Online Gambling, Not Quite Like the Stereotype

Darryl Kaplan of Standardbred Canada has a very good article in this month's Trot Magazine in his monthly section called "The View".

He explains in it, how racing has missed the boat on very much the past generation. He asks if the "Ontario industry report won't work, what will?" Very good questions, of course. And a good article.

In a couple of paragraphs, and I am sure only for effect, the writer speaks of offshore poker and other sites being of "little cost". This resonates well in racing, and in some way certainly true. But it made me think of how often in racing we hear things like "all these places need is a webpage and they are in business." It marginalizes them, and adds fuel to the 'if we could shut them down all will be well' folks. They are not a nuisance they are a business; one that knows their customers and exists because they do everything they can to get more.

Online poker sites for example can pay up to $150 or so for a customer, and that is only the affiliate charge. They advertise, they offer free hand histories, bells and whistles. There is cutthroat pricing. There is technological advancement, virtually on a daily basis. They have customer service programs that would make Sam Walton proud. They pay bloggers, writers and anyone else that they can get their hands on to grow. They generally work their tails off. It is one competitive business.

To illustrate, I can think this might be a meeting at an online sports betting and poker site.

Big Cheese: What is on tap?

CTO: Lots in the pipeline. We have a new API so our players can download histories into excel. We are also planning a score ticker for the desktop, an odds comparison tool and a few other software packages for our players. That in addition to making sure that we get payments out quicker. We ran a study on our players and they said they wanted that. Also our customer team has built a content spider to sweep the web for mentions of us, so any poor mentions will be responded to, and data will be logged so we fix the customer's problem. We also have scraped box score data for football, baseball, hockey and basketball and have built a searchable database, as well as a sport betting line maker with that data. Our players can now get data from these sports back to 1965 at the click of a mouse and make their own betting lines. Our studies show that we can attract new players with this, and our existing players will bet more, and be happier and more satisfied with our offerings.

Big Cheese: What about you Marketing VP?

Sr VP Marketing: Well, our affiliate program is good, we're paying $125 per customer. Our metrics on our web advertising has them coming in at $214 a new customer, down from $244. We have bloggers and some new websites signed. As well we have employed writers for our site for the football season. We are currently spending over 400k to send players to the world series of poker and they will be wearing our hats. We are sponsoring a poker tournament a two casino's. We are running commercials in 12 countries and everything is on schedule for our Super Bowl party where we invited 200 of our top players to come for free. Our comparison data showed that when we offered out a bonus on soccer betting losses, handle went up by 12% so we are going to do that with three other sports. As well we are promoting in running betting to four stock trading magazines because we think that our new software, which mirrors trading software, can encourage stock traders to come play with us. We want a slice of that billion dollar market so we made a product that sells us to it.

Big Cheese: Well I have initiated our new pricing. We now will have nickel lines on baseball. Four others have gone to seven cent lines, but we have to go deeper. We have to price accordingly or we are not going to be in business for long. I also want rebates increased for some of our every day players. A new promotion: If you bet a bet a day you get more back.

This is a competitive landscape, and frankly we are not working hard enough, so let's hope the next meeting we have even better results.

I have not been to a racing meeting. But I can honestly say that I think it would be quite a bit different than that one.

Keep in mind, many of these sites started with angel financing of probably less than a million dollars, a far cry from the billions we have received from slots alone. We have absolutely no excuse for not competing by now.

They are beating us. They are kicking our butts. But it is not because they "put up a web page and are not expensive like racing." They are expensive and it takes a hell of a lot more than a web page to win. They win because they sink money into their businesses, understand their customer, and have an entreprenuerial drive that is second to none.

We need some of that spirit.

If we stole 0.1% of their customer base - 1 in one thousand people is all - we would more than likely triple handles in our sport. The question remains: Is there anyone out there who wants to try?