Big Mo -- Online Casinos

[superbook]

Big Mo --

A couple of days ago you had asked me about my trip to the conference in Toronto and for my assessment from an operator perspective on casino software quality and price issues.

Sorry for the delay, I was out of town and just now got the time to get back to you.

The bottom line is that none of the software on the market today is perfect, if the front end looks great then there are problems with the back end. It's always something.

But if forced to rate what's out there from an operator perspective, I would recommend to someone looking to buy today:

1. Gambling Software Systems (GSS)
2. RealTime Gaming
3. Microgaming

Depending on your interests, you might find some interesting info on online casinos at winneronline.com.

Just so you know where I'm coming from, my associates and I serve as consultants to this industry with a specialty in customer acquisition. So we're more interested in the business from an operator perspective and obviously my recommendations are skewed in that direction.

If you have more specific questions feel free to email me at jonruns@msn.com.

Hope this was helpful.

[heath]

<BLOCKQUOTE>quote:[/size]<HR>Originally posted by superbook:
Big Mo --


1. Gambling Software Systems (GSS)
2. RealTime Gaming
3. Microgaming
Hope this was helpful.<HR></BLOCKQUOTE>

GSS has a horrid reputation.

What is the url for RealTime?

Why/How can you put GSS over these others? I go to their site, I see nothing about their software, nothing about their licensees, etc.

Are you serious?

[superbook]

Heath –

Big Mo asked for my opinion and that’s it. There’s no question that GSS has a PR problem, but that’s one reason their products offer good value in the market today.

There are around 25 major online casino software providers in the world and those three would be where I would start if I were an operator just starting up today.

GamblingSoftware.com (www.gamblingsoftware.com) (GS) games are one of the most common JAVA-based gambling packages on the Web. The graphics aren't as elaborate as you'll find in some downloadable casino applications, but the games are fast-loading and very stable.

In business since 1997, GS has 40 licensees including: Online Casino, Abyss Casino, Alps Casino, BigShots Casino, Casino 4 Turks, Casino Brio, Casino Plaza, Cinderella’s Casino, Code Casino, Cyberbet Casino, E-Vegas Online, Excelsior Casino, Fashion Casino, Game Time Casino, Golden Coast Casino, Golden Payouts Casino, Living Casino, Lucky Dogs Casino, Lucky Win Casino, Monte Casino, Only Winners Casino, Palm Tree Casino, Picadilly-Casino, PitBoss Casino, Place My Bet.net, Prince Monaco Casino, Pyramid Palace Casino, Roman Palace Casino, Supreme Casino, Trivia Casino.com, Vegas Grand and World Class Casino.

For more information on RealTime Gaming visit their homepage at www.realtimegaming.com. They have 25+ licensees including GrandBanks Casino and INetBet.

[heath]

Superbook,

If you look back at that post, you'll see it was I who asked you about your experiences at the conference, so forgive me for following up with more questions.

How in the world you can pick Gambling Software over those others is truly an exhibition in out-of-the-box thinking.

You get a gold star for being a contrarian, that's for sure.

What did you think of playtech.com and some of the other newcomers?

Thanks for taking the time to share your experiences.

Heath

[superbook]

Heath --

I think you play the stock markets: when was the best time to pick up J&J or Philip Morris? Respectively, at the height of the Tylenol scare and in the midst of the tobacco settlement. These events said nothing about the quality of those two companies and their products but a lot of negative press significantly depressed their values. I bought MO in the Fall of '99 at 23 and its now close to 50.

IMO the same is true of Microgaming and GamblingSoftware. Both of these companies have good products but lousy PR. They got sucked into player disputes by former licensees (Golden Palace in the case of Microgaming and Players Fortune in the case of GamblingSoftware). Good products but lousy reputation with players.

Microgaming is clearly trying to turn this around and in Toronto made a real attempt to reach out to the media (just ask Spearmaster).

The darling of the show was, as you mentioned, Playtech. Their downloadable application, in Shockwave and Java, reminded everyone of Casino-On-Net. From my perspective, while the front end is nice, I didn't get a lot of questions answered about the backend. Where are their programmers, Eastern Europe, Israel?

As I mentioned in earlier posts, my primary focus is on customer acquistion and retention. IMO none of the products on the market are any good right out of the box and all need to be customized to some extent. This usually requires cooperation and programming support from the developer. You don't want to buy a package from a developer who just walks away after he's cashed your check.

The online casino business is very bonus-driven; whereas sportsbooks might pay 10-15%, online casinos routinely offer 300%. The key to avoiding bonus abuse is tracking turnover, making the player turn the free money over 4 times or so before withdrawing. This requires sophisticated software.

Tracking/retention is another matter -- customer turnover at online casinos is even higher than at sportsbooks. An online casino needs to know where are the players coming from, where are the best players coming from and who are the best players and offer incentives to keep them coming back. This is serious CRM stuff.


[This message has been edited by superbook (edited 06-14-2001).]

[This message has been edited by superbook (edited 06-14-2001).]

[KingOfTheSquares]

CRM= Cranberry Rum Muffins?

C'mon, Gives us Squares a chance. Tell us what these insider Rumma-Rumma terms are!

[superbook]

KOTS -- Sorry.

CRM is the latest marketing bs buzzword, an acronym for Customer Relationship Management.

It means getting to know your customers as well as possible so you can give them exactly what they want. More and more possible with todays technology.

For example, if your off-shore book knows you like to communicate by email and that your favorite team is the Yankees, they can send you an email every day the Yankees are playing reminding you to place your bet on the Yanks along with the latest odds. Or they might email you with the offer of a Derek Jeter autographed ball if you post up another $1000. CRM is about recognizing that all customers are different and tailoring individual products and offers to them.

The cranberry raisin muffins sound good though.

[BigMo]

Thanks Super,

and you too Heath.

Since you brought up the investing thing,it fits my que to you: who was the best from the operators standpoint. Since I'm always looking for the next great thing, who will be the next starnet or crypto, it makes sense that what is hot at the conference will be the next black bottom line.

Heath has been very good at this in the past, in fact bringing up Boss back when they were kiddies.

Maybe you 2 would like to speculate about which of the gaming stocks you like the best. Of course, we're not interested in any of the bricks and mortor, or any company like IGT which is way too established. Even cryp, mentioned by super in the last thread, is not speculative enough.

Lets open it up to all areas, casinos, software, sportbooks (interesting article post Heath, about the Brit megabook, of note in it was their ability to use scales of production to lower their unit operating costs, I'm sure a suprise to most), bingo, poker, you name it.

You guys familiar with the rivtrend index?

[superbook]

The River City Group has created an index of gaming stocks. You can check it out at:
http://www.igamingnews.com/rivtrend.htm

Give me a couple of hours tonite and I'll give you my top 3 picks in terms of stock performance in the gaming industry. I'd love to see yours too.

[superbook]

Another good index and site for info is:
www.streetdice.com

[superbook]

I've got to admit when it comes to stocks, I'm not much of a gambler but more of a value investor. As stated above, I rather try to make 100% on a Philip Morris than 1000% on an IPO.

That said, here's my top three. Two of the three are profitable and hold nice positions in their respective categories. I've purposefully chosen one operator, one software developer and one technology company. In alphabetical order:

1. CryptoLogic (CRYP) -- good products, strong support service one of the major players in gambling software. As the big boys from Vegas enter this market, they'll feel most comfortable buying from the biggest developers like Crypto. The company is profitable, current P/E is 21.

2. Stanley Leisure (SLY.L) -- operator of land-based and online casinos in the UK. They have a nice franchise of upscale operations and more room to expand. Profitable, the stock has P/E of 15.

3. YouBet.com (UBET) -- supposed to be profitable in 2002, I think they're a takeover target for someone like Murdoch who will bring gambling to your television set. Great opportunities to move in to digital television in the UK (think soccer instead of horses).

Remember, I'm not a stock broker. If these stocks sound interesting, check them out and try to get in at a decent historical price. In the interest of full disclosure, I own shares in UBET and have worked with CRYP.

[sandwedge]

the thing that bothers me about UBET is that the meat of what they offer is too easily duplicated by offshore sportsbooks, which don't have the regulatory problems (so far ) that UBET has to cope with (varying state laws affecting there ability to provides service,etc.)

if they offered a good quality video feed of the races, it might help. in fairness to UBET, i have not checked out the video of the races for many months, have they improved it any? it wasn't worth bothering with last time i checked. Also, if the racing TV providers like TRN and TVG get established it would further damage UBET's chances, imo.

great idea though.

[superbook]

Sandwedge --

Fair points and it would be interesting to hear from someone who is currently using YouBet.

In case you missed it, YouBet signed a strategic alliance last week with TVG so that angle is covered.

Also, YouBet announced that they took in $2.6 million in wagers the week of the Preakness. With a good Breeders Cup coming up in November they should finish the year strong.

I don't see any of the offshore guys making inroads into YouBet's business, I don't think the tracks or the tv stations would deal with them.

[Spearmaster]

Interesting discussion going on here.

Funny thing is I may or may not have run into Superbook sometime in Toronto - as I'm sure he will attest, it was a total madhouse there.

As GSS is Java-based, it will never be on my list of recommendations. However, as Superbook pointed out, they still have a reasonably strong client list.

RTG seems to be growing fast. I didn't get a chance to talk to them so I can't provide any further insight, but I do think their software is pretty good.

Microgaming, as Superbook points out, is indeed looking to become a bit more open with the public. How this will be accomplished remains to be seen - one must remember that Microgaming is still a closed company, and as such has no real obligation to make public reports. I think that they do realize that it is in their best interest to take a more active, visible role in dealing with the media and the public, and I am confident this will be addressed over the coming months.

Boss, sadly, chose to showcase their new Java-based no-download games, so I didn't spend a whole lot of time looking at them.

Playtech? Everyone seems to be abuzz about them but frankly I didn't see anything that was deserving of special attention, at least as far as I was concerned. But I bet there is a lot more to the story, and the resemblance to Casino-On-Net is not just a pure coincidence.

WorldGaming/Starnet? We'll see about their July release date. They were talking about late last year as well, and missed that by a mile.

Did I miss anything?

[superbook]

While it may have been busy in Toronto, I don't think Spearmaster missed much.

As Spearmaster points out Microgaming is a private company that can do whatever they want. So why the sudden turn to be more open? First, I think they've realized that their bad PR has hurt them in the pocketbook and second, perhaps they want to cash out and go public.

[This message has been edited by superbook (edited 06-15-2001).]

[heath]

BigMo,

As previously stated, I don't like any of them.

With a gun to my head, here's my analysis:

1. Look for a company with an emphasis on sales of their product NOT their stock. IQ Ludorum is an example of the former, Poker.com an example of the latter.

2. Look for companies with big institution investors on board (Boss Media qualifies but I don't know of any others that do).

3. SportsXction (sp??) already has a bit of a "in" in the Vegas market. They may be the go to company when Vegas goes online with sports betting. Their stock is around $2.5 and went up 50 cents or so 2 weeks ago after an article about them in either Fortune or some rag like that (don't remember -- see my site news archives for a link).

4. The best product won't win here -- ask Cisco and Windows 2000 Server's competitors if the best product is winning in that space.

At the end of the day, I think its tough looking for a diamond in the rough and even established players like Crypto may be a gamble.


Spearmaster, Super:

I went to Playtech.com and downloaded their software.

They've got like 4 games.

Stop the presses,
Heath

[Spearmaster]

Like I said, I don't see anything special with Playtech, and I'd like to know what all the fuss is about.

If anyone here is a Playtech rep, I'd like more info.

[Voodoo]

&gt;&gt;3. SportsXction (sp??) already has a bit of a "in" in the Vegas market. They may be the go to company when Vegas goes online with sports betting. Their stock is around $2.5 and went up 50 cents or so 2 weeks ago after an article about them in either Fortune or some rag like that (don't remember -- see my site news archives for
a link).&lt;&lt;

Heath,

Is this the same SportsXction that tried
to get interactive wagering going from
several LV sportsbooks? I found them to
be lacking in just about all areas.
Nothing they've ever tried seemed to be
very well-thought out.