Dan Nedelko » gambling

Absolute Casino — Social Media and Gaming

Dan Nedelko — Fri, 23 Oct 2009 16:43:07 +0000

I’ve been in the eGaming industry on a number of levels and in a number of capacities for 7.5 years now, a lifetime in that sector. Over the past couple of years specifically it has become increasingly clear that the industry is completely stagnant from a product perspective. I were to specifically look at the following major channels: Sports, Casino, and Poker you can see some innovation there.

Sports: the introduction of live betting and interacting with customers through social media (not spamming them) has grown the industry somewhat. Personally I enjoy “In Game” Betting.

Poker: arguably this is the most social and progressive of the channels. Since poker is community based there a a number of interesting innovations that have taken place but as for pur “innovation” it’s still Texas Holdem without a ton of innovative build outs to that strategy and product development.

Casino: this is the stagnant sector. The traditional “money sucking machine” of the industry the competitive landscape is filled with less than reputable (trust me) offshore operators who hold their concepts of slow payouts, shady tactics and questionable marketing very near and dear to their hearts.

There are a number of reasons that this sector has not innovated from lack of regulations (promoting owners with criminal histories to maintain a fairly decent operation) to software providers who do not innovate their products or services which will always impact the marketing (if you haven’t got anything but another Casino Bonus to promote then what are you *really* selling?)

Well I ran into Absolute Casino today and was very impressed. The actual site on registration is clearly in a testing phase but the concept is fantastic (it’s actually exciting — which is new for me especially in the past couple of years). A social network aware multiplayer casino with Facebook integration.

This is brilliance and something I personally have pitched to previous consulting clients. The problem they have is paralysis, everything is so comfortable for them at the moment that innovation has gone out the window. There is also a level of arrogance, simply put — many operators are completely unwilling to invest the money and the resources into innovative products.

But if you look at Facebook, have a peek at the Poker, Casino and Gaming apps. There are hundreds of thousands of people playing on a regular basis. Mainly because Facebook makes it social, I’m not downloading some software client and clicking on a video slot machine. The interaction is the thing that makes this extremely unique.

I look forward to checking out the final product in a month or two. It should be very cool and could potential be a disruptive force in the world of eGaming. I hope so. The industry simply is no longer interesting and it is clearly being left behind, with it’s head stuck in the sand.

But it’s nice to know I am not alone in this point of view. Hussein Chahine who is the founder of Advanced Gaming Labs (and Absolute Casino) has it dead to rights:

“I have been a technology provider to the gaming and betting industry for the past five years and it became clear to me that the industry has stopped innovating. The technology suppliers are too removed from the consumer, while the operators are falling short of understanding and building a business that embraces today’s social-networked internet world. This has presented a unique opportunity for us to enter the market as a new gaming company, where millions of concurrent players are empowered to connect [and] compete.”

This should be of particular interest to any affiliates out there who are making money from the traditional model. The days for these sites are numbered unless there is innovation, have a look at the next generation of gaming providers and set yourself up for shifts in the industry. Being left behind is the worst danger.

Post from: Dan Nedelko

Boss Media Fines Licensees

Dan Nedelko — Thu, 10 Sep 2009 08:55:46 +0000

So here’s some good news in the world of eGaming, specifically online poker. I read this article on EGR this morning and through I had to write a post on it. From the article:

BOSS MEDIA HAS introduced fines for poker network licencees that rely too heavily on rakeback and don’t bring in enough casual losing poker players, or ‘fish’.

The rule will focus on the monthly payout ratio of individual Boss Media licencees, analysing the percentage of winning players against losing ones. The payout ratio is calculated by dividing the total cash game winnings by the total cash game stakes recorded for each site.

Now there a few things here that I wanted to chirp about. I’ve been involved with eGaming Marketing now for 7 years, over those 7 years I have worked with alot of providers all over the world. Since it’s a fairly unregulated market in certain areas (read: full of shoddy operations) there are some pretty interesting marketing practices.

For instance I have seen “retention” marketers that rely on heavy gamblers “move” these players from one “brand” to another and call it an increase in business (that is specifically for a single company that has multiple brands or websites). Frankly I’ve seen that so many times over the years that it makes me want to vomit.

: Image by JohnSeb via Flickr

That’s not marketing, that’s saving your own skin because the out dated marketing practices you are using are not driving in the recreational players (or in the world of Poker the “fish”). Boss Media has it right, absolutely and completely right. The fine structure they are putting in place will force it’s licencees to invest in marketing and become mainstream — appealing to normal people out there.

Far too many eGaming companies out there rely on a stock of heavy gamblers to sustain their business. When they do this they can continue to provide crappy customer service, slow payouts and treat new customers like garbage. It’s a stigma that this industry needs to get through in order for it to be come mainstream.

Think about it, if I’m a normal person and become interested in Online Poker do you really think I’m going to deposit $100 or $200 into an operation that has outdated philosophies of customer service and marketing? Those days are gone.

It’s time for eGaming and Online Poker rooms to put the customer first, market to recreational players and get with it in all areas of their operation.

Good Job Boss Media. I wish that more providers would implement similar policies and weed out the dinosaurs of the eGaming industry.

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32Red Active Players Up Revenues Down

Dan Nedelko — Wed, 02 Sep 2009 09:32:23 +0000

More interesting financials from online casino operator 32Red. Looks like they had an increase in active players, which is always good (customer service and retention likely get credit for that) but a revenue drop of 11%. Here’s a brief synopsis of the interim results:

Overall revenues –11.2% to £5.8m, from £6.4m at the same point in 2008.
Active Casino Players +23% 14,490 over the same period in 2008.
New Casino Players +19% to 9733 over the same period in 2008.
32Red now accepts Paypal transactions (one of the few to do so).
Invested £400,000 into backoffice and infrastructure.

Some interesting quotes from 32Red:

32Red attributed the fall to “the challenging economic environment faced by the UK and the rest of Europe during the first half of the year”

“Despite the global recession, 32Red has managed to grow its new casino players by a record 9,733, driven in part by our new television advertising campaign that has helped deliver a lower cost of customer acquisition. 32Red is well positioned to take advantage of any improvement in market conditions.’’- Ed Ware 23Red CEO

Looks like the recession, economic climate and consumer’s fear of spending on credit continue to affect the bottom line of gaming operators. But kudos to 32Red, they have the exact right idea. Investing into marketing now is the route to go — they’ve acquired new customers through investment in marketing. Obviously a revenue slip is not what you *really* want but then again during a global recession online gaming will be hit very hard. Particularly if the operator is seeking “retail” or casual players as opposed to heavy gamblers.

They’ll be well positioned to retain those clients and activate them when spending trends begin to rise. Smart business in tough times.

Wal-Mart website lets other retailers sell products (cbc.ca)
Measuring Influence on Twitter (daveduarte.co.za)
Revolutionizing customer care (slideshare.net)
William Hill set to lead the field offshore (telegraph.co.uk)

Post from: Dan Nedelko

Online Gaming Revenues Flat and Dropping

Online Gaming Revenues Flat and Dropping

Dan Nedelko — Fri, 28 Aug 2009 09:04:30 +0000

Well I’ve said it before — if you do work in the gaming space this recession has been fairly tough all around. Contrary to popular belief people do not gamble more during tough times, especially online. They might drink more, smoke more and watch more movies but logging on to deposit into an online gaming site is one of the first things to go during such a brutal recession.

Another significant point that needs to be taken into account is the credit crisis and crunch in the United States. Never before in the history of the US has the state of credit been so bad. I’m also not making this stuff up — have a read of this BBC article titled: Credit crunch to downturn to quote:

The International Monetary Fund (IMF), which oversees the global economy, warns that potential losses from the credit crunch could reach $1 trillion and may be even higher.

