The future of i-gamingbusom.com/xfiles/Eurotechno 2003 Speech.pdf · Betfair Case Study.. Internet...

Rais Busom

[email protected]

Rais Busom

[email protected]

The future of i-gamingThe future of i-gaming

Made by professionals, Made by professionals, forfor professionalsprofessionals

The QuestionThe Question

II--Gaming and GamblingGaming and Gambling, how , how

are are traditional operators traditional operators

moving to online and moving to online and

interactive platforms and interactive platforms and

what what can be can be learnt from learnt from

this marketthis market??


The AnswersThe Answers

..FIRST FIRST partpart ofof thethe ANSWERANSWER

.. The The traditional traditional “e“elephantslephants”” are moving too lateare moving too late

.. And too slowAnd too slow

.. And And manymany, , really doreally do notnot believe in believe in ii--gaming in short termgaming in short term..SECOND SECOND part of the part of the ANSWERANSWER

.. Not toNot tooo muchmuch has has been learntbeen learnt

.. Internet is Internet is a a good tool, but...good tool, but... How many of you still print How many of you still print

out out your your ee--mailsmails??..What can we do? What can we do?

Change from slow Elephant Change from slow Elephant

Companies to Companies to fastfast CheetahCheetah CompaniesCompanies


Is IIs I--gaming about fear?gaming about fear?


What is the right Strategy?What is the right Strategy?


“Believe in the “Believe in the

Internet … MORE Internet … MORE

THAN EVER.”THAN EVER.”

Andy Grove, Andy Grove, CoverCover quote, quote, Wired Wired (June 200(June 20011))


“Where does the Internet rank “Where does the Internet rank

in priority? in priority?

It’s No. 1, 2, 3,It’s No. 1, 2, 3,

and 4and 4.”.”Jack WelchJack Welch


“Let’s be clear on one thing: If “Let’s be clear on one thing: If

you take a business that is a bad you take a business that is a bad

business and put it online, it’s business and put it online, it’s

still a bad business. It’s just still a bad business. It’s just

become an online bad business.”become an online bad business.”

Michael DellMichael Dell


““WeWe allall workwork forfor

dotdot..comscoms nownow!”!”TheThe real real lessonlesson ofof thethe era era isis thatthat thethe

differencesdifferences betweenbetween thosethose onon andand offoff

thethe NetNet are are disappearingdisappearing, ,

Robert WalkerRobert Walker, ,


““If things seem under If things seem under

control, control, you you are are just not just not

going fast enoughgoing fast enough””Mario Mario AndrettiAndretti, , F1 F1 andand CART CART Champion Champion


Barriers toBarriers to ii--gaminggaming

..Land Based Operators protect their core Land Based Operators protect their core

businessesbusinesses..Gaming Manufacturers innovate littleGaming Manufacturers innovate little..Regulations and Regulators Regulations and Regulators –– Conflict of interestsConflict of interests, ,

makes it difficult to legislatemakes it difficult to legislate..This Industry is closed to innovationThis Industry is closed to innovation..Lack of Lack of IT IT professionalsprofessionals andand leadersleaders in in the the

IndustryIndustry


Enablers for Enablers for ii--gaminggaming

..Banks pushing for Banks pushing for a a position position in in Gambling Value Gambling Value

Chain prepared to financeChain prepared to finance..Young people Young people are are the target marketthe target market..Advantages of the technologyAdvantages of the technology:: anywhereanywhere, , anytimeanytime..Industry requires new sources of income Industry requires new sources of income && profitsprofits..Need to open new marketsNeed to open new markets..The Change starts at the fringes of the IndustryThe Change starts at the fringes of the Industry


The beginningThe beginning

..19941994--1999: 1999: PioneersPioneers..19991999--2000: 2000: PiratesPirates..20002000--2001: 2001: Burst the Burst the InternetInternet BubbleBubble..2002 2002 and beyondand beyond: : Traditional Industry Finally Traditional Industry Finally

ReactsReacts........but we but we are are still at the beginning ofstill at the beginning of ii--gaminggaming


TheThe MatrixMatrix of Strategiesof Strategies

Same Business Model New Business Model

Real to Virtual MGM GrandMGM GrandMGM GrandMGM Grand ????

Virtual to Real EurobetEurobetEurobetEurobet ????

Real Only LAELAELAELAE PhotoplayPhotoplayPhotoplayPhotoplay

Virtual Only Casino on NetCasino on NetCasino on NetCasino on Net BetfairBetfairBetfairBetfair

Mix Virtual and Real CirsaCirsaCirsaCirsa


MGM Case MGM Case StudyStudy

..R2V Strategy: R2V Strategy: From From real real to to virtualvirtual..Considered NumberConsidered Number 1, in 1, in this industrythis industry..TheyThey accept players from accept players from onlyonly 12 countries12 countries..Operation Operation fromfrom the the Isle of ManIsle of Man..AApprovalpproval obtained fromobtained from AAmericanmerican Gaming BoardsGaming Boards..Extremely rigorous Extremely rigorous control control and operationand operation..Good Promotions on/off lineGood Promotions on/off line


FactFact: : Market onMarket on//off lineoff lineFigure 1: Conceptual diagram: traditional gamblers forming the core of

online gamblers

Traditional

gamblers

Internet

users

Gambling experience Internet proficiency

- middle-aged

- medium to low income

- gender mix

- young adults


- gender mix

Online

gamblers

Traditional

gamblers

Internet

users


- middle-aged


-

Traditional

gamblers

Internet

users


- middle-aged


- gender mix

- young adults


- gender mix

Online

gamblers

Traditional

gamblers

Internet

users


- middle-aged


-

Source: Datamonitor D A T A M O N I T O R


25% 25% Customer Customer matchmatch

Source: The River City Gambler Monitor

Internet

paying only

3%

Landbased

casino only

17%

Internet for

free only

8%

Landbased

casino &

Internet Free

47%

Landbased &

Internet

paying

25%

9% bet using

mobile phone


MGM StrategyMGM Strategy

..They try to reach new terrestrial customers They try to reach new terrestrial customers

through through InternetInternet..Spanish Land Based Spanish Land Based Casinos can’t Casinos can’t reactreact..OnOn LineLine Casinos aren’t legal in Casinos aren’t legal in SpainSpain..Very difficultVery difficult forfor aa SpanishSpanish Casino Casino to establish an to establish an

offoff--shore operation like Hard Rock Cafeshore operation like Hard Rock Cafe


Our Message to Land based CasinosOur Message to Land based Casinos

Internet is not only a new channel Internet is not only a new channel

to target customers, it is a global to target customers, it is a global

challenge. A new kind of challenge. A new kind of

competition between Land competition between Land

Based is born...Based is born...


Eurobet Eurobet Case Case StudyStudy

..V2R Strategy: V2R Strategy: From From virtual virtual to to realreal..Born Born as aas a Phone Betting CompanyPhone Betting Company..NowNow ..coco..uk is for uk is for UK UK onlyonly..Now Now ..com is Internationalcom is International, , any kind of any kind of media media ..They They are in are in Betting Shops Betting Shops in UK (Coral)in UK (Coral)..In In bars bars in in ItalyItaly..They work with terrestrial agents They work with terrestrial agents ((runnersrunners)) and and

consolidatorsconsolidators


BetfairBetfair Case Case StudyStudy

..Internet Internet Innovation Innovation StrategyStrategy..Less riskyLess risky, , costlesscostless..Betting one to one Betting one to one ((against other punters not against other punters not

again professional bookmakersagain professional bookmakers))..EasyEasy, , SecureSecure, , LiveLive, , Best OddsBest Odds..Don’t Don’t exist exist in in Land Based BusinessLand Based Business..BetfairBetfair isis a a typical typical InternetInternet Business Model that Business Model that

really worksreally works ((like ebaylike ebay..comcom))


Two realitiesTwo realities

..Internet as a Internet as a new new MarketMarket

.. ThereThere areare people whopeople who playplay only on lineonly on line

.. YouYou cancan reach this market only with anreach this market only with an Internet StrategyInternet Strategy

.. It is It is a a very profitable niche marketvery profitable niche market

.. Off shore gambling is targetting this marketOff shore gambling is targetting this market..Internet as a Internet as a ChannelChannel of communicationof communication in in order order

to extend the present businessto extend the present business

.. The strategy mostThe strategy most compatiblecompatible for the traditional industryfor the traditional industry

.. Communications and New Technologies to serve Communications and New Technologies to serve

traditional Industrytraditional Industry

.. AA way to increase profits with minimum costway to increase profits with minimum cost


Cirsa Cirsa choose choose a mix a mix strategystrategy

..On Line systems On Line systems are are both Market and Channelboth Market and Channel........and theyand they are are also something also something NewNew..The concept of ChannelThe concept of Channel isis a a mythmyth, , onon lineline

systemssystems are are muchmuch more more than thisthan this... ... ..They representThey represent a real a real breakthroughbreakthrough..A A copernican turncopernican turn..The future of The future of ii--gaminggaming


CirsaCirsa On Line SystemsOn Line Systems

..Any kind of machine and device connected with Any kind of machine and device connected with a a

central central server or distributed serversserver or distributed servers..No No mattermatter what you want to call the productwhat you want to call the product: VLT, : VLT,

AWP+, AWP+, Instant LotteryInstant Lottery, , Interconnected Interconnected Bingo, Bingo,

Fixed Odds TerminalsFixed Odds Terminals, etc., etc...New games on demandNew games on demand..New ways of tracking playersNew ways of tracking players..New marketsNew markets..Jackpots everywhereJackpots everywhere


The Network is The Network is

the centerthe center

Scott McNealy, SUN Microsystems CEOScott McNealy, SUN Microsystems CEO


AnswersAnswers, , againagain

..We need fast Cheetah type We need fast Cheetah type

CompaniesCompanies..FastFast, , but traditional and innovativebut traditional and innovative..LeadershipLeadership..The future of The future of ii--gaming will gaming will be in be in the the

NetworkNetwork not not in in the machinethe machine


Which movie do you Which movie do you

prefer?prefer?


The EndThanks!

The EndThanks!

The future of i-gamingbusom.com/xfiles/Eurotechno 2003 Speech.pdf · Betfair Case Study.. Internet...

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