December 28, 2015

Ladbrokes boss makes the biggest gamble of his career

I was brought up with my grandparents,” says Ladbrokes chief executive Jim Mullen, and they “would show me how to put on bets”.

“What I didn’t know at the time was my grandfather and my grandmother were teaching me my arithmetic and fractions.

“They were putting a bet on and then I would have to work out what the winnings were, and that was the game we played on a Saturday and a Sunday.

“I look back on it fondly as I try to do the same with my own sons now.”

Mullen has been enthusiastic about gambling ever since those early maths lessons. And Ladbrokes’ £2.3bn merger with rival bookie Coral arguably marks his biggest wager yet.

Beleaguered Ladbrokes has lost ground to competitors in recent years and Mullen hopes to reverse that decline by combining the company with Coral to create Britain’s biggest bookie, a giant with about 4,000 betting shops.

Informal talks between the two companies started before Mullen took over at Ladbrokes in April. However, Mullen has been central to the deal since taking charge of the troubled bookie, and is emphatic the merger will help revive its fortunes.

But the tie-up faces challenges that Mullen, who will lead the merged company, must overcome.


The biggest is securing the approval of the Competition and Markets Authority (CMA) without being forced to sell so many shops the deal becomes unworkable.

Some analysts have estimated the regulator could demand that Ladbrokes Coral, as the combined business would be called, offloads more than 1,000 shops. Mullen dismisses this as “just a farcical figure” and adds: “I would hope that the CMA… knows that we’re doing this obviously to grow scale in a sector which I believe is con-solidating.”

Mullen must also contend with opposition to the deal from a vocal Ladbrokes shareholder, the Irish billionaire Dermot Desmond. The tycoon urged investors to block the tie-up, arguing the merger encumbers Ladbrokes’ shareholders with privately-owned Coral’s debt.

Although shareholders overwhelmingly approved the deal last month, Desmond, who has encouraged Ladbrokes to hire new M&A advisers to examine alternatives to the Coral deal, has pledged to fight on. Despite that threat, Mullen refuses to criticise the outspoken investor.

“I am happy to discuss and debate the concerns that he has, but I’m just not quite clear what the alternative is,” he says.

Does he like Desmond? “Yes,” comes the quick reply, “because he invests in Ladbrokes and I like my shareholders. I also like that he’s invested in Celtic and it’s my hometown club.”

Born in Glasgow, Mullen, 45, is an avid fan of Celtic and enjoys betting on Scottish football “because I think I know something about it”.

Practising his sums with his grandparents, Mullen, now a married father of two boys, grew familiar with gambling from a young age.
“All my family went to betting shops,” he says. “I was brought up where it was a pastime.”

After leaving John Ogilvie High School in Hamilton in South Lanarkshire, Mullen studied computing at Glasgow Caledonian University, when he made a killing staking a considerable portion of his student grant on Celtic winning the double. Gambling aside, Mullen, who also has an MSc in software engineering, funded his student days working in a William Hill betting shop, and after graduating took a job at Celtic’s rival club, Rangers, developing its ticketing.

Jobs at advertising agencies both in Scotland and London were followed by a spell at News International where, among other things, Mullen developed digital strategy for Sun Bingo. He then joined William Hill’s online business as chief operating officer in 2010 before moving to Ladbrokes in 2013 to lead its digital operations.

Mullen is refreshingly honest about the mistakes that have damaged Ladbrokes.

“We missed out in football,” he concedes, admitting that rivals “stole a march” in developing bet-in-play products for the game.

Under his predecessor, Richard Glynn, Ladbrokes focused on building its own in-house digital technology rather joining rivals in enlisting the expert help of third parties such as Playtech. It was “a brave decision”, Mullen says, but “it didn’t work out and put us back three years”. Ladbrokes eventually struck a partnership with Playtech in 2013.

Still, Mullen will not blame Glynn for Ladbrokes’s misfortunes.

“I got on well with Richard; he made some informed decisions and some of the bets didn’t pay off. But I’ve been the CEO for eight months now, so you need to starting looking at Jim Mullen,” he says.

Certainly, the new boss has been quick to develop a turnaround plan, which he unveiled in July alongside a dividend cut.

While waiting for the CMA to investigate the Coral merger, Mullen wants to transform Ladbrokes into a “multi-channel” business.

Quarterly results in October showed Mullen’s plan is starting to bear fruit, with the bookie having acquired more than 20,000 new active online punters through its shops.

However, despite that progress, the Ladbrokes boss is adamant the entire industry now requires respite from new regulation if bookies are to successfully plan for the future.

Since last December, gambling firms have been hit by a 15pc tax on online betting, an increase in the duty on gaming machines to 20pc, and restrictions on staking on fixed odds betting terminals.