It says the effects are spreading from sub-prime mortgage assets to other sectors, such as commercial property, consumer credit, and company debt.

This consumer credit issue has caused some serious ripples in the revenue forcasts for some major online gaming organizations. In particular:

888.com casino revenues fell 23% in H1 2009
PartyGaming reported lossses in their Sportsbook operations and a flat line in Poker and Casino operations.

Being a marketer during a tough time like this makes life extremely difficult but my advice is to stay the course. Do not shift gears quickly and continue building during an economic downturn. If you position yourself properly you will be far ahead when the market begins to recover and you will reap the rewards.

Make a quick, myopic shift change and you will be taking steps backwards and be behind the game when recovery takes place.

IMF sees slow growth, tax hikes soon (thestar.com)
Dispatches from the front: Cautious optimism in Jackson Hole (dailyfinance.com)
U.S. GDP to grow 2% by 2014: IMF (cbc.ca)
You: Recession eased in second quarter, data show (msnbc.msn.com)
US slump is almost over IMF predicts (telegraph.co.uk)
Eurozone recovery under threat as credit contracts again (telegraph.co.uk)

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Online Casino Games for British Columbia

Dan Nedelko — Mon, 24 Aug 2009 08:56:46 +0000

This is an interesting new development. Looks like the Province of British Columbia will be providing a legal online casino and online gambling website for residents of the province.

The BCLC (British Columbia Lottery Corporation) is guessing that their online casino offering could generate $100 Million in revenue by 2014.

Having been involved in online gambling from a marketing side for about 7 years this is definitely an interesting development. Offshore casinos have roadblock after roadblock in dealing with North American facing customers. Everything from where to advertise to how to pay out the customers is an issue.

Check out this quote from BCLC CEO Michael Graydon:

““Rather than it all going offshore to places like Antigua, there’s an opportunity to keep it here in British Columbia,” corporation CEO Michael Graydon told CBC News.”

I was “Web Manager” at bodog.com (whose marketing arm was known as Riptown Media at the time) and created their Internet Marketing department back in the day (when I started there were 70 some employees at Riptown Media when I finished there were over 500) — that is a direct reference to Bodog as Bodog.com is now being run to some degree out of the tropical island of Antigua.

Some of British Columbia’s changes are:

Allowing online casino gaming at https://playnow.bclc.com.
Daily betting limit of $10,000 per day (from $120 per day).
A 24 hour “cooling off” period for customers who lose too much money.

This is a huge step forward for legalized online gambling in Canada (and ultimately in the US) — which is a good thing overall. I know I’ve been chomping at the bit to actually be to market online casino and online gambling products in the same way other products are marketed.

It’s time to legalize online gambling already.

Check out the source article:

BCLC introduces legal and authorized online casino gaming

B.C.‘s online casino plan draws criticism (cbc.ca)
B.C. raises stakes for online gamblers (cbc.ca)
Minnesota Sued Over Online Gambling Ban, While Frank Again Introduces Bill To Legalize It (techdirt.com)

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Online Gambling in CR Government Sites

Dan Nedelko — Mon, 27 Jul 2009 09:56:45 +0000

This article has been reprinted from http://gamblingcompliance.com:

The Costa Rican government has confirmed plans to create a new gaming authority under forthcoming legislation that will also subject all gaming companies – online and offline – to tighter licensing and taxation requirements, the country’s finance minister has announced.

The government’s plans to address Costa Rica’s worsening fiscal situation include tighter regulatory control over gambling and an extra 2 percent tax on the gross revenues of all gaming operators established in the country, finance minister Guillermo Zuñiga announced earlier this week.

Speaking at a press conference in Costa Rica’s capital, San José, Zuñiga stated that the government would introduce a new gaming bill for discussion in the country’s parliament, perhaps as early as this August.

Zuñiga said the 2 percent gaming tax on gross gaming revenues would allow the government to generate US$85m per year in new revenues. The proposal comes as Costa Rica attempts to address a fiscal situation that has seen government revenues drop eight percent during the first-half of the year, with expenditure rising by more than 20 percent. Projected GDP growth for the year has also been lowered by the country’s central bank. Under the fiscal plans, the government will also introduce US$112m worth of public spending cuts.

The finance minister said the gambling bill would include steps to establish a new gaming regulator under the control of various government departments. The regulatory body would be charged with issuing licences to gaming companies and ensuring their compliance with legislation. The new regime will apply equally to online betting operators, and the country’s 35 terrestrial casinos, according to local newspaper reports.

Zuñiga refuted any notion that Costa Rica’s move to tax and regulate gaming was related to the country’s inclusion alongside Uruguay, Malaysia and the Philippines on a list of countries that failed to meet international tax standards that was published by the Paris-based Organisation for Economic Co-operation and Development (OECD) in April 2009. Zuñiga this week described the Costa Rican government’s gambling plans as falling within a “global tendency” to regulate gambling activities.

Costa Rican casinos were made subject to more stringent licensing requirements just last year. However, an April 2009 report from global anti-money laundering (AML) watchdogs the Financial Action Task Force (FATF) criticisd the Costa Rican government over a failure to apply more effective AML controls to its gaming sector.

The report said such protocols “appear to be lacking in Costa Rica, El Salvador and Nicaragua despite recent attempts by their respective governments to better control and regulate the industries”.

Costa Rica has also played a central, if controversial, role in the development of the global online gaming sector. A number of the most prominent names in the remote gambling industry have at one time or another installed offices or call-centres in the Central American country, despite the fact that the activity has never been formally regulated under Costa Rica’s gambling laws.

There are currently around 250 internet gaming firms registered in Costa Rica, according to the US State Department. At present, these companies are not subject to either gaming taxes or specific licensing fees, although they are forbidden from accepting bets from Costa Rican residents.

Several previous attempts have been made to establish tighter controls over online gaming in Costa Rica.

A temporary law passed in 2003 required all internet gambling companies to be formally registered with the government’s finance ministry, while several other bills proposed by politicians to impose stricter regulations on Costa Rica-based operators have stalled in the country’s legislative assembly.

Zuñiga said he was confident that the government’s latest initiative would receive parliamentary backing, though he acknowledged that the government had yet to sound out its Libertarian Movement coalition partners over the gambling plans.

Costa Rica’s stock as an online gaming jurisdiction has fallen significantly since the United States’ clampdown on US-facing gaming websites that has encompassed both the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) and the collapse of Costa Rica-based and London-listed operator BetonSports just a few months later.

BetonSports’ former-chief executive David Carruthers has now pleaded guilty to violations of US gambling law following his 2006 arrest in Dallas in transit between London and his home in Costa Rica, while the company’s founder, Gary Kaplan, is due to stand trial before a federal court in Missouri later this year.

A number of gaming companies, such as Sportingbet, have also moved their principal operations away from offices in Costa Rica as they have withdrawn from the US market and come to favour bases with closer links to the online gaming industry’s core markets in Europe and, in particular, the UK.

How Costa Rica’s new rules will be applied to those internet gaming firms still based in the country is not yet clear. According to local media reports, they could see the Costa Rican government mimic tougher restrictions that have been put in place in Antigua & Barbuda in recent years. Antigua was admitted to the UK government’s ‘white list’ of approved online gaming jurisdictions in November 2008.

Representatives from Costa Rica’s land-based sector are said to broadly welcome the plans to impose stricter licensing and regulatory controls on gambling businesses. However, a spokesman from the Costa Rican Casino Association questioned the wisdom of hitting casinos with higher tax burdens when casinos, too, were suffering as a result of the country’s economic difficulties. The government’s plans to limit casino opening hours were shelved earlier this year on operators’ concerns.

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Dan Nedelko » gambling

Absolute Casino — Social Media and Gaming

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32Red Active Players Up Revenues Down

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