunities for more agile, more aligned gambling brands to deliver greater customer focus (and results) in the short to medium term.

    RAFI WILL KILL IT AS COO: I first met Rafi when he was COO of Playtech. He was always viewed as the guy that would give you a straight answer, wouldn’t fuck around – and then deliver what he said he would. He knows gambling & the industry inside out, and there has always been a general feeling that if you were going to pick an industry COO – that he’d be #1.

    This is notin opposition to him being CEO of a large public firm – but a case of Rafi being most comfortable being down in the absolute detail of the days to day, and not having to be the “BIG VISION, BIG MISSION…” sprinkler of fairy dust on a large organisation. Richard Flint is a great example of someone who combined the ability to inspire (teams) internally, and have enough charisma and slickness to put an acceptable face on an industry that is struggling with reputational issues. My gut feeling is that Rafi will be more comfortable with an inward VS outward facing role. He’s one of the good ones. I don’t know Peter Jackson – but he’s already got a board (eg: Gary McCann) that has ‘been there/done that’ in terms of long term growth and debt management.

    I’m fascinated to see how Marketing gets apportioned out on a Group basis. Flutter moved to MD’s that were brand & territory focused. TSG’s (marketing structure) approach has been more vertically focused – both in terms of product & where the customer sits in the lifecycle. There has been a move from a general online POV, to break down the CMO role into complementary, but more technically focused areas. A Group CMO announcement? I wouldn’t be too sure about that.

    MARGIN MATTERS. WILL POKER MATTER? TSG’s debt weight has been a killer. TSG has consistently delivered some of the best margins in the industry, but over the last few years hasn’t been able to touch it – due to the requirement around  positive cashflow. The converse of this is that TSG’s marketing spend has been the lowest of its (industry) peers – as a % of its online revenue. The theory is that less drag of debt, deeper pockets (budgets) and rationalised Marketing overhead (people & partners) will allow an increase in the % of spend VS revenue – that can help drive top line revenues. However – it’s never as simple as this. I know Poker (for example), has tended to be at the bottom of the list of priorities for Flutter – as general category growth has tended to be focused on the Sports & Casino verticals. ‘Stars has always taken the lead in terms of category-widening (for Poker) – but my gut-feeling is that the Group focus may not allow this (for Poker) – and that x-sell will now be #1, 2 & 3 in terms of Poker focus.

    This probably creates even more of an opportunity for Partypoker (& GVC) in terms of building on the real authenticity that it’s built up in the Poker space over the 18 months or so.  Party’s challenge here – is to maintain Poker authenticity, whilst building more holistic and seamless Poker-driven gambling experiences  – for the more “recreational” type of player. Stars Rewards is a beast at doing this – very interested to see if their model and player experience with Stars Rewards gets used on a wider Stutter group basis.

    THE TERRITORY OPPORTUNITY: I think that this is where this deal gets most interesting. Industry people tend to forget that online sports betting is still a) nascent in many territories and b) has tended to be behind online poker in terms of (early) online adoption. Pokerstars was a truly global operator, before Paddy Power (for example) was of any significant size. If you look at the US as a territory – Poker has been the more “acceptable” face of online – and sportsbetting is only catching up. If you look at the territories below – I’d have a belief that Poker as an entry point – is going to be far easier to gain an (initial) toehold and expand from there. It’s where Flutter are probably most looking to growth – outside of the pure US story.

    THE US IS WHAT MATTERS. Fox Sports + Free To Play. Fanduel + Poker. A Pokerstars legacy that goes back to the early ‘Noughties. Even Full Tilt as a secondary brand? Boots on the ground already in key markets. An Exchange in New Jersey. US fantasy sports marketing experts as part of the Management team. There is very little not to like about where this positions Stutter in terms of the overall US opportunity.

    I’m familiar with the people from TSG that are over there. (Less so with the Flutter team). They are some of the smartest guys in the room & highly motivated to succeed. BUT – there is a question now, as part of an even bigger organisation that has an updated vision & mission – as to whether there will be organisational challenges that will slow up what they want to do. Decisions that have already been made in terms of budgets & resource allocations will be picked over again. Flutter will want to have some of Peter Jackson’s men up close & personal with everything that’s going on. Trust will have to be built up – at the same time that a 10 figure marketing spend is marching out the door in the pursuit of market share / land grab.

    There are still some outstanding questions over who owns what IP, that relates to sportsbetting business procesess (eg: cashout) due to how the USPTO treats IP versus the EU. Firms are circling that one, and it could prove expensive. Positive newsflow about the US will the petrol that will drive the engine of the share price here. It’ll be one to watch that’s for sure.

    SPORTBETTING PLATFORM FIGHT TO THE DEATH: Openbet. Skybet. Betstars. Betfair. Migrations. Integrations. Trading teams. Margin. Trying to see the wood for the trees in terms of technology / market fit – is as much of a political game, as it is in terms of the best technology and capability winning. I know that if was Skybet – I’d be concerned that my expertise was complementary to a core Paddy one. I know that the Trading overhead (in terms of headcount) at TSG. was punching well above its weight in terms of markets / scale per trader. Their challenge was market / platform fit due to TSG historically being a Poker business. Stutter have the luxury of choice, but that brings hard decisions around the big picture. Shoe-horning US sports and the required differences in exotics etc – is not an overnight job & that’ll be the focus in terms of core platform market development for the long term. If you have a “one territory, horse-racing focus” your horizons are…limited.

    FINALLY – the industry is a state of flux. Mega deals have become more the norm than not. If it’s a mega deal to simply acquire tech or skillsets (a la Uber, a la Google or Facebook), it makes sense – as those deals increase capabilities that serve the customer. The mega deals in the gambling industry are driven by “synergies, reduced marketing costs because we can scale more efficiently & greater brand access to territories we don’t currently serve…” – and the reality is that – whilst the drivers are real =====- the clear outcomes as a result, unproven, at scale.

    For example, performance marketing is not binary. Just because you own more brands, and have a smaller Marketing dept(s) doesn’t mean that your acquisition costs will go down. You are still competing against your own & competitor brands. Your (corporate) scale doesn’t mean anything to your end-users other than a greater ability to deliver hygiene factors around security and safety.

    New management + revised territory marketing plans, based on new priorities + decisions around technology + integrations + internal politics + lack of clarity around future structures + the challenge of owned or licensed IP (in the US) + responsible gambling focus + regulatory pressure – all at bigger scale – do not suddenly become easier problems to solve, just because you are the biggest. Unfortunately – creating scale, scales your challenges too.

    I’m looking forward to watching how Peter Jackson’s next epic unfolds. It’ll definitely be big box office – but will it be…good?

    I’m available for full-time work or consulting – details here.

    **********************************************************************************

    Other good articles & resources that are linked to this deal:

    Here is the Flutter-Entertainment-plc-and-The-Stars-Group-Inc – corporate-doc that gives an internal >> external rationale of the deal.

    Here is the investor presentation from Flutter – here.

    Here is the link to TSG’s last investor roadshow and set of strategic priorities – here.

    @brettsmiley breaks down greater specifics on Foxbet and Fanduel & the US opportunity – here.

    @gamblinglamb (Alun Bowden) gives his expert analyst take on his four pillars of risk – here.

    @DustinGouker looks at what it means for everyone else in the US – here.

    Here is where I break down the US IP piece that relates to Cashout – here.

  • Cashout is at interesting times: Part 1.

    MAY YOU LIVE IN INTERESTING TIMES is one of those sayings that people get confused by.

    The phrase is actually a misconception and nothing to do with wishing one well. It’s a curse, not a blessing. And the genesis of it, is confusing, at best. More background on it here.

    I can see the same type of confusion around some of the claims & counter-claims related to the genesis, development & rights ownership of sports betting Cashout functionality, particularly as it relates to the fast-growing US sportsbetting market and a generally litigious US commercial and tech IP environment. It’s interesting times.

    This piece focuses on some of the companies that have some sort of cashout offering that is targeting the regulated US sportsbetting market, patent history & what the challenges could be.  I’m going to follow up this piece (Part 2) by trying to dive into the overall numbers to get any sense of the size of the cashout market & what its worth to people.

    But first…

    A recent Twitter conversation flagged a tier 1 CEO (unofficially) saying Cashout is “…the 4th biggest global sport (by betting volume)…” In simple terms, that puts it in the billions (globally) in terms of turnover. That’s a significant number. (Ref: @GuyHardingOC on Twitter, a good industry follow).

    Here are some examples how the likes of Fanduel, Foxbet, are already talking up this “4th biggest sport” to their customers.

    Since the “opening up” in the US sportsbetting market (on a limited state basis) there has been a number of companies (that I’m aware of) – that are specifically focused on the Cashout IP space. Some have claimed “invention”, some have claimed “first to file” and some have claimed nothing generally, but definitely have plans to file claims around the cashout experience.

    Some of these sample companies include Colossus Bets (patents here – first filed Aug, 2013). Get Out Ahead LLC (patents here – first filed Feb 2016). Marketmaker Software Ltd (patents here – first filed April 2007) and some that have more a secondary market cashout focus include Bet Prophet & Prop Swap. Prop Swap is live and Bet Prophet is due in the next few weeks.

    Regarding progress in the US, in particular (because of the different treatment of IP), there have been claims & counter-claims (in particular, on social media) regarding the “invention” of cashout – and this is where it’s worth looking at the differences between the EU patent system, and what’s happened in the US over the last 20 years.

    (An important thing to note is that claiming “invention” has little to no value (in terms of the IP/patent process) VS actually being “first to file” – ie: being on the record with the Patent office as filing a patent and thus (in their eyes) – “inventing” something).

    The internet can get pretty heated in terms of some of these conversations. Regarding the EU (and UK in particular) my own opinion is that anyone can claim “invention” (in particular) for something like Cashout – as there isn’t the same paper trail as there is (now) in relation to the patenting of business method(s) IP for the US. There is varied opinion as to whether the first (obvious) enterprise versions were front-ended by Betfair / Extrabet / bet 365. I don’t know – but lots of people have an opinion on it!

    My interest here – is about where the growth from a US perspective may be.

    ************************

    Some background:

    About 15 years ago, the US Supreme Court (and by proxy the USPTO) made a far-reaching decision in the “Bilski case” that allowed business methods to be patented (a case won by US attorneys Finnegan IP).

    Previously, only physical inventions “for machine or transformation” were allowed (to be patented).

    The European (patent) system doesn’t confer the same weight to business method or UX IP – and thus, methods that may be outside the patent system in Europe, can actually be patented in the US. This has both protected (companies in the US) and resulted in massive investments in overall IP ownership.

    The world’s leading tech innovation companies of the last 50 years are all correlated USPTO IP owners, and include companies like IBM, Google, Apple, Intel, Microsoft and Qualcomm. The US had slipped back in the global rankings for IP, but a new more protective regime has (been) refocused since Trump came to power. We’ve also seen tech-focused household names step into the sportsbetting IP arena with the likes of Microsoft (filed Oct, 2014) & Sony targeting the sportsbetting space, in advance of the legal movement we’ve been seeing.

    The ownership, licensing and aggregation of sportsbetting (and related) IP, is something that’s not particularly familiar to EU operators & firms. So, the standard approach (that I’m aware of) has been to sit back and “let the lawyers deal with it.” Which may not be the smartest approach – given how the US subsequently deals with breaches of IP ownership & remedy.

    The most important element in terms of setting an initial bar (around IP ownership) is “first to file” VS “first to invent”. The reality is that a claim to “invent” something, that also confers ownership of the IP requires an individual (or organisation) to be first to file around the (invented) IP with (in particular) the USPTO. (There was a good recent Twitter example of claim VS counter claim re: cashout ((in the overall betting space)) – butgiven that it (cashout) wouldn’t have been patented in EU – the argument could only really have been resolved via looking at a “first to file” with the USPTO, for the US Market).

    Typically, as far as patent offices are concerned – the person or organisation that files the patent first, is classified as the owner of the monopoly right to exploit. This is where “prior art” is so crucial in the field of patents – and talk of “invention” is cheap VS actually having a verified date and staking a federal claim to inventing a method or process that has been officially recorded.

    A good recent example is the GAN ownership of offline loyalty card linking to online accounts in US casinos (patent awarded Sept ’14). Offline loyalty has existed longer than the online gambling industry – but GAN were smart enough to recognise the power of that technical link between on-property/in-house behaviour, before other organisations got there.

    Brad Allen from EGR – commented on a recent article that looked at this area “”For betting and gaming firms without key patents then, the US system could present major cost barriers in the future.”

    …and this is where Cashout starts to get very interesting.

    Given that we know that there are key differences between patenting business methods and UX’s in the EU (in this case, the Cashout method) VS the US – there no “single source of truth, (ie: first to file evidence) for Cashout in the EU. However, the landscape is different with regard to the evidence in the US.

    There is (current) evidence that suggests that Oddsfutures (Marketmaker Software Ltd) have actually been first to file around the broader business methods (April, 2007) that relate to Cashout IP in the US. Their US patents are also cited as “prior art” by a number of other companies that include: Winview Inc, Colossus Bets, Bspot and Wall Street software provider Trading Technologies International Inc. Marketmaker’s original incarnation was as a betting exchange back in ca. 2007 – so there seems to be historical  direct experience of the design of a sportsbetting product here.

    My understanding is that while it’s possible to claim “invention” of a UX  for a business method or process, it doesn’t really have any validity (in the eyes of the USPTO) if a) you haven’t been first to file (for that “invention” and b) you (or your business) refers to the invention that you claim as “prior art” in any filing (which seems to be the case for Colossus Bets).

    Where I think that this gets really interesting is that my own experience (of large betting & gaming operators) is that when something gets flagged from a potential “legal issue” (in this case, IP) point of view – that it gets passed over to internal legal teams to deal with. Not product or commercial people.

    My own experience also reflects that there can (sometimes) be a disconnect between a legal understanding of what a simple piece of bet functionality is VS or even what a UX or business method is VS how that business method is made real from a product or commercial POV. There can be a disconnect between a legal team’s theoretical understanding of the impact of something VS the “real world” application of the “thing”. In the case of cashout + UX + graphical user interface – this could prove to be a very costly error for firms that don’t join up communications between the product & commercial side of the business & the legal side.

    Colossus Bets have been pretty vocal in terms of claiming significant ownership of the cashout space in the US. My understanding is that they’ve built a portfolio across multiple countries with ca. 12 patents that relate to the US – and ca. 20 on a global basis. My sources tell me that there has been a significant 7 figure investment in getting to this point. Current licences (to third parties) are focused on pools & slots.

    Marketmaker have had much media coverage, in terms of their earlier (ie: first to file) claims around more general sportsbetting / cashout IP. Their historical experience in the Exchange space, is supported by the early filing of cashout specific IP claims. Their (current) approach seems to be less adversarial & more partnership driven, as my sources tell me that their preference is to partner and build on their historical industry experience to develop an IP focused business that works in tandem with industry leaders – that can then strategically align with Operator’s long term sportsbetting plans.

    The challenge for Marketmaker (in my opinion) is bridging the gap between a business that’s active from a sportsbetting market POV (eg: like Colossus) VS being seen as a company that’s currently not developing it’s own solution (eg: Bet Prophet / Colossus) and is attempting a pure “IP focused” play in talks with (US facing) Operators.

    In my own opinion, their (Marketmaker’s) patent portfolio looks the most interesting, in terms of the clearest application against new sportsbetting cashout product in the US – BUT, this application is probably going to mean that Legal depts (in particular) are most likely to try and put it on the “broad application” category (ie: “we think that this mightnot be applicable to cashout in general but we can’t be 100% sure…”) Personally, I see this as different to more niche cashout that relates to pools or slots (a la Colossus).

    Some personal observations:

    Getting a view on what IP owners have done / are doing in terms of enforcement actions of cashout IP, is not easy. My understanding is that yes, some of the companies in the space have commenced initial “cease & desist” actions against those they believe to be infringing.

    I also know that some are taking a longer term view in terms of building the most compelling long-term partnership based vision for the space – and this is where there are still opportunities available for Operators to bridge that disconnect between legal opinion VS future cost of remedy by partnering / licensing the relevant cashout IP – not to mention a number of available tax benefits, with the right structure.

    From my conversations over the last few weeks, my opinion is that Colossus seems to be taking a more aggressive approach (in terms of enforcement) and Marketmaker are taking a lower key approach (at the moment) in terms of pursuing partnerships with the largest T1 operators.

    The secondary market operators are more focused in terms of how they can build a compelling general proposition and worrying about liquidity, acquisition, retention, etc – and may not have really focused on the IP ownership piece yet. In my opinion, that’s an error – and they need to move that on.

    There are some big questions that need to be asked around secondary markets in particular. The likes of Bet Prophet & Prop Swap have significant challenges around a) building enough liquidity to offer enough depth and choice to make their offerings attractive from a consumer POV and b) do they have IP that is defensible? My own experience with Tailorbet showed me that the liquidity (choice) piece, combined with the challenges around building a compelling user experience that both simplifies and informs player choice and experience – are not small.

    Anyone who has ownership of business process IP in the US, that directly reflects the process & user experience of the typical cashout experience that has been so successful in the EU, is only at the beginning of the journey in relation to US sportsbetting claims. Given how the focus (by US-facing Operators) has been about getting on the ground with US companies & brand partnerships andthen getting go 2 market with plans agreed & signed off & in place and the lack of need in the EU to be as focused on the patent & IP requirements – I think that we will only start to see real progress over the coming quarter or two.