“I just ask for clear air from the government and regulators,” says Mullen, who believes the divisive industry “needs defending by leaders who actually love the sector”.

He is scathing of critics who he believes do not understand gambling, which has staunch opponents.

“I just don’t like people who have never put a bet on who make judgement calls on this sector provides,” Mullen says.

He speaks with equal passion about horse racing, where an escalating row over racing funding could see some bookies barred by the sport from sponsoring events.

“I will be showing up at all of the opportunities to sponsor racing until racing tells me I’m not welcome,” Mullen says.

He warns that if Ladbrokes is forced to divert its sponsorship money into other sports “it will take three years for it to come back [to racing]. That would be a very, very dangerous place for us to get to.”

Ladbrokes is “fanatical” about racing, making it a natural sponsorship partner for the sport, says Mullen.

Indeed, the first bet he can remember placing with his grandparents was on Red Rum’s third Grand National win.

Mullen says his two sons are not bad at picking race winners, either.

“By going on the colour of silks, their performance has been far better than mine from following the form, which is the great thing about sport.”

December 18, 2015

PokerStars rolls out BetStars 1.0

Having confirmed that subsidiary PokerStars would be launching a standalone betting product, Amaya Inc has today debuted BetStars.com version 1 for select jurisdictions.

The new brand will operate under the domains Betstars.com, Betstars.eu, and Betstars.uk, and on dedicated iOS and Android applications, marking the initial first stage of Amaya and PokerStars’ entry into the sports betting market.

Amaya confirmed that the sports betting product would be supported with a new sportsbook platform which would be rolled out in early 2016.

PokerStars will further support its new brand with an external customer acquisition campaign in the first half of 2016. As part of this marketing campaign, BetStars intends to introduce an innovative new betting product on the platform which will distinguish the brand from competitors.

Rafi Ashkenazi, CEO of Rational Group, commented on the initial launch of the BetStars brand

“We’re very excited about the launch of the BetStars brand, and expect it to be one of the most talked about sports betting sites in 2016 as it continues to evolve with new products and features that we believe will set us apart as a betting brand for the true sports fan. We’re applying the same dedication and passion we have for poker to sports betting, and intend to create an authentic, world-class offering. The BetStars brand will build on this passion and provide a safe, trustworthy and, most importantly, exciting environment for sports fans.”

BetStars will initially offer a range of betting options across more than 25 sports, including football, tennis and basketball, as well as specialty offerings such as eSports and poker. More sports markets will be made available in 2016, including horseracing.

The brand will also feature a range of in-play betting options and exclusive offers and promotions that sports bettors expect from a world-class online sportsbook. PokerStars anticipates the brand will expand into additional key jurisdictions throughout 2016, extending its reach to approximately half of PokerStars’ unique active poker customers.

December 11, 2015

Brazil allows for gambling debate but national framework still faces long road

he Brazilian off and on approach to regulating gambling appears to be on again after a special review committee for the Brazilian Senate progressed the legislative agenda for a regulated national betting industry.

The idea of regulating gambling in a country that banned bingo reletively recently in 2007 was mooted earlier this year as the government faced a fiscal crunch.

Bill 186 has now been approved by the Special Committee on National Development, with the body reportedly including research on the prospect of opening a legalised national online gambling framework.

The committee’s findings, which includes the potential for 35 casinos in the country, will now be open for discussion to members of the Brazilian senate.

In light of its progress, Brazil’s pro-gambling lobby has stated that any new national gambling framework still faces a long road to becoming a reality, betting consumers and campaigners should therefore remain objective about the country adopting a legalised agenda in the near future.

2015 has seen Brazil suffer a financial ‘annus horribilis’ as the country sees its worst economic growth performance in 25 years. Furthermore this week the Moody Investor Service downgraded Brazil investment grade to ‘Junk Status’.

Close associates of President Dilma Rousseff have publicly stated that the government are willing to implement a new national gambling framework as state public funding initiatives appear to be “cash-strapped”.

However Rousseff critics have pointed out that the government are in no way prepared to act on their ‘easy rhetoric’, as any talk of progress on a national gambling agenda is met with in-action.

Leading Brazilian political figureheads have agreed that the government can no longer afford to ignore a potentially regulated industry that could raise an estimated R$ 23 billion (£4 billion) in taxes. Furthermore all political parties appear to agree that at present national gambling laws are simply out of date with modern consumer habits.

Brazil’s slow progress towards even reviewing its gambling framework has left many commentators cynically questioning whether any government would want to pass a national gambling framework which will potentially have to satisfy multiple stakeholders; at intra-state level, national sporting bodies, federal police and a divided senate.

