Calvin Ayre's 2012 Predictions for the Online Gaming Industry

Calvin Ayre's 2012 Predictions for the Online Gaming Industry

Press Release: Calvin Ayre Wed, Jan 4, 2012 

LONDON , January 4, 2012 /PRNewswire/ 

Last December, I published predictions for the online gambling industry in 2011. Looking back, the results were strong which has encouraged me to offer the online gambling industry fresh prognostications for 2012.

1. AMERICA: Long before the US Department of Justice's admission that the Wire Act didn't extend beyond sports betting, I was on record as predicting no positive momentum for online gambling legislation at the federal level in 2012. Anyway, the recent DoJ announcement just underscores my long-held belief that it's the states that make the gambling decisions in the US.

I say it's 50/50 that there will be one more state doing remote gambling in 2012, and even that one state may only offer online purchases of lottery tickets. But while progress will be slow, this state-by-state process that started in late 2010 with remote sports betting in Nevada will continue to spread over the coming decade.

2. EUROPE : I don't expect much in the way of significant developments here. With faith in a common currency significantly shaken in 2011, the ongoing Balkanization of Europe's gambling markets will only accelerate. Overall, this is a stale and mature market with an economy that will remain shaky for a long time to come. The smart companies (smart enough to have steered clear of public markets and shareholder meetings) will be shifting their focus toward…

3. ... ASIA : This market is still in its infancy, yet it's already bigger than the rest of the world put together. Those who make a name in this region have yet to be determined, but one thing is for sure: public companies will not be among them.

4. LATIN AMERICA : The southern half of the western hemisphere will never rival Asia in terms of scale, but in gambling terms, it's largely virgin territory, and probably represents the second best market to target in 2012.

5. INDIA : A massive market that always seems to get overlooked for some unexplained reason. Someone will figure out how to crack this market one day, and when they do… cha-ching.

6. CONVERGENCE SWINGS BOTH WAYS: In 2011, the focus was on land-based casino companies getting their digital feet wet. Going forward, I can see at least one major online brand laying a brick and mortar foundation in 2012. Someone is going to crack the integration code, overcoming the challenges of combining online and land-based gambling into one symbiotic business model. It's my opinion that the guys best positioned to do this integration are the online companies that control their own technology and are not burdened by massive amounts of debt. Unlike online, land-based gaming is a natural fit for the public markets as you are subject to whatever regulations exist in the country in which you build, and you know you are never going to move a land-based casino.

7. MO' MOBILE, MO' OFTEN: patently obvious but mobile is still on a massive growth curve.

8. LIVE DEALER CASINO: Already massively popular in Asia , live dealer's appeal will spread to other markets and into other forms, such as bingo. The technology has matured, and bottom line, it's just more fun. Conversely, as live dealer casinos continue to excite, RNG casinos have grown stagnant due to a profound lack of innovation by the super-complacent companies that dominate this space. However, this stagnation means the road is wide open for some innovative company to make serious inroads.

9. SPORTS BETTING: The sector will continue to evolve slowly but vibrantly, with more betting types and increased integration with social media. Sports betting is the most complicated of all the channels and has the largest barriers to entry. This means that most of the innovation will come from existing industry players. Look for this to happen primarily in less regulated markets, though - as usual, player value is highest where the regulatory hurdles to experimentation and innovation are lowest.

10. BODOG RECREATIONAL POKER PLAYER MODEL: Though released in late 2011, its impact on the global online poker industry will remain the big poker story of 2012. I recently had a chat with Patrik Selin and Jonas Ödman, the two brains chiefly responsible for the rollout of the new 'controversial' Bodog Poker Model. These two have been developing this model for the past five or so years and the preliminary data they're crunching tells them their theories are correct. The remaining features of their model, complete with a number of player-suggested improvements, will roll out over the first quarter of 2012.

12. OTHER POKER MODELS: Subscription poker and free-play virtual chip models will continue to grow, but their ability to convert players into risking real money will remain a major question mark.

13. HORSE RACING: The sport of kings is far from dead, but unless someone can find a way to attract a younger demographic to the track (in person or online), the knackers will continue sharpening their knives. Horseracing would benefit from some celebrity jockeys and an infusion of pop culture. The stuffy old top hat thing needs to be replaced with a hipper scene.

15. THIS SITE ROCKS AND YOU KNOW IT: CalvinAyre.com will be formally recognized as the largest and most comprehensive site covering the global online gaming market, but then I would say that.

16. WHO REALLY KNOWS?: Right this second, there's some guy toiling away in obscurity on some project that will prove mind-blowingly good but which absolutely no one could have predicted (yet, like all truly great ideas, will seem completely obvious given the benefit of hindsight).

http://winsgame.com

Bodog founder Calvin Ayre

Saturday interview: Bodog founder Calvin Ayre

Financial Post  

Vince Bucci / Getty Images

Calvin Ayre is a successful - and controversial - entrepreneur. He grew up on a pig farm in Saskatchewan, attended the University of Waterloo on a full scholarship in physics and pioneered online gambling through his Bodog website family. He dabbled in real estate, then in the stock market in Vancouver, where he lost a skirmish with securities officials. 

He built a huge gaming business and in 2006 made it to the cover of People magazine as one of the world's most eligible bachelors, and also to Forbes' 100 richest list. That same year, the United States cracked down on online gambling and he licensed his brand and technology to others. 

Today, he is semi-retired, living mostly in Antigua and avoiding travel to the United States in case of repercussions. In a recent interview in Antigua by Diane Francis, FP editor-at-large, he talked about his life, his future, Bodog and the online gaming world.

Q Why did the Americans crack down on Internet gambling?

A They became concerned and passed the Unlawful Internet Gaming Enforcement Act, which restrains transfers of payments between banks in the United States and international gaming companies. It's not in effect until June 2010. It's not illegal for Americans to place bets, but it is illegal to solicit them. So, none of us located there. The first attacks began in 2006.

PartyGaming, a U.K. public company, raised US$10- billion in 2005 and that's when the U.S. government started changing [its focus]. [PartyGaming's] CEO was jailed and massive shareholder value was destroyed. Another, named BetonSports, was busted and all their customers lost all their money, too. The U.S. situation was partly due to the fact that some politicians didn't like it from a tax perspective [operators weren't incorporated or paying corporate tax in the United States]. 

Las Vegas is divided on online gambling - some are for it and some against. But you can't stuff the genie back into the bottle. The powers that be are trying to figure out how to tax online gambling. I predict it will be slowly legalized in a hodgepodge of states. Democratic Congressman Barney Frank is talking about bringing in a regime. The current U.S. stance is the same as Prohibition, which didn't work then and won't work now. 

The U.S. will end up taxing online gaming in five or 10 years. The Canadian government is still sitting on the fence, but Quebec, British Columbia and a Maritime province are talking about intra-provincial online gaming.

Q Have they gone after you and is this why you live in Antigua?

A No, I haven't lived in Canada for 10 years or been in the Canadian tax system. The legal system did not allow me to do this in Canada legally. (He could not locate his head office and operations in Canada.) Now I like living in the tropics. I went home for a month this summer and love Canada. 

As for Bodog, I've retired as a gaming operator. I own the brand names - Bodog.com - but have licensed them and the technology to others in various regions. Europe and Canada are served by Bodog Europe out of Antigua, where gaming is legal; Asia is served by Bodog88.com owned by a Canadian guy in the Philippines; and the United States is served out of the Mohawk reserve in Canada. My license model is like a franchise, but they have to operate their own entities. If they get into trouble or have a scandal the licence reverts back to me. But these are five-year deals.

Q How have you escaped the type of problems the British and others have had?

A [The Americans] have left me alone. I voluntarily exited that market in 2006. I don't think any of us are important in the big picture. The U.S. has a few other problems to think about these days. It's flattering but there are much bigger issues right now.

Q You don't go to the United States. Why?

A I wouldn't go because nobody in our space will go there. It's just standard procedure.

Q How much did Bodog make before the crackdown? Forbes said you were a billionaire?

A My current deals aren't revenue based and are all different structures, which I don't talk about. Forbes audited our books and based the number on the same multiple that the British public companies were trading at, or more than US$1.5-billion. In 2006, Bodog made US$320-million in revenues and 25% profit.

Q Does it upset you that the Americans did this?

A It's as if you owned an airplane and it crashed. You cannot cry about it. Things happen. You just have to deal with it. I have a nice life.

Q What about stories that the Americans seized US$24-million from a Bodog bank account?

A The operators of Bodog for the U.S. issued a press release and said that was not their's or Bodog's money.

Q What is the state of Internet gaming today after all this?

A It's bigger than ever.

Q Since it is not regulated everywhere, is there fraud?

A In the early days there were some issues, but the Internet has built-in transparency. Cheating sites are outed by players and the good sites get bigger. In 15 years, Bodog never missed a payout of a winning bet so we have a really strong brand. You grow your business by paying out all your winners. Also, the software in the jurisdictions where gambling is allowed is routinely audited. In sports betting, the scores are the scores so players monitor. It is self-regulated in that sense.

Q What's next?

A In September I will be launching a Bodog poker network. Poker is not illegal to bet online in the U.S. because it's considered a skilled game. It's a grey area, but there are lots of American companies with poker sites. I hired a guy who ran one and in 2010 we will have our site. Then we are planning a fifth Bodog business in Latin America in Spanish. I've also started Bodogbrand.com, which is an e-zine about the gaming industry with blogs and photos and party coverage. There's also Bodog-branded coffee and we are looking at coffee bars, starting in Latin America, possibly with gambling too.

Q You were in real estate and the stock market. How did you get into online gaming?

A It started in 1994, when I was in Saigon and could not get the Stanley Cup results for days. I was there to manage a real estate development and decided things were not working out well, so I walked away from my investment. I already had HQ Vancouver - a technology incubator company. I studied the Internet - knew it would revolutionize the world. I have a bachelor of science degree and taught myself networking. Then I read the newspaper one day about Ron "the Cigar" Sacco, who was taking bets in the Dominican Republic from over the phone. That was the lightbulb moment for me - sports betting over the Internet. Nobody else was doing this so I started building the software. With money raised in the market in 2000, I put up my website in three months and hired Carl Schmidt, a brilliant and hardworking software architect right out of university.

Q What's the future of gaming?

A In five years, Bodog will be a dominant player online again and governments will all be in this business.