    My Operator experience also tells me that if there’s any chance that secondary markets were to have any impact on the volume / margin / customer numbers VS actual direct sportsbetting market operators that both a combination of repricing of cashout models, as well as a defensive push to shore up market share would happen very quickly. We’ll have to wait and see what happens there…

    Finally – for me there are some interesting questions that still need to be explored in terms of the Cashout space?

    For Operators targeting the US & planning to use cashout:

    Given how different the US IP space is VS learned (sportsbetting product) experience in the EU, is there enough focus (by Operators) in terms of a clear understanding of the difference between a historical EU experience VS operating under a new IP paradigm in the US?

    As an Operator, are you comfortable / happy that you are relying purely on an internal Legal opinion in terms of veracity of any IP / patent claims?

    Have you walked / talked through what’s being claimed (not just with Legal but…) with sportsbetting and/or product + UX people too?

    Has there been a financial risk assessment of the impact of remedy (ie: not licensing, pushing ahead and then being found in breach) VS the upfront cost of doing (even a limited term) licensing deal with relevant (claimed IP) owner?

    (OBSERVATION: Companies that have signed multiple US facing deals and are B2B sportsbook suppliers & dependent on revenue share could be strategically exposed to infringement claims (from IP owners).

    This is an interesting area in the US, as with the rush to a) get to market and b) gain market share – there is a question as to the financial exposure of Operators (that are using 3rd party software) to potential (IP) infringement via the offering of Cashout to their end-users.  My own understanding is that the USPTO federal framework can be aggressive in terms of significant “remedy” if a 3rd party is in breach. How comfortable are the decision-makers that their organisation is not exposed to IP infringement claims? This will be very interesting to see who liceneses what over time.

    For secondary market operators:

    How will you build enough liquidity to make end-user experience interesting at scale?

    How do you make the user experience so simple, that a typical recreational market punter can buy/sell ideally more quickly & simply than at a typical bookmaker?

    How do you acquire customers in the first place? Is there a super clear USP as to why the secondary market should be an option in front of the primary market?

    What US facing defensible IP is there that can be patented / owned? Does the secondary market provider know what prior art exists in terms of their offering?

    Finally – I had direct experience of the North American bettor, early in my career. The drivers of value or perceived value, the ability to de-risk (particularly in accumulators) coupled with the Operators’s need to lock in margin, as well as driving overall turnover – mean that, in my opinion, cashout willbe in the top 5 “sports” in the US, over time.

    It’s going to be very interesting to see whether the overall USPTO treatment of IP has as big an impact as I believe it’s going to – particularly where we’ve seen the market share that has been taken by both Operators and software providers (eg: Kambi) in the fast-growing and developing US market.

    There will be winners & losers. Just like every day in sportsbetting. How big will those wins & losses be? Only time will tell.

    (Part 2 to follow with a focus on the numbers).

    Twitter follows that are relevant here:

    Tweets by BradAllenNFL

    Tweets by ColossusBets

    Tweets by GuyHardingOC

    Tweets by betonliamcasey

    Tweets by MarcButterly

    *********************************

    Based in Ireland, I’m available for consulting / advisory projects focused on marketing, leadership, betting & gaming, ecommerce. Contact me here.

  • 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.

  • 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.

  • 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

  • Who’s taking the (Gambling) horse to France?

    For those that remember the “…who’s taking the horse to France…” good ‘ole Kerrygold ads – here is the online gambling equivalent with the provisional list of operators that will be licensed by the French governement for online betting & gaming.

    It’s a list of 11 – and there are some notables missing.

    Obviously no Betfair or Bet365, no Ladbrokes or Will Hill. Ditto – Expekt, Unibet. And of course, no Full Tilt (but I believe that ‘Stars have put in a bid for a licence).

    Paddy Power are piggybacking the PMU with a deal whereby they are providing fixed odds product and trading infrastructure. Personally, think it’ll be interesting to see if they (PP) can ramp up the trading bodies to provide the PMU with the bandwidth they need for successful ROI. Have you tried to hire fluent french speaking sports traders? I’m betting there’s not as many out there as you’d think…

    My understanding is that there are 17 actual licence requests that have been retained by the French government – but that there hasn’t been much movement in terms of liberalising the blackjack / roulette or Lotto products.

    There are horses, and it is France – is that enough of a link?

  • 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…