December 10, 2015

Betfred looking at 500 betting shop sale off

With the Ladbrokes and Coral deal moving forward with the £2.3 billion merger, Betfred are looking to possibly snap up some 500 betting shops from the newly combined betting firm that Betfred believe will have to be sold to allow the deal through the Competitions Commission.

Currently Ladbrokes and Coral have a combined estate of 4,000 sites and to get the deal through the competition commission the business believes it will have to shed some 500 betting shops and that’s where Betfred hope to profit.

Fred Done, who founded the business with his brother Peter 48 years ago, told The Sunday Telegraph he would “absolutely” be willing to talk to the bookmakers about buying sites offloaded to gain regulatory approval for the deal.

“We operate just short of 1,400 shops, another 400 or 500 shops wouldn’t be a problem to run,” he said. “If somebody knocks at my door and says: ‘Fred, do you want to buy some of these shops?’, I’d like to sit down with Coral and Ladbrokes and have a discussion with them.”

Most analyst’s say that with the merged company having some 45% share of the market by the number of betting shops and 47% share of total revenues in betting shops in the UK many say that a sale of some 500 shops will have to happen to reduce that share percentage.

However Betfred think there will be competition for those shops from Paddy Power, private equity firms and foreign buyers.

Australia should not ask tech firms to block illegal gambling sites

As the Australian government look at ways of blocking illegal online gambling sites offering their services to Australians, many of the leading online companies say it is impossible to block those sites.

Twitter, Facebook and Google all said to wagering review chairman Barry O’Farrell it is impossible to block offshore online gambling sites and the government should not burden the online tech companies to help to do this.

“We consider there to be fundamental flaws and significant practical difficulties with any attempts to filter the Internet such that it may not be possible to automatically block content,” the companies said in a joint submission to the government under their Digital Industry Group association. “Who would determine whether a service is illegal and would entire websites be blocked if there are both legal and illegal services on the website?”.

Figures show that Australian nationals gamble some $24 billion a year and it is estimate $1 billion is to offshore illegal gambling sites that the government want to stop.

The government want tech companies to install web filtering to block these sites but in a joint statement to the review board the companies say it is unworkable.

Those tech giants also have big concerns around its own legal liability should it move to cut access to commercial websites.

“We have concerns around legal liability in preventing access to commercial websites and question what safe harbours would be provided. In addition, internet filters can be easily circumnavigated and information about how to use virtual private networks (VPNs) is widely available. There is no existing legal precedent in Australia requiring Internet companies that are not ISPs to filter access to websites,” the note to the review board says.

December 07, 2015

Bearded Bucks: Minnesota Lottery Goes Hipster with Artist Chuck U

Bearded Bucks scratch-off cards from the Minnesota Lottery represent the peak of hipster state lottery operations. Not only can players win $10,000 by scratching off the beard of a lumbersexual to find craft beers and bird silhouettes but losers can also enter that card to win an art print signed by hipster artist favorite Chuck U.

Minneapolis-based ad agency Olson pitched the idea “and worked with the artist on the design of the ticket, which is unique and, given the number of bearded, plaid-wearing men in Minnesota this time of year, undeniably on-trend,” said Vicki Holets, Minnesota Lottery Marketing Manager

The Lottery is well aware it is satirizing Minnesota’s many hipsters. Its dedicated Bearded Bucks page begins, “Ladies and gentleman, hipsters and dudes, it’s time to get your beard on!” And, of course, there is the winning bird silhouette.

Why a bird, those unfamiliar with hipster icons might ask? Because, “putting a bird on it!” is what hipsters do. Kind of the same way craft beer is hipster. Speaking of craft beer…

And to promote Bearded Bucks, the Lottery went on a Tour De Beards that included craft breweries across Minneapolis-St. Paul. It also started a “Chancetaker” series, featuring Minnesotans like the co-founder of craft beer brewery Tin Whiskers, which also held a Lottery-sponsored beard contest in October.



And then there are the recent TV commercials best described as a combination of Wes Anderson scenes, Tumblr memes and Geico commercials.





“Customers have liked Bearded Bucks,” said Holets of the game’s reception. “The game is performing slightly above average for a $2 ticket, which we attribute to regular players liking the game and new customers trying out an eye-catching product.”

Hipster themes in state lottery communications are not new—18 months ago, New York flirted creatively with hipster stereotypes for its “Bejeweled” game.

But being a true hipster means being able to say you were into it before it was cool—and the Oregon Lottery can brag that it was doing hipster lottery back before it was cool. It even put a bird on it.

Nonetheless, the Minnesota Lottery has no intention of giving up on hipsters—Holets says it will “absolutely” do more “hipster” lottery promotions. “We had a blast promoting this game at craft breweries and other plaid-friendly locations, so we are working on new products that will appeal to that audience.”

Meanwhile lottery hipsters will have to vie with the lottery undead. Oregon Lottