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Robin Le Prevost, Director of eCommerce Development, Alderney eGambling Limited
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JURISDICTIONS
2010
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Jurisdictions 2010
Alderney Regulation Information
n Type of Company Entity available for iGaming Firms Limited companies.
n Reporting Requirements to the Gaming Regulators and/or Financial Regulator Periodic financial reports are required.
n Corporation Tax Rate 0% Corporation Tax.
n anti-Money Laundering Policy for iGaming Firms All operators must comply with the AML legislation in force.
n additional Gaming Tax Rate No additional taxes.
n Restrictions on Jurisdictions from which you can take Wagers
n Minimum Share Capital for an iGaming Company
There are no restrictions.
£2.00
n Security Requirements/Indemnity for Players Deposits A variety of mechanisms are acceptable commensurate with the Business Plan and commercial performance of the operator.
n Licence Fee Category 1: B2C licence: The licence fees are based on annualised Net Gaming Yield, as follows: n NGY up to £1m - annual fee £35,000 n NGY of £1m to £5m - annual fee of £70,000 n NGY of £5m to £7.5m - annual fee of £100,000
n Contact Details of Government Department or Regulator Robin Le Prevost Director of E-Commerce Development States of Alderney PO Box 15, St Anne's Alderney British Channel Islands GY9 3HT T: +44 [0] 207 993 8564 M: +44 [0] 7781 109 809 E: robin@AlderneyGambling.com W: http://www.AlderneyGambling.com
n NGY in excess of £7.5m - annual fee of £140,000
(In the first year of operation the license fee is £35,000, irrespective of NGY)
Category 2: B2B licence (resident and non-resident) carry a fixed annual fee of £35,000. n Associate Certificates (typically for key software suppliers) carry a
fixed annual fee of £10,000. n Temporary Use Licences (typically for disaster recovery purposes)
carry a fixed annual fee of £10,000.
n Licence Duration 12 months.
n Do Local Banks Process Online Gaming Transactions? Yes.
n Bandwidth Type available All types of bandwidth are available from a variety of suppliers.
n Software Testing Requirements Yes technical standards are published by the AGCC.
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6 good reasons for choosing Alderney
· · · · · ·
Technical infrastructure capable of supporting the largest global businesses Tax efficient with no profit taxes, gambling duties or VAT (TVA) Superb logistics - located at the centre of Europe with Global reach Sophisticated, modern business environment with substantial support services No requirements regarding employment and residency Long history of supporting innovative and dynamic businesses
PO Box 15, Alderney, British Channel Islands, United Kingdom GY9 3HT Phone: +44 (0)2079 938 564 Mobile: +44 (0)7781 109 809 Email: info@alderneygambling.com www.alderneygambling.com
JURISDICTIONS 2010
Alderney A perfect match between regulatory innovation and commercial enterprise, by Robin Le Prevost, Director of ecommerce development, Alderney eGambling Ltd. The world of iGaming is changing radically and this demands a new approach from both operators and the established offshore jurisdictions. For the operators, they need to address the increasing ‘mainstreaming’ of their industry which requires legal operation, compliance with high regulatory standards and the discharge of their tax liabilities wherever they transact – all within the context of a more competitive environment as the bricks and mortar and virtual worlds collide; a much different landscape and one which brings with it higher costs, responsibilities and corporate governance. For the offshore jurisdictions, it is equally life changing, recognising that control will be wrestled out of their hands into the laps of the major economies. From being the centre of attention their role, whilst equally as important, will change with an emphasis on the provision of support services and this will require not only a change in mindset but also a fundamental and structural rethink.
Alderney’s vision Alderney is used to leading the way and has taken further giant steps with the introduction of its new legislation for 2010. Based on three fundamental pillars, Alderney’s vision is to provide a base for global and regional iGaming companies founded on a combination of innovative regulation, a world leading and competitive commercial environment and a technical capability which is second to none.
world – iGaming regulation will rely on a complex interweaving of relationships at the regulatory level and Alderney is at the forefront of this strategy. The new framework takes a modular approach enabling operators to choose the right elements for their business reducing costs and complexity.
Category 1 Licences The Category 1 licence covers all the aspects of the player relationship including registration and funds management. A Category 1 licensee is then free to offer gaming and gambling opportunities to his customer base from whichever supplier he chooses and there is no requirement to purchase additional licenses to cover multiple activities as with some regimes. Seamless transfer of the player is ensured between the Category 1 holder and the holder of any Category 2 license but players may also be sent to non-Alderney licensed platforms with the caveat that the player must be informed about the change in regulatory protection. This system allows the widest possible choice of games and software to be offered by operators with a Category 1 license and does not restrict the operator to games providers within the jurisdiction. Licence fees are highly competitive and operators can take advantage of the unbeatable fiscal arrangements. Integrated operators who both register the player and provide the gaming platform require both a Category 1 and 2 licence.
license are also able to take players from licensed operators from other well regarded jurisdictions without the requirement for any further licensing which removes any risk of double taxation on player activities. For B2B platforms this latter feature is vitally important as many regimes enforce double taxation through compulsory licensing. Alderney’s regime also caters for deployed networks, cloud computing and other advanced technologies and is, as far as is possible, future proofed in these respects.
Software Supply Certificates Third-party suppliers of software are required to hold a Software Supply Certificate which ensures that the software is secure, reliable and fair.
Temporary Use Licence Operators from other jurisdictions (if permitted by their regulator) are able to apply for a Temporary Use Licence in order to operate from Alderney’s world class infrastructure whilst under the terms and conditions of their primary licence.
Commercial environment Operators in Alderney enjoy a truly competitive commercial environment with no VAT or gambling duties and with a current rate of corporate tax at 0%. The low cost licence fees are designed to encourage the inward investment on which the jurisdiction thrives.
Category 2 Licences Regulatory innovation Alderney’s regulators are widely respected and enable Alderney to forge deep and meaningful relationships with other regulators across the globe. This approach is vital in the new landscape where jurisdictions which choose to isolate themselves or to hang on to outdated concepts will find themselves and their operators on the wrong side of the fence. As in the bricks and mortar
The Category 2 licence covers the actual delivery of games and gambling opportunities from a managed platform which can be located in Alderney or, revolutionarily, on platforms outside of the jurisdiction in a location(s) of the operators choice. The Category 2 holder can also include as many different games and activities as they want under the single licence system for which there is a modest fixed annual fee. Holders of a Category 2
World class infrastructure Alderney, through the superb facilities on the neighbouring island of Guernsey, boasts 15 modern data centres with more being built, nine fibre optic routes off island with direct connection to London, Paris and the major trans-Atlantic routes between Europe and America, which pass directly through the island. We believe there is simply no better place to be located for ecommerce business. ■
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Jurisdictions 2010
Curacao Regulation Information
n Type of Company Entity Available for iGaming Firms For iGaming businesses it is advisable to incorporate a so-called e-Zone Company in Curacao. The e-Zone Company can be either a N.V. (Naamloze Vennootschap) which is a Limited Liability Company or a B.V. (Besloten Vennootschap) which is a Private Limited Liability Company. Both entities have the following requirements: n Capital divided in shares; n At least one shareholder is required. This shareholder can be an individual or a corporate entity; n One General Meeting of Shareholders must be held a year. This meeting must be held in the Netherlands Antilles in person or by proxy by the foreign shareholder; n At least one managing director must be a resident in Curacao. Managing directors can be individuals or entities; n A registered office and address must be maintained in the jurisdiction and in an designated e-Zone area in particular; n A minimum capital amount is needed for incorporation; n Shares are issued in registered form and can be converted into bearer shares; n Shareholder’s register is not open for public inspection.
n Corporation Tax Rate 2% of Net Profits; no import duties, no sales (turnover) tax. Expatriate employees working for an e-Zone Company can be entitled to a special income tax regime subject to obtaining the necessary ruling. e-Zone Permit is required to be obtained prior to operations.
years and will automatically be renewed unless conditions and requirements set by authorities are not met.
n Do Local Banks Process Online Gaming Transactions No, these services are rendered to Curacao companies by renowned international gaming-friendly banks.
n Bandwidth Type Available n Multi-gigabit n 5 international fibre links n
Self-healing ring
n Fully redundant
n Software Testing Requirements n Certification of RNG n Games need approval of Minister of Justice
n Reporting Requirements to the Gaming Regulators and/or Financial Regulator Requirements may vary according to circumstances. Copies of communications between company and client, including but not limited to gaming rules, result of game and pay-out to be available to Regulator or supervising authority for five years. The responsibility at all times remains with the Master License holder.
n Anti-Money Laundering Policy for iGaming Firms n Additional Gaming Tax Rate None.
n Minimum Share Capital for an iGaming Company
National Anti-Money Laundering Regulations, Unusual Transactions Act, Counter-Terrorism Financing Regulations and Know Your Customer Policies are applicable to all Curacao Companies. International standards apply.
No minimum capital is required.
n Security Requirements/Indemnity for Players Deposits The security requirements and/or indemnity for players’ deposit are subject to the Master License holder.
n Licence Fee The fee for a sub-license is subject to the discretion of the Master License Holder and varies in practice approximately from USD$1,000 a month to USD$5,600 a month.
n Restrictions on Jurisdictions from which you can take Wagers Netherlands Antilles.
n Contact Details of Government Department or Regulator Department of Justice of the Netherlands Antilles Wilhelminaplein z/n, Curacao, Netherlands Antilles Attention: Mr. Herbert Coffie Herbert.coffie@gov.an
n Licence Duration By law the sub-license is valid for an indefinite period under a valid Master License. The Master License is valid for a period of five
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Jurisdictions 2010
The Return of Curacao Why operators find their way back to Curacao. Curacao (Netherlands Antilles) was one of the first jurisdictions to regulate online gaming dating back to 1993. The legislation that regulates this is the ‘State Ordinance concerning the exploitation of hazard games on the international market by means of service lines’; P.B. 1993 no. 63. Many of the large, well-known online gaming operators have their roots on this Dutch Caribbean island, operating with a Curacao entity which holds an iGaming license of the Netherlands Antilles. As the industry developed, so did the challenges these pioneering operators were facing. Firstly, their main market at the time, the United States, closed its doors to online gaming providers targeting their residents, forcing operators to rethink their strategy and shift their focus to different markets. The UK became the alternative market for many Curacaobased operators. A second important development occurred: the UK decided not to include Curacao on its jurisdictional white list. As a result, many of these operators had no choice but to make the strategic decision to move their operation to one of the white listed jurisdictions in order to comply with the UK regulations. In fact, this move was ultimately driven by the operators’ continuous aspiration to be recognised as credible, fair and respectable providers of online games by regulators, business partners and most importantly, their player base. The move to jurisdictions such as Malta, Alderney, Gibraltar and Isle of Man would fulfil this aspiration as these are jurisdictions which are either white listed or were respected by the EU on grounds of free movement of goods and services in the EU.
National regulation However, that was then and this is now. As I’m writing this article, the online gaming industry is faced with yet another challenge. The difficulty operators are experiencing today is a new trend of national regulation imposed by the countries where players reside. A new era has begun! No longer is the gaming license in the operator’s jurisdiction of establishment sufficient, but one should nowadays hold a license in the market where its player base resides as well. The UK once lead the way as a successful example of innovative, bilateral agreement-based regulation. The UK allowed those operators that met their criteria to be acknowledged as so-called white listed jurisdictions. This earned
them the right to legally target UK residents. Unfortunately, the other target markets have not followed this trend, but instead, have imposed national regulation based on criteria which aims to protect their national operator(s), have control over what is offered and safeguard their taxation rights amongst others. I’m under the impression that before you know, this trend will force an operator which targets the whole of the EU to acquire 27 licenses to
With this in mind, operators are moving to Curacao, some even returning to their roots. But why Curacao? What is this jurisdiction’s competitive edge over the others? Curacao offers the prospect for a licensed iGaming company to set-up in a cost effective, taxattractive and time efficient manner (an iGaming company is set-up in a few days and licensed within a week). Furthermore, this company is only subject to two percent tax on net profits. The company will not pay any gaming taxes either, as these are not levied in Curacao. Lastly, the licensed iGaming company enjoys a credible status with the renowned banks and merchant processors as a trustworthy, regulated, competitive and effective iGaming jurisdiction, ensuring the company can operate smoothly.
Favourable position
cover that particular region. That is excluding the gaming license in the tax-attractive yet experienced jurisdiction where it is established and operating from. Not only will the cost of doing business for these international operators increase substantially but such additional national regulation will increase operational inefficiency. In comparison to the national operators’ competitive position as a result of national regulation, the international operator will have a difficult task maintaining its competitive edge. The other parties will simply be able to provide their services at a lower cost. But this is a worst-case scenario for the future. Unfortunately though, the present has already shown some characteristics of this predicted future. Namely, no longer are the jurisdictions that were once praised for their lengthy, intensive and costly licensing process (and which had earned them a white listed status by the UK) respected and tolerated by the other target markets. What was once a competitive edge, a value and perhaps even a must for operators to be licensed in one of those jurisdictions, seems to have little added-value today. Instead, target markets such as France have created their own national regulation and licensing.
Needless to say, Curacao has been a key player ever since the beginning of this industry’s existence. The knowledge of both the regulator and the service providers is immense and has withstood the challenges the industry has faced over time. In addition, Curacao has an impressive six decade history of being an important financial services centre. Also, as a member of the Financial Action Task Force on Money Laundering, Curacao has strong anti-money laundering legislation in force and complies with all international standards. Lastly, Curacao is white listed by the OECD (Organisation for Economic Co-operation and Development) implying that while it has an attractive fiscal policy, it is not considered a tax haven. And last but not least, Curacao is an Associate Member of the European Union (EU) and a designated Overseas Country and Territory (OCT) of the Kingdom of the Netherlands, a position that opens many doors for more favourable developments in the future. n
Elaine M. Behr heads the Business Development team of e-Management. e-Management (www.emanagement-group. com) provides tailored Corporate Services and Business Support Services for International e-Gaming Companies from Malta and Curacao.
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Jurisdictions 2010
Overcoming the New EU VAT Dilemma Double-digit VAT can destroy iGaming’s bottom line.
Curacao does not have VAT. The consequences of VAT throughout Europe have now become a significant factor to where an iGaming operator, affiliate or skin locates. It effects, literally, what is left on the table. Since VAT is unrecoverable with respect to transactions between operators and their affiliates and skins, EU iGaming companies are looking for immediate relief. Double-digit VAT rates can be devastating to bottom lines. This is why many iGaming executives have enquired how to restructure their corporate framework to take advantage of Curacao’s longstanding fiscal regime. In addition to no VAT, one of Curacao’s most cherished benefits is a special two percent net profits tax on earnings that are valid through 2026. While global Internet-based gambling is booming, online gambling operators are now keenly focused on a jurisdiction’s tax policy for gambling. In addition to the VAT dilemma, many operators are now taking a second-look at Curacao, particularly in light of possible white listing changes in the UK that may totally change the landscape. The thought of losing market share to offshore competitors based in jurisdictions such as Curacao, where the VAT and tax benefits leave much more on the table to invest, has sparked new life into the Curacao iGaming venue. Amendments to the VAT rules across the EU will invariably impact most operators. Through the introduction of a system which will enable tax authorities to monitor the cross-border provision
of services, 2010 will see the dawn of a new era in VAT and a new dilemma for iGaming operators to overcome. If you have an online global business, locating it in Curacao’s “eGaming E-Zone” at the Dutch (Curacao) government’s international telecommunications centre has many benefits. Being located there provides an iGaming company with no VAT, import duties or turnover tax due for goods entering the eGaming E-Zone or for services that are rendered within the E-Zone. This situation has sparked a flurry of attention to Curacao by both skins and their software providers domiciled in EU-licensed jurisdictions. Fast-track cases will be accommodated by a special eGaming unit that understands that some cases require immediate assistance. Curacao’s eGaming specialists understand that an operator and a skin may be offering the same service. However, this service is usually offered differently to the operator in terms of marketing strategy or vehicle. The skin’s offering looks different, and indeed may be different in terms of promotions. Many consumers are not aware that the two companies, which compete directly with each other and which are owned by separate entities, are, in fact, using the same back end software system. Skins that have contracts with the software providers are often utilising the operator’s license in another jurisdiction unless there is a requirement to also secure a license in the same jurisdiction. Curacao’s licensing provider – Curacao-eGaming, provides both licensing and E-Zone co-location services and understands the VAT dilemma that skins and their software providers in other jurisdictions are facing. Representatives of the remote gaming sector in Curacao are in dialogue with other jurisdictions to explore the possibilities that licenses awarded by Curacao-eGaming to skins might compliment the other licensing jurisdictions’ terms and conditions. In all instances, it will be imperative to ensure that lines for legal recourse for consumers against all license holders are clearly set out. n
In summary No VAT percent Maximum Profit Tax on Net Profits and not on “drop” n Zero percent tax on Gross Bets n No import duties, no sales (turnover) tax n Dividend withdrawals are not restricted n Fast and professional company formation n Over a decade’s experience as a licensed jurisdiction n One license which covers games of skill, chance and sportsbetting n eGaming, E-Zone Co-location Services at the Dutch Antilles Government International Telecom n Issuance of primary or backup iGaming licenses n Special programs for software and network providers n Multiple major undersea fibre optic cable systems terminating to or originating from our government’s telecom. n
n Two
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interview
Curacao –Trading Post to the Americas Rob Vermeulen, CEO of E-Commerce Park, contemplates the remote gaming environment in the jurisdiction of Curacao. Let’s start with the advantages of the island itself – what are the benefits of Curacao as a gaming jurisdiction? Importantly, Curaçao is located in the Latin American Region, as opposed to most of the other gaming jurisdictions and, therefore, is an ideal location for targeting the Latin American gaming market. It lies outside the Hurricane Belt and is one of the world’s first licensed jurisdictions. It has a four hundred year history of being a trading post for the Americas and the availability of a range of state-of-the-art financial and telecommunication infrastructures and services means that Curaçao offers the environment needed to operate global e-commerce businesses. This distinguishes Curaçao from its (regional) competitors and makes the island unique from a geographic perspective, as well as in providing an ideal business environment for the interactive gaming community. What is the scale of competition for hosting and IT services companies in Curacao? E-Commerce Park (founded in 2001) is the only state-of-the-art Tier III data centre in the region. So this goes beyond just the territory of Curacao. There are some other options on the island, but they do not qualify as a data centre and/or are subject to local loop service levels. We are also the largest facility on the island, with our current capacity to well over 200 cabinets. E-Commerce Park is carrier neutral and multi-homed, guaranteeing the co-located clients a variety of access and better warranties and SLAs. Our on-site Network Operation Centre technicians are trained to be the eyes and ears for management of client infrastructure and are available 24 hours a day, 7 days a week. What did the opening of the two new data centres signify for E-Commerce Park? We did more than just that. We built over 1,100 square metres of high secured space, including a new generator plant, with a current capacity of 1.2 Megawatt and on-site fuel storage of 15,000 gallons. Besides the two new data rooms, we also
house the cable-head of Columbus Networks, as well as the head-end of a new triple play (cable TV, Internet, telephony) service provider on the island. On the second floor we will house our new business continuity centre to accommodate the requirements of our banking and corporate clients. But the litmus test has been the telehotel service. This proved to be a much needed carrier neutral facility where licensed telecom providers can establish their own POP, bringing in their own
premises” for the AGCC eGambling licensees. More and more companies are depending on digital information and reliability, with business continuity and disaster recovery being two of the more specialist needs and requirements. With the hosting certificate we can provide that much needed fail-over and continuity of service for the AGCC licensees. To further accommodate our clients, we also have on-site office space and will have a
“More and more companies are depending on digital information and reliability, with business continuity and disaster recovery being two of the more specialist needs and requirements.” outside fabric to allow interconnection with both the international as well as the local networks and clients, including the Caribbean Internet Exchange (www.car-ix.net). For instance, Paul Scott, President of Columbus Networks stated that his company were “extremely pleased with our choice of E-Commerce Park (ECP) to host our subsea landing terminal. During our 2006 research to determine the optimal location to land our planned new subsea cable from Trinidad, we explored a number of options and various islands. However, the decision was clear; ECP was the most qualified facility to ensure us physical security, carrier class back up and support systems, and high quality on-site technical support staff that are capable of addressing all our needs”. Talk us through the significance of your recent announcement regarding Alderney… In January of this year, ECP were granted a hosting certificate, issued under section 7 of the Alderney eGambling Ordinance 2009. This qualifies E-Commerce Park as “approved
Business Continuity Centre available in the summer of 2010. We realise that our local as well as regional clients need to have a fail-over site in case some of their infrastructure becomes temporary unavailable. What would your advice be to companies considering Curacao as a destination for their iGaming services? I’d say that if you are looking for a favourable taxregime for your online business, and are seeking access to the Latin American or pan-Caribbean market, then Curacao is the most viable place for you to be based. In terms of seeking a reliable and secure disaster recovery site, naturally I would suggest E-Commerce Park as the most logical option, especially considering that qualified ECP customers only have to pay two percent annual profit taxes, no import duties and no sale tax. Ultimately, Curacao is an experienced and renowned hub of iGaming business which houses the right tools and most up-to-date resources to ensure that your modern day gaming operations will be well supported. n
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Jurisdictions 2010
Isle of Man Regulation Information
n Type of Company Entity available for iGaming Firms An Isle of Man company must be incorporated in order to be licenced. Local presence can be supplied by Corporate Service Providers if required.
n Reporting Requirements to the Gaming Regulators and/or Financial Regulator Access to the business, its systems and audited accounts when requested by the Gambling Control Commissioners.
n Corporation Tax Rate
n anti-Money Laundering Policy for iGaming Firms
0%
Full AML due diligence. Indemnification procedures, record keeping, internal procedures, education and training, as well as adherence to the Isle of Man Gambling Control Commissioner’s Guidance Notes for the Prevention of Money Laundering.
n additional Gaming Tax Rate Duty payable on retained gross profits: n For gross gaming yield not exceeding £20 million per annum: 1.5% n For gross gaming yield of more than £20 million per annum, but not exceeding £40 million per annum: 0.5% n For gross gaming yield exceeding £40 million per annum: 0.1% The exception is football pools which carries a 15% duty rate.
n Restrictions on Jurisdictions from which you can take Wagers It is the responsibility of the operator to make these decisions, however, the Gambling Control Commissioners may ask for confirmation that independent legal advice has been taken if they have a concern about a specific target market.
n Minimum Share Capital for an iGaming Company By discussion as part of licence application process.
n Contact Details of Government Department or Regulator
n Security Requirements/Indemnity for Players Deposits
Garth Kimber – Head of eGaming Development Department of Economic Development Hamilton House, Peel Road Douglas, Isle of Man, IM1 5EP T: 01624 682307 M: 07624 464473 E: garth.kimber@gov.im W: www.gov.im/gambling
Operator must demonstrate full protection of player funds. Recently passed legislation will ensure a separate account for player funds will legally protect them.
n Licence Fee Application fee £1,000 and then annual fee under Online Gambling Regulation Act of £35,000 per annum.
n Licence Duration Five years then renewal is required.
n Do Local Banks Process Online Gaming Transactions Yes.
n Bandwidth Type available A wide range of SLA guaranteed Internet Bandwidth, Private Circuit and MPLS connectivity solutions are available and provided over two resilient fibre optic rings and one point to point cable.
n Software Testing Requirements Certificate from an approved testing house is required as part of the licence application process. Details can be obtained from the Gambling Commission.
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Jurisdictions 2010
Reputational Value Stephen Kane, Head of Data Centre Commercial Development at Manx Telecom, puts corporate reputation at the top of the agenda in a rapidly changing sector No one can accuse the iGaming sector of being boring. It’s a revelation to spend just a half an hour looking at some of the early editions of this magazine, or other publications covering the sector, to see just how much has changed in a very short time. Let’s face it, the sector has had a short, and at times, chequered history, but a few things have remained constant throughout – perhaps the biggest being growth. Despite anti-gaming legislation and despite global recessions, the sector has grown as iGaming – in all its forms – moves firmly into the mainstream leisure sector – and I believe that this is an irreversible trend. There is no going back.
Man’s appeal that it offers tax advantages?” Well, yes, it’s true that the Isle of Man offers a package of taxation, grants, and other incentives all aimed at helping any eBusiness establish itself and grow, but that’s not why an increasing number of companies – and an increasing number of iGaming operators – choose the Island. I’d argue that one factor above all is helping the Island (and comparable jurisdictions) win and retain iGaming operators, and it’s a very topical one – reputation.
Corporate reputation If you doubt the importance of corporate reputation and its effects on winning customers, on
“Recently, some commentators have questioned the viability – or rather the relevance – of offshore jurisdictions as more and more countries embrace and, in turn, regulate iGaming.” The fact that the industry is growing doesn’t, of course, mean that it will stay the same shape and recently, some commentators have questioned the viability – or rather the relevance – of offshore jurisdictions as more and more countries embrace and, in turn, regulate iGaming. I’m prejudiced, of course, but sitting here on the Isle of Man I think offshore centres have a big future. There are many reasons for this, and some of them are unexpected and surprising.
Tax One of the most common factors usually associated with offshore operations are the tax advantages. While it’s true that some jurisdictions offer virtually tax-free establishment and operation, that should never be the deciding factor when it comes to choosing a location – and with the best operators, it never is. “Ah,” I hear you say, “but isn’t part of the Isle of
share price, and the role it can play in generating favourable attitudes amongst regulators, just look at what’s happened to poor BP. Whatever the rights and wrongs of the situation, BP has surely come to understand the importance of maintaining its corporate reputation, and the costs (in every sense of the word) of neglecting it, or putting it in danger. Many of the better iGaming companies have come to understand this too. They choose the Isle of Man because it is well regulated, because it has joint tax agreements and reciprocal information exchange agreements with other countries. They know that there is a world of difference between being based on the Isle of Man and being based elsewhere – and it’s a difference that can be ‘mission critical’ when it comes to corporate reputation. The fact that many countries are now regulating iGaming doesn’t invalidate our ‘offer’ as it is perfectly possible to be based offshore and
operate even in the most rigorously regulated jurisdictions. Indeed, most reputable jurisdictions look favourably on the Isle of Man as a member of the same peer group – a good and reputable place to do business. Technical considerations also come into this. Not every country, and not every location in that country, has state-of-the-art connectivity and hosting operations, but the Isle of Man, and Manx Telecom, has both. Just as the growth of iGaming is very unlikely to be checked, so too is the need to be based somewhere which actually enhances your corporate reputation, and in this respect, the Isle of Man already has a head start; it is already ahead of the game. As if to confirm this, Manx Telecom has recently been acquired by CPS Partners, a specialist international telecommunications management company, and HgCapital, a leading European private equity investor which invests mainly in the telecoms, media, technology, healthcare, industrial and services sectors. Announcing the purchase, Alex King, Head of Technology Media and Telecoms, said, “The Isle of Man is an attractive economy for any investor, thanks to the actions of successive governments in creating an economic and regulatory framework in which companies can grow and flourish, and an enviable reputation for integrity. We are investors with a growth agenda and, in particular, intend to continue to promote the Island as an attractive and reputable place for the establishment of eBusinesses.” I couldn’t agree more. n
Stephen Kane is Head of Data Centre Commercial Development at Manx Telecom, where he is responsible for the commercial development and strategic management of Data Centre solutions. Stephen currently looks after a customer base which spans the Isle of Man, UK, Ireland, Mainland Europe, North America and Australia. He also works closely with the Isle of Man government to promote the advantages of basing an eBusiness on the island.
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JURISDICTIONS 2010
Distributed Denial of Service (DDoS) Attacks By Phil Adcock, CTO of Domicilium (IOM) Ltd.
“I don’t need to worry about DDoS because my service provider does that for me.” – Anonymous “Why do I need DDoS protection? Our business has never been a target.” – Large Corporation “It used to be a problem but you just buy a Cisco box these days don’t you?” – IT Consultant “If we ever get hit we are going to reboot the server.” – Start-up business All of the above are real comments made by businesses we have worked with. If you or anyone in your business has ever been caught thinking or saying any of the above then it might be a good idea to read on. Otherwise you may want to just skip this article and read the Domicilium advert! If you have never come across Distributed Denial of Service (DDoS) attacks then a short plain English explanation might help. Imagine a theoretical world where lots of businesses and home users have not been fastidious in protecting their personal computers. Assume these machines are compromised with a fragment of code that allows them to be remotely controlled from a single source (say an Internet chat room). Individuals wishing to perpetuate DDoS attacks buy time on a large number of compromised machines located across the globe. An individual who wishes to attack your company logs on to a chat room somewhere in the world and issues a command to commence the attack. Once the attack has been initiated traffic from all over the world, directed towards your Internet presence, starts to rise exponentially. This bogus traffic builds to a level where your web presence becomes swamped and customers can no longer reach your site. The longest continuous attack we have ever encountered lasted eleven days and involved several gigabits of traffic.
Defence strategy If we are to successfully mitigate DDoS attacks we need to understand the nature of attacks and how best to combat them. There is a common perception in the market that if you buy the correct box and position it in front of your web presence, that it will automatically learn what ‘normal’ traffic looks like and automatically mitigate a DDoS attack should one occur. There are a number of problems with this approach that we should consider when sculpting our DDoS protection strategy. Firstly, the DDoS attack might be directed at another customer of the service provider. If all of their incoming bandwidth is swamped then it really does not matter what box you bought. You can effectively be taken offline because your provider does not have adequate protection. Equally, if your incoming feed is being swamped by a DDoS attack, filtering the erroneous traffic may not be a workable solution. Given that multiple gigabit attacks are commonplace you must ask whether you want this traffic delivered to your front door.
Sophistication Assuming all of the above points have been analysed, understood and mitigated there is still one major issue. Modern attacks are very sophisticated and designed to trip up those who have little knowledge of their infrastructure. We have seen a number of adaptive attacks that continually change to attempt to compromise a site. One must remember that in most cases, DDoS traffic is shaped to look like real traffic and if it continually changes then relying on an automatic device is not necessarily going to be particularly effective. Just when we thought it couldn’t get any worse there is one other problem we ought to consider. Once you have sculpted your own DDoS protection strategy and all looks good, you should ask one
final question, “how does my top level domain protect itself?” Assume our business uses that well known domain, .zog. Every time someone wants to connect to www.ourbusiness.zog, the .zog name servers are checked to identify where the infrastructure resides. If the name servers were taken down by a DDoS attack then nobody would be able to find your site. The reality is that this is a huge risk that is outside of your day-to-day control. To compound the issue domain resolution normally uses a protocol called UDP and it is incredibly complex to mitigate a UDP-based DDoS attack. After doing all that sterling work to ensure your business is protected, it could be your domain name that takes you down! There are a number of different approaches to ensuring such attacks are mitigated including the implementation of an infrastructure based around an ‘anycast’ network. Space does not allow us to provide a recipe for mitigating all of the risks identified above. Indeed, if we published such a recipe some bright spark would immediately find a way to compromise it. The most important thing is to ensure that you fully understand the risks and that you have a coherent strategy in place to mitigate them. Beware of automatic inline devices that will magically make your problems go away – they don’t exist! ■
Phil Adcock is the founder and Chief Technology Officer of the Domicilium Group, a leading data centre and network provider headquartered on the Isle of Man. He is a graduate of Lancaster University, UK holding a Ph.D in Computer Science. Phil is a Chartered Fellow of the British Computing Society and a member of the Association of Computing Machinery.
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Powering the online gaming industry since 1998. We simply provide world class hosting, network and technical services with a proven disaster recovery track record to the world’s most demanding online businesses. If uptime is important to your business call domicilium today. www.domicilium.com
+44(0)1624–825278
info@domicilium.com
Jurisdictions 2010
What Does a Jurisdiction Offer You? As a gaming operator, choosing a jurisdiction in these times of uncertainty is not the easiest thing to do. Not only is there the consultation on the regulatory future of remote gambling in Great Britain and a number of European countries at various stages of designing and implementing models of regulation and announcements on corporate tax rates, but there are also everincreasing sources of advice. In a world where jurisdictions are defending their positions, trying to attract new business and appearing to be more competitive with each other
The Isle of Man has demonstrated the importance of a slick and efficient system for licensing and the benefits of ease of access to the right government and regulatory representatives, all of which have led to a jurisdictional reputation that will enhance a business rather than detract from it, and allow the business access to the markets it wants to work in. Testimony to the regulatory and promotional bodies’ success in delivering, both together and in their separate activities, are the new companies that have relocated to the Isle of Man in the last
“In a world where jurisdictions are defending their positions, trying to attract new business and appearing to be more competitive with each other than ever, it is hard to determine the reality from the rhetoric.” than ever, it is hard to determine the reality from the rhetoric. Some of the rhetoric doesn’t match the reality even though it may have done 12 months ago. It would be easy for the confused operator to make decisions based more on past reputation rather than being able to sort out today’s reality. The Isle of Man is concentrating on today’s reality; it has not been a place for shouting loudly but concentrates on delivering the best possible business environment for our companies to thrive in. This means in-depth consultation, ensuring regulations are in line with up-to-the-moment business technologies and requirements and that the reputation of the Island remains at the highest level. This translates into an environment that is economically competitive while remaining internationally responsible.
18 months, a number of which have seen the island innovate into new areas of online gaming. Relocations include Mahjong Logic, a leading software developer of the real money player-toplayer mahjong network, and Real Deal Poker, a market-first in the world of poker, offering a game based upon the deal of a real deck of scrambled and shuffled cards by the fully automated ‘Cut N’ Shuffle’ system. The island has been able to offer new companies flexibility and one example of this approach can be seen through the new 2010 Gambling Supervision Bill. The Bill gives independent status to the Gambling Commission and ensures player funds are legally protected by ring fencing them in a player account separate from the company’s operational account. This gives full protection
to players through a low cost solution for the operators. Additionally, it meets IMF preferences for regulators to be separated from governments and further demonstrates the island’s compliance with international standards. Added to the above, the inclusion of the Isle of Man on the OECD ‘white list’, and the move to automatic exchange of information with the EU puts the Isle of Man at the forefront of international tax cooperation and transparency. Added to which the Tax Information Exchange Agreements (TIEAs) and double taxation agreements which the Isle of Man Treasury has signed, mean that other countries now have a greater understanding of the Isle of Man. At all times, jurisdictions need to work alongside the private business sector and regulatory regime so that they can deliver for business. The cooperation between the public and private sector on a day-to-day basis as well as at industry events, is a powerful tool in communicating this message. Prospective companies are able to hear ‘from the horse’s mouth’ what the business landscape is truly like on the island. The objective is to attract companies to the island for a preliminary meeting. The Isle of Man’s motto, in Manx Gaelic, of ‘Quocunque Jesseris Stabit' translates as 'which ever way I am thrown I will stand’. This is achieved through the reality, not the rhetoric or even the reputation. Therefore, when next comparing jurisdictions, meet the people, look at the ease of doing business and ask yourself if the regulators are accessible, work with other countries globally and if they can offer a genuine ‘value for money’ service to assist in protecting and developing your business. n
Garth Kimber, Head of eGaming Development, Department of Trade and Industry.
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Jurisdictions 2010
Malta Regulation Information
n Type of Company Entity Available for iGaming Firms Remote Gaming Companies in Malta are regulated by the Remote Gaming Regulations, 2004 (LN176/2004) under the Lotteries and Other Games Act, 2001 (LOGA). Licensees are classified according to the manner they assume game risk.
n Corporation Tax Rate 35% tax on companies with certain rebate claims.
RNG test certificate and adequate systems review processing. A certifier is appointed by the LGA to audit the process before granting a license.
n Reporting Requirements to the Gaming Regulators and/or Financial Regulator Bi-annual Accounts, Incident Reports, Monthly Players’ Balances, Clients Funds’ bank statements and Decommissioning of gaming and control systems equipment.
n Additional Gaming Tax Rate n Class 1: €4,658 per month for the first six months since the ‘go live’
date, and €6,988 per month thereafter. n Class 2: 0.5% on gross amount of stakes accepted. n Class 3: 5% on real income. n Class 4: Exempted from tax for the first six months, €2,329 per month for the next six months and then pay €4,658 per month for the full duration of the license. n Class 1 on 4: €1,165 per month since the ‘go live’ date. The maximum gaming tax payable annually by one licensee shall not exceed €466,000.
n Restrictions on Jurisdictions from which you can take Wagers None.
n Contact Details of Government Department or Regulator Lotteries and Gaming Authority Suite 1, Level 3, TG Complex, Brewery Street, Mriehel, BKR 3000 Malta W: www.lga.org.mt E: info@lga.org.mt T: +356 2546 9000 F: + 356 21 316 599
n Minimum Share Capital for an iGaming Company Classes 1 & 2: €100,000. Classes 3 & 4: €40,000 The Minimum Share Capital must be issued and fully paid up.
n Security Requirements/Indemnity for Players Funds The Remote Gaming Regulations (2004) require that player funds are held separately in a Client’s Account. The LGA monitors the Accounts monthly and reviews bank statements to ensure that the funds are covered.
n Licence Fee €6,988 annually.
n Licence Duration Five years, this is renewable thereafter.
n Do Local Banks Process Online Gaming Transactions? Yes.
n Bandwidth Type Available Multi-fibre links connected to various international carriers at Gigabit capacities such as Cable and Wireless, Telecom Italia and Interoute.
n Software Testing Requirements
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JURISDICTIONS 2010
Malta – Transforming Challenges into Opportunities Despite its size and inherent limitations, Malta can boast that it was the first EU country that introduced a framework for remote gaming. Malta had the foresight to put the principles of responsible gaming at the core of this framework namely to: ■ Ensure that all games are fair and delivered in a transparent manner ■ Protect children and vulnerable persons ■ Keep gaming free from crime, corruption and money laundering Our regulatory framework is technology-neutral and game-neutral. This framework focuses on activities and processes rather than games and technology and this makes it a flexible instrument that sets down fundamental principles but leaves sufficient latitude and opportunity to deal with, and accommodate, future requirements. A flexible framework coupled with serious regulation helped to put Malta at the forefront of remote gaming jurisdictions – a position that Malta is tenaciously striving to retain despite recent ECJ rulings and developments within EU member states that seem to threaten Malta’s position as the premier remote gaming jurisdiction within the EU. On an EU front, Malta was always very clear. It maintains that in the absence of a specific EU directive on gaming, the provisions of the treaty should apply – specifically in this case article 49 (now article 56). The treaty guarantees to EU companies the freedom to establish themselves in other Member States, and the freedom to provide services on the territory of another EU Member State other than the one in which they are established. The principles of freedom of establishment and free movement of services are two of the so-called ‘fundamental freedoms’ which are central to the EU internal market. In the past couple of years, some of the member states served with infringement proceedings have started to lay down the groundwork for ‘liberalisation in a regulated manner’. What this means in practice is that each EU country will have its own a-la-carte ‘liberalisation’ defined according to the needs of that country. Whether these needs are underpinned by social or fiscal considerations is an old argument which has been flogged to death. What is certain is that in the
current scenario operators find themselves needing to apply for state licences and having to pay taxes and abide by the regulations in that state. All of this undoubtedly places a significant burden on profit margins and possibly drives out small operators. Whether it will lead to better player protection and lower incidence of money laundering and related crime is yet to be seen. Malta has always been a strong contender of the mutual recognition principle – a position that until some months ago was also advocated by the UK. In recent months, however, the UK has jumped ship and is following developments in other EU member states and introducing licensing requirements for overseas-based online gaming operators that are targeting UK customers.
So where does this leave Malta? In my view, Malta should not lose sight of its mutual recognition principle – but this is fast becoming a long-term rather than short-term objective. As a result, the island should adopt a pragmatic approach in the short to medium-term and leverage its significant and relevant experience in the remote gaming industry to give, on one end, some peace of mind to regulators and on the other end, more expediency and uniformity to operators that now find themselves having to apply for licences in different EU countries. One alternative could be bilateral arrangements with other EU member states that could possibly cater for an EU member state ‘fast tracking’ an application process and waiving some conditions requested of applicants for those operators that are already licensed in Malta. As an EU member state, Malta should certainly be in a much better position to negotiate such arrangements than countries that are not in the EU. Such bilateral arrangements, however, usually come with a lot of horse trading and could take quite some time to put in place. Another more radical approach could be for Malta to introduce the concept of certification. Certification is the process through which an Authority grants recognition to an operator that meets certain established criteria enshrined in an EU-wide recognised operational standard.
Experience During these past years, Malta has gained
significant and important experience in the regulation of remote gaming operators. Today, the island can boast specialists in different lines of service that have developed the expertise to assist remote gaming operators and enable them to operate more efficiently and effectively whilst satisfying regulatory requirements. The development of a principles-based standard that is recognised by EU member states would not obstruct the licensing process requested by a member state and would not interfere with the tax collection in each member state. It could, on the other hand, result in introducing a degree of uniformity in the operating processes operators are expected to have in place and facilitate a number of regulatory tasks including monitoring and compliance. Malta has the experience and knowledge necessary to set up such a certification agency and provide a recognised seal of approval to operators licensed in different EU countries. This seal would be evidence that the operator has in place processes that will result in fair and responsible gaming – an objective which each EU member state actively supports. Another advantage is Malta’s specific focus on the licensing of gaming platforms that offer the B2B model. ECJ rulings and case law to date have primarily revolved around B2C models as they have been concerned with the protection of the consumer. The licensing of gaming platforms by a reputable jurisdiction such as Malta should help to give other EU regulators some comfort when licensing operators on that platform, thereby, increasing the operators and liquidity in that network. Malta has the resources, experience and capabilities to overcome the challenges resulting from current developments and indeed transform these into opportunities to continue to service the remote gaming industry. ■
Maria Micallef is certified public accountant by profession and is currently a partner with RSM Malta, one of the leading service providers in the remote gaming industry in Malta.
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jurisdictions: interview
Co-Location for a Growing Industry Ian Curtis, CEO of BMIT Limited, discusses the importance of today’s hosting and co-location requirements for operators in the iGaming space. Firstly, give us a little background on BMIT and its affiliation with telecoms provider, ‘GO’. BMIT is Malta’s leading provider of hosting and co-location services, providing reliable and secure facilities to a wide range of customers requiring data centre and communication related services. The company was established in Malta in early 1997 as a service provider to the financial services sector and today we are one of the leading online gaming service providers in Europe. As you mention, BMIT Limited forms part of ‘GO’, Malta’s leading communications provider and quadruple play operator. In collaboration with Interoute, a sister company to GO, BMIT has direct access to Europe’s largest and most advanced Next-Generation Network (NGN), offering a full complement of network and value added services. Through this strategic alliance, BMIT’s data centre facilities are connected to pan-European carriergrade networks, ensuring 24 hours a day, 365 days a year support and monitoring of systems, network and infrastructure. Additional services are also available, including remote systems management, advanced managed services and specific gamingcentric applications and processes for online gaming operators. What is the true benefit to gaming operators in outsourcing their IT services to specialist providers? At BMIT, we understand that IT services are essential to the successful delivery, operation and maintenance of gaming applications, infrastructure and operations. The option to outsource such services depends on the internal costs of delivery, and the benefits of controlling and managing the systems, weighed against the costs and benefits of an outsourced solution. By outsourcing these services, operators are entrusting their IT services to specialists who in addition to their core standard services are now able to provide a deeper, more extensive offering. For example, our latest range of managed services (distributed content delivery, disaster recovery, managed firewall services, etc) enables specific
customer requirements to be addressed in a flexible, efficient and cost effective manner. In addition, clusters of resilient, load-balanced server and storage infrastructures are used to enable highly available and flexible virtual environments. As a result, our customers are able to focus their energies on what they are good at. Naturally, the immediate benefits of this include cost savings and reduced capital expenditure. BMIT applies its experience, resources and proven processes for its customers to attain these benefits as well as to ensure that expected levels of quality and service are exceeded.
of Man, Gibraltar and in at least 25 other cities throughout Europe. Such relationships have allowed us to extend our portfolio of data centre services to new territories and jurisdictions to allow our customers to benefit from geo-neutral, co-location and associated services. How will this investment in your European network benefit new and existing customers? Essentially, we can create just the right virtual data centre environment that any business may require, wherever it may be around the globe – and it’s not just about data centres. We can ensure control
“IT services are essential to the successful delivery, operation and maintenance of gaming applications, infrastructure and operations.” For gaming operators, downtime is an issue of huge importance to their business with any instance of ‘outage’ or systems failure meaning a dramatic and negative impact on their operations. What solutions are in place to reduce the impact of such failures? We appreciate that even the shortest amount of downtime of our customers’ IT infrastructure can have a serious and devastating effect on their business. For this purpose, we have developed a suite of services which minimise the impact of any natural or internal disasters resulting in systems failures or loss of data. Of course, we understand that the consequences of a disaster are serious, with unplanned outages possibly resulting in loss of revenue, customers and productivity. We can, therefore, provide the necessary specialised expertise and consequently, eliminate the need for investing in additional resources or a second redundant data centre facility. Of particular relevance to the online gaming industry is our recent strategic alliance with leading data centre operators in Guernsey, Isle
over the flow of data between our customers’ business and its own customers. Our investment in an extensive virtual hosting platform with complete redundancy means that we can offer failover within each data centre and even transfer virtual machines between data centres to offer a geographic failover service if required. In this fashion, our customers can benefit from a local presence in one of our data centre facilities across Europe, with access to a complete suite of high speed network and value added services. The scale and reach of BMIT’s network means that its customers will benefit from faster delivery of content and less delay. Our customers can, therefore, deliver their content closer to their customers, wherever they may be. From London to Paris, from Moscow to Rome, or from Malta to the Isle of Man, we can provide a service wherever needed. We provide our customers with a single point of contact for all their data centre and network requirements and guarantee a seamless service across our network of data centres. n
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Jurisdictions 2010 “Sign up, deposit, start playing.”
New Markets, new Opportunities? “Inregistrering, insättning, spela.”
“Inscription, dépôt, jouer.”
“Anmelden, einzahlen, spielen.” “Inscrizione, deposito, giocare.”
Managing websites in different languages and teams that provide customer support in their respective mother tongue are standard for most online gaming operators. And whereas the term ‘localisation’ is usually applied to translations and software adaptation, it could soon mean much more. With a number of jurisdictions issuing licences and attempting to block operators that have no licence in that particular country, operators might soon need to apply for licences in different EU jurisdictions, regardless of whether they have already been licensed elsewhere. With the exception of Malta, the EU ministers agreed on a common definition of illegal gambling. The definition, which states that “gambling in which operators do not comply with the national law of the country where services are offered, provided those national laws are in compliance with EU treaty principles”, seems to go hand in hand with the recent ruling of the European Court of Justice which found Dutch authorities were right to block their residents from betting online on commercial platforms which were licensed in the UK. Whereas the Dutch authorities clearly want to protect their state monopoly, other (draft) legislations require foreign operators to apply for a gaming licence in the state where the service is being offered. Online gambling is either regulated, or is in the process of being legalised in a good number of the 27 states that form the European Union. New markets always bring new opportunities, but applying for a number of licences, preparing different paperwork and understanding and adapting different rules and regulations will definitely be a challenge for most operators, besides the extra costs included. It also raises questions of where the company should be based. Will
regulators force operators to set up companies or a physical presence in the jurisdiction where the license is issued? Is this in line with the current provisions within the EU treaty? Malta has one of the most advanced regulatory regimes and is in full compliance with EU legislation. The checks and controls exercised by Malta ensure the integrity of the operations conducted in or from Malta – thus, a licence from Malta should be valid across the EU. In recent years, Malta had seen an influx of online gaming companies. Today, there are 300 of them and all invested in Malta because of the country’s attractiveness. A strong regulatory framework, favourable fiscal regime, multi-lingual staff, a competitive salary structure, excellent technology infrastructure as well as relatively low rental costs are among some of Malta’s advantages as an online gaming jurisdiction. Another important aspect has been the ease with which operators have managed to attract, where required, expertise from overseas to work and live in Malta that besides having excellent Mediterranean weather also offers a safe environment and an envious life style. Consequently, even if operators will be required to apply for more than one licence or Malta may not be their first preference to apply for a licence, they should still consider Malta as their base. With changing legislation in mind, operators require a sophisticated jurisdiction with an excellent tried and tested infrastructure from where they can manage their online gaming operations in Europe and elsewhere. Malta’s service providers to the industry have over ten years of experience and their knowledge is not limited to online gaming in Malta. Over the years, they have gathered a thorough understanding of the industry and the market, the
operational and technical needs of operators as well as the compliance requirements. The latter will be the prevalent business concern, because operators will have to comply with regulations which will differ in every jurisdiction. Thus, service providers need to understand the holistic requirements of the online gaming industry in general and this is where multi-jurisdictional experience will be key. We have already handled licence applications for clients in other countries than Malta, including preparing due diligence, ‘Know Your Client’ and other required documentation. Where the physical distance might create problems, we can rely on our partner network in the respective countries. Using a company that already has experience in the market and an understanding of what is required, saves the operator time and money. Even with changing legislation and the opening up of new markets, Malta is still very well placed and prepared to remain an online gaming hub. Moreover, because of its infrastructure and the high level of service provision it is also a good location from where companies can administer their European or international operations. n
Sonja Lindenberg is the Business Development and Marketing Manager of the Fenlex Group. The company provides corporate services such as accountancy and company administration to international clients and is specialised in the iGaming industry. Sonja has assisted a number of companies through the application process for an online gaming licence and has helped them set up operations in Malta.
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payments
sports betting 2010
For the Love of Sport What sports bettors want in payments, by Dan Starr, CMO, NEOVIA Financial. Let’s just say it: 2010 is the year for sports. With most big betting brands having spent significant sums of money on the football World Cup this year, sports is taking centre stage for small and large merchants alike. But why sports? Besides the obvious four-letter word (FIFA), sports is now being touted as one of the most sustainable gaming verticals, even in sluggish economies. Why? Because of sport’s inherent connection to culture and nationalism, which means that having a flutter on sports doesn’t have some of the stigma of poker or casino. So many big brands are spending millions to acquire customers in this key vertical hoping to capitalise on big events like the Grand National, Cheltenham, the World Cup, Champions League, Six Nations and Twenty20 Cricket. And without significant growth in poker, there couldn’t be a better time to focus on sports. Given how much money is being spent on brand awareness and new customer acquisitions in sports, it’s important to turn prospects into paying customers. While it’s convenient to paint all online gamblers with the same brush, it’s clear that there are different strokes for different folks, especially when it comes to payments. Here’s a look at the unique payment preferences for sports bettors.
Sport knows no borders, payments shouldn’t either Merchants wanting to get the most of out of their sportsbetting customers have to offer a global payment solution that provides local deposit options. Everyone knows the difference a recognisable local payment option can make to conversions, but you also need to ensure that you are offering local currencies, languages and support. Of these, the two most important are definitely local payment options and local currencies since sports bettors prefer to deposit, bet and cash out all in their local currency. When prioritising countries or regions to integrate local options into, think UK, Germany, Brazil and Asia – all key areas for sportsbetting.
Live betting demands real-time payments With live betting accounting for more than 50 percent of interactive sportsbetting turnover, you have to offer your customers a frictionless way to spend on your site during game play. Keep in mind these guys aren’t always near their home PC; in fact, many of them are in the pub watching the game with friends, so using cards and inputting 16-digit numbers, expiry dates and CVVs can cause customers to abandon bets. You need to offer them a fast and easy way to top up their accounts. eWallets are perfect for this since they only require two pieces of personal information that is usually stored on mobile devices anyway. And with live betting becoming so popular, you need to make sure that your system can handle high-volume transactions at any given time. You don’t want your site to fall over because you have too many customers showing up to spend money!
Access to quick cash Sports bettors want instant access to their cash after a win because it could be months before the next game they want to bet on comes around. It’s been proven that offering your customers an instant withdrawal option will actually help you win them over in the first place. It may seem counter-intuitive, but customers want access to their money, so give them what they want and you’ll have them for life.
Help customers settle up their bets and tabs Especially important in the big sports like football, hockey and cricket, the ability for sports bettors to settle up their tabs or pay out their pool money is key. Because these sports are uber-social, their payments have to allow them to easily connect with their circle of friends. Peer-to-peer payments allow customers to easily settle up bets or beer tabs, depending on how the game went.
Give everyone what they want Many major gaming sites say they see more acquisitions from sports than any other sector and that these kinds of customers are easier to cross-sell into other gaming verticals like poker and casino rather than the other way around. When you do acquire sports bettors, you want to make sure that you will also be satisfying their payment needs when they start playing at the tables and slots.
Security and peace of mind For the smaller merchants, converting customers can be difficult because customers spend a lot of time researching sites before they feel comfortable enough to spend their money and share their personal information. Providing them with a secure and private payment option that guarantees that their financial information stays with them can mean the difference between ‘browser’ and ‘bettor’. Overwhelmed yet? This is a lot to ask for just your cashier page, but when you think about it being the conduit for your revenue, you can’t underestimate the importance of having a payment strategy to support your key verticals and scale with your business, especially when it comes to a growing vertical like sports. n
Dan Starr is Executive Vice President and Chief Marketing Officer at NEOVIA Financial. Mr Starr is a proven global business executive with more than 15 years experience in the software industry. He held the position of CMO at Salesnet, a pioneer in the on-demand customer relationship management (CRM) market, where he propelled worldwide brand awareness to number two. As Vice President of Marketing at Parametric Technology Corporation, Mr Starr successfully led project teams responsible for driving re-positioning, branding, go-to-market, product, online and customer loyalty strategies.
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sports betting 2010
Parspro Programming Language Mainly Java. However, Parspro developers select each tool and programming language to fit the problem at hand. Servers requiring high concurrency and multi-processor support are developed in Erlang. Core servers, which provide transaction support and risk management, are developed in a functional language, Scala, while utilising the support of the Java eco-system of thirdparty libraries. Our consoles are designed as Web 2.0 applications, and are developed in Smalltalk. Front end applications, such as our Player module for in-play betting, are developed in Flex. Electra, our iPad application for CFOs and Chief Bookmakers is developed in Objective-C.
Robustness Fault-tolerance is a key tenet of our design philosophy and a cornerstone of all Parspro systems, as are asynchronousmessaging and server clustering. By utilising persistent queues, stateless server processes, read-through caching, write-behind caching, distributed processing and clustering, we can provide our customers with stable systems at three-nines uptime. Our standardconfigurationis tested at 400 TPS, with higher numbers available, albeit with a more expensive hardware installation.
Hardware Requirements Parspro’s hosting environment is built on VMware virtualisation technology. The difference from traditional server hosting and virtual data centres is that in the traditional hosting environment, every server is run on a single dedicated physical machine. In the virtual environment, the web servers are independent from the physical machines. Parspro runs a virtual cluster consisting of several physical machines, each of which can run up to 20 or more virtual servers. Each customer is hosted in a totally isolated network. The environment we have created consists of the best hardware currently available: HP blade centre servers, HP EVA disk arrays, and Cisco solutions for both LAN and SAN networks. The benefit of this solution is its great flexibility, which gives our costumers the opportunity to start out with a few servers and grow rapidly and painlessly as the demand increases. In addition, VMware makes the servers independent of hardware, providing a high level of redundancy. If
a physical machine fails, the servers affected are instantly up and running on the next available server in the pool.
back office. Whichever the case, the process is seamless and painless.
API
Parspro has been a leading provider of live betting systems and solutions since 2003. Juliet, our latestgeneration solution, has been extensively tested and proved extremely solid and reliable. Our standard configuration is tested at 400 TPS, and higher numbers are available if required.
Live Betting Module Parspro provides a full REST-based API for all betting metrics, in addition to ATOM-based feeds for all settled markets. Our systems are designed as stand-alone engines, providing all betting, riskmanagement and settlementfunctions. An SSO (Single Sign On) server is provided tounifylogins and account balance transfers. Extensive documentation, including code samples, XSD files, and protocol descriptions are available to all Parspro customers. To date, we have successfullyintegratedwith a number of back offices, including Unibet and GrecoBet.
Risk Management For optimum protection, Parspro risk management systems operate on a tripartite basis, offering automatic odds recalculation, while providing real-time information on maximum risk values of games and game items, and generating risk values on each individual user.
Event Creation Parspro systems provide automatic event and fixture creation from all major providers, including BetRadar, BetGenius, and custom feeds for horseracing. Events can also be created manually by the bookmaker or odds compiler. Parspro systems also provide automaticmarket creation, with over 40 different market types. Over 200 markets can be offered for each event. As an example, Bet24 recently offered no less than 156 different markets on the Cameroon Vs Denmark fixture at this year‘s World Cup. As with events, markets can also be added manually by the bookmaker or odds compiler.
Real-Time Updated Dashboards Parspro consoles provide real-time updates of all betting transactions, worst-case and probable exposures per markets and events, turnovers, P&L, betting and pricing trends to all bookmakers. Chief bookmakers and CFOs also have access to Electra, an Apple iPad application that provides a complete and comprehensive overview of all offered events and markets, including pushed events for risk management. Electra provides real-time updates from all in-play events, with details of betting patterns,realisedprofits and loss, bookmaker performance and match updates. Electra’s networking layer supports secure VPN traffic over Wi-Fi and 4G networks, and allows complete monitoring of the entire in-play book. Networktechniciansand system administrators have JMX and Nagios-based consoles for monitoring the overall systems.
Second-Line Technical Support Parspro provides all our clients with a full range of 24/7 technical support and additional professional services.
Bonus Management modules in the back office n Total bonus management for all products
connected to sportsbook n Deposit,register and product refill bonuses n Bonus can be given by country/affiliate/currency/
payment options
CRM Provides email reports to designated users.
n Bonus can be given based on codedbased/lists/
vouchers n Total controlof how oftenand how muchbonus
Affiliate Support Yes, both third-party and software.
is given n IP block n Bonus reports
‘Connectability’ to other Software Parspro has successfully integrated with existing poker and casino sites, and others using their back office. We have also done the reverse, integrating third-party poker and casino sites into our own
Company Profile Established in 2000, Parspro is a leading provider of full-scale betting systems, services and solutions to new and existing online operators. n
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Orbis OpenBet Technical Specifications Programming Language The core high performance logic is in C, whilst business logic is in TCL – a highly flexible and robust scripting language. This combination gives OpenBet the ability to produce exceptionally high performance code whilst being able to maintain a consistently fast time to market.
n Risk can be managed at sports, event or
selection level. n OpenBet allows the operator to identify individual accounts and restrict a customer’s betting limits. n VIP or risky customer bets can be referred to a trader for individual treatment.
n The new RGI interface provides a simple
integration for third party casino and bingo providers whilst still allowing the full OpenBet games and bonus management system. RGI ensures that an operator is not restricted to a single supplier and can develop a best of breed offering.
Event Creation
Live Betting
Robustness
n Event creation is provided via any combination
n All sports available for live betting, ability to move
The OpenBet sportsbook is a highly robust and scalable architecture used by many of the world’s largest bookmakers. n Stateless, ‘shared nothing architecture’ (SNA) provides resilience and load balancing. n Real world bet loads peak at 200 bets per second whilst servicing games, casino and poker transactions. n Lab testing with a modest hardware profile reaches rates of over 400 bets per second n OpenBet provides a highly tuned transactional engine and performance remains at the forefront of our development effort.
of feeds, spreadsheets, ‘quick set-up’ with autogeneration/price derivation or manual entry. n OpenBet integrates with a constantly expanding selection of feed providers, including: Betfair, Betradar, Betgenius, SIS, PA, UK Tote, Sporting Index and Bettordata. n Feed integrations can be via the format of the individual feeds or a standard OpenBet API. Automated event, market and selection creation as well as pricing, resulting and additional event management functionality is available.
CRM n The OpenBet platform provides a single
Hardware Requirements n OpenBet is truly scalable; the entire system can
run on anything from a standard laptop through to the latest 64+ core servers. n OpenBet is designed to be hardware agnostic and will scale to make the best use of the hardware provided. n OpenBet customers run on a commodity x86 systems as well as the enterprise level servers.
API n The OpenBet API, a clear easy to understand XML
interface via HTTP, extends the full functionality and scalability of the OpenBet sportsbook to third-party systems. Complete, fully featured third-party sportsbooks have been built on top of the trusted and robust OpenBet platform.
Product Features Risk Management n Comprehensive, real time single and multiple
account view across all gaming products, key for identifying total customer value. n Integrated reports and ‘at a glance’ customer statistics identify a customer’s behaviour. n Promotional tools allow targeted campaigns to be developed and tracked against demographics for which they are most appropriate. n Fully tracked and audited emailing capabilities allow operators to remain in contact with their customer base. n OpenBet Player protection features facilitate operations in nine key regulatory jurisdictions.
seamlessly into live mode at event start. n OpenBet LiveServ technology allows price
updates and new markets to be pushed to a customer’s web browser in real-time. n The LiveOdds product, built on LiveServ technology, is integral to its customers World Cup and recent UK General Election offerings.
Real-Time Updated Dashboards n OpenBet trading tools provide a real-time view of
the current book position. Various feeds also give the trader the best possible view of their current position in the marketplace. n Active monitoring of all transactions in real time, combined with advanced filtering and highlighting, allow operators to react quickly to any activity on the site. n Reporting provides everything from customer registration through to declining customer activity.
Second Line Technical Support n Any problem on the OpenBet system is taken very
seriously, as such we ensure that we have our best people on the front line 24/7.
Affiliate Support
Bonus Management Modules in the Back Office
n All transactions can be tracked against affiliates
n The OpenBet bonus management allows complex
when required. n Integrations with networks such as Trade Doubler and Income Access enable operators to carefully target the affiliate programs whilst utilising the OpenBet campaign tracking tools to identify the effectiveness of each initiative.
offers to be constructed requiring customers to complete a list of actions such as referring a friend, making a deposit, placing a bet on a specific event or entering a promotional code. n Rewards can include cash, non-withdrawable cash or ‘freebet’ tokens that can also be used to cross-sell between gaming products.
liabilities through OpenBet’s trading interface. n Using sophisticated algorithms, multiple
Connectability to other software
liabilities are managed using several views. The trader can see potential liability as the bet is placed whilst also highlighting the more critical final leg risks. n Automated liability management safeguards operator risk during unattended trading.
n Alongside its own gaming offerings, OpenBet
Company Profile
provides a robust and configurable platform onto which modules such as poker and bingo may be integrated. n An extensive API gives full access to third-parties such as Microgaming, Playtech and Chartwell.
The award-winning OpenBet Sportsbook is the trusted partner to many of the world’s biggest names in betting including Paddy Power, William Hill, Ladbrokes and most recently the French government-backed PMU. n
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OddsMatrix OddsMatrix is a fully managed sportsbook, licensed in Malta, which enables start-ups as well as existing operators to get started without much of the associated experience, cost and risk of setting up their own service. OddsMatrix manages event creation, odds compilation, and risk and provides an integrated player handling and bonus system – all delivered within a customized site design and back office. The OddsMatrix software is developed in Java and runs on OddsMatrix servers which ensures that nothing needs to be installed by operators.
API Support and Documentation Whether the operator wants to set up a sportsbook from scratch or integrate into an existing operation (casino, poker, bingo, etc) we can plug OddsMatrix straight into the operator’s system with minimal integration overheads. The sportsbook can be a standalone brand or seamlessly integrated into an existing website giving players the feeling of using the same system across the different gaming products. When users go to the sportsbetting solution, user session and necessary user details are automatically transferred using a web service. To manage funds, we set up a wallet where users can make virtual transfers, for example, between their poker account and their new OddsMatrix sportsbetting account. We maintain this account. OddsMatrix launched the first customer in January 2009 and since then we have launched 18 further customers, on a wide variety of proprietary or third-party back-end systems, proving the
flexibility and efficiency of the OddsMatrix API and integration team.
Back Office All event creation and odds compilation is fully automated based on observable market odds, with an odds algorithm that seeks to both correlate with the true odds and scale odds to be at a level with the mainstream bookmakers. Another of the key features are the many different dashboards, such as the latest 20 registrations, deposits, withdrawals, bets etc – all updated in real-time so there is no need to refresh. This is a great way for both marketing department and management to follow risk management as well as players’ reactions to special marketing initiatives. The back office also offers an advanced betting analysis tool where everything related to bets, deposits and withdrawals can be located instantly. The information can also be broken down per affiliate, allowing the marketing team to identify the players’ betting behaviour based on every single affiliate referring the traffic. The marketing team can then speak to the affiliates about ways to optimise their marketing efforts. It is also worth mentioning the bonus management system since the operator can create promotional incentives like free bets and deposit bonuses in a few clicks and also target affiliates, countries and single/multi bets individually.
Front End The OddsMatrix front end is very simple, easy to
navigate and easily customisable. All odds are updated in real-time, with true push technology and with no use of Flash or any other plug-ins. Hence, there is also no need for a special area or presentation for live betting. The real-time front end gives the operator’s sportsbook a good indication of activity, dynamics and will also reduce the impact of changed odds and failed betting slips.
Live Betting Live betting allows players to place bets once an event has started and opens up a wide range of actions – all whilst the game is being played. OddsMatrix already offers live betting on a wide range of soccer matches and will add more sports and live betting markets soon. Initial reaction and results from the FIFA World Cup betting has been very positive. Live betting his is just one more example of the benefit of not only getting top quality software but also the management and operations that come with it. Live betting is rather costly but with many operators on the OddsMatrix platform, each pays much less than they would on their own.
About EveryMatrix Founded in 2008, EveryMatrix is one of the fastest growing solution providers within the industry. Over thirty companies now use one or more of EveryMatrix’s products which include the company’s flagship fully managed sportsbetting solution OddsMatrix, gaming management system GamMatrix and complete banner management system BanaMatrix. n
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Global Betting Exchange – iBroker Information provided by Ron Regan, Business Development Dircetor, Global Betting Exchange. Programming Language
Event Creation
iBroker uses range of languages, for example, on the backend we use Microsoft .net and for our programming language we use C#, asp and .net. For the database Ms SQL server we use programming language T-SQL.
iBroker automatically obtains market and price information from the GBE exchange. It covers 21 sports (around 5,000 markets weekly) and other novelty events such Eurovision and Big Brother.
Live Betting Module Robustness iBroker utilises the GBE exchange platform and can handle a huge amount of transactions and price changes per second. Stress testing on the production system achieves14,000 price changes per second.
iBroker allows operators to offer around 400 inrunning events per week across a range of sports. GBE is constantly increasing the number of events and markets that are offered and can work with new partners to offer live events that have never before been offered, such as UFC, for example.
Hardware Requirements
Real-Time Updated Dashboards
We are software as a service so no hardware requirements are needed. We have an iBroker hub that is based in Guernsey and all our partners are hosted there. However, we do have some partners who prefer to host in-house so we have a three star and five star hardware solution based on the volumes of betting activity they have forecast.
iBroker manger is a tool that allows the operator to understand what’s happening at any time on any event or market. The back office is broken down into 4 areas: 1) The Monitor – this is where the operator monitors live transactions and reacts in real-time by changing limits and prices. 2) The Manager – a back office suite where the operator controls parameters, sets limits, and organises settings through different channels (Website, Kiosks and Customer Groups). 3) Customers – a section where operators manage and control their customers. From here, they can determine whether to pass winning customer business to the exchange or lay losing customers themselves. 4) Devices/ partners – this is how you add and manage new white label partners.
API The GBE API gives operators the ability to seamlessly integrate iBroker into their existing customer management systems. We believe this is an industry leading integration allowing for full and seamless single registration, single sign on and single purse.
Features Risk Management
Second Line Technical Support
iBroker gives the operator total flexibility when managing risk. It allows them to underwrite bets directly or to automatically hedge onto the exchange without exposing the operator to any risk. It enables the operator to both specify prices explicitly and to specify that prices should be automatically derived from exchange prices. When using iBroker you never have to exclude or limit the stake of a winning customer. Simply pass all his or her bets directly onto the exchange and take a margin no matter if it’s a winning bet or a losing bet.
GBE runs a full 24/7 second line technical and operational support operation out of its head office in Dublin. All CS agents are fully trained on every aspect of iBroker and have experience supports partners in Asia and Europe
Company Profile iBroker is a complete sportsbook solution that obtains market and price information from the GBE exchange and allows the operator to underwrite bets directly or to automatically hedge them onto the exchange. It enables the operator
to both specify prices explicitly and to specify that prices should be automatically derived from exchange prices. The operator can segment customers into different groups and can specify different operating parameters for different user groups. The operator can also specify different operating parameters for different sports and for different combinations of sports and user groups. For example, the operator can specify that all horseracing bets for a particular user group be hedged onto the exchange but all rugby union bets for the same user group be underwritten directly. The operator can also specify different operating parameters for pre-start and for in-running markets. For example, the operator can specify that pre-start bets are to be underwritten directly at the prices specified by the operator but in-running bets are to be priced from the exchange and hedged directly onto the exchange. iBroker will automatically switch from underwriting bets directly to hedging bets onto the exchange when a market is turned in-running on the exchange and without requiring any action by the iBroker operator. The administrative overhead of iBroker is extremely low. The operator does not need to specify operating parameters for all sports, user groups and markets. In the simplest case, iBroker would be configured to derive pricing for all bets (that is, to take exchange prices and apply a fixed margin) and to hedge all bets onto the exchange. iBroker would then automatically cover all markets covered on the exchange with absolutely no on-going administration by the operator. It would provide a return on each and every bet placed while exposing the operator to absolutely no risk. However, the operator can specify different operating parameters for different user groups, markets and user group/sport combinations. The operator only needs to specify operating parameters for cases where the general operating parameters are not desired – if the operator does not want to differentiate between different groups or different sports the operator only needs to specify operating parameters once. n
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sports betting 2010
GTECH G2 – Sports Betting Information provided by David Poirier, Senior Solutions Architect, GTECH G2 – Sports Betting Programming Language Our sportsbetting solution, MarginMaker™, is a multitiered system combining a range of technologies and employing the best practices of mission critical transaction and risk management systems design. It is an Oracle-centric enterprise application. The middleware uses a proprietary C++ messaging system (NPI). Transactional middleware also features proprietary communication protocols (C++) for data exchange over WAN distributed transactional systems. Either .NET or Java are used for transaction servers – depending on the target deployment. The front ends are written in a combination of .NET, Java, VB and HTML, with C/C++, C# and Java for the middleware. There is extensive use of XML and Ajax for the website.
Robustness Our sportsbetting solutions have given our clients a scalable system that has the proven consistent high performance and reliability, whether it be driving over 2,000 retail betting terminals online from a single host in Chile or processing high volume transactions as seen at the Grand National, where our retail systems in the UK successfully handled over five million sportsbetting wagers on this single event, ensuring that they were fully risk managed with optimal security and maintaining profitability.
Features Risk Management MarginMaker™ features a dedicated Risk Manager application as well as several others for during an event and historical in-depth analysis. As bets are placed the relevant data is automatically reflected in real-time for each market showing the bets, stakes and liabilities for each market. The system features automatic and manual risk control via limits that can be set at the selection level, but inherited in a hierarchy up the sport level. This allows full, fine grained control of markets, with minimal overhead for unexceptional markets.
Event Creation Margin Maker™ supports two different modules for event creation: Event Builder and E-Venue. Event Builder is an event creation tool and is based on a flexible framework and template approach which allows for very specific customisation and tailoring for a client’s particular markets. This provides a solution optimised for control without overheads or manual repetitive actions. E-Venue is a data feed consolidation and management tool. It accepts data feeds from major industry suppliers (and manual entry) and supports an open API for swift addition of new feeds and third-party development.
Hardware Requirements
CRM
GTECH G2’s sports solution is built using commodity hardware for all of its components. It is comprised of a variety of different modules. Since each client has a different business profile, the size of each module depends on the overall scope of the business environment or portion of the business model for which the sportsbetting system will be used and, therefore, is dimensioned accordingly. There is vast scale of different configurations for each module, from start-up to medium to large sized bookmaker facilities. The differences between the various options are given in terms of resiliency, robustness, maximum processing power, maximum processing speed and scalability.
Our customer services module features integration with telephone systems, ticketing applications, the ability to integrate with external ‘call-centres’ including all the functionality required for operational customer relationship management. For analytical CRM, we provide raw data structured in data marts which are ready to be loaded into analytical eCRM products driven by the preferences of our clients’ marketing departments.
Affiliate Support
API
GTECH G2’s sportsbetting products support affiliates, and many of our existing clients are running affiliate and white-label programmes. We have integration points to all the established affiliate management products in the market place.
MarginMaker™ features a number of open APIs for external access. These support wallet and betting transactions, content provision and other interactions. These generally use .NET, SOAP or XML/HTTP access mechanisms.
The GTECH G2 organisation offers a full suite of other gaming software, including bingo, poker, casino and games, as well as integration to GTECH lottery systems.
Connectability to other Software
All G2 products are fully integrated through presentation and wallet, but also offer open integration to the many third-party services in the market including gaming and other products, such as wallets, payment processors, marketing and analysis tools and channel deliveries.
Live Betting Module MarginMaker™ provides a number of live betting features such as views, administration and trader tools. In addition to integration with many third-party ‘in play’ products aligned to our clients’ diverse requirements. Certain clients have a derivatives engine to automatically price numerous markets from a few key inputs.
Real-time Updated Dashboards MarginMaker™ has dedicated real-time trading and alert tools that send alerts directly to the Risk Management application or to an Alert Scroller. Alerts cover both trading and auditing functions including sportsbetting alerts such as maximum book loss, price updates, maximum takeout rulebook, etc. All the alerts are parameter driven and configurable.
Second Line Technical Support Our client-focused support culture with its demonstrable track record of top-quality experienced second line technical support services are provided to many different countries and cultures across multiple locations and time zones.
Bonus Management Modules in the Back Office MarginMaker™ provides fully configurable crossproduct bonus management and special-offers modules, for example enabling our clients to promote new sales channels or business units, new products and matching special offers that their competition offers.
Company Profile Finsoft, the sportsbetting software and games specialist was acquired by GTECH in 2007 and now forms part of the GTECH G2 group. At the heart of the product suite is the MarginMaker™ platform which supports fixed odds, pools and spread betting on any sport, across all channels and for any business model. n
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New Report - Out now!
Online Sports Betting
A Market Assessment and Outlook
The latest report in the Global Business series will give you: • Global betting market overviews by region • Strategies into areas of opportunities; how you can expand and grow • Important factors affecting growth in the industry and how to avoid the pitfalls • Join the mobile revolution and learn how it’s affecting sports betting offerings • Discover the marketing strategies used by leading online sportsbooks • Stay updated on regulatory issues affecting your market • In-depth analysis of player demographics To order your copy today or request a free executive summary email Reports@iGamingBusiness.com and quote 11GRV06/S To see the full list of iGaming Business Reports visit www.iGamingBusiness.com/content/research
Mobile GaMinG 2010
Mobile Gaming 2010 – Introduction It is a sector that has suffered a number of false dawns; if only because it is a sector that has promised so much. The iGaming industry has watched with both keen and cautious eyes the development of the technologies that are now driving the mobile platforms and devices to very quickly outgrow their cellular communications origins, and become what many term, ‘the future of computer technology’. Over the next few pages, iGaming Business invites you to assess for yourself the many areas at work in today’s mobile gaming landscape. How many times have we heard mobile gambling described as the “Holy Grail” or that we are in “the advent of “mobile gambling?” In my opinion, more than one too many. These are the views of stakeholders that are not involved in the fastest growing segment in our industry; practically all of our customers see a tremendous growth and a keen customer interest in the mobile channel. Yahoo! researcher, Patrick Hourihan, found that the likelihood of spending or staking money by using the Internet on your mobile phone in the next six months was 30 percent. That’s almost a third of punters likely to start betting via their mobile phone in an imminent future. Combining this with the fact that the mobile phone is the most prolific consumer product ever invented and that customer behaviour is moving to immediate consumption, and you have the channel of the future. A new ever-connected and impatient generation is on the rise and they don’t want to be constrained to a physical location or a specific time in order to consume. Technology is, as always, a key factor for success. Where in the early days, technology was a constraint with poor handsets, limited network capabilities and, most importantly, poor user experience support in the handsets, today’s technology is more than good enough. Will it get better? Of course it will! Mobile phones and their capabilities are, today, among the most technically advanced products and fastest evolving technologies on the market. At the speed that handsets and mobile operating systems are evolving, what’s new today is old
tomorrow – so I’m just waiting for the next version of iPhone, which will probably be able to do my laundry for me…
Smartphones Smartphones such as the iPhone and Android are leading the way for expansion in the channel through technology. There are two main reasons for this: firstly, the customer experience and secondly, the educational level of the end user. Since the iPhone’s entry to the marketplace, most brands have focused on the user experience, be it through touch and high-resolution screens or improved functionality (no longer a handset for making calls alone, but for browsing the Internet or using mobile adapted services). Consumers are also spending more time using their handsets as a consequence of having new ways and purposes of using them. Smartphones and their capabilities have become much more like computers than pervious mobile devices, and this makes their users educated in the sense that they are already accustomed to using the mobile channel as a computer to consume information and goods.
games. The mobile phone is, essentially, the ideal channel for betting – you carry it with you wherever you go meaning punters can place a bet at any time. Betting is, for most people, a leisure activity and so should be made easy and fun. A mobile phone gives the punter the freedom to place his bet without having to be at home in front of the computer or running down to the betting shop. At the end of the day, mobile is a no-brainer. The mobile channel, and it is a channel and not a product as perceived by some, is the closest fit physically, as well as emotionally, to the average person. For most people, the mobile phone has become an extension of their life, managing both work and leisure. As the following articles will show you, the mobile sector of this industry is a vibrant and rapidly expanding area and I would argue that at the end of the day, it’ll be the operators, not the suppliers, who will drive the mobile channel and ensure its success. However, the suppliers have a responsibility of providing the tools and support to ensure the success of the operators. This is not the advent of the mobile channel; we’re already there! But perhaps you’re not… n
Gaming channels I would argue that sportsbooks are the main drivers in the gambling space for the mobile channel. We see clear evidence of this in the sportsbooks powered by Mobenga, but I have no doubt that casino and fixed-odds games will be successful too. There are many reasons why sportsbetting is more suitable for mobile gaming than other
Christian Rajter is the CEO of Mobenga, which helps gaming companies in making their business mobile. Previous to Mobenga, Christian held various senior positions at Expekt.com for four years, the last being CEO. Christian has vast experience in the online industry ranging from online retail business to payment processing and online banking.
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when you sell over 100,000,000 scratch cards a month. that’s fun! NeoGames is the pioneer and the global leader of the online scratch cards market. Since establishment in 2005, NeoGames has been providing an advanced solution combining a robust platform, interactive games, and a set of comprehensive operational services. Gaming operators, national lotteries, affiliates, and media companies benefit from flexible solutions that include fully managed operations and customized integrations of its scratch and instant win games offering.
• Expand your business by generating new revenue stream. • Partner with the most experienced provider of soft-gaming solutions. • Enter the fastest growing gaming segment.
www.neogames.com
bringing back the fun!
Mobile GaMinG 2010
Device Technology and Consumer Prevalence Marcel Puyk, CEO of Cellectivity, explains how the dawn of Smartphone devices has realigned the industry’s previously misled perception of mobile gaming growth. Much has been written over the years about gambling and betting on mobile phones becoming mainstream and starting to emulate the successes we have seen in online gambling. Initial hype that indicated there would be enormous growth in the mobile gambling market was, however, based on flawed growth assumptions, which led to strong scepticism when it didn’t happen. This scepticism has held back the development of the market significantly. But recently, there have been some encouraging signals leading the major online gaming operators to look at mobile with fresh eyes.
Device innovation Amongst the many reasons why mobile gambling just hasn’t lived up to expectations, has been the capability of mobile devices to provide a positive user experience for the gambler. How could a device with a small, low resolution screen and a tiny keyboard and no mouse ever rival the experience of online? During the last 18 months, opinion has shifted considerably in favour of mobile as a real alternative, and an addition to, an online gaming offering. The success of the iPhone has been instrumental in this, as have the many similar types of handsets, such as Google’s Android. It introduced, and made mainstream, handsets that are purely touch screen based, without a keyboard – so, therefore, with larger high definition screens. Phones started to look very different and all of a sudden, almost unnoticed, the mobile phone had morphed into an entertainment device as people started downloading ‘apps’ to play games on the move. This device innovation has enabled developers to be much more creative, particularly in the casino and bingo-style games. The phone itself became seen less as a restriction and more as an opportunity to do something different and new, to attract new users who are interested in using their phones for more than just making calls. App stores played a huge part in this process. Developers started designing applications for these new phones that they could download with just a few clicks. An explosion of new applications, mostly by just a single or a small
team of developers filled these stores with huge numbers of applications, including many games. Such was the focus on these app stores that when Google’s Android first started to establish itself in the mainstream market, reviewers noted that the Android market only contained 20,000 apps versus 100,000 in the iStore. ‘There’s an app for that’ entered the mainstream language and as a consequence, mobile phone users started to explore this vast mobile landscape of downloadable apps. The stats are huge: ABI Research predicts that Smartphone users will download six billion apps worldwide this year, more than double the number in 2009. The biggest will still be the iStore, and Getjar alone is already generating three million downloads each day. It looks, therefore, that the new devices and software have certainly achieved a goal long treasured by the mobile industry: people are actually starting to use their phones as minicomputers and are becoming comfortable with browsing and downloading applications. Recent research by comScore shows that 31 percent of all mobile phone users in the UK used apps in June 2010. Amongst Smartphone users, this number was a whopping 78 percent.
Gaming barriers However, for gaming companies, there was (and is) still a barrier to this. Two of the most popular stores, the iStore and Android’s market, do not accept real money gambling applications. The iStore has recently opened up a little bit, allowing ‘geo-restricted’ gambling applications to be offered, but that is still a severe limiting factor on growth for the gaming companies. What gaming companies then did to ‘circumvent’ this restriction actually has the potential to fundamentally change the mobile gaming market. Utilising the capabilities of the browsers in these devices they developed WebApps. These are services that run in the native phone browser but that almost look like applications you download. You can even add them as icons to a home screen, just like apps. These have some advantages to developers,
as an update to your service does not require a new download, but also disadvantages – because nothing resides on the phone itself, all images have to be downloaded each time you start the service or do anything, which can lead to lag, and certainly higher data consumption.
Operating systems Many question what will happen to the operating systems in phones and how that will affect consumer attitudes. The iPhone has been rightly lauded for its role in making the mobile a very nice interactive device. Android has taken up the challenge to that and is now becoming much more mainstream with very nice devices by Samsung and SonyEricsson launched in recent months. This puts the closed (iPhone) system up against the open (Android) system. Let’s not get carried away with the iPhone versus Android debate quite yet, however. We should not forget that Nokia is still the largest Smartphone manufacturer in the world and it will continue to push its Symbian platform and try to maintain its lead. The mobile market, therefore, shows no signs of stabilisation in terms of a standardisation of operating systems. Whilst Android may be outdoing the iPhone in terms of growth (from an admittedly small base), other operating systems are making a new (Linux) or renewed (Windows Mobile 7) attempts to take a share of this significant market. This battle is not yet over by a long way, so developers of mobile gaming applications and services will be required to be on their toes and support varying platforms for the foreseeable future. As always, the consumer will decide. n
Marcel Puyk is CEO of Cellectivity, a leading UK mobile e-commerce technology and service provider specialising in mobile betting and gambling applications.
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when your creation becomes a new market. that’s fun! NeoGames is the pioneer and the global leader of the online scratch cards market. Since establishment in 2005, NeoGames has been providing an advanced solution combining a robust platform, interactive games, and a set of comprehensive operational services. Gaming operators, national lotteries, affiliates, and media companies benefit from flexible solutions that include fully managed operations and customized integrations of its scratch and instant win games offering.
• Expand your business by generating new revenue stream. • Partner with the most experienced provider of soft-gaming solutions. • Enter the fastest growing gaming segment.
www.neogames.com
bringing back the fun!
Mobile GaMinG 2010
State of the Union Matti Zinder, head of Spiral Solutions, tackles the changing terrain of mobile games software for today’s progressive market. I’m happy to report that we have established a positive environment for the mobile gambling industry; one that is nurturing its growth. Much has already been said about the waves of regulation spreading across major European markets. This holds great promise for mobile gambling, as well as for the wider iGaming industry. Within regulated markets, we have seen that mobile has become a central part of any iGaming service. While our outlook remains cautiously optimistic, the signs are extremely positive. There are also a number of specific developments and trends to watch out for. They may appear small but they have the potential to transform the industry.
Mobile hardware Mobile hardware is a principle change driver in the iGaming industry. The debut of the original iPhone really challenged the traditional way people viewed and used their mobile phone. Until this point, technology had been stagnant with manufacturers happy to make specialised ‘feature phones’. The mobile Internet was still an unappealing prospect for consumers who faced slow loading times, unintuitive controls and high data charges. Device fragmentation undermined developers’ efforts and underpowered handsets limited their innovation.
Game development The iPhone forced a change in the entire mobile industry and galvanized manufacturers to produce devices capable of doing so much more than just placing calls. This, in turn, prompted the network operators to reduce data usage costs which encouraged handset makers to make more advanced phones. Suddenly, developers had the freedom to make more creative and interactive games. Since that point, the gap between PC gaming and mobile gaming has been closing. Casinos, gaming brands and others are seeing the value in a cross platform offering; providing a seamless transition between land-based to PC to mobile gaming. Previously, the key was to develop a game that worked on as many devices as possible in a fragmented market. While the market is still highly fragmented, we see a sharper focus on the user experience, with rich graphics and a variety of
games. Crucially, there is no depreciation in quality of experience. Instead, the experience is the same, whether you are playing online or on mobile. Smartphones like the iPhone remain a massive driver but tablets will really propel the market forward. Today, we see the iPad as a near perfect middle ground between mobile and PC. It may still seem a little niche but it bridges the gap brilliantly.
We can see that from the success of the various app stores, which represent potentially fantastic distribution channels for our mobile casino clients. With cheaper data packages and more choice, end-users are increasingly happy to use their mobile phone for web browsing and online gaming. Our strategy is simple; to cater for as much of the market as possible. This means that
“The iPhone forced a change in the entire mobile industry – suddenly, developers had the freedom to make more creative and interactive games.” The iPad and the tablets market is a developer’s dream. It is built for gaming, for surfing the Internet and for consuming content with its enlarged screen and ultra portable size. The opportunity for more advanced mobile games is incredible.
Key drivers Google’s Android operating system is also one to watch. Phone manufacturers are currently fighting to launch the latest and greatest Android phones, and Android will soon outgrow the Apple ecosystem. This doesn’t mean developers should simply switch to Android – there are ample opportunities to sustain both markets. The industry must cater for both platforms if it is to maximize its reach and growth. The second key driver is HTML5. The beauty of HTML5 is that it virtually eradicates the main fragmentation issues. While native apps are capable of delivering a deeper and richer experience, you have to develop each game for specific platforms. HTML5 is slowly emerging as the industry standard in high-end Smartphones including Apple’s family of iDevices, Android and the new BlackBerry handsets. Games developed with HTML5 can be played by a huge audience across a wide range of mobile devices, and an audience that is increasingly turning to web-based gaming. Native apps are also clearly in demand.
we will continue to develop for both native apps and HTML5, but we will look to take the lead in the market by offering a strong HTML5 portfolio. We will see transformative changes in the industry over the next year. Customers have more advanced devices and are demanding a mobile experience to match. Developers have been desperate for the opportunity to push sophisticated games. Now all the pieces are in place for a groundbreaking 12 months. Mobile is without doubt a sector to watch. n
Matti Zinder is the founder and CEO of Spiral Solutions Ltd., a leader in online gaming business solutions, established in 1999. Foreseeing the great potential of interactive gaming, Matti Zinder established Spin3, a division of Spiral Solutions, in 2003. Spin3 is today credited with developing and rolling out one of the leading mobile gambling solutions worldwide. Matti is a leading voice and authority in the area of mobile gaming, and has served as a keynote speaker at many international wireless industry symposiums and conferences, including the Mobile Entertainment Forum, Mobile Gambling Forum, MEM Asia and the Asian i-Gaming conference and expo (AiG).
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NeoGames is the pioneer and the global leader of the online scratch cards market. Since establishment in 2005, NeoGames has been providing an advanced solution combining a robust platform, interactive games, and a set of comprehensive operational services. Gaming operators, national lotteries, affiliates, and media companies benefit from flexible solutions that include fully managed operations and customized integrations of its scratch and instant win games offering.
• Expand your business by generating new revenue stream. • Partner with the most experienced provider of soft-gaming solutions. • Enter the fastest growing gaming segment.
Mobile GaMinG 2010
Utilising and Maximising Video on Mobile platforms It was inevitable. Make phones smart enough and powerful enough and sooner or later, someone will find a way to push advertising onto them. Annual US mobile ad spending today is between $400 and $600 million. The Kelsey Group, a market research firm, projects that the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013. Jupiter Research estimates it will reach anywhere between $4 billion and $5.7 billion by 2014. Cisco predicts that mobile traffic will double each year over the next five years with 66 percent of that traffic accounted for by video. With the rise of web phones like the iPhone, Android, Blackberry and Palm (Verizon’s CEO says that 40 percent of its new phone sales are such Smartphones), mobile advertising promises to be a huge growth area.
Why mobile ads? Jupiter Research said the response rate for mobile advertising has been higher than alternative methods, and mobile Internet will be the most popular method of delivering mobile ads. For companies and ad agencies looking to get more of their message across to potential customers, mobile advertisement is a new and powerful tool. Advertisers understand the power of video, and that people who see a video in a rich media ad are simply more likely to make the purchase. Rich media ads containing video appear to increase purchase intent.
advertiser the opportunity to serve better targeted video ads, based on a user profile and preferences, as well as the geographic location of the user at any given moment. As for monetisation, the advertiser knows that his ad is being delivered to the right target audience, using sophisticated location and preference-based targeting, so he pays more for an ad with higher conversion probability, even more than on a website, where the targeting is more general. Then we have the iPad, which differs from Smartphones. It’s actually the first e-reader to offer a full colour display and a screen close in size to the standard magazine page size, and it has a potential to link to ad servers to offer ads customised for the individual reader. The iPad allows advertisers to use their existing standard-size marketing material, drastically reducing the cost of launching an iPad-based campaign. Until now, any advertiser wanting to reach consumers on a mobile device had to contend with a very small screen size and a variety of layouts with which to display their advertising and catalogues. It limited the effectiveness of the advertising and included the additional cost of creating or modifying existing material to fit to different screen sizes and layouts. The iPad changes the entire layout cost equation in advertisers’ favour.
Utilizing video on mobile platforms
Monetisation of mobile video – role of networks
Online advertising providers use sophisticated adtargeting and ranking algorithms with the dual aim of maximising revenue while providing a superior user experience. Internet marketing places an emphasis on targeting: marketing that appeals to a specific behaviour or interest, rather than reaching out to a broadly defined demographic. Online and offline marketers typically segment their markets according to age group, gender, geography, behaviour and other general factors. Mobile websites are springing up by the minute, and the majority of consumers carry mobile devices nearly all of the time. The device is personal, and the ‘always-connected’ nature of it gives the
Publishers want to turn their video traffic into a revenue generator, but without ads, it becomes a cost centre. Advertisers are clamouring to reach the eyeballs that are increasingly focused on video served to mobile devices, but lack the ability to do so with scale. Ad networks and platforms sit in the middle, needing to provide the same functionality in the mobile space as their standard web-based video products do today. The video ad networks and ad management platform vendors are the glue that bonds together the publishers and advertisers. Therefore, both advertisers and publishers should consider carefully with which network to work. It has to have both marketing and technical experience and
the tools to enrich the videos by adding ‘trackable’ links and action-based layers, amongst others. Special attention needs to be given to the technical aspect. Both advertisers and publishers should be aware that there are various available mobile platforms and there is a need to prepare content in appropriate formats, resolutions and frame rates, detect the mobile platform type and deliver the content in the appropriate format.
Summary Mobile gets better, bigger and faster. According to a recent article from Adweek, the shift in mobile ad spending in the US is attributable primarily to growth in mobile web usage. Mobile web browsing used to be a basic, irregular experience due to less sophisticated handsets, slower networks and prohibitive consumer pricing. The age of Smartphones and unlimited data plans has changed that. If better web browsing and the personal nature of the mobile device were not enough to convince an advertiser that this is the place to be, understand this: the phone knows where you are. Advertising using this channel is more relevant, personal and targeted, allowing the consumer some sense of control and the notion that they are driving the experience rather than simply being served. This, in turn, increases the likelihood of conversion and the spending of actual money, which is the obvious end game of all advertising. Add to that the high conversion of video advertising and content, and you have a successful formula for utilising and maximising video on mobile platforms. n Liat Fuchs is a Marketing Director at AffiliatePLY. com, a video based ad network. AffiliatePLY is a new and unique concept, delivering videos on performance base (view, lead, sale, etc), as well as CPM, and monetising videos for both advertisers and publishers. Liat has been in the online affiliate and marketing industry for over five years. Liat has a BA degree in Political Science and Asia Studies from Tel Aviv University, and an MBA with marketing orientation from The College of Management, Israel.
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Mobile GaMinG 2010
Product Suitability
iGaming Business invites Charles Cohen, CEO of Probability plc, and Mark Gibson, Senior Business Development Manager at mkodo, to assess the products that will prove the most effective and relevant on the mobile platforms of today, and tomorrow.
Charles Cohen, CEO, Probability plc Lottery, bingo and casino I want you to know I’m writing this article on my iPad, which is a device so magical that millions of people have bought one without really knowing why. This is not unusual. Many millions more are recklessly throwing their money at spotty teens in mobile phone shops to trade in their perfectly good camera phones (so 2009, darling) for the latest in touch screen, Smartphone ware (now, with Facebook!). Marketing people have long understood this phenomenon. They know that we are not buying the benefits of these products but the features.
will be played on mobile devices than desktop devices or laptops (big things with keyboards) within five years. Firstly, consider the fact that on current trends, there will be more mobile Internet connections (and traffic) than fixed-line (i.e. desktop) in three to five years globally. Morgan Stanley, the investment bank, thinks that mobile Internet traffic will grow 66 fold by 2013 from where it is today. How? Try some simple maths: there are 1.6 billion desktop Internet users worldwide and over four billion mobile users. Desktop computer sales are falling. Mobile sales are rising. QED. Now look at what Wired magazine, that epistle to the digerati, calls “the death of the Web”. Ten
“We expect our clients to be generating 40 to 50 percent of all digital sportsbook stakes through mobile within a couple of years.” Those features are a big bright screen, no buttons, ‘always on’ Internet, and plenty of Facebook. Making actual phone calls, for those of you old fashioned enough to care, is now like the reverse gear on your car: you need to have it, but generally don’t use it. The biggest selling mobile device this year is the iPad. It is not a phone. In the wannabe-intellectual potty talk of the marketing industry, what people are really buying is not a device, but a ‘lifestyle’. In truth, no-one knows what this really means; it probably doesn’t mean anything except a few too many lunches with the ad agency. What is diabolically clear already is that ownership of this type of device comes with the adoption a set of habits and attitudes which are very relevant to the future prospects of lottery, bingo and casino on the mobile channel. Those prospects, by the way, are excellent. My confident prediction is that more gambling games
years ago, web pages represented over 50 percent of Internet traffic, chat was about 20 percent, the rest was email and geek blah blah. Today, the web is 23 percent, the same as peer-to-peer for chat and sharing porn and stolen music, whilst video is 51 percent. The fact is that web browsing is passé. Browsers are being used for video, and not much else. Lastly, look at what people are using mobile devices for. Not making calls, for sure. iPhone users have downloaded billions of apps. Billions. Whilst a new PC means watching streaming video, a new mobile means playing games and doing stuff like shopping, chatting and any other displacement activity you can get your hands on. So this is where the gambling comes in. According to the UK Gambling Commission, 55 percent of UK adults took part in some kind of gambling activity last year. Just over five percent of adults used some kind of online gambling service other than the national lottery.
Round Table
My pitch to you is that mobile gambling is the way to reach that missing 50 percent of adults who gamble or play lottery, but don’t reach for the PC when they do it. The ‘always-on’, big screen, ‘in your pocket’ mobile device is the most ‘entryist’ technology for gambling into the mass market since the scratch card was invented. Some people mistakenly believe that the advantage of mobile gambling over desktop is its portability; you know, ‘gamble-on-the-go’. Actually this isn’t true. We have surveyed our customers and the most popular place to play mobile slots is on the sofa (usually with the TV on). We also know that they typically play for under 15 minutes a session, with two sessions a day, and nearly always at the same time. This is a pastime which you fit into your day, not the other way around. You see, whilst the great strength of the 15 inch desktop computer screen is the fact that you can get lost in it, immerse yourself in it for hours, the great strength of the three inch mobile screen is that you don’t have to get up. You can turn it on, have a few spins, and turn it off again. No calories required. It is a cheap thrill. This is why slots and scratch cards are the true killer app for mobile. Instant win games with limited required interaction are fast, undemanding of your attention, and strangely exciting in small doses. Like a macaroon. I’ll give you an example from the house of pain. Last year, we developed a new slot with a very spiky payout pattern. Some people were coming in and winning thousands in a very short space of time. Great. Fantastic. Photos on the website and so on. On a desktop casino, this kind of win would have just extended the play session an hour or so, but on the mobile we found people who won big didn’t play longer. They stopped, took the money, or sat on it until the next ad break or traffic light, shift break or trip to the toilet. Those winnings lasted days and days. Happy customers – not so happy finance director. Bingo is also going to do brilliantly on mobile.
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Mobile GaMinG 2010
We launched the first multiplayer bingo in the UK over three years ago now and it’s still our most popular single game. Chat is key: people really do want to exchange gossip whilst the game is going on. You’d think that bingo wouldn’t work, but the fact is that like slots, it doesn’t require you to pay too much attention. If you can play with one eye, I say, you’ve got a great game. It’s too soon to say what this whole iPad thing is going to do to the market. Here, you’ve got a mobile device big enough and light enough to offer an immersive PC experience, but it has the privacy and convenience of the mobile, except for the pockets thing. Some research recently found that most of them are used exclusively in the home. I can’t wait to see how bingo works on it.
Mark Gibson, Senior Business Development Manager, mkodo Sportsbetting The time of mobile is, at last, really here. There are now more mobile phone accounts than landlines. More people own a mobile phone than a PC. As mobile browsers, data speeds and available content improve, consumption of services on mobile will continue to boom. Betting and gaming services are no exception. mkodo clients have seen substantial growth in mobile sportsbetting over
the last couple of years; the last six to nine months have seen the curve rise dramatically. Right now, mobile can be expected to generate ten to fifteen percent of all digital sportsbook stakes, up from two to three percent 18 months ago. The mobile channel presents an outstanding opportunity for sportsbook. mkodo clients have seen their customers develop an appetite for in-play betting… and in-play sportsbetting is absolutely made for mobile. Furthermore, the consumption of sports events is often either live at the event or on TV. If customers are watching TV, it is likely that the PC, where there is one, is not conveniently located whereas their mobile phone is. And if they’re out at an event or watching in a pub then the mobile is often the solution. The increased acceptance by consumers of the mobile as a trusted place to make transactions, as witnessed by Amazon’s announcement of $1 billion annual mobile sales, will significantly benefit all gaming sectors in terms of mobile activity and revenue opportunities. Mobile is a great opportunity for all gaming markets such as poker, casino, bingo and lottery which is why we partner with other expert companies to offer such products to clients alongside mobile sportsbook. Sportsbook, however, currently has the edge over other sectors for the experience it presents to the customers and their demand for the service.
Other products are still considered ‘nice to haves’ that customers use in their downtime. The mobile sportsbook has, by contrast, become a necessary part of an operator’s offering; customers want to be able to place time critical bets whenever and wherever they are. If their operator does not provide a high quality mobile service it becomes a key factor in the decision of a customer to place their bets elsewhere. Sportsbook works well for today’s mass-market mobile phones because it is essentially a data-led service that utilises menu-based structures with which customers are familiar. Other gaming activities such as poker, and indeed, to a certain extent, bingo, tend to have a more social aspect requiring multi-player environments that are currently more suited to the online space. Looking forward, the scope for sportsbook on mobile is huge. At mkodo, we expect our clients to be generating 40 to 50 percent of all digital sportsbook stakes through mobile within a couple of years. It is this scope for profitable growth, plus the customer demand for the service, that makes sports the most likely channel for mobile expansion. Further drivers for this expansion include the exponential growth of m-commerce, of in-play betting, of the mobile as a social/ viral tool and as a delivery channel for sports information. n
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mobile gaming 2010
Dispelling the Nonsense and Hype Around Mobile SEO Mobile has been hyped as ‘the next big thing’ for a few years, and based on this year’s Smartphone adoption rates, it finally looks like this hype is coming true. I won’t be quoting quarterly growth rates or how Android is exploding, because by the time this goes to print, the numbers will be massively out of date. All I’ll say is this: my dad has a Nexus One running Android Froyo and after only a couple of sessions with him showing him how to read his email and open his browser, he’s never looked back. So based on this sample of one, I can safely say that Smartphones are now officially mainstream. So moving on from my statistically invalid sample of one Luddite...
Let’s first cut through the ‘BS’ Search (or at least Google Web Search) is the same no matter what Smartphone you’re using. There are currently no special tricks you need to know about optimising your site for mobile, at least not from a ranking perspective; Google serves the same results for a general commercial query regardless of device. I’m not talking about accessibility, web standards or browser specific redirection. There are plenty of blogs and articles out there to cover the usability side of mobile development. I’m purely talking about the current state of play with Google’s core ranking algorithm. Let me demonstrate: See table opposite for the results for the query ‘Online Casino’ using Google.co.uk on my Laptop using Firefox Vs my lovely Android device. OK, so I hit a different data centre and Gala Casino was in the place of Wikipedia. It happens! So what’s with the mobile SEO bandwagon? What has changed is the way users query Google, and more importantly, how we interact with the web using a mobile device. People have been asking me for years... “What’s the next big thing? What will displace Google?” to which I usually reply... “Google will dominate the
Search Era, but that era will come to a relatively abrupt end as we fundamentally change the way we use the web”. I believe this paradigm shift will be toward social discovery. User behaviour fused with recommendations through your social graph and mobile will be a big part of this.
History lessons and pornography I’ve always said that in order to predict the future accurately we must understand the past. So let’s take a trip back in time, back to the days
when the web was young. Many of the innovations in online visitor and user acquisition first appeared in the adult industry. The demand for sexual gratification is so wired into our DNA that the demand went on to fiercely drive the innovation required to feed the insatiable appetite for web traffic and profits. Innovations such as pop-up networks, traffic exchanges, and affiliate programs were largely driven from the adult sector. So what can we learn from this market? Let’s
# Rank
Google Android Browser
Firefox Browser
1
www.888.com
www.888.com
2
www.32red.com
www.32red.com
3
www.intercasino.com
www.intercasino.com
4
Casino.ladbrokes.com
Casino.ladbrokes.com
5
www.mpthrill.com
www.mpthrill.com
6
www.bet356.com
www.bet365.com
7
en.wikipedia.org/wiki/Online_casino
www.galacasino.com
8
www.onlinecasino.co.uk
www.onlinecasino.co.uk
9
www.galacasino.com
en.wikipedia.org/wiki/Online_casino
10
www.onlinecasino.org.uk
www.onlinecasino.org.uk
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mobile gaming 2010
Even your social graph or perhaps app review sites should be using Web Search, but the message I’m trying to get across is that times are definitely changing; we’re using the web differently with mobile and best practice in mobile is moving on so quickly that if I wrote about it here, it would be out of date by the time you read this. If you really want to keep ahead of the curve in mobile SEO, mimic the strategies of the sites ranking in Google’s top ten for “Mobile Porn”. History always repeats itself. Clearly, the greatest benefit of using apps in your mobile marketing and retention strategy is that, once installed, a mobile app which provides your users with the experience they are looking for will continue to engage with that application. The process of searching will only occur once the application no longer provides them with a satisfactory experience, or possibly when they hear of a better experience elsewhere. Keeping your customers away from Google is as valuable as acquiring them via Google.
And remember... Always seek professional advice before commencing your SEO campaign. Picking a keyword is picking a fight. Don’t pick a fight unless you’re sure you can win. n look at the relative search volume for “Mobile Porn” from Google Trends (see above graphs). Note the spike in July 2010. Back in the early days of the World Wide Web, the adult market was the first to mature sufficiently to drive best possible practice to for effective and efficient traffic driving and more importantly, active funded accounts. Notice the spike at exactly the same time, July 2010. This clearly mirrors the previous example and can only be associated with this year’s explosive Smartphone adoption, although currently, the Web Search traffic for “Mobile Casino” is negligible in comparison the “Mobile Porn”.
Here comes the paradigm shift What has begun to change is the way we use mobile. With over five billion apps downloaded from the app store and 170,000 apps available in the android marketplace, for most of the information we consume, there’s probably an app for that!
What the hell is SEO anyway? Search Engine Optimisation is not the process of optimising a search engine; we leave that endless task to the engineers that tirelessly work toward ensuring quality search results are delivered based on some degree of democracy, and right now,
Google’s democratic ballot box accepts text links. While the acronym SEO is here to stay, the fact of the matter is that SEOs are not in the business of optimising search engines; SEOs are in the business of optimising your digital assets. Traditionally, this has meant web pages and content in simple terms. This not only applies to video, images, news, products, local services and real-time streams, but also your mobile applications. A mobile application is just another tool in your online marketing toolbox, it is an asset and it needs to be optimised both for discovery and for viral or social distribution. Most users generally search for and discover applications either in the App Store, Android Marketplace – some even use App World or QR codes like the below:
Paul Reilly. If you have any specific questions email me directly at paul.reilly@stickyeyes.com or follow me on http://twitter.com/paulreilly, or stalk me on http://foursquare.com/user/paulreilly.
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Mobile GaMinG 2010
Mobile 2.0 and the App Generation Mobile apps: what is the story so far? When I was asked to write a piece for this mobile supplement, I realised I could be in for something of a voyage of discovery. It is a very interesting and somewhat compelling challenge to understand why the transition to mobile in the iGaming world (the eternal promise of the mobile channel) has not yet been fulfilled. Why has this been the case? Is it still relevant to assume that, yet again, this latest ‘advent’ of handheld opportunity will be missed anew? I dare say not. The iPhone, as many of the contributors in this supplement have already touched upon with authority, has changed the landscape considerably; there is the mobile space before and after the iPhone. A complete paradigm shift in the Kuhnian perspective is what Steve Jobs achieved with this device, and it is likely that the same will happen with its bigger sibling, the iPad. The reasons why the uptake of the mobile channel in iGaming has been slow are varied, and, surely, some of the challenges remain. The screen size and overall experience of the device, despite the affects of the iPhone, is still relevant as the majority of the world’s users do not have Smartphones, let alone an iPhone or an Android device. Emerging markets like South East Asia, Latin America, Africa and some parts of Europe and Russia, are still virgin to the Smartphone revolution and, therefore, the advantages and the apps revolution that I will come to later, do not come into play. Yet, the sheer number of potential players in these emerging markets cannot be ignored.
not have an ecosystem in place to work in tandem with it. As a distribution channel, the iStore is a developer’s dream. You can literally reach tens of millions of mobile users through one channel; one submission and essentially, one partner. (An article on how difficult it is to actually be accepted by Apple and the policies in place would surely make for an interesting read, but that is for another time.)
Android
In every challenge lies opportunity
Android entered the picture after the iPhone. As with many things that Apple does, Google follows by opening up the paradigm. By this I mean that, as far as they want us to believe, Android is for openness what Apple (and the iPhone) is for a walled garden. I am a big fan of what Android achieved, and by all intents and purposes, Android will be the main platform, store, and ecosystem in the mobile industry in the near future (as I seriously don’t see a real contender for the time being). Developing applications for the Android platform makes sense – keeping the iPhone in the picture makes even more. But the mobile story does not end here. There are other contenders in the space, such as Nokia; still the world’s number one Smartphone manufacturer with its OVI Store. Also, independent app stores are a very good distribution channel for application developers, including iGaming companies. The main one, and the second most relevant (per number of downloads) is Getjar. Indeed, the independent Lithuanian company serves three million application downloads per day!
The iPhone not only brought a new experience to mobile, it created a whole new market place. In fact, I dare say that the iStore is as revolutionary (read money making) as the iPhone itself. It would have been pretty useless to have a device so capable, so interesting, so engaging and so widening in perspective as to what the mobile stands for, and
Fragmentation reigns supreme in this space. It is the biggest issue developers face in the mobile ecosystem. HTML 5 promises to bridge that gap as the web app, thanks to this new technology, will have as many features and experiences as the
Where to put my app?
native app (bar the extra charges for using it) which makes developing for a multi-platform very easy. There are also platforms out there that simplify development native applications and make it more cost-effective. An example of this would be PhoneGap. PhoneGap has created a platform that simplifies the development of native apps using web app tools. It converts web apps into native apps, and it applies to iPhone and other platforms. This could serve as a good solution, albeit it with its limits, to having a multi-platform strategy in the mobile space. The time for mobile is here; it might just be in your pocket, waiting for an update!
Mobile 2.0 and the open space! The second part of this piece will be relating to the Mobile 2.0 phenomenon. It is, in great part, related to the mobile app revolution and opportunity mentioned in part one of this piece, but it widens the discussion a bit further to include all those services that are Web 2.0 in nature, and are transferable to the Mobile device. Tim O’ Reilly’s famous remark about what Web 2.0 is (“harnessing collective intelligence”) puts it in context quite nicely. However, to understand what is meant by Mobile 2.0 even further, I would like to put to you a quote from a ‘colleague’ (co-founder of Mobile Monday London), Daniel Applequist: “Mobile 2.0 is not ‘the future’. It is services that already exist all around us. These services are maturing at an amazing rate and what they are doing is effectively knitting together Web 2.0 with the mobile platform to create something new; a new class of services that leverage mobility, but are as easy to use and ubiquitous as the web is today. These services point the way forward for the mobile data industry.” The web, as we all know, has changed. It has become user-generated, and most of all, usercontrolled. Brands no longer have the final say on
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Mobile GaMinG 2010
what they mean and stand for; nor do they have control on what is said about them, when it is said, and in what tone. It is much more of a level playing field these days, with anonymous singers getting signed to big record labels after they manage to gather millions of viewers on YouTube; writers getting discovered from their blogs, and so on and so forth. The same, to a great extent, applies to Mobile 2.0. Thus, all this stands for openness, for new context creation, for new content creation and most of all, for a new interactive paradigm being sewn through the device itself. Video blogging on the move; calling with one click, using VOIP; creating location-aware services and other sorts of mash-ups not previously conceivable; and now, the biggest buzz in town – augmented reality applications and layers. Games in real cities are being created using this new technology. Imagine playing a mafia-style game in London with points and levels, running around in real physical buildings. The real and the virtual interwoven
to give a richer experience. The possibilities are endless, literally. How would this apply to the iGaming industry? It would be very interesting to see what sort of ‘layers’ could be created to make social games, skill games and also gambling games more real-life, and thus, I dare say, more engaging. There are many ways the gaming community could use augmented reality to make money and expand their brands further. A casino game, for example, being played in a real place, but with the features and experiences of the virtual, online one? Or a social game, played with virtual currencies, incorporating elements of bingo, or poker into it? We are in for a rollercoaster ride in the mobile space. The most successful device ever created will keep on surprising. The ecosystems around it and the innovation that it sustains is immense, and the more time passes, the more intricate and essential to the person they will become. We are into the personal domain – the device is an extension of us, unlike the PC, or laptop, or TV, or any other
medium. We own the mobile, and the mobile, to some extent, owns us. The information it retains, the information it can give us, and the experiences we can go through thanks to it are pretty much endless. Mobile, despite all the false promises in the gaming industry so far, will prove to be arguably the biggest and most lucrative opportunity we have ever seen. However, it is not tomorrow, but today where the game is being played. n
Rene’ Colin Magri is the Chairman of Mobile Monday Malta; an advisor to start-ups in the mobile space; an expert in mobile affiliate marketing, and current Chief of Operations with an innovative branding/PR and media agency, MarketHandle, where technology is used for the benefit of its clients to help them expand their brand both in value and reach, globally. rene.magri@markethandle.com.
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Mobile GaMinG 2010
Mobile Gaming Affiliate Marketing James Hilton, Joint CEO at M&C Saatchi Mobile, explores the affiliate marketing sector on the mobile channel. Back in the day when online casinos were launching on the Internet, affiliate marketing was introduced into the marketing mix and within no time at all, affiliates became a very strong source of new users and, in turn, made a great deal of revenue which they are still seeing pay dividends today. Mobile casinos have been around for several years and with affiliate marketing being well established, mobile casinos were expecting the same level of support/sales‌ but what has gone wrong? Naturally, there is no simple answer but there are various factors which, all combined, make clear the road ahead.
Mobile media A large issue is the distinct lack of available mobile media for driving acquisitions. Most inventories are presently being monetised by direct CPM sales or through remnant media networks. One of the largest remnant networks is ADMOB which was purchased by Google for $750 million. ADMOB offers publishers an immediate way to monetise all their traffic and with this being the case, it is hard to persuade publishers to entertain revenue share/ affiliate agreements for mobile casinos. A traditional affiliate marketing strategy is to buy search (PPC) traffic. When typing in a search on a PC, users are greeted with dozens of relevant results. Mobile is very different; the users are not typing in long term strings and the majority of searches are conducted on relatively few (short-tail) search phrases. Additionally, mobile devices have smaller screens than typical PCs and there is only room for limited paid-for results which, in turn, has driven up the cost of the top listings dramatically. High PPC rates make this form of traffic generation inhibitive for affiliates.
Smartphones Before Smartphones, the majority of users entered the mobile Internet through operator portals. This is changing. The iPhone was sold exclusively through O2; when users decided to surf they were pointed directly to the web and not O2 Active. This has made the task of finding scalable opportunities harder and affiliates have to spend a great deal of time discovering new partners which may not be profitable compared to working their traditional Internet gaming activities. As the market is maturing the goalposts are continually moving. Smartphone adoption has generated an entirely new audience who are using their mobile devices in a variety of different ways. With Android and the iPhone, audiences are growing, and so, therefore, are the opportunities. Apple has finally allowed sports book apps (Betfair, Ladbrokes, etc) while Android accepts virtually all apps. For the first time in many years, Smartphone media supply is starting to outstrip demand, and if this continues, there may be a clear opportunity for affiliates.
Challenges One large barrier for affiliates is that because mobile gamers generally spend less, the resulting payouts are proportionately lower. In addition, the small screen is generally for on-the-move gaming and people without fixed line access. Whilst the experience is very enjoyable, it does not compare to playing in front of a PC monitor. This being the case, affiliates entering this space can be disappointed if they are used to online affiliate commissions. One final issue is the lack of mobile tracking. Presently, there is no comprehensive universally accepted cookie tracking solution on the market.
This issue makes it impossible to track post-click and view-based conversions. The majority of online acquisitions rely on cookies so this is a barrier which needs to be overcome. To compound all of the above, UK consumers are continually changing their handsets, which means the majority have to be re-marketed to, to re-download, which again can increase churn. One area where mobile affiliates can gain traction is using their Internet skills to migrate users from the fixed line Internet to the mobile Internet – many companies are trying this and, perhaps, it requires the specialist skills of affiliates to lead the way. Clearly, there is a large opportunity for affiliates but we must remember that the mobile and online markets are very separate entities. The platform and the audience are different and marketing activities have to reflect this. Over time, affiliates will pay a vital part of the marketing mix for mobile gaming but this will take a great deal of effort from affiliates and merchants. n
James Hilton is joint CEO at M&C Saatchi Mobile. M&C Saatchi Mobile is a full service mobile marketing agency which develops mobile strategy, mobile technology solutions and plans and buys mobile media globally. It presently represent a vast array of mobile gaming companies and knows exactly what is required to acquire mobile gaming users. This experience has taken many years to develop and I am not sure affiliates would have neither the budgets, nor time to invest in this embryonic discipline. As the market stabilises and Smartphone adoption increases, there will be a variety of opportunities for affiliates providing they embrace the mobile channel and invest their time and money into this medium.
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Mobile Payments in Gaming One of the more challenging areas of the mobile environment for gaming companies has been payments. Here, Jacques LeDisco talks us through today’s mobile billing revenue models. The key challenges for billing in mobile gaming include: Generating revenue from mobile players in a world where 65 percent of adults lack credit cards or bank accounts. Providing transaction security and anonymity over a mobile network. Designing a user interface and functionality adapted to the characteristics of mobile devices. Supporting transactions for deposits, subscriptions, or premium download revenue models. Compliance with Age Verification and problem gambling regulations, UIGEA, EU directives and UK laws.
Mobile billing revenue models SMS While the majority of the world either does not use credit cards, or have a bank account (even in the USA, one in 12 adults do not have a bank account), there are over two billion mobiles with SMS service. Currently, premium SMS is used to bill mobile subscribers for services such as chat, dating, downloads of wallpapers, apps and ringtones; and for micro-billing. Micro-billing allows users to pay for third-party SMS, WAP and WEB content by sending an SMS to a short code and in return, receives either the content directly (for immediate SMS content) or a pass code to log into the WAP or WEB-site where the desired content resides. SMS micro-billing has a number of advantages over credit card and premium-rate voice billing: it can handle small payments amounts; almost anonymous payment processing (only the mobile phone number is known to the content provider); and is widely available to mobile subscribers worldwide. Pre-paid phones comprise a significant portion of subscribers. These accounts are often configured to decline adult and gambling transactions, so the available customer base is seriously reduced. The main obstacle to widespread use of SMS payments in gaming is the payout ratio. Current payout thresholds do not produce an acceptable ROI in an online gaming business model.
Premium app revenue While the global economy recovers from the Great
Recession, the mobile app market is booming. Google chairman and CEO, Eric Schmidt, stated that Google is positioning its Android mobile operating system to drive revenues exceeding $10 billion a year, with revenue generated by advertising and digital content downloads. GetJar (www.getjar.com), the world’s second largest mobile app store, continues to surpass Nokia’s Ovi store, reaching three million downloads per day. GetJar is second only to Apple’s iStore, with more than one billion downloads to date, and is available across all mobile platforms including Android, Blackberry, Java, iPhone, Symbian and
to mobile handsets but to charge for content, as well. Worldwide premium SMS short codes are available for 45 countries. The content owner determines over the prices, the content and the branding.
Windows Mobile. Premium apps offer mobile gaming operators access to the entire world. Besides generating revenues in regulated gaming markets, premium play-for-fun apps can generate revenue in unregulated markets, including the USA, where iPhone downloads is already a billion dollar market. Currently, Apple has only accepted a Betfair betting app, for distribution in the UK/Ireland market. In addition to becoming the first major betting company to release a sportsbetting app for the iPhone, iPod Touch and iPad, Betfair introduced GPS verification of the user’s location to confirm the gaming jurisdiction. The app includes in-game odds and bets. Betfair processes more than six million transactions a day from its three million registered mobile customers. Charles Palmer, Head of Mobile at Betfair commented: “Our registered mobile users increased 40 percent in 2009 and continued investment in the mobile channel has contributed to a 50 percent increase in year-on-year mobile revenues.”
Finally, voucher cards such as Ukash, can also be used for mobile payments. No credit is required, and payment is anonymous. Voucher cards can pay for calls, gaming deposits or mobile downloads. Ukash transactions are processed by entering a secure, ready-to-spend PIN code, which can be spent directly at one of the thousands of websites accepting the voucher card.
Private label app stores mPUSH, from txtNation, is a private label mobile content storefront that allows unrestricted distribution of mobile content including gaming apps for the iPhone, iPad, Google Android, HTC and Blackberry mobile devices. This white label solution allows app developers to distribute mobile content directly to consumers. mPUSH has an integrated mobile billing module, allowing gaming operators not only to send content
Payforit Payforit is a new payment service, supported by all licensed UK mobile operators, designed to make it easy to pay for low cost, one-off or subscription services on mobile devices.
Voucher cards
Third-party mobile billing platforms Age verification, legal gaming jurisdiction verification and EU regulations are integrated into global mobile billing platforms, mENABLE (by txtNation) and Bango. These platforms also accept payment via SMS, WAP, phone, credit card or bank debit. These plug and play solutions feature the most advanced security, usability, and functionality, with localization options for language, billing method, currency, regulatory compliance, and customer service.
Conclusion The mobile billing alternatives currently available to the gaming industry are adequate to meet the requirements of usability and functionality, regulatory compliance, global coverage and security on mobiles at an attractive ROI. n
Jacques LeDisco is a regular contributor to iGamingbusiness, on mobile technology. He has published market research reports on gambling, and currently, manages mobile marketing campaigns for gambling clients on PPC sites and through bulk SMS. He can be reached at j.ledisco@txtnation.com.
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Social Gaming
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The Online Potential of Lottery Based Products Ólafur Andri Ragnarsson, Chief Software Architect at Betware, examines the opportunities and challenges awaiting lotteries considering their online migration. The product portfolio of the modern iGaming industry represents more about entertainment than it ever has. Consumers are now presented with a more rounded, diverse and immersive experience that allows them to marry their leisure and gaming pursuits with their social and entertainment needs. Indeed, the latter aspect, that of community, has been a catalyst in honing gaming platforms to the demands of a much wider demographic meaning that we are now seeing a more miscellaneous catchment of people playing at gaming sites. This has, arguably, been best illustrated by bingo and lottery offerings, whose side-games and well tailored peripheral stimuli have ushered in a new breed of casual iGaming consumer. These players, increasingly confident and comfortable in an online environment where it concerns their privacy and the safety of their finances, represent an opportunity for lotteries to become a digital force.
Why migrate? Traditional offline lotteries are facing an increasingly stern competitive environment in the private markets, making their plights to maintain, never mind increase, their market shares ever more difficult. Governments are also putting a significant amount of pressure on operators for more revenue, which then impacts on the lottery’s own burden of driving up increased business to meet expectations. This is made all the more difficult by their lack of clarity with regards to player data. In attempting to expand business to make it more profitable, operators need to fully understand their players, their behaviour, their likes and dislikes, how much they spend and what they spend it on. This information is not readily available to offline enterprises – consumer trends aren’t as traceable. It is one of the most compelling aspects of the online environment that such vital information is readily available through innovative tools and solutions supplied by companies like ourselves. The ability to better understand your players (KYC) will provide a platform to build a better and more compelling sales offering to them, which can have a dramatic impact on your conversion and retention rates. You need to be where your consumers are and
today, they’re online. Another aspect to remember is that the terrestrial lottery audience is ageing meaning that for purposes of longevity, operators need to be appealing to the so-called, Net-Gen audience – which already accounts for a large percentage of today’s online consumers.
New landscape When making the move to the online environment, one of the first things to remember is that a simple transfer of offline practices and methodologies will not be sufficient in making a viable and successful business model. The premise of the lottery product, naturally, remains the same, but bearing in mind how technical capabilities and, therefore, consumer expectations have progressed, it is important to reflect that change in any Internet-based offering. As mentioned earlier, the peripheral stimuli are important aspects in engaging lottery customers, particularly in terms of retention. Your core lottery offering will always be your main calling card, but it’s the quality and diversity of the experience you offer that will keep players loyal and satisfied. We are at a technological advantage these days, to offer more exciting and visually rich games and also to move into other areas of gaming such as bingo, casino and live-betting sportsbook models. These multi-player and betting options give operators the scope to build a sensitively organised portfolio of compelling content that will aid in the creation of a sustainable lottery and all-round iGaming product. There is also the social media component in inspiring community amongst your players. The lottery demographic, as in bingo, thrives on community spirit and is active within the social networks that bring together today’s online traffic. The communities already exist – the opportunity for operators is to provide players with the tools to communicate with each other. The Internet is a platform but it is also a business tool – taking advantage of the opportunities that already exist is a must for any gaming enterprise moving online from their terrestrial origins.
Future scope
the game to the next level, to be a more immersive and interactive proposition for the consumer. This also helps with the promotion of your product, and gives your affiliate partners more tools to enhance their own efforts in spreading the reach of your brand. Affiliates represent an important asset to any online business, particularly in the iGaming sector. It is a component of your business model that is highly effective in driving new traffic to your sites and employing good relationships with your affiliates will engender a healthy flow of new and converting players to help grow your business. Indeed, it could be said that the retailer of the future is anybody that can promote and sell tickets, be that through internal marketing, affiliate marketing, and through partnerships with other Internet media, such as online newspapers and the websites of sports teams. The opportunities are there now, and the clear thinking lottery operators will understand that their futures aren’t restricted to traditional models. Now is the time to prepare for change, to prepare for the shift from terminal-based methodology to a new, online mentality that will cement the next phase of growth for the lottery sector. It’s an investment in the future, but it shouldn’t be overlooked that in doing this, operators must invest in the right partners to help smooth the challenging transition from terrestrial business to online operation. The right partner will be looking ahead to take your business to the next level and to help increase levels of player acquisition and retention. Lotteries need to be where their players are, and in today’s multi-faceted gaming industry, they are online. n
Olafur Andri Ragnarsson, Chief Software Architect, was one of the founders of Betware along with Stefán Hrafnkelsson in 1996. Olafur Andri serves as a faculty member at the University of Reykjavik, teaching a course on technology trends. He has a BSc. and a MSc. degree in Computer Science from the University of Oregon, USA. E-mail: andri@betware.com – Phone: +354 580-4740
The Internet affords lotteries the chance to take
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Canadian Lotteries Steal a March on their US Cousins Understandably, in recent months, the eyes of the online gambling world have been focused on events taking place in the US; either looking to Barney Frank’s attempts to get legislation through the US House of Representatives and ultimately into law, or watching events taking place in California, Florida and New Jersey as state lawmakers look to the possibility of getting regulation successfully through the starting gate. But this focus on events in the US runs the risk of ignoring equally important moves that have taken place north of the border. Indeed, it is fair to say an online gaming revolution has taken place in Canada in recent months after lottery operators in three Canadian provinces moved to launch online gaming operations.
British Columbia The first signals of change came in 2009 when the British Columbia Lottery Corporation (BCLC) announced it would be seeking to offer casino-style online games such as blackjack, roulette and poker on its PlayNow.com website. When the news emerged, BCLC admitted the obvious – that a move online was designed to “respond to evolving player and online gaming market demand and offer British Columbians legal gaming options where revenue generated stays in British Columbia to benefit all residents”. This shouldn’t be considered such a leap – Canada’s lotteries have long been allowed to offer Internet-based gaming to their own residents on an intra-provincial basis. BCLC was already offering online bingo and poker-themed lottery games on its website. A further aspect of the Canadian developments had also been prefigured by the recent experience of the lotteries, which had previously combined to offer the inter-province games, Lotto 6/49 and Lotto Max, to great effect; the cross-Canada offering had proved very popular, providing greater liquidity with larger prize pools which itself led to greater participation.
Hence, the broadening out of the product line would be matched with another bold step forward as BCLC would also be moving to combine its online operations with two more Canadian lotteries, Loto-Quebec and the Atlantic Lottery Corporation (which runs the lottery for Nova Scotia, New Brunswick and Newfoundland).
Controversies The Canadian lotteries were keen on building both the liquidity and the critical mass needed to make the product attractive to the customer while also
Loto-Quebec, Canadians would be spending over C$1 billion on unregulated online gambling sites by 2012. This is still below Loto-Quebec’s own lottery sales, which hit C$1.85 billion in the fiscal year to 2009. But that figure was down C$51 million on the previous year, and Loto-Quebec acknowledged this past June that over 80 percent of the population was now playing the lottery online. In other words, consumer trends and technology developments were telling the lottery operators that it was time to make a move.
“What is particularly interesting about Canada is the degree to which it will inform the debate in the US.” providing the safe playing environment inherent in trading under the state lottery banner. But the moves didn’t come without their own controversies and sensitivities. Just ahead of announcing that it would be moving to expand its online offering, BCLC faced public criticism when it announced that it would be abandoning its mandatory weekly deposit limit of C$120, instead allowing players to set their own limits of anywhere between C$1 and C$10,000. The company said the move reflected player demand and represented best practices within the industry, but this didn’t stop the negative headlines, proving once again the tightrope that the online gaming industry will always be walking in terms of public perception. But the three Canadian lotteries that have, todate, opted to expand online have all recognised that the online opportunity was worth too much for the lotteries – and by association the provincial governments – to ignore. According to one of the new online participants,
But what is particularly interesting about Canada is the degree to which it will inform the debate in the US. The provincial governments faced the same question as the various state and federal authorities in the US, and came to the conclusion that a system which opened up legal online gaming to the population, but restricted the number of operators was the way forward. It is hard to believe that something similar won’t take place within a very short space of time in the US. n
David Loveday – Chief Executive Officer. David Loveday has been Chief Executive at OpenBet Ltd since 2002 making him one of the longest-serving CEOs in the betting industry. His previous career encompassed senior sales roles in the investment banking market working for Sun and then Sybase. David is a graduate from the University of East Anglia.
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Side Games: iGaming’s Ticket to Lottery Markets
For lottery operators venturing online, instant-win side games are often the first step toward integrating other iGaming products, especially in jurisdictions where regulations limit product offerings.
Many iGaming heads have turned to the staterun lottery world which some think promises more opportunity for growth and expansion than the competitive, saturated commercial iGaming sector. As European and, potentially, North American markets regulate and open one jurisdiction at a time, many of these markets are destined to be dominated by state-run regional monopolies. While these monopolies may bring iGaming products to new markets, suppliers serving the commercial iGaming sector could be edged out by the large corporations that already service the multi-billion dollar global lottery industry. One thing is apparent as the first iGaming software developers begin providing products to state-run monopolies in Europe and North America: what the iGaming industry labels ‘side games’ may be its ticket to enter the lottery market.
Current examples Austrian Lotteries, for example, is adding new side games to its online casino channel, win2day.at. The lottery has been running a poker network for two years and will now offer three easy-to-play instant win games on its site. In addition, Swiss Loterie Romande has launched Loro.ch, a new online gaming site for residents of Switzerland’s francophone cantons. The new back end to the site means that the lottery can now add other online gaming products such as sportsbetting, bingo and instant-win games to its core online offering. To satisfy regulatory requirements, most lotteries can only offer Internet games with pre-determined outcomes, not casino games that rely on random number generators. Yet, this may not be a huge disadvantage considering the kinds of games that sell best to lottery players. GTEch G2’s head of Lottery Solutions, Alan Mackey, has helped numerous government lottery operators develop their online offerings. his close working relationship with major lottery operators over the last fifteen years has given him an informed insight into what kinds of products work in the lottery environment.
“There are many factors determining the success of a game, of course, but one thing I would say is if you have a very high selling scratch card on the street the online equivalent usually does quite well,” Mackey explained. “They’re usually the best sellers because the brand name, often heavily advertised and promoted in the market, attracts players. “A basic scratch card game is something like a match three of nine boxes that you scratch. In the animated world of the Internet, however, they
that before or after they purchase their lottery ticket. “Familiarity is very important. The next category of games that sells very well is Branded Games. Who Wants to Be a Millionaire, Battleships, Monopoly, brands that people know well – these games work very well in the commercial world and are working just as well for lotteries.” One of the difficulties with lotteries is that a lot of them don’t have the legislation in place to offer fixed odds side games. Although Flash animations
“Bingo developers have found that you can’t just embed any old casino game within a bingo client and expect bingo players to flock to it.” take on a whole new dynamic. You might have an animated coin that scratches the card as you click on the boxes, or some other animated manner is used to reveal the symbols or numbers based on the theme of the game. But it’s still a match three of nine or a familiar mechanic like that. These are the types of games that sell well both in the shops and online.”
Familiarity Bingo developers have found that you can’t just embed any old casino game within a bingo client and expect bingo players to flock to it. The game has to be designed to appeal to the unique tastes and preferences of bingo players which, amongst other things, means simple design and bright colours. certain types of products work much better than others on lottery sites as well, but it may have more to do with brand awareness and value than game design. “People coming to lottery websites are generally lottery players. Seeing something that’s familiar to them, something that they play in the shops, is quite attractive to them. They’ll load their wallet to play lotto, but then they’ll see other games with familiar names and will spend that extra €4 or €5 playing
and entertaining images and soundtracks make them fun, in most interactive games on lottery sites, players don’t actually affect the outcome. The online game is more like an elaborate, entertaining way to scratch in search of a winning number. “For camelot in the UK, we came up with a method where you can still have a hiLo game but the Flash movie piece is really more for entertainment than game play. When the player purchases the ticket the prize is selected at that time and given to the game. This maintains the pre-determined outcome nature of lottery games. We did this because obviously scratch cards could be boring online and we wanted to make them more entertaining and dynamic. This method allows all sorts of games while still adhering to legislation,” Mackey concluded. Regulators may be opening new markets for iGaming products but since it’s often only state-run lottery operators who are allowed to deliver them, commercial iGaming operators may still have to fight for their piece of the pie. In the meantime, the restrictions that state-run lotteries operate under mean that the iGaming products they offer initially may be more like those sold at the corner store lottery ticket vendor than the Las Vegas strip. n
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Business areas Our business areas are Content, Safety and Customer. Clarifying these areas can also be done graphically. We have chosen two approaches, one as an extension of the logo and the other as specific symbols. These can be combined or used separately.
Business areas
To clearly demonstrate that we are serious, we attach trademark labelling Our business areas are Content, Safety andtoCustomer. Clarifying these areas (TM) our symbols. can also be done graphically. We have chosen two approaches, one as an extension of the logo and the otherColours, as specific symbols. These can be design and typography may not be altered. See examples of combined or used separately. usage in the Besedo product sheet.
Business areas
To clearly demonstrate that we are serious, we attach trademark labelling Our business areas are Content, Safety and Customer. Clarifying (TM) to our symbols. can also be done graphically. We have chosen two approache extension of the logo and the other as specific symbols. Thes Colours, design and typography may not be altered. See examples of combined or used separately. usage in the Besedo product sheet.
To clearly demonstrate that we are serious, we attach tradem (TM) to our symbols.
Colours, design and typography may not be altered. See exam
Besedo is an experienced business process outsourcing company specialized in the Internet and media market, efficiently providing usage in the Besedo product sheet. solutions based on typical needs for leading companies within these industries. Besedo was founded in Sweden 2002 and has since then grown into a global organization with offices in Sweden, Malta and Malaysia providing services for online companies in more than 14 different languages.
True experts in online business Content
Web sites need dynamic attention and professional moderation to stay interesting and top of mind. We deliver all this to make your business bloom.
Sweden +46 8 522 371 00
Safety
Dynamic online marketplaces are full of opportunities, but certain risks are inevitable and must be dealt with. We have the experience to help you protect your business and keep your customers safe from fraud.
Malaysia +603 2035 5995 besedosales@besedo.com
Customer
Providing outstanding service is as much about understanding your customers needs as it is to show them you are ready to solve their problems. We have customer insight that will make your business more profitable.
Malta +356 2778 0250 www.besedo.com
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lottery supplement 2010
Differentiating Yourself with a Strong Soft-Gaming Offering
National lotteries have been enjoying the throne of the monopoly in their local markets by having total control over their audience, their product offering, pricing, advertising, and a lot of other resources that are essential to perform in the lottery market. However, in moving to the Internet, they face barriers to entry that they are not familiar with from the offline world. Competition is, no doubt, the main challenge, followed by technology and marketing as well as taxation structures which all differ substantially in the online landscape. Experienced online gaming operators are entering local incensing regimes in some countries whilst in others, they operate offshore but still present a competitive challenge. At this ‘crossroads’, it is frequently asked, ‘what might be the right strategy lotteries need to take to compete with the experienced large scale Internet gaming veterans? What are the product strategies to adopt? What marketing focus they should implement?’
The online approach Taking a closer look at the existing product offering of lotteries that have started to operate online, we can see that there are, essentially, two different approaches. The first is to get equipped with the traditional hard-core gaming offering consisting of sportsbetting, poker and casino (if applicable and allowed by the regulator). With limited launches in regulated markets so far, this approach has only brought success to a few cases. Where lotteries entered into a product offering they didn’t have in the offline business, and were, therefore, not recognized by the local market to be a leader in this field, they did not succeed. Poker is the most common case which illustrates the failing efforts. The second approach is understanding that the lotteries’ core value lies in the soft-gaming market and that they should create an offering that leverages on their unique selling point and knowhow. Despite the fact that classic lottery tickets make up most of their offline revenues, they do not have the same expected appeal on the
Internet. A comprehensive and winning online offering should include scratch cards, instant win games, bingo, and slots where applicable, which not only have proven online appeal but leverage completely on their brand credibility. The soft-gaming vertical mentioned here is not only a product offering strategy but a complete marketing approach that is characterized by design language elements, retention marketing communication as well as other important aspects concerning responsible gaming.
Migration To start this journey, scratch cards and instant win games are lottery properties that can be used as a spearhead. Lotteries have built a strong brand identity for these products and gained widespread popularity amongst the offline audience in their markets. Hence, these products and their branding can act as the ‘differentiation factor’ in the highly competitive online gaming market. In order to establish trust and familiarity, the national lotteries can migrate their most successful offline scratch cards to the Internet. But in order to reach the same success, it is not enough to merely create a copy of the revenue generating offline cards. Instead, those cards should be upgraded into an online game by adding interactive features, to provide a critical mass of at least a few dozen games and to constantly refresh them. It is not an easy practice to successfully develop and migrate scratch games from the offline world to the interactive online environment. Yet, through the pioneering vision of companies like our own, today’s online lotteries can expect a wide portfolio of familiar, fun and instantly gratifying online Flash games which are accessible for everyone. The user interface is simple and the graphic approach soft, and games are developed with the intention to create a friendly, non-intimidating playing environment – the ideal setting for the mass-market audience which is equally split in gender. Both male and female players above the age of 35
form the soft-gaming audience. To target such a wide range of players requires a large and diverse games portfolio that consists of online games with interactive features to enable high player engagement and long-term entertainment. Lotteries should aim to offer completely new, interactive and fun online games that are imaginative and creative to provide the player with a total entertainment package that will keep them coming back time and again. To ensure further online success, national lotteries will need to strengthen their unique proposition with a soft-gaming offering in order to lead the regulated online market and compete head-to-head with the traditional online gambling operators in the intense Internet environment. n Mr. Moti Malul is the VP of Sales and Business Development at NeoGames. He formed the B2B Sales Division which was established during 2008 and under his leadership NeoGames signed and launched more than 15 fully managed online scratch cards operations, and Software Integration solutions for customers in nine different countries, among which are leading media brands and top gaming operators. Prior to his position at NeoGames, Moti held senior positions in the Mobile Telecom industry for over 12 years, in companies like Ericsson, Mobixell and Sabio focusing on Product, Sales and Business Development. NeoGames is the pioneer and global leader of the online scratch cards market. Since its establishment in 2005, NeoGames has been providing an advanced solution combining a robust and secure platform, interactive games, and a set of complementary operational services. Gaming operators, national lotteries, affiliates, and media companies benefit from flexible multi-channel platform solutions that include fully managed operations and customized integrations of NeoGames’ soft-gaming offering, a comprehensive approach of scratch cards, instant win games and slots. For further information, please contact sales@neogames.com or visit www.neogames.com.
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RECRUITMENT SUPPLEMENT 2010
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Round Table
recruitment supplement – round table discussion
What measures do companies who are seeking expansion need to bear in mind in terms of tailored recruitment, particularly in building a workforce for a new geographic or product market?
Wayne Tritton, Senior Consultant, Euro London Appointments Businesses looking to grow, particularly in the aftermath of the recession, need to have a clear, well thought out strategy in place. According to recent research, the biggest inhibitor to growth is a lack of the right skill sets – in other words, not having the right people. Research is essential, so ask yourself what areas you need or want to grow, and what people and skills you will need in order to facilitate this growth. Once you have established the types of roles that will be needed, make sure you have a good idea of the salary levels you’re going to need to offer by
to post on generic job boards, it can often be a false economy. Sifting through applications and CVs, many of which may well be irrelevant takes time – a resource which may be best used on aspects of your growth. A recruiter, as well as helping develop the job specification and salary offering can also do all of the initial legwork and present you with a shortlist of suitable candidates for you to interview. If expanding into another geographic location or into a new product area, be even more cautious. It’s crucial to seek advice, either from a partner company who is already active in your potential new location or market, or from a recruitment consultancy who knows the territory, the market
“When a company seeks to expand its operations, the corporate direction it decides to take will prove crucial in defining its recruitment strategy.” benchmarking them against similar roles within the gaming market. All too often, organisations will spend time developing a job specification only to find out further down the line that the candidate or skill just doesn’t exist for the salary on offer. Initial research beforehand will save both time and resources and one option is to use the services of a recruitment consultancy. They will not only be able to map the market in terms of the skill sets available but can also provide sample job specification and CVs to illustrate the type of candidates out there, and the typical salaries on offer. If you do decide to use a recruitment consultancy, choose the correct one by ensuring that they have a specialist division with the gaming sector. This is key when trying to fill specific roles within a niche area, and whilst it may appear cheaper to advertise on your company website or
and the potential pitfalls. If you’re looking at overseas expansion, for example, then there may be differences in the cost of living and so, by definition, differentials in salaries in the area or alternatively, there may be different notice periods required. Speaking to someone who knows this area will alleviate the possible problems you may have if unprepared. Another consideration is the real possibility that you may have to look at attracting ‘heavyweights’ with extensive experience and knowledge of your sector. This is where a recruitment consultancy can really help – they are continually mapping the market and so will be able to pinpoint the people with the skill sets required. Be aware that packages will have to be competitive if you want to attract the very best. And the best is exactly what you’ll need if you are serious about facilitating real growth for the future.
John Doyle, Group Marketing Manager, Pentasia When a company seeks to expand its operations, the corporate direction it decides to take will prove crucial in defining its recruitment strategy and the relationship it forms with its preferred recruitment suppliers. If the company decides to follow a strategy of market penetration, that is increasing revenue from selling more of its existing products in existing markets, it will normally have come to this decision because it knows its commercial environment extremely well and has identified major growth opportunities. Depending on the size of the market in question, the company’s management will not only know its main competitors and market influencers but will also have a good idea of the types of individuals they would be interested in hiring to manage the push for expansion. In this instance, a recruiter will be required primarily to locate and source those individuals suitable to fulfil the client’s requirements quickly and efficiently. While it may be required to impart information on conditions within the recruitment market, it is less likely to be called upon to give advice and expertise on the commercial environment itself. However, when a company looks to expand operations through penetrating new markets or releasing new products, the role of the recruiter can take a very different nature. Obviously, it is very unlikely that a company will elect to expand in a particular direction without first undergoing an extensive period of research. However, when choosing a recruitment partner, one of its primary considerations will be to secure the services of one that possesses extensive, relevant experience and can demonstrate a track record of success. In this instance, it is entirely likely that the recruitment supplier will possess a level of
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knowledge and experience in the market that is greater than that of the client. This creates more scope for the recruiter to be employed in a role that is far more consultative in nature than one that of mere service provision. A client will want a recruitment partner who is able to impart advice and analysis on the market and its prevalent conditions. It should also possess the expertise needed to enable it to offer guidance on those resources the client should secure in order to develop a corporate structure that can manage the expansion successfully. The structure of the relationship between the client and the recruiter will be close and the recruiter has the opportunity to have a major impact on the shape of the client’s expansion strategy. This makes the choice of recruiter a far more important one. Over the past eight to ten years, the prevalent trend within iGaming has predominantly been one of expansion both in terms of market penetration and market and product development. On a personal level, we have been called upon to assist with clients’ expansion plans repeatedly over the years and have formed close relationships with our clients as a result. As markets have been opened and products developed, clients have called upon us to impart expertise in various areas and our position as a provider of impartial and consultative advice has allowed us to grow with our clients by reacting to market conditions as required.
Steve Wyatt, Managing Director, Inside-Egaming.com The US. Will it? Won’t it? If so, when will it? Who knows? One thing is sure, if you an operator of size you will be keeping a very close eye on this and will already have plans for entry, or re-entry when the bell rings. If operators have designs on new territories or products then, of course,
recruiting the appropriate expertise, if they don’t already have it, is crucial. The smart operator will have historically recruited staff with many strings to their bow. This philosophy has never been more appropriate with the legal landscape changing at an ever increasing pace. No sooner have France and Italy settled down, then Denmark and Greece now look like being the latest to regulate and, by so doing, change the potential markets in terms of who decides enter these territories and who doesn’t. If you are currently eyeing up a new territory or considering applying for a licence in one, it would certainly help to hire tailored staff with relevant marketing and media experience, in order to maximise your ROI. You may already have your team in place with a strategy, but hiring someone with existing media contacts in your target territory certainly helps to get you off to a running start. Performing successful tailored recruitment should always start with a keen awareness of what you are trying to achieve and where the deficiencies in your current staff lie. You may decide that hiring an additional person on a permanent basis is not the way to go. You may be able to achieve the results you desire from either an interim, or outsourcing it all together. My experience of advising clients is that these latter solutions are often the more cost effective, and harbour lower risk. When you do need to hire a new permanent member of staff, however, there are certain measures you should take to ensure success. The first is to utilise your own network of industry contacts, and with social media being used ever more for business, this process is getting easier. My advice, however, would be to use this method in conjunction with a reputable agent as if it does not work, you will have to start the process again. Before you embark on recruiting someone you should have a crystal clear wish-list of candidate criteria, as it becomes very easy to
Round Table
start to compromise on what’s important. Ideally, you should use an agent that has been around for sometime, understands the industry and has had sufficient time to build up a good database of contacts. n
Wayne Tritton is a Senior Consultant with Euro London Appointments heading up the Betting and iGaming Division. He has 14 years Sales and Marketing experience.
John Doyle is Group Marketing Manager at Pentasia having joined the company as a consultant in 2004 after a five year career in marketing. After three years overseeing the recruitment of key personnel into a range of key iGaming clients, John moved into the newly created position of Group Marketing Manager for Pentasia in November 2007.
Steve Wyatt is an HR and recruitment professional with 14 years experience spanning five industries including iGaming. Steve is Managing Director of InsideEgaming.com which provides career management, recruitment services, and B2B opportunities for operators and supply companies to the industry and beyond. Visit www.Inside-Egaming.com for more information.
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recruitment supplement
Interim Resourcing
Over the last 12 months, there has been a sharp rise in demand for interim consultants and project based consultancy assignments from the betting and gaming sector. Interim management has been a mature recruitment market for many years and the maturing of the online betting and gaming sector appears now to be recognising the benefits of using this rich pool of industry expertise. Demand
Turnaround
Assurance
The 2008 to 2009 recession did not appear to have affected the gambling sector as much as some other industries. However, many companies have still used the more challenging market conditions to take a close and introspective review of internal process and efficiency. Most companies do not focus on these less exciting aspects of their business during periods of high-growth. A period of low/no growth, or even regression, has forced some companies to focus on the detail of their internal operations and reassess company direction. The subsequent demand for interim consultants to turn around businesses in distress or resurrect projects which have fallen into disarray has increased sharply as a result. Combined with numerous changes to senior management teams and some high profile M&A activity, demand for flexible resourcing and project based consultancy has reached an all-time high.
An interim consultant is often used in business turnaround situations as it is far easier to make the sweeping changes required without being burdened by historic procedures and politically sensitive environments. An interim consultant has a different mindset and can cut through politically charged staff environments. A consultant is unlikely to have multiple internal relationships which may hinder the drastic and often unpopular staff changes required for the long-term business benefit.
The writing of a CV needs to show not only career history and skill sets but also detail on services offered and specific achievements during previous contract assignments. The cost of engagement (day rate multiplied by duration) needs to be compared to the business benefit of the services being offered (i.e. additional revenue streams or cost saving). Prospective end-clients need a high degree of assurance that you can go into a company, quickly understand the remit and then deliver measurable differences. The ability to demonstrate effective operational skills combined with financial and broader business understanding is also paramount. Clients do not want someone with a purely operational skill set. They need someone who also fully understands the farther reaching consequences of their actions to the profit and loss sheet. There are many very effective and experienced interim consultants presently operating in the betting and gaming sector. Many have first class education, top-tier consulting firm backgrounds, and decades of highly relevant industry experience. When operating as interim consultants they are not always ultimately responsible for the deliverables of a project as with the big consulting and outsourcing firms and do not provide the same degree of assurance. However, when their day rates are approximately a third of those quoted by the big consulting firms and when it is not practical or possible to a recruit permanent employee, interim consultants quickly become a highly valuable and cost effective resourcing alternative. n
Speed The rapid engagement of an interim resource is often the answer to an immediate business requirement. Business-critical and time-sensitive projects often require the immediate attention of a ‘seasoned’ professional with niche skills not available on the payroll. There is generally a pool of available consultants who have recently completed their last client assignment and are ready to start immediately. When compared to the time-scales required to conduct a full structured search for a senior employee, notice periods, induction, and learning curve, an interim should be immediately effective and provide results many months earlier. A permanent recruitment process is often being conducted in the background of an interim. This relieves the pressure to appoint someone just to complete a pressing business objective and allows time to hire the right long-term employee. The consultant can also transfer some of their experience and knowledge to permanent staff and, therefore, leave a skills legacy long after contract expiry.
Cost A consultant who is engaged on a seemingly high day rate will have to quickly achieve highly visible results. P&L holders and business managers recognise the numerous costs associated with permanent employment but not all permanently employed colleagues will. With return on investment continuously under close internal scrutiny at many levels, pressure to justify day rates, which are often twice that of a permanent counterpart, is constant. People rarely consider the extent of the payroll costs such as sick pay, holiday pay, maternity leave, learning and professional development, pension contributions, healthcare, car/car allowance and notice periods. There is also Employers tax and National Insurance payments, so the all-inclusive day rate quickly starts to become a cost-effective solution in the right situation.
Career consultants Interims are rarely filling in while they ultimately secure permanent PAYE career positions. Nearly all have their own limited companies and are directors, shareholders and employees of their own consulting business. 90 percent take full advantage of the tax status associated with self employment. The use of IR35-friendly contracts enables consultants to self-manage tax affairs with their accountant which gives an average ten percent net pay benefit.
Bruce Gamble is Director of Pentasia Interim & Contracts. He joined the recruitment and staffing industry in 1991 during the technology and dotcom booms and began recruiting for the iGaming sector in 1999 before co-founding Pentasia in 2001.
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recruitment supplement
Flexible Working or a More Corporate Future? Is there still a place for corporate practice in today’s industry, or does each employer now have to accept that understanding the work/life balance is more important to your chances of recruiting the right talent at the right price, as well as for things like morale, loyalty and productivity?
Let us first assess what we actually mean by the term ‘corporate practice’. It is loosely defined as a builtin, self-regulating mechanism whereby a business will set standard work practices as part of the company’s corporate rules and regulations for all employees. For the most part, employers will look to enforce corporate practice as standard, setting a precedent for expectations within the workplace. For the larger, more established organisations, this is generally the most effective way to operate, with a one-size-fits-all approach, ensuring equal working parameters for everyone. However, the question here is, ‘can this alienate potentially excellent candidates, and are you really getting the best talent for your money?’
Candidate expectations It is more often than not that we hear the phrase: “One of the reasons I’m looking for a new position is for a better work/life balance”. Whether referring to a shorter commute, less time spent travelling with work, adaptable working hours, ‘flexible working’ can refer to a number of different aspects, but it’s essentially a flexible work schedule for employees. We’re often asked by candidates, “Do you have any remote based positions that will allow me to work from home or a local office?”, and for the most part the answer is “The client requires this role to be centrally based”. A particular example of this can be seen in the positions of Regional Affiliate and Marketing Managers, who often sit within the central business office outside their territory of responsibility, in a role requiring frequent travel. Is there more benefit in having a candidate based remotely on-the-ground in the region they are working in?
What are the merits of offering flexible working from an employer’s perspective? As an industry that operates across global boundaries and time zones, there is an even larger justification for offering flexible working to employees. Having a Spanish Affiliate or Marketing
Manager on-the-ground in Spain for instance, with a strong network of contacts in the form of media, commercial and sponsorship partners, along with local and central government figures, close working proximity will undoubtedly better facilitate the ability to develop key relationships. The phrase “People buy from people” has never been so true – it’s one thing building a rapport with someone
mistake, and limiting the working options for staff will dramatically reduce the pool of talent from which we would ordinarily look to source suitable candidates. This essentially means you risk missing out on the ‘ideal’ candidates, and are in danger of losing them to one of your competitors. At Esanda, we provide a consultative service and look to guide our clients through the recruitment process, and
over the phone, but that connection on meeting with someone in person and having them in the immediate vicinity where meetings can frequently take place, can truly make the difference to people’s buy-in of one another and promotes a much more effective working relationship. It is important to remember that the term ‘flexible working’ doesn’t have to mean employees don’t have guidelines in place and expectations set upon them; they should still adhere to corporate rules and work towards set KPIs to measure output and results. iGaming is a technologically advanced sector and communication channels are free flowing through the use of tools such as Skype and video conferencing, therefore, geographical borders need not act as an obstacle in your ability to stay in regular contact with your employees. During a recent interview, a discussion came up around how a team can be successfully managed if they are spread across international boundaries, and how do you trust that they are working as expected, and the answer was simple “It’s all in the results that are produced”. The iGaming industry is at the forefront of the ecommerce world, and is known for moving ahead of the times, putting into practice different methodologies to achieve the best results. It’s a very basic formula; you set measurable targets, allow them to manage their own workload and assess the results that follow. This environment is conducive to a happy workforce with positive morale, and breads loyalty and high productivity levels... the makeup of a workforce every employer desires.
wherever possible, we will encourage them not to limit their options too much. By casting your net wider in offering flexible working, you can avoid making an expensive recruitment mistake and eliminate additional costs associated with frequent travel abroad or commuting expenses, further increasing your cost savings. Do not make the mistake in assuming that offering flexible working means you have less control over your employees or equally, that they are not as dedicated as you would expect. We are not underestimating the fact that competition is rife in what is fast becoming a heavily saturated industry within certain markets, and more than ever, expectations are high and the pressure on employees is increasingly apparent. Working beyond even what corporate practice dictates, is more and more common, and employers are understanding and embracing this requirement. But offering flexible work practices to help promote a better work/life balance for employees will undoubtedly lead to a happier, loyal and more productive workforce, and, providing the right measures, practices and controls are in place, as an employer you can reap the rewards that this brings. n
Cost saving... one of the primary objectives of most organisations! Recruiting the wrong person can be an expensive
Sarah Moulin heads up the Marketing and Commercial team for Esanda Recruitment. She has over six years recruitment experience with extensive knowledge of eMarketing within the global iGaming industry.
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recruitment supplement
Role Model Applicant Defining the correct screening and interviewing procedures for specific positions within your company.
First interview Most people’s perception of conducting first interviews is that they are meant to be informal and easy. Whilst there is some truth in that, it is equally as easy to give the wrong impression of your organisation and yourself by being too informal and having no structure to the conversation. There are actually many pitfalls the interviewer can fall into by not preparing properly. This can easily put off a potential star candidate who may be interviewing with a number of companies as well as your own. I know from my own experience of being interviewed that there are some definite dos and don’ts that the interviewer should adhere to. For example, a particular interview I had some years ago leaps to mind. Firstly the interviewer kept me waiting for 40 minutes. When he finally arrived he was unshaven, his shirt and tie a mess and he had clearly not even looked at my CV before he had entered the room, as he proceeded then to sit down and read it. Being on time, smart and prepared applies to both sides of an interview. Once you have dispensed with the early pleasantries of how their journey was, it’s a good idea to have some structure to the interview. The usual method would be to run through the CV starting in the past and working through towards to the present. This ends up at their current role, and the natural conversation around why they are looking to leave. The next logical questions are what they are looking for and then crucially what they know about your company and the role they are applying for.
Assuming the candidate gives a good impression of his or herself and knows something about the company, the next stage would be to invite them back for a second interview. At this stage, it is not unusual for the company to ask the candidate to prepare something to talk about. Some companies cheekily ask for a full business plan for five years with strategy and projections on PowerPoint. Whilst this may be hugely beneficial to the company, depending on the level of job, this long and laborious process can put the applicant off as it represents a huge amount of work done for free, with no guarantee of any reward at the end. My recommendation would be to ask them to present on one or two topics at most. They can still do a PowerPoint presentation, but won’t feel like they are being taken for a ride, information wise. At the end of this process you will have an idea of how they perform in a business environment, how well they can prepare and present information, and whether their personality type will fit with the existing team. Often it is a good idea to introduce them to the team as a final step, possibly in an informal setting. n Steve Wyatt, founder of Inside-Egaming.com is a recruitment professional of 14 years. He has placed hundreds of candidates in medium to senior roles spanning 5 different Industries, Steve also advises other recruitment companies on training and best practice issues.
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The Industry’s Preferred Recruiter
MARKETING FOCUS
Direct Mail Is it still relevant in today’s technological age? By Karl Dukes, Sales and Marketing Director, Media Hut. Time and time again, I come up against questions like this: “If people won’t even open emails, why would they open actual mail?” “Junk mail box Vs doormat – junk mail is still junk mail…” My usual response is a simple one; they are all part of the marketing mix. For so long, the online gaming space has ignored traditional media. Indeed, only in more recent times have we seen some of the major brands leveraging mediums such as TV and ‘outdoor’, finally eschewing the warm, fluffy, comfortable world that they are used to of banners and skyscrapers, CTR and pop-unders, email broadcasts and affiliate traffic. It seems we are finally coming out of the comfort zone. However, as one could have expected, people to whom direct mail (DM) is a new technique, and therefore, is still a learning curve to an extent, try to analogise it to something, and the nearest thing they think of is email. They are similar, indeed complimentary, but not identical. In an increasingly saturated marketplace such as ours, I think it is important to understand consumer behaviour. One of the reasons that email is ‘not opened’ is due to it frequently being unsolicited, untargeted and impersonal. Another is the ‘spam’ factor. Spam is still a BIG problem for email, with 21 percent of people receiving more than 21 unsolicited emails a day, while a quarter receive between one and three a day. This is simply not the case for direct mail, but only if we as an industry ensure that we stick to the basic rules. However, by utilising established techniques, it is possible to demonstrate that, like a well targeted email, open rates for DM are in fact higher than ever before. Recent figures released by the Direct Marketing Association’s Sixth Annual (2010) fast.MAP
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Marketing-GAP Tracker (the DM industry’s only tracking study), show that three quarters of householders open mail packs. Not only this, but statistics also show that in 2010: Almost eight out of ten adults open and read promotional mail. Although still impressive, this includes a year-onyear decline of seven percent. Six percent increase in those opening mail from companies they use. People like receiving direct mail much more now than they did six years ago.
person on your mailing list must at least look at your mail. That means that, if you’re good at writing headlines, your direct mail will always convey a message. People collect their mail on purpose and at a time of their own choosing. So unlike online messages, direct mail doesn’t get in the way of other things they were intent on doing. Moreover, when direct mail is well targeted and well executed, recipients willingly set distractions aside to read. Since that’s not something they can do while texting or looking at the BBC news online, direct mail gives you their full attention.
Let’s get them working together! Dumping direct mail for online delivery is both unnecessary and unwise. A solid interactive marketing strategy has plenty of room – and plenty of need – for both. Combined, direct mail and the Internet make for an unbeatable impact. Go with either one alone, and you risk missing out. Despite what some marketers may think, the Internet doesn’t reach everyone. Not everyone who owns a mobile phone uses it for Internet access. And not everyone with Internet access conducts transactions online. Moreover, reaching people who are online is getting harder. Spam filters consign emails to oblivion unseen and unopened. Banners work, but only to a point. Enter direct mail. Just about everyone has a mailbox, and surveys show that, even in today’s online world, people rate ‘getting the post’ as a favourite on their list of daily activities. Many people who are hesitant of responding online are quite comfortable using the mail. And those who choose to respond in person or by phone needn’t go to the trouble of printing a coupon, because your mail piece is already in hand. Since mailboxes don’t have spam filters, every
How Internet and the mail work together Earlier, I said that you needn’t choose between direct mail and the Internet, and I meant it. So let’s talk about how well the Internet and direct mail work together. Combining direct mail with the Internet improves your reach. People you may miss with one you may pick up with the other. But on a deeper level, many marketers have dramatically increased direct mail results by sending an advance email advising people to watch their mail for a special offer. The opposite works, too. Direct mail is a powerful way to direct people to a website they might otherwise never have found. When direct mail sends people to the Internet, or the Internet turns their attention to their direct mail, you create involvement. Torn between the Internet and direct mail? Don’t be. This is that rare instance in which you can have your cake and eat it too. n
Sources: Direct Marketing Association’s Sixth Annual (2010) fast.MAP Marketing-GAP Tracker USPS
MARKETING FOCUS
Web Design and Branding Getting it right for 2011 and beyond... The two main things we know about online players today is they are not that loyal to any one gaming brand and that they have become experienced, mature players who know the difference between a newbie operator and good or bad software. Taking this into account, we need to move forward with the correct skills to entice new players, retain old ones and build a long lasting identity with our customers. To start, we need to look back at the lessons learnt and at past design hurdles.
Building your brand: theme Vs traditional Back in the day, it was hit and miss with regards to designing a casino site for the masses. Many operators attempted different styles of web design and were always interested in breaking the mould. But, does breaking the mould hold substance? Experience over time answered the question with a large ‘NO’. ‘Theme’ was a large factor in an operator’s mind. What theme will attract their customers and how could they appeal to their market’s imagination? This brought about a rush of new sites and brands centred around the themes of Egypt, Arabia, Neptune and so on. But the one thing overlooked was that not everyone finds a certain theme appealing, which instantly cuts out a large percentage of your possible gaming market (which translates into ineffective marketing budgets). When marketing your casino as a whole, you need to look at creating very generic brands that not only appeal to a larger gaming audience but also focus on the product – which is gaming, not a theme. We have seen that a picture of slot reels and blackjack tables gets the message across so much quicker than a pyramid and a sphinx which has nothing to do with the product itself. More generic gaming sites also have the ability to cross borders, cultures and gender demographics. It is important to have an array of themes within your game pack which then appeal to a cross section of players. Evidence has shown that users are split between the different game themes within slots. For every player that is attracted to a slot
because it has a ‘detective’ theme, there is another who prefers an underwater theme or a superhero theme. This definitely answers the question as to how you need to approach the front door of your casino site and focus more on the generic gaming offering to entice the full complement of possible casino players. So, names like Jackpot City, The Gaming Club, Red32, Cherry Red, etc, offer a great foundation to bringing the message across very quickly to users, when trying to convert them to their gaming brand. Once an operator has chosen their name and come up with their brand there are fundamentals to follow in building a successful site. The real term for a website is a conversion vehicle.
Blueprint Nature has shown us simple things, like bees being attracted to the most beautiful flower, and the same analogy can be applied to humans and websites. Experienced players know the difference between good and bad design which then translates to quality conversions. In the old days, we had plenty of design restrictions such a low bandwidth, no proven blueprint to layout, no understanding of target focus and no cross-border branding experience. Another mistake in breaking the mould was the use of 100 percent flash animated sites. The main problem with this is SEO; it kills any type of longterm natural search listing opportunities. Flash can be cleverly used, but more as an embedded element within your site highlighting your promotions, sign up offer and call-to-action. There is a blueprint and key elements regarding layout which need to be present in order to have an effective site: Download button: this needs to be repeated often, as a graphic, text link, in the navigation bar and so on. It is the most important tool in your conversion basket.
Promo area: this has to be large to entice your user. This area should be animated, preferably using a short flash movie to get the user’s attention. The promo area is effectively a camouflaged download button. Sign-up bonus: this is paramount to the player conversion path and is a large download motivator. Credibility flags: these are your ‘licensed by’, ‘audited by’ and payment/banking options. Support 24/7: this increases player confidence in the tangible aspect of the casino. View games link: players love to see pictures of the games on offer. This is a heavily viewed area of the gaming site. If you have good games then bring them to life on the site. It is important in the early stages to do A/B testing, which is sending different traffic to different versions of your site to rate performance ratios. A small tweak in the design or brand can make a radical change in conversions. I could go on and on explaining how to optimise your site and brand for success but the above advice should get you thinking in the right direction. In this competitive market, we need to leave our emotional choices at the door and be strategic going forward. n
Moshe Adir is CEO and Founder of Vegas Kings and Bet Foundry. Moshe has been an entrepreneur in the gaming space for the past 13 years and has helped many operators achieve their goals in building powerful brands and acquiring new players. Moshe loves being part of the evolution of online gaming.
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MARKETING FOCUS
Barking up the Right Tree When the creator of Facebook, Mark Zuckerberg, was first asked who he was going to send it on to, he replied: “Just a couple of people. The question is, who are they gonna send it on to?” And marketing was changed forever. I worry... in fact, I worry a lot. I worry that I’m not getting enough fibre. I worry that I’ll die alone (probably of a fibre deficiency). I also worry about that smell by the fridge? Most of all, I worry that I don’t know about the latest life-changing product that I very probably need, because advertisers can’t get to me anymore. It’s not like I’m hiding from them, in fact, I’m sure they’re still out there somewhere shouting about the latest abdominal-cruncher or toilet duck, I just can’t hear them anymore. Why? Well I’m simply far too busy tagging photos of myself on Facebook, typing ‘smilies’ at friends on MSN, or regaling my unknown Twitter followers with details of what I had for breakfast.
Times, they are a’ changing… Companies used to get to me through the telly, but not only do I never see adverts anymore, I won’t even switch a programme on until it’s been going for fifteen minutes so that I have a ‘buffer’ to fast forward through. I couldn’t tell you the last advert I saw, but I can tell you it had “X 30” written in the bottom left-hand corner of it. Paper is out too. Twenty four of the top twenty five newspapers are experiencing record declines, with 78 percent of business owners no longer buying a newspaper. So just how the hell am I going to find out what brand of coffee, kitchen towel, or house insurance is in vogue this week? I wouldn’t want to be using the wrong brand of car wax on my dog. Online phenomenon, Facebook, took a mere nine months to attract 100 million users – that’s the equivalent of the entire population of Spain and South Korea put together and signed up in under a year (or the Philippines and Papua New Guinea, if you prefer – I ‘Googled’ it). This is doubly impressive when you consider it took the Internet four years to reach half that number, and radio 38 years to do the same. YouTube – a site traditionally used to host footage of cats dressed as Hitler and fat people falling over – is now the
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second largest search engine on the planet. Times, they are a’ changing…
Social media This social network lifestyle has meant canny marketers have had to join them to beat them, inventing ‘social media’ along the way – a ‘new term’ relating to a variety of online activities designed to enable, encourage and coordinate technology with social interaction through the construction of
Agencies are already assisting gaming companies with the generation of ‘fans’ – sometimes in excess of 10,000 per month – that are already fans of complimentary brands. The agencies then assist in providing interesting and engaging contact that will appeal to the growing fan base, so that it eventually grows organically. It’s getting harder to get the attention of consumers through traditional methods such as telemarketing, direct mail, email blasts, printed ads
“Online phenomenon, Facebook, took a mere nine months to attract 100 million users. This is doubly impressive when you consider it took the Internet four years to reach half that number, and radio 38 years to do the same.” words, pictures, videos and audio. Today’s news and entertainment finds us via social media, and now products, services and brands are following suit. Over the last few years, social media has provided the ideal platform for companies to truly engage their audience through a combination of creative and innovative marketing campaigns. Traditionally, social media has been considered an excellent retention tool, however, if approached in the right way, it can also be an extremely useful acquisition tool. An engaging Facebook page is worth its weight in diamonds – branded client pages, adding links to company websites and ‘landing’ welcome pages to pull people in. Facebook is a cool site, so your on-page content has to find the right tone to fit in. Conversational content, tips and advice and direct promotions will convince more people to join the page and also interact.
and TV/radio. Now, the ways of interacting and obtaining new customers becomes easier by using SEO/SEM, blogging, social media and viral videos. Using a social media agency like Game-On enables you to find out where your customers are ‘hanging out’ online and build compelling and engaging brand presences that encourage interaction and develop relationships with your target customers. They can find potential ‘target profile’ customers and introduce them to your brand, gaining powerful ‘opt-in’ from your target market. n
Sarah Jones is co-founder and codirector of Game-On Marketing, part of the Game-On Group of companies.
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The Affiliates Guide to the Gaming Galaxy
MARKETING FOCUS
Social – Out of Control, When I Let my Power Go You’ve read it before. The world is changing. Your brand is not the logo you carry, the casino you host or the markets in your sportsbook. Your brand is the collected thoughts, emotions and feelings that people have and express. That is true today more than ever. For the first time in the history of business, the customer is empowered with tools of communication and collaboration that force companies to become more transparent and authentic.
drink a Coke or how a webpage acts. It’s the whole experience of a brand, every touch-point of it. Maybe there are many as important sites as your own? Facebook founder Mark Zuckerberg predicts two types of future companies: the truly social, with social DNA and the ones that add a ‘Like’ button and feel happy. Zuckerberg says that the ones
When social disruption comes – are you embracing it or running scared? What we see is a paradigm shift in the way companies do business. Social is disruptive, it changes what it means to run a company. Every day, people spend more time socialising, expressing themselves and looking for information online. If you do not integrate social as a part of your business, your brand is naked and exposed to what everyone is saying. No representative from sales is there to protect your brand. You neither own nor control what people say about your product, yet this is the very thing people read to decide what product to use. This means that you need to: A) focus on having a great product (people say good things) and B) be aware of the conversation, to tap in, listen and to engage.
It’s horizontal and how the phrase ‘social media’ screwed it all up I’m the first to admit it; I don’t like the term ‘Social Media’. I believe the term confused people. Social is fine, but media makes people believe that it is media in a traditional sense and that the same dynamics apply. They don’t. In social, impressions can’t be bought in the same sense. Alex Bogusky of Crispin Porter says, “The old media paradigm was PAY to play. Now you get back what you authentically put in. You’ve got to be willing to PLAY to play.” If it’s worth talking about, it’s talked about. Can you see the value in strengthening the relationships with your customers? Can you see how real conversations can help you make sense of what you should develop and what your competitors are doing and what your future customers think about you? Thought so. Customer experience isn’t just how you feel when you drive a Ford, how it tastes when you
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not embracing social will suffer big disadvantages in competition. Social is a layer across all products, to enhance them and the experience using them. Social touches every aspect your company and it should be seen as an extension of good business ethics more than a vertical channel that can be bought. And it will, done right, provide sales down the line. I am happy to work with Betsafe.com a company that embrace social. I am part of an avant-garde company and together with great people I help develop an iGaming brand for the future. As the market disrupts, early adopters will grab market share, reinvent and to expand the market.
Shatter the social silo and integrate social in everything you do Social media should not be treated in an experimental silo, or with separate deployment. It needs to be added up front, not ad hoc. Social technologies must sit horizontally across the company as they impact many forms of tactics and approaches. In order to fulfil business objectives, it must also be treated as part of the business. CRM? Socialgraphics as a complement to demographics? Recruitment? Be part of the tech or design community for employment branding? Competitive
analysis? Brand monitor to track your and other brands? Support? Have proactive mission control that helps customers before they contact you? Another example: Garmin produces GPS watches. You can sync the watch via Bluetooth with an online community that shows you where you have been on a Google Map. The information is directly uploaded to Facebook where you can share it with your friends. What is marketing, what is product and what is business development? Here, social is used as a layer to enhance the experience, value and fun that the ‘customer’ feels. Social works best when doing remarkable stuff. Nike’s global
brand director Simon Pestridge says, “We don’t do advertising anymore. We just do cool stuff... it sounds a bit *****, but that’s just the way it is. Advertising is about achieving awareness, and we no longer need awareness. We need to become part of people’s lives...” Social is much more than acquiring new customers. It is a layer that sits across all entities of a company. What is the ROI of your telephone? Interested in what we do? Throw me an e-mail at razmus@betsafe.com The Nike Extreme concept and photos are made by http://www.access-agency.net Razmus Svenningson is the social strategist of Betsafe Services that works together with Betsafe. com. Betsafe is a company that is young, creative and often mentioned as one of the earliest adopters in social media within the iGaming industry in Europe. Mr Svenningson is working with social implementation and direction through strategies to the internal social media group but also to integrate social media horizontally in the Betsafe Group. Get in touch – mail Razmus at razmus@betsafe.com
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MARKETING FOCUS
How Social are you?
Social media has transformed the Internet in the past five years but many companies still struggle to embrace it. Ian Green offers a simple strategy for managing your digital profile.
Let’s imagine you’re in the pub having a conversation with your best mate about your local football team’s dismal standing in the league table. Someone else in the bar, a stranger, is eavesdropping. He is a fellow fan and commiserates with you about the team’s failings – so he joins in your conversation about the team’s bad management. The landlady behind the bar chips in her views, and the old bloke sat at his usual table holds forth about the team’s poor defence. Everyone enjoys a conversation. Now let’s imagine you’re online on your Facebook account having the same conversation with a bunch of people who have become friends with you because you’re all interested in the same football team. You’ve never met them in real life but you have a shared interest that you wish to talk about – and there are thousands of you. As a definition of social media – such as websites like Facebook, LinkedIn, blogs, Twitter, YouTube, Flickr, Plaxo, FourSquare and the emerging mobile applications – the term ‘conversation’ neatly sums up what social media is. It is an ongoing digital dialogue which is having a huge impact on people’s personal lives, but also on businesses too. Now imagine the conversation around your brand – whether you are a game developer, operator, distributor or manufacturer – and consider what people are saying about your company. Are you listening? Are you engaged? Are you adding to the conversation? No? I thought not. Most businesses don’t bother and they are missing a huge marketing opportunity. Some people love your company and brand and are talking about it in glowing terms but you are not talking to them. Others really don’t like you and are telling others why they hate you but you are not talking to them. Are you? If you’re not in the conversation, you’re not engaged. If you’re not engaged you’re not in the game and your brand can be trashed. Meanwhile, in failing to engage with social media your company’s ranking on the search engines will be significantly curtailed as social media is now one of the main influencers in search engine optimisation.
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Facts and figures
Follow
Let’s look at the statistics. If Facebook was a country, it would be the third most populated, ahead of the United States – only China and India are bigger. More than 500 billion minutes are spent on Facebook every month and 25 million items of content – links, blogs, photos, videos, news – are posted there every month. One third of 18 to 34-year-olds check their Facebook account after they wake up. 24 hours of video content is uploaded onto YouTube every minute and two billion YouTube videos viewed every day – this is rising sequentially. Meanwhile, more than four billion images are hosted on Flickr. Elsewhere, 95 percent of companies use LinkedIn to identify and attract new staff and there are more than 27 million tweets per day on Twitter. Are they talking about you? Possibly. Are you talking to them? Probably not.
Seek the online community which is talking about your company online. They might be customers, employees, suppliers and competitors. Understand what they are saying about your company – their likes and dislikes. There are simple tools on the web to seek out your community – either using Google or more specialist social media search sites like addictomatic.com
Business opportunities Social media is not a revolution. It has evolved as people have adapted to the Internet and moulded it into a media which suits their needs and desires, but business has been slow to embrace the opportunities of social media. And curiously, the gaming sector – which should be the most digitally enabled – is failing miserably. Major companies now recognise the importance of social media as a communications and marketing medium. Scores of business-to-consumer brands now have thousands and in some cases, millions of followers on their Facebook and Twitter sites and are happily talking with their customers, addressing criticism and accepting praise. Any company considering this powerful new marketing tool must use it as part of the overall marketing strategy of the business. For instance, why bother with a blog or Twitter account if you do not have a link to them on your corporate website?
Follow, create, engage For any marketing manager in the games sector considering a social media footprint, the simplest strategy is: ‘Follow, Create and then Engage’.
Create Establish a personality and tone of voice for your brand and create a social media profile which might include a blog, Twitter, LinkedIn and Facebook page.
Engage Join in the conversation through your blog and other social media websites. Follow people in your field, those who are talking about you and engage with them. You will quickly begin to establish a community who you will engage with. Not everyone will be a fan. There will always be detractors but at least you are now part of the conversation and can address any issues as and when they arise. As a marketing tool, social media is the most potent tool in your possession and can significantly improve how you communicate with your customers – covering all areas from sales promotion to crisis management. Meanwhile, it will do wonders for your search engine optimisation, significantly improving your company’s digital footprint. n Ian Green is Director of Media at GREEN Communications – a full service media and communications agency specialising in social media and digital PR. Clients at GREEN Communications include Gamestec, Mazooma Interactive Games, and Quest International among many others. Ian is also a board member of bmedia, the digital network for the North of England, and a board member on the National Media Museum’s Internet Gallery Advisory Board. Ian blogs at GREENblog.co.uk.
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in-play betting feature
Historically, the in-play areas of sportsbetting websites have been dominated by swathes of Flash used to display everything from the scoreboard to the betting opportunities. Several years ago, this was the only way to provide a dynamic experience in a browser and have any hope of crossbrowser compatibility. In recent years, however, the browsing landscape has started to see some real innovation, driven largely by the surge in popularity of modern browsers such as Firefox, Safari and most notably, Google Chrome. By Philip Slater, Director, Geneity Ltd.
Unlike previous generations, these new browsers compete for bragging rights in standards compliance, forcing even Microsoft to actively restart development of its Internet Explorer browser or risk irrelevance in the modern web landscape. But what does this mean for betting websites, and for in-play in particular? Simply, that it’s now possible to deliver the full live betting experience using standard web technologies such as HTML, CSS and JavaScript, complete with pretty graphics, dynamically generated markets and odds that are kept bang up-to-date. With the latest additions to the standards, it’s even possible to implement push technology and video directly in the browser without using any plug-ins. Now the in-play section can appear as an integrated part of the website rather than some alien object dropped into the side bar or the middle of the page. It is SEO-compliant, allowing search engines to read and index the data that’s available. And it won’t stop there. Google in particular has a huge amount to gain from driving innovation in the browser as it tries to push more and more of what we once only used to do on the desktop into the browser. There’s also the small fact that Apple has declared war on Flash, banning it from its various ‘i’ devices.
Form factor Apple’s iPad and the slew of competing tablet devices that will no doubt appear over the coming year, would seem to finally offer a form factor that is compatible with lounging in front of the television watching the match whilst giving the opportunity to liven things up with a quick bet now and again. It’s a form factor that is large enough not to be ‘fiddly’, yet its use doesn’t have to interfere with the principal activity. There’s also the promise that as everything in our home becomes Internet enabled, televisions themselves
will finally be able to offer web content alongside live sporting pictures without the issues of broadcast rights. There’s still a long way to go before a TV becomes an Internet device that anybody actually wants to use, and it may yet never happen for betting, but again, there are some big names with their own agendas trying hard to push it in that direction.
On demand As the technology to deliver the in-play offering becomes more standard, so will the expectation of having a full range of relevant markets available on demand. Feeds are part of the solution but if bookmakers want to differentiate themselves they will need to make increasing use of algorithmic solutions. These are capable of continually recalculating prices on the huge array of available markets based only on a small number of input parameters received through a feed or from a trader. The increasing algorithmic sophistication and the ability to push out and present data in an ever more timely fashion will allow the creation of even shorter-term markets, such as ‘What will happen next? A goal, a corner, a free kick?’ created, priced, resulted and settled without requiring any trader interaction. Needless to say, mobile is very much part of the new technology landscape and now that devices have performance and browsing software that is broadly comparable to desktops, it is no longer the case that mobile sportsbooks need to be the domain of specialists. Obviously, the smaller screen size needs to be catered for, but in the new world order, there’s no reason why the technology driving in-play interfaces on the web can’t deliver comparable experiences on mobile. Watch this space for your location-aware phone suggesting inplay bets on the very sport you’re watching. n
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in-play betting feature
Case Study: Integrating Live Betting Technology into Existing Frameworks Probably the most critical business decision that any online operator will ever face is choosing the appropriate software; a process often fraught with difficulty. Thorvar Hafsteinsson, Marketing Manager at Parspro, outlines the procedures of integration for live betting technology with existing core systems. The old adage, “You have to spend money to make money” is often true. However, there is always the question of whether an investment is paying off as projected. When adding live betting to an existing framework, the ideal platform is one that fully integrates within an existing system – thereby, maximising investments without the need for any additional expenditure. Such integration optimises return on previous investment while simultaneously adding live betting revenue to the operation. Maximising returns from all investment is of critical importance, which, in terms of software, involves balancing a host of features such as payment processing, bonus systems, player accounts, affiliate programs and CRMs, all of which must function together seamlessly in order to operate efficiently. To achieve this, many of today’s live betting solutions are based on a single sign-on wallet where balance and bonuses are always up to date, and can be operated in any language and in any currency. For example, Parspro’s ‘Juliet’ live-betting platform is built on two key designs – Event Driven Architecture and a Data Grid. Designs such as these address the core requirements of scalability, extendibility, robustness, fault-tolerance, and a fast transaction engine. Systems built in this way comprise multiple interconnected layers (clients, channel servers, console servers, distributed cache servers, core servers, and a database server), with each layer responsible for a portion of the overall business logic. System functionality is partitioned into each of the layers to boost performance and to distribute load evenly across the entire system. Integration with external systems is handled by a large number of web services that are exposed by the core servers. In this case, documented APIs allow the easy creation of additional channel servers, such as an iTV channel server or terminal server. Fundamental to the system architecture is the concept of events and messages. All communications in the system are driven by messages. Requests for actions to the core server
by the channel servers, such as logging a player in, are sent as asynchronous JMS messages delivered through a cluster of MQ servers, which is key to achieving scalability and high performance.
Removing financial hurdles Live betting generates increasingly, and proportionally, more revenue for operators. As a result, competition is greater than ever and growing rapidly, leading to increased demands for additional event offerings. Traditional manpower requirements in live betting have always been a financial obstacle to providing new market offerings. This, however, is no longer true. Automation has made staff needs virtually redundant, achieved by integrating live streams from third-party odds providers directly to Juliet’s web services. When integrating with Betradar for example, live streams include the following functionality: Odds Suggestions are delivered via XML Over 25 different bet types Betradar administrates the complete match (bet stop situations) Bookmakers can set their own individual configuration New odds are updated continuously during the match Betradar delivers all results for immediate payout Betradar administrates the complete match, including odds suggestions, re-opening and ‘bet stops’ in real-time The following are currently available event possibilities: Soccer: up to 1,800 matches Tennis: up to 450 matches Ice Hockey: up to 150 matches Basketball: up to 400 matches All data requests, such as available sporting events, betting markets, and results, are handled by the Data Grid. The Data Grid consists of a number of dedicated cache servers, and a near cache component running on each channel and
console server. Data objects are partitioned across the grid, with a backup of each object stored on a separate cache server. The cache servers manage over thirty named caches, with each cache having its own properties, for example, object eviction strategy, storage properties, access rights and custom cache loaders. Data objects are updated or loaded by cache loaders during a cache miss, or via agents that are injected into the Data Grid. A large number of JMX MBeans are exported by the core servers and provide real-time access to transaction counters for the entire system, as well as technical data concerning each internal component.
ROI As mentioned at the top of the article, in optimising the return on investment for the addition of live betting software to your core systems, your integration set-up should be seamless and one that maximises your return while minimising any additional expenditure. Today’s live betting platforms are designed to fully integrate with an operator’s core systems with minimal fuss and cost, allowing the large scale deployment of the hugely successful live betting phenomenon to continue unabated. n Thorvar Hafsteinsson joined Parspro in 2006 as a web designer, and was appointed Marketing Manager in 2008. He previously worked for eight years as a multimedia designer, and prior to that as a TV producer and technician. He also co-founded a multimedia production company that he ran for several years. Established in 2000, Parspro has developed into a leading provider of innovative online betting systems, solutions and related services for electronic media platforms. These include software, secure state-of-the art hosting, and a full range of support and ancillary services for online sportsbetting. Products include ppTOTO, sports book software; Miranda, latest-generation sportsbetting platform; Juliet, groundbreaking gaming system introducing live betting with tournaments; Cordelia, pari-mutuel horse and greyhound betting solution; and Elektra, iPhone application enabling real-time live betting and tournament event monitoring.
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in-play betting feature
In-Play? There’s an App for That… If there is one word that represents the challenge faced by the online sportsbetting providers as they attempt to keep up with the demands of their customers it is ‘app’, says David Loveday, CEO, OpenBet. This isn’t the start of yet another article suggesting that we should prepare ourselves as an industry for the new frontier of mobile gaming. As the recent financial results of the biggest European sportsbetting operators have clearly shown, mobile betting is actually already upon us. Smartphones changed the screen size and, in the process, changed the game. But the challenge thrown down by the ubiquity of mobiles is not about the technology. To me, mobiles mean apps – and that means content and specifically, it means in-play. Not coincidentally, at the same time that mobile betting began its inexorable rise, the sportsbetting operators were also getting excited about the possibilities of in-play betting.
Trend-spotting The biggest and best brands in online sportsbetting are already well aware of what in-play betting can do for an online – and a mobile – offering. The likes of Paddy Power, Bet365, the mighty bwin and William Hill are known today as much for the opportunities they give to bet on events as they are happening, as they are for their pre-play betting. In-play is the trend above any other that has been getting sportsbetting operators very excited in the past 18 months or more. Comments from William Hill at the time of their last trading update are typical of how the industry views the possibilities for in-play. In a trading statement released in January, the company said that in the year to December, a strong sportsbook performance – up around 57 percent in turnover terms in the first six months of the year – had been underpinned by the broadening and deepening of the in-play offering which had seen growth of around 114 percent. This hammered home the message from an investor day presentation in 2010, when Chief Executive, Ralph Topping, made much of the advances the company was making with its in-play
betting offering, providing prices on more events, more markets and more bet types. Numis analyst, Ivor Jones, said that William Hill’s trading update showed the benefits of “getting technology, brand and product mix right at the same time”. The theme of ‘getting the mix right’ was picked up by new Ladbrokes Chief Executive, Richard Glynn, at his first interim results presentation late last year. Launching ‘Project Galvanise’, Glynn said the key to his company’s future was to understand more fully the customer journey. Admitting the
and, of course, the many aspects of social media such as chat and links with services such as Twitter and Facebook. It is a technological challenge, but also a content challenge. In-play has the numbers on its side already, and, over the coming years, it is sure to provide an even greater array of sports, events and betting opportunities. But the most successful operators will be the ones that bring the customer the level of personalisation and customisable content that they expect from other forms of new media.
“Live betting will be the lifeblood of sportsbetting operators in the years to come. For once, we can say the future is already with us – now its time to exploit the many possibilities.” firm had a deficient in-play product, Glynn said he believed the company needed to “listen to what our customer wants. We’ve got to deliver to the customer, whenever, wherever and however they want it,” he told analysts, adding that the company needed to deliver “enhanced personalisation and enhanced products, and to reward [the customer] for using it.”
Multi-media This is where I believe the ‘app’ challenge comes into the equation. Delivering an experience to the customer – whether via mobile or the Internet – is about engagement, about enthusing the customer enough that they not only enjoy their time on your site, but are liable to be enticed back, again and again. It will be about a betting experience that is truly multi-media, with live streaming and commentary, accompanied by data and statistics
What also caught my eye when William Hill released its January trading update was that the company also took the opportunity to launch a new Android app which it said would allow its customers to access over 40,000 pre-match and in-play markets from William Hill Online on a daily basis. Michael Byrne, head of mobile at William Hill Online, pointed out that the product enhancements to the company’s mobile offering had led to an 800 percent increase in bets, an 828 percent increase in turnover and a 900 percent rise in unique users. That’s what an app can do for you – an app built on the possibilities being opened up by in-play to engage the customer in ways that the online pioneers of only ten years or so ago could only dream of. Live betting will be the lifeblood of sportsbetting operators in the years to come. For once, we can say the future is already with us – now its time to exploit the many possibilities. n
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Geneity Limited, Swan Centre, Fishers Lane, Chiswick, London W4 1RX +44 (0) 20 8742 8393 sales@geneity.co.uk www.geneity.co.uk
IN-PLAY BETTING FEATURE
In-Play Betting, Outsourcing and the Road Ahead The Financial Services industry provides a blueprint for the industry’s future says Warren Murphy, CEO of Sporting Index, operator of the Sporting Solutions trading and pricing service. Most commentators believe the industry is heading for significant structural change. Too many sportsbooks are offering similar services, chasing the same customers, often across complex regulatory frameworks. Costs of acquisition and retention are rising, margins are under pressure and consolidation is, therefore, seen as the logical way forward. However, is consolidation the only way forward? What about the vast majority of sportsbooks that aren’t in the consolidation window? Some of the big companies will get bigger, but this type of change is in the realms of the few. Beyond consolidation, I believe that significant fragmentation is on the way with sportsbooks increasingly outsourcing core services to specialist operators. In turn, they will then focus on the value-generating aspects of their business. If you have your doubts, consider how the financial sector has evolved through the last 20 years. There are no longer any ‘jacks of all trades’. In an industry that is founded on setting its own events and prices, there are bound to be sceptics, so let’s scratch under the surface and look at in-play betting. This is the real growth area for sportsbooks. It is also an area that is perfect for outsourcing to specialist operators, either all or in-part, particularly to those that combine both algorithmic and trading excellence.
sports all take place through the night, an in-house, in-play solution, therefore, requires significant time, investment and is operationally challenging. The demands of extended in-play coverage can stretch the resources of even the biggest bookmakers, and for other bookmakers it is a near impossibility to keep up. Outsourcing inplay services is a quick, cost effective and highly flexible option. For some operators, outsourcing brings a fear of reduced differentiation. However, the fact is that pricing as a point of differentiation has almost disappeared, with trading floors increasingly ‘controlled’ by accountants. Trading rooms are no longer the jewel in the sportsbook’s crown; it is a specialised resource that has become too expensive to scale, especially for the unique area of in-play betting. As a result, trading excellence has been replaced by ‘average pricing’ with sportsbooks preferring to quote a re-constituted offering of rival companies’ prices rather than construct their own. A glance at the offerings available reveals very little differentiation in markets or prices, which is hardly surprising when many sportsbooks generate match odds in-play by tracking either the market or the exchanges, rather than using their own skills.
In-play and outsource
This is a risk averse, low cost strategy to adopt but it generates an inferior margin. Quite often, prices bear no resemblance to the data expressed by the underlying event, to the extent that they are inefficient even with the addition of ‘overround’. Many sportsbooks now lack a detailed knowledge of the underlying liquidity and, therefore, follow price changes, sometimes blindly. Customers are becoming more sophisticated over time and the less bookmakers understand about the properties of their industry, the harder it will be to sustain profitability. Therefore, sportsbooks will need to apply greater
Sophistication In-play betting is ideal for outsourcing because it is not easy or cheap to do well. It requires detailed data sets, sophisticated algorithms, robust models, data feeds and/or access to pictures, knowledgeable traders and the ability to present content in a highly useable way for demanding customers. Look at the provision of US sports in-play as an example. Because there aren’t many skilled US sports traders available, because modelling certain US sports is a real challenge and because the
sophistication to their pricing to counteract their customers’ increased knowledge. Yet, the question is, with the diminution of true bookmaking skills, will they have the in-house skills to react? The case to me is clear. The financial system is based almost entirely upon specialist providers and our own industry will follow suit. The successful sportsbook of the future will be the one that is focussed on marketing excellence in recruiting, retaining, servicing and innovating for its customer base. This will be the battleground. Successful sportsbooks will excel and will actively seek to outsource services to specialists in those areas where they can no longer add value, or it is not cost effective to do so. That is the way forward for in-play betting. ■
Sporting Solutions In-play service: key features and benefits Unrivalled coverage Sporting Solutions covers over 20 sports in-play, 24/7. No other supplier comes close for breadth of coverage or number of in-play markets. Unique proposition All live events are monitored in real time by a Sporting Index trader so price changes are verified by a person, not just an algorithm. Increase profitability and reduce costs Add markets with keener pricing to drive customer activity without additional trading staff. Flexible commercial model Choose a fee plus revenue share, fixed fee or pay-pergame model to meet your business needs. Full service offering We also provide horseracing and liability management services for a complete outsource solution.
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In-Play in the Zone
Ian Williams, Marketing Director at Buzz Sports, surveys the main themes and trends behind the in-play betting market of today and what we can expect from an evolved market in the future. The impact of the in-play product on traditional betting markets Without doubt, the growth of in-play betting has increased revenues across the board. The desire of the customers to bet with companies offering the best in-running product has made bookmakers, who were traditionally slow to react to customer demands, alter their approach significantly. I believe that there will always be a percentage of people that only have a fixed amount of disposable income to spend on gaming, so you could argue that they are now spending that ‘in-play’ as opposed to traditional fixed odds pre-game betting. I do not think that in-play totally cannibalises traditional markets, however, it might mean that people lower their stakes slightly on their traditional betting pattern and have some left over for during the game, but, I think we have seen in-play driving increased volume overall. Before in-play was born, a bookmaker had around 25 markets on a game, whereas now, they could settle over 100 markets inplay during a game. Not only does it create revenue, but it makes the bookmaker’s site a destination, adds content and increases dwell time.
How the in-play model can drive future sportsbetting growth In-play betting is a simple evolution for betting on sports – we have come a long way from bookmakers offering minimum trebles on football
“A system that is designed to enhance the viewing experience by entertaining the user for the entire time they are watching a game of football. This, we believe, is the future of in-play betting.” coupons! Today, players want to know how a game is being played out before they wager and, as such, companies have responded to their needs and developed sophisticated platforms to cater for the in-play gambler. Technology has advanced to a position now where we can take thousands of bets per second and hold a market in milliseconds. The majority of people that want to bet in-play will already be doing it or will at least have tried it. The challenge, as always, is to drive new people to the market, and this can only be done by making it as entertaining as possible.
Where live streaming fits in with the current live betting market Steaming is a very important piece of the in-play puzzle if you want to be able to offer customers a huge choice of sports 24/7. I believe, over time, that streaming will become less important, as users and technology progress. People watching and betting
on mobile and iPad-style devices are able to interact with bookmakers in places they previously couldn’t. That said, how streaming aids the growth of the in-play industry is through broadcasting relatively unknown leagues and games from around the world, providing content when local traditional markets are in downtime.
What and/or where next for in-play? Zone play is what is next for in-play betting. People are betting in-play because it’s the ultimate experience; they want instant gratification. Punters want live action, they want to be informed, they are not handicapped by a lack of knowledge pre-game regarding team selections, etc; they can simply watch the game and back their judgement as it is being played out in front of them. We have built a system that is designed to enhance the viewing experience by entertaining the user for the entire time they are watching a game of football. This, we believe, is the future of in-play betting. n
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In-Play in the European Market
– Measuring the Success of the East-West Adoption
The European adoption of the in-play betting platform has transformed the sportsbetting market with many of today’s major sportsbooks seeing the majority of their revenues stemming from live markets. By Kristian Nylen, CEO of Kambi Sports Solutions. Market impact Since the turn of the new Millennium, and, more specifically, within the last five years, the online gaming industry has experienced a significant acceleration of technological development across many of its core products and platforms. This evolution has been stark. Indeed, the traditionally faster developing markets, such as casino and poker, have consistently been pushing the frontiers of its business capabilities into new and untrodden ground, with the dawn of both 3D and live gaming platforms. Similarly for sportsbetting, it has been this ‘live’ element that has accelerated its own resurgence in fortunes as the in-play (or live) betting model emerged from Asia to, if not revolutionise, then certainly galvanise its European Internet-facing operations. Of course, this is by no means a phenomenon that we can herald as ‘new’, but it is most certainly one that has helped to reshape the revenue streams of today’s leading Internet sportsbooks, accounting for anywhere between 30 to 60 percent of total income from sports bets. The product has been entrenched in the European market long enough for us to understand why it has been, and continues to be so popular for the consumer. Interestingly, what it hasn’t done is marginalise the traditional customer set of pre-match, fixed odds bettors in the pursuit of a newer, more tech-savvy customer. In fact, the availability of in-play markets acts just as much as
a retention tool for existing traditional punters as it does for the acquisition of a new breed of end-user, seeking more entertainment from his/her betting experience. Where the operators are concerned, together with live streaming, in-play is also the one gaming product that has been the hardest and most expensive to copy, and the larger operators have been able to take advantage of this. However, the evolving nature of end-user demand, together with fierce competition and the lower margins generated from in-play betting has forced the hand of most European operators to update their product offerings, and in some cases, business models, to refocus on new technology to cope with the high load and complex administration of the product.
Eastern origins One can’t talk about the in-play product without mentioning Asia – the early developers in the in-play betting field. Early on, Asian bookmakers understood the importance of a 24/7 offering and started to offer events that weren’t being broadcasted. The offering, however, was limited to a small number of markets per event and only on football. The leading European bookmakers now have a wider offering than their Asian counterparts with more sports and more markets per event. This stems from the fact that consumers there aren’t looking for a more rounded entertainment experience; the Asian market is all about high odds
and the broader football product. So while Europe’s adoptive strategies can be traced back to the initial Asian template, today, it would require quite an extensive shift in focus for Asian sportsbooks to cater for European consumers, and vice versa.
Sport in Europe The fact that top level sporting events occur more frequently in Europe is not necessarily a reason as to why the adoption of in-play markets has been so successful, or why Europe is particularly wellsuited to live betting. Some exceptions aside, interest for these events will be internationally spread throughout the calendar. Away from football, the European market has seen significant interest for sports that are exceptionally well suited for in-play betting, such as tennis, volleyball and basketball.
The future In-play betting is an online-specific market so, of course, the high Internet penetration in Europe is a big factor as to its prevalence. As more countries go online we expect them to follow the same path. We can only see a continuation of the major growth experienced thus far, by attracting new revenue streams but also by bringing in more of the traditional bettors as discussed earlier. Pre-match betting will always be a factor for sportsbooks but in the future, it will be the live betting market and its related products that will ultimately define the online bookmaker. n
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PayPoint.net is delighted to be Headline Sponsor of the 2011 iGaming Business Payments Supplement
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Unlock Greater revenUes with intelliGent Payments It is clear that by gearing a business for the online marketplace you substantially increase your opportunities to make revenue. However, with increased competition and uncertain economic conditions, it can be difficult to achieve financial growth. Michael Norton, Managing Director of PayPoint.net explains that although the gaming market continues to show some buoyancy compared to other areas of the economy, the current climate still presents many challenges. In today’s competitive environment, gaming operators are well aware of the high costs associated with customer acquisition and customer retention. Marketing and platform costs, as well as affiliate and player costs are increasing and customer lifecycles have shortened, with the fickle nature of consumers resulting in increased churn. It’s not enough to drive traffic to your site; you need to ensure you get ROI on your marketing efforts. It costs a lot of money driving traffic to your site so once custom arrives, you want to make sure you don’t lose it – every transaction has to count if you want to run a profitable online gaming website.
Dynamic payment environment Unfortunately, the journey doesn’t end at the payment page. Just because a customer has paid and the money has left their account doesn’t mean the transaction will succeed. An issue that gaming operators are faced with in the card acceptance arena is declines from what appears to be legitimate depositors with valid cards. It is estimated that of the 35 percent of transactions declined in the online gaming environment, the majority are rejected for non financial reasons. For many operators, this equates to approximately 20
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percent of total attempted transactions resulting in a drop in revenues and increased customer annoyance. This is a phenomenon that has been gaining traction in the gaming industry with no solution forthcoming, until now. The solution that has been developed is helping online gaming operators improve successful card transaction levels. In the process of bringing this product to market, it has also identified numerous characteristics of failed transactions as well as the reasons why. These findings have challenged the belief that a card transaction will either be accepted or declined and that the gaming operator is powerless to influence the outcome. In fact, in a dynamic payment environment, operators can recover the majority of lost transactions identified above.
Cause and effect The causes of authorisation declines are numerous and complex. There is rarely a single fix. Each Visa and MasterCard issuer has its own authorisation systems, policies, processes, risk parameters and other considerations that must be factored into the overall solution. For example, there are banks that refuse 7995 transaction codes, some that will
not accept transactions from certain European countries and some that refuse 3D secure transactions – this is just the tip of the iceberg, but gives an impression of the types of issues we have to deal with. Understanding and optimising the transaction configuration offers the greatest probability of success. This can be achieved in real-time to ensure that an exceptional customer experience is maintained. Payment processing in the online gaming environment is dynamic with the rules and systems used by the banking institutions changing on a daily basis. By keeping tabs on these developments, we are able to provide a future-proofed solution that will continue to benefit the gaming industry. In addition to delivering greater revenues and a better return on marketing spend, there are other financial benefits to this approach. For instance, 3D secure transactions are significantly cheaper to process from a direct cost and fraud risk perspective. Currently, very few gaming operators use 3D secure because a large number of transactions get declined. By optimising transactions, gaming operators can benefit from the additional security of 3D secure processing SponSored by
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without the increased risk of harming the customer experience. Ultimately, transaction optimisation can deliver increased revenues from gamers who are able to deposit quickly and easily, combined with greater customer satisfaction with more gamers playing and depositing larger sums. The ability of each remote gaming operator to swiftly and successfully take card payments defines its success. Marketing funds are wasted if the customer experience is ruined by an unsuccessful attempt to deposit funds; conversely, there is a huge competitive advantage to be gained from getting it right.
Opportunity losses On the other side of the coin is the ever-present threat of online fraud and how to ensure you accept transactions in a risk-free environment. It goes without saying that an effective fraud solution is essential for any online business to minimise risk and loss. If a fraudulent transaction takes place, not only do businesses lose out on the transaction, they may also be subject to fines, or even blacklisting by the card issuers. However, managing fraud can be time intensive, costly and at times, inaccurate. Many businesses implement fraud prevention tools that are configured with the mindset that reducing risk means reducing acceptance of transactions. However, by being so restrictive, they are, in fact, declining transactions that are not fraudulent (often referred to as ‘opportunity losses’). By taking a ‘safety first’ approach and declining all suspicious transactions, a significant proportion SponSored by
of all potential sales volume is rejected. This approach offers no opportunity to maximise revenues or seek out additional acceptance. Risk is ever-changing, so a flexible fraud management solution that can be instantly tailored to adapt to your businesses risk profiles, allowing you to build bespoke screening rules to manage fraud
Taking payments is essential to the survival of your online gaming business but don’t lose sight of ways in which you can maximise customer conversion. More than ever, it’s becoming critical to establish a partnership with a key technology provider who offers advanced, intelligent payment solutions. With this knowledge at our fingertips,
“It is estimated that of the 35 percent of transactions declined in the online gaming environment, the majority are rejected for non financial reasons. For many operators, this equates to approximately 20 percent of total attempted transactions.” and the needs of your business, is advisable. Any PSP worth a second glance will offer configurable fraudscreening solutions and authentication mechanisms, such as 3D Secure, at a minimum. But by looking at more than just fraud and evaluating the complete online purchase process from beginning to end, you can significantly minimise your opportunity losses. There are many fraud solutions out there that will minimise risk for you, but make sure you find one that takes an intelligent approach to fraud screening rather than a one-size-fits-all approach.
today’s gaming operators are able to accept more payments while maintaining stringent risk controls. This makes your service to your customers even more efficient. In such a dynamic environment, operators should appreciate that there is much more to making money than simply processing payments. In order to succeed and stay ahead of the game, online gaming operators need to understand where unnecessary losses may stem from, how to address them and have a solution in place that can convert them into increased profits. n
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Emerging Markets – the State of Online Payments As emerging markets continue to show economic growth rates that far exceed those of developed nations, it is no surprise that gaming operators are looking to expand into these territories, by Tricia Lines Hill, VP Marketing and Corporate Communications at First Atlantic Commerce. Overall, emerging markets are expected to grow at about 6.1 percent in 2011, according to the Royal Bank of Canada. Compare that to expected North American and European growth rates of somewhere in the 2.5 percent range and expansion into emerging markets seems a good proposition. But just as these markets open up huge revenue potential, they also expose new challenges, of which payments top the list. An obvious element to the success of expansion in these markets is the payment systems and access to each payment type. Currently, not only are the online payment systems across the emerging markets underdeveloped, but payment methods and consumer preferences are different in each country. For the purpose of this article and space constraints, I will only refer to the payment methods in the emerging markets of the Latin America Caribbean Region, which ranks second among emerging markets (behind Asian countries) in terms of GDP growth (according to the International Monetary Fund [IMF], the region’s economic growth is forecast at four percent for 2011).
Latin America Caribbean Region (LACR) The online marketplace in Latin America is growing at an unprecedented rate. Francisco Ceballos, Country Manager at MercadoLibre Mexico, the largest eCommerce player in Latin America, said that Internet sales have grown at a compounded rate of 30 to 40 percent for the last five years, as reported by Worldwide Business Research (WBR). And according to WBR, 28 percent of Latin America’s half a billion people are already using the Internet. With increased broadband penetration, better access to computers, and improved payment and security options, experts predict this number to more than double by 2015. A compelling reason to expand.
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Many of the large multinational operators have already developed roadmaps for expansion or are currently serving various markets within South America with Mexico and Argentina proving particularly popular. For those companies looking to enter LACR, each jurisdiction in this region needs to be considered separately as the payments systems are unique to each country. In Argentina, for example, popular methods include Babro, CobroExpress and Ripsa cash payments, Cabal, Shopping and Italcred local credit card payments and Argentinean bank transfers. Mexico does not allow credit card payments for online gambling. However, Oxxo, 7-Eleven and Elk3tra are prevalent cash payment options as are Bancomer, Santander, IXE and Scotiabank bank deposits and transfers. Ukash is also available in both markets. The banking market is underdeveloped and this clearly poses a challenge for the gaming industry. Yes, there are various payment options out there, but they are primitive when compared to Western payment methods. Cash payments and bank transfers are not instant. So there is a lag time between a player’s deposit and them being able to play the game. It takes between 24 to 48 ‘working hours’ for a company to get paid via a cash payment method and 48 hours for a local bank transfer. Plus you also need to add in the window of time it takes for the player to initiate the payment. This, of course, takes away from impulse gambling revenues and affects the speed at which an operator can acquire new players.
Working with the right payment provider The bottom line is that if you are looking to grow your business outside of the UK and/or Europe, you need to consider LACR. While there are challenges,
the online market is large and growing, and the right payment partner can connect you to the popular payment methods across the region. Look for an international, Internet payment solutions provider that understands the region, and provides both credit card processing (if available) and domestic payment options across your planned markets of entry. Operators that find the right partner will be able to focus on their game, while leveraging the expertise of the gateway. Gaining access to alternative and domestic payment options via one implementation or point of contact is a key component for expansion. Not only is it a cost saver in terms of integration time and IT/HR resources from the outset, but it will allow you to spend less time on managing these payment infrastructures going forward. n
First Atlantic Commerce (FAC) is a secure, pCI certified payment gateway that has been offering custom, online payment and risk management solutions since 1998 to merchants across the Latin American Caribbean region, europe and Asia pacific. We are based in the Latin American Caribbean region for credit card acquiring so we understand the region and we can support payment using popular domestic services across the Latin American Caribbean markets. payment methods include real-time bank transfers, eWallets and online cash payment systems including those previously mentioned, as well as electronic Funds Transfer (eFT), checks, Ukash and Moneybookers. For information on how First Atlantic Commerce can help your business, please email us at sales@fac.bm.
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Innovative. Online. Payments. Online gaming is a fast changing business. As a company that services leading global players, processing in excess of ÂŁ10 billion in transactions annually, we understand the challenges and opportunities you face. We know that every business is unique so we specialise in innovation and customisation. Much more than a payment service, we also offer intelligent routing, advanced risk management and PCI DSS compliance. By developing tailored solutions for your business we can help you maximise revenue, streamline your processes and keep you ahead of the game. Plus we ensure peace of mind by operating a reliable, resilient and secure payment platform that is accredited to all industry regulations.
Find out more Web www.paypoint.net/igaming Call 0800 810 0138
PAYMENTS SUPPLEMENT 2011
Why emerging markets will be next.
People in so-called emerging markets, such as Brazil, Mexico and Russia love to play games. But do they pay? Up until now, mainstream game companies have found it difficult to monetise emerging markets with their traditional retail business models. The high-entry pricing of hardware and software, as well as illegal copying of games, has limited growth. Due to the simultaneous uptake of several new online and mobile game platforms, genres, and business models, the gaming landscape has changed dramatically. The shift towards ‘free-to-play’ games offering an enhanced experience, with micro in-game payments, could provide the ideal strategy to open up the emerging markets and deliver the levels of revenue so long anticipated from these parts of the world.
How the West was won New research on consumer gaming behaviour and preferences has revealed the impact of online and mobile business models in mainstream gaming. International market research firm Newzoo reported that at least 48 percent of the $24.7 billion spent on games in the US was spent online. This was split across digital downloads ($2.5 billion), social games ($1.5 billion), casual game websites including skill gaming ($3.7 billion), Massively Multiplayer Online (MMO) games ($2.7 billion), and mobile devices ($1.6 billion). Key EU markets such as the UK (£3.7 billion), Germany (€4.9 billion) and France (€4.0 billion) show a similar divide. On average, growth across all online and mobile game platforms has almost entirely compensated for a drop of 20 percent in total spend on console games. This ranges from 27 percent for MMOs to 66 percent for games played on social networks in the US. Growth percentages in Europe are even higher.
How the rest will benefit These new business models offer gamers in emerging markets an opportunity to play high-
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quality games without any entry barrier, as well as a variety of ways to start paying that fits their budget and payment method preferences. Of course, it is all about conversion. Peter Warman, MD of Newzoo comments: “It is the combination of recent developments that has changed many games companies’ views on emerging markets. Online business models have been optimised, illegal copying isn’t an issue anymore, and enough profits have been made in Western and Asian markets to give them the financial resources to localise and market the games.” Bob Voermans, Senior Business Development Manager EMEA of GlobalCollect, adds: “As a payment and monetisation consultant for international game companies, I suddenly see everyone put emerging markets, such as Brazil and Russia, on their priority list”.
Global business, local money Publishing games online is an international business, contrary to the retail-driven traditional games business. As many game companies have experienced first-hand when servicing European consumers, localisation is key to monetising players. Adapting gameplay, visual design and language comes to mind first, but it is adapting the business model and choices of payment methods to local preferences that are actually the key drivers of a successful monetisation strategy. John Peterson, Senior Business Development Manager NorthAm GlobalCollect, comments: “I have worked with clients who have attracted significant numbers of players to their games in emerging markets by offering local payment methods. We have assisted them to extend and optimise their payment solutions to meet local preferences, resulting in a 20 percent increase in revenues from those regions. That easily covered the cost of content localisation.”
Where to start and what to expect? It is relatively easy to conclude that emerging markets provide unique opportunities at this moment in time, considering the current state of the market. It becomes harder when having to decide on what countries to focus on first, how to localise your content and business model, as well as backing up your plans with facts. Stuart Mann, Business Development Manager EMEA at GlobalCollect explains: “We have seen year-onyear total transactions grow 103 percent in Russia and 228 percent in Brazil in 2010. We have also witnessed the growing impact local payment methods have on monetising games. Both the Brazilian payment method, Boletos Bancario, and the Russian payment method, Webmoney, doubled the number of consumers using its service online via GlobalCollect. In addition, the Average Transaction Value for these local payment methods increased in 2010, with Boletos matching that of credit cards in Brazil.” Bob Voermans adds: “It is these types of industry insights we use to advise our clients on a strategic level. We know that research is vital to ensure gaming companies implement the right strategy to grow their online business. As a logical consequence, GlobalCollect has chosen to back the new series of National Gamers Surveys in the US as well as Asia and emerging markets performed by Newzoo this March.” ■
GlobalCollect is one of the world’s premier Payment Service Providers of local e-payment solutions for international Customer Not-Present channels such as Internet, mail, and telephone orders, and specialises in a wide range of industries, including online gaming. GlobalCollect offers access to a portfolio of payment methods in over 200 countries and 170 currencies. www.globalcollect.com
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Boost your Affiliate Business with Easier Payments As the iGaming industry grows, so does the need for fast, secure payment options. With affiliates motivated to make money while wanting instant access to commissions, the best way to attract and retain them is to make payments fast, easy and versatile. Dan Starr, EVP and CMO at NEOVIA Financial, outlines five key considerations for merchants who are looking for a cost-effective and efficient affiliate payment system. 1) Free and instant payouts In the past, the preferred payout options of gaming affiliates were bank wires and transfers, but they can be slow for the affiliate and costly for the merchant. Payment methods that take less time and money have gained popularity on a large scale. When a merchant is deciding what payment method is best for them – usually one that is free and instant – they should make this the top withdrawal option for their affiliates, keeping in mind that most people choose the first option presented to them.
2) Integration and availability of payment options A key factor here is ensuring that quick and easy payment methods are available to affiliates wherever they are, taking into account their language and currency of choice. With numerous affiliates in various countries requesting payments in their own currencies, merchants must ensure they are flexible enough to provide affiliates with payouts in the currency they choose. Integrating with multiple payment options is also vital to ensuring that they are able to support affiliates from around the globe, particularly in key affiliate markets like Eastern Europe, LATAM and the BRIC countries. Payments providers, such as ourselves, have responded to these demands by offering more enhanced service, in our case, service in over 180 countries and 18 currencies integrating many international and local deposit and withdrawal options.
3) Affiliate benefits and perks Ultimately, the affiliates choose the payment option, so supporting their preferred choice could result in merchants winning more business from both new
and existing affiliates. The types of features affiliates look for in their preferred payment system are: the ability to get instant and free payouts from their merchants; instant withdrawals (ideally through a prepaid card); simple peer-to-peer payments that allow them to pay their customers or sub-affiliates in whatever currency they need to, and, of course, a system they can trust. After all, many affiliates use their payment system as their business bank account. Having different types of withdrawal options also plays a role in establishing trust among affiliates. Having more and easier ways to withdraw is an important part of ensuring that affiliates have confidence in their system, and it creates repeat business. Our experience has shown that merchants who offer easy payout options get more repeat business and greater customer loyalty. Security is another crucial aspect. Because some affiliates treat their system as a secondary bank account, it is vital that they opt for a provider with a solid track record against security breaches like account hacking.
4) Available through popular affiliate networks With some merchants actively working with hundreds of different affiliates, it is important that the software managing their affiliate program includes the affiliates’ preferred method of payment. Indeed, the bigger the affiliate base, the bigger the problem for merchants, as paying out to 100 unique affiliates via different payment options can be an arduous manual process. Using a flexible payment option already integrated by leading
affiliate networks reduces the hassle, cost and time of paying out commissions to affiliates.
5) Reputation Reputation plays a huge role in attracting and retaining customers, especially in today’s increasingly socially-driven iGaming industry, where players can share their experiences of a company to a wider audience through the likes of Facebook, Twitter and YouTube. More than ever, when it comes to money, trust is key, and is built on a company’s reputation. While reputable payment methods drive affiliate adoption, less trusted ones have a negative effect on an affiliate’s uptake. As such, merchants should look for a company that is regulated, publicly traded (as this guarantees a level of transparency and governance) and also one that affiliates choose themselves. Choosing a payment partner that will help enhance their reputation is vital to a merchant in the affiliate industry. n
Dan Starr is Executive Vice President and Chief Marketing Officer at NEOVIA Financial. Mr Starr is a proven global business executive with more than 15 years experience in the software industry. He held the position of CMO at Salesnet, a pioneer in the on-demand customer relationship management (CRM) market, where he propelled worldwide brand awareness to number two. As Vice President of Marketing at Parametric Technology Corporation, Mr Starr successfully led project teams responsible for driving re-positioning, branding, go-to-market, product, online and customer loyalty strategies.
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the future of moneybookers
payments supplement 2011
New technologies can dramatically increase your conversion rates and revenue per user. Meidad Sharon, VP Sales and Marketing at Safecharge, explains three ways to leverage the latest trends and tech for better results. 1. Keep the players playing There is no longer a need to stop your players from playing and redirect them to a series of payment pages. Instead, new payment tools help you maintain consumers’ interest and prevent interruptions or reasons to abandon the payment process. With Flash payment screens, the payment process becomes simple and intuitive, with more appealing graphics, interactivity and customer experience than old fashioned HTML payment pages. Without leaving the game, a window pops up and asks the user for payment details. Once completed, the window disappears and the player continues where he left off. If he has already provided his details once, the Flash pop up simply confirms the amount and payment is made with a click. The Flash payment model may be easily integrated into gaming and other e-commerce products, allowing the end users to pay for their requested service or to top up their balance quickly and conveniently. The ease and speed of Flash payments raise conversion rates dramatically. In particular, the Flash model makes the repeat payment of micropayments in the midst of playing a no-brainer, thus raising the average revenue per user. It should be noted that the Flash payment model will work best in a Flash environment – that is, integrated into a Flash-based game or application. Easy to integrate, Flash payment screens may be customised and branded with your look and feel.
2. Let them choose how they want to pay Flash payment screens support any direct type payment method – such as, but not limited to, credit cards and direct deposits – as well as the redirect SponSored by
ones. Generally, the more payment options you make available – including local methods, even if you are an international vendor or service – the higher your conversion rate because you are basically casting a larger net. And let’s face it; consumers are particular about their payment methods. They want to pay with their preferred method, and will frequently switch vendors based on this criterion alone.
in order to maximise the processing of legitimate transactions while minimising the false positives. The combining of leading-edge algorithms with historical transaction data means that the system’s database continually learns through experience and identifies subtle patterns in buying habits and characteristics of online fraud perpetrators, enabling the relevant risk management team to make more reliable decisions. Enhanced
“Consumers are particular about their payment methods. They want to pay with their preferred method, and will frequently switch vendors based on this criterion alone.” 3. Maximise legitimate transactions. Minimise false positives Flash does not mean compromising security or fraud protection… in some cases, flash increases security as it overcomes certain last word hacking techniques. Flash payment solutions, such as SafeCharge’s Payment Booster, are designed to minimise the distraction to the end-user, while maintaining the highest security standards, meeting all of the requirements set by the international PCI Data Security Standard. Flash or not, minimising your exposure to online fraud by using an advanced risk platform is critical. Advanced systems should have a comprehensive fraud detection solution that is a web-based ruling system developed by expert industry professionals
verification methods allow merchants to customise their own transaction rules as well as define report tools according to specific parameters. Systems such as this grow with their clients, adapting to their needs in order to maximise their profits and minimise their risks. A key way to maximise approval ratios for legitimate transactions is to optimise the transaction traffic among a range of respected acquiring banks (SafeCharge’s Payment Manager routes transactions to the optimal acquiring bank according to predefined parameters and best practices). For example, local banks are often more accepting of local users, so Spanish consumer transactions may be sent to a client’s acquiring bank in Spain and German transactions to a German bank. n
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payments supplement 2011
Markets on the Rise: Latin America and Europe Jim Broom, Sales Director at Entropay and Michael Norton, Managing Director of Paypoint, look at two regions that continue to grow in prominence in the iGaming industry: the emerging Latin American market and an evolving Europe. Latin America Jim Broom, Sales Director, Entropay As the emerging markets for the iGaming industry continue to expand rapidly, it is becoming ever more apparent that the Latin American stronghold in the market is one which will continue to grow. There is enormous potential for new gaming businesses and those domiciled in other jurisdictions for development into new areas of work in the continent. This is exemplified by the fact that in 2009, the population of Internet users in Latin America was 118 million among a population of more than 400 million, making the ratio enormous for one of the global emerging markets and in tandem with a solid penetrations rate, is a clear indicator that opportunities for growth are rife within the gaming sector. Although the market in Latin America is a challenging one – not yet as refined or developed as many of the global gaming markets – it boasts one of the fastest growing e-commerce segments globally. One of the most pressing challenges the Latin America region faces in the iGaming sector is with regard to online payment services, which are, notably, a crucial component to the success of any iGaming offering. The payment service providers in the continent are of a different standard to those that have evolved in other jurisdictions globally. Similarly, the need for the localisation of payment services is imperative across the region, in that, without attention to detail, there will be a fewer uptake of new gamers.
Payment challenges for Latin America As more gaming companies move into the region, there will be greater pressure on service providers to match-up to increasingly high standards, and alongside this, there will be a large space for expansion for payment solutions in terms of their offerings. Often, in the Latin America region, accepting payments online from first-time consumers can be an incredibly cumbersome process, and
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approval rates for transactions can be very low. Payment processing poses many challenges, varying from country to country across the gaming sector. For example, in some countries across Latin America, customers are required to have an international credit card to perform online operations, subsequently closing off potential customers from the industry. It is here that the local aspect comes into play, and an increased focus on local payment methods would be invaluable to the Latin America industry. The advent of the Latin American region’s presence in the iGaming sector will impact directly on the role of payment providers, resulting in an increased demand for alternative payment solutions, whilst putting pressure on the challenges that payment providers in the region are already facing.
Europe Michael Norton, Managing Director, Paypoint The regulative landscape throughout Europe will be quite different in 2012. Mindful of the forthcoming changes in the gaming marketplace, it is clear to see that the age of regulation is upon us and will be one of the main challenges facing gaming operators this year. Many operators currently take the stance that as long as they have a valid online license (e.g. Malta, Gibraltar, UK, etc) they will continue to accept bets from any EU country, regardless of local laws there. The European Commission is trying to change this outlook to enforce a consistent approach across Europe, but it has been a battle, as different jurisdictions have different laws and circumstances. So what will 2011 bring? A number of European countries are looking to regulate gaming. The tax revenue is an attractive incentive given the current state of the economy. We expect this move to be adopted by numerous countries. Localised regulation will lead to higher costs in each territory
which means that strong business cases will be required upon entering those markets. A consideration for operators will be the fact that with every new market comes a higher level of risk. As the regulatory environment for gaming can vary significantly from one territory to another, this not only adds to the complications of running an online global gaming business, it also makes it far harder to adopt common policies for managing fraud. Whilst there is a range of technology solutions available, which facilitate every key risk management process, successful operators will need to combine these with intelligence about every territory they operate in. As there is no one rule for Europe, a close understanding of every new market entered is required and gaming operators will need to assess what is best for consumers in that region. This can be a lengthy and expensive process. Talking to existing online payments and KYC providers with global experience will go a long way to help implementing the right policies for future success. Product development and optimising content will also be a focal point as the software or playability offered by the operators to the consumer will remain crucial. Evolution of payments will continue throughout 2011 as conversion of the customer from viewing, to registering and to finally depositing funds successfully is essential. Innovation from the payment providers will play a part as they offer operators intelligent routing methods to improve card success rates that maximise revenue. Something that cannot be overlooked is implementing local payment methods within each territory, as payment behaviour differs considerably from country to country. In the UK, we’re used to Visa and MasterCard being ubiquitous with online payments but it’s not the same in Europe – as you move away from the UK, credit and debit card acceptance is a lot lower, whether it be Carte Bleue in France, iDeal in the Netherlands or PostePay in Italy. n SponSored by
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payments supplement 2011
Ten Ways Instant Payments Strengthen Affiliate Relationships While developing strong relationships with affiliates is necessary to get the most from affiliate marketing programs, most online gaming companies struggle to find tangible ways to build such loyalty. What is the best way to show affiliates you value them and the work they do? Pay them instantly. Merchants who can deliver fast, hassle-free payouts will attract (and retain) affiliates who believe in their brands and work hard to promote them.
Pay with speed and ease Instant payment methods deliver both speed and ease. Here’s how they work. An affiliate begins working with a merchant and is due to receive their first payout. The merchant sends the affiliate an email invitation to register with the instant payment provider (in this case, Entropay, see diagram). After a very short sign-up process, the affiliate is sent payment in the form of a prepaid virtual Visa card with a 16 digit account number and a three digit security code. The affiliate can immediately use the card for payment just like a traditional debit or credit card. The funds can also be transferred to a personal bank account or converted to a plastic card for PoS (point of sale) purchases and ATM withdrawals. (Figure 1) Prepaid virtual cards that operate with international card networks such as Visa and MasterCard are a secure and cost-effective way to pay affiliates around the world. Payouts can be issued in a variety of currencies, which allows merchants to overcome currency conversion issues and save on foreign exchange fees. Global payments can be processed instantly with low fees that are predictable, enabling real-
time audit tracking and easy reconciliation. In today’s economic climate, wasting money on costly administrative charges from cheques and wire transfers simply doesn’t make sense.
Building long (and profitable) affiliate relationships Here are ten ways instant payments help gaming companies drive growth and profitability through stronger affiliate relationships: 1. Use a simple payout process. Do not make affiliates jump through hoops to access their money. Only the payment amount, affiliate name and email address are required for a payout. Once issued, payments are immediately available to spend by affiliates in just a few clicks. 2. Work with trusted financial partners. Affiliates want their payments to come from reliable, well-known companies. Make sure your provider partners only with established global brands including Visa, MasterCard, Barclays and Envoy.
5. Accommodate affiliates by helping with efforts such as Google AdWords. Flexibility encourages affiliates to work more efficiently and generate more business. A strong provider will allow multiple virtual cards to be opened under one account, allowing marketing on Google AdWords to be more customised. 6. Make global payouts easy and hassle-free. Sending payouts to countries where current options are slow, limited or restrictive becomes quick and easy when using established schemes and universally recognised brands. For example, EntroPay virtual cards are issued by Visa, allowing payouts to be instantly converted to any currency in real-time. 7. Keep fees low. More money goes into an affiliate’s pocket when a merchant pays less for a payout. Your provider should charge just one low, flat rate per payout regardless of the selected currency, form of collection or country of residence. 8. Avoid cheques and wire transfers. It’s a hassle to issue them, and it’s a hassle for affiliates to receive them.
3. Pay faster so affiliates can spend more on promotion. The wheels of commerce turn much faster when cash flows quickly. An affiliate appreciates prompt payouts from a merchant, and often reinvests funds into additional marketing resources.
9. Issue payouts of any size. Even smaller payments can have a larger impact when sent on a regular basis.
4. Offer multiple spending options. Giving affiliates a choice in how to spend payouts can strengthen a merchant’s brand. Find a provider whose customers can choose the payment method best for them and spend funds through the virtual card, a plastic card or a bank transfer.
10. Maintain security. Security is critical when using any online payment method. Many of today’s providers have invested heavily in state-of-theart technology and 24/7 support to ensure that transactions are secure and deposited funds remain safe. Ensure yours is one of them. n
FigurE 1 EntroPay provides affiliate payment solutions for a number of top online gaming companies. For more info on how you can generate instant affiliate payouts and ongoing success, stop by our booths (b36) at the iGaming Super Show in dublin, May 24-27. Missed us at the iGaming Super Show? please contact us at sales@entropay.com or visit our website at www. entropayforbusiness.com.
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payments supplement 2011
The Changing World of Online Payments Julian Artope, VP Marketing of the new Moneybookers rebrand, Skrill, talks about how the company’s change in perspective is reflective of the payments landscape in which it operates. What was the impetus behind the rebrand? Two years ago, we found ourselves talking to a growing global audience through an increasing number of languages. ‘Moneybookers’ works well for a very specialised crowd – namely native English speaking online gamers. But ask a nonnative speaker and in 80 percent of cases, they will misspell the name or misunderstand it. Nowadays, we are integrated by the likes of ebay.com, Skype and Thomas Cook and are serving a wide range of international business verticals. We became a global company, while still sporting a specialised, local brand. Naturally, we needed to address this. Explain, if you could, the process behind making a decision of such significance. This is a conversion-driven rebrand. Since we are taking such a big leap, we want to create the perfect brand for our merchants’ cashier pages. That’s why we heavily tested everything to inform a very numbers-driven approach: we evaluated our brand and ideas with the help of tens of thousands of Moneybookers customers and representative online sample groups in 12 countries and various linguists for 16 languages. Eventually, this led to over 1,500 options in terms of potential names. This was distilled into a shortlist of brands which we then tested in checkout scenarios for recognition, ease of spelling, trust, and global acceptance, including colour. One of these options scored consistently well throughout: Skrill. It was clearer, friendlier and much more noticeable – increasing a customer’s willingness to pay for services. At the same time, it’s short and easy to spell, while giving us the opportunity to own a strong global word. Skrill means choice. Skrill means flexibility. Skrill means reliability and peace of mind. Skrill makes you safe online. Will the Moneybookers brand still exist under a wider Skrill business? Skrill is the consolidation of our business under one big umbrella. We are introducing it to align all of our business verticals; the one-stop-shop for all types of payments, a wider business offer and increased
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reach all from one place. While we move to this new and greatly extended home, we’ll still be offering our existing services through Moneybookers. But once people see what Skrill offers, we’re confident there will be no hesitation in making the change. How do you plan to introduce the new brand? Over 80,000 merchants have already signed-up, knowing that offering our brand on their cashiers enhances trust. Over 16 million customers have gotten used to Moneybookers, and we don’t want any of our partners to lose even a single one of their customers in the rebrand process. This is why we are doing a ‘soft’ launch. Instead of just exchanging Moneybookers with Skrill overnight, it’s a process which will be executed over the next 18 months or so. We’ll first ensure that our merchants have all the creatives and branding material they need, and enough time to integrate this on their sites, before we launch Skrill for end customers. Meanwhile, we start telling the story of Skrill on the Moneybookers homepage to ensure customers get excited about the new brand. Skrill.com will be constantly updating and evolving throughout the year. Skrill gateways will also see some product and usability improvements, which merchants can then integrate. Another key point is that Moneybookers customers will not need to open a new account, as we will simply transfer their account over to Skrill – including all the new functionalities and usability improvements. You’ve mentioned what Skrill stands for and the practical reasons why it delivers over the current branding, but what does this name provide you that Moneybookers doesn’t? It’s short, it’s global, converts on checkouts and reflects better what we do, capturing the ease and straight-forward functionality of our payment system. It nicely fits the space we act in – think of Google, think of Skype. We know it’s nonsuggestive, but it gives us the potential to add meaning to our own brand. And who knows? Maybe soon you will ‘skrill’ your funds online to wherever you need to send them.
Does the new brand represent a new business philosophy? A completely new business philosophy. It had to be. We are now a global payment provider in over 200 countries and territories, with over 100 payment options, used by 16 million customers and a suitable solution for every online business. That’s what makes us PayPal’s biggest rival. Whichever point of the online payment cycle you’re coming from, we are the one-stop-shop, whether you’re buying or selling. How it will strengthen your position in the gaming industry? We will deliver better facilities and better access to our readymade customer base all with seamless transactions that will be rewarded as often as possible. You can already see this with the VIP Loyalty Program, which is our first initiative under Skrill. We reward VIPs for every transaction they make. We’re offering more as a business and as a brand. There has been a crop of re-brands in the industry recently – what is this telling us about the current business landscape? Has there been a wider shift in the understanding of brand strength? It tells us that as the world gets smaller, the need for a global brand gets bigger. What makes our move to Skrill unique is that it is the first conversiondriven rebrand. Sure we’re changing the brand, but, as we boldly say; we’re also changing the world of online payments. n Julian Artopé joined Skrill in August 2008 and as Vp Marketing is responsible for the global marketing communication of the group. previously, he was jointly responsible for the launch success of studiVZ, a German version of Facebook as Vp Community and Communication. After finishing his studies in General Management & business Law he worked as online Marketing Manager at berlin-based p2p credit marketplace smava and co-founded Shoeboxed Inc.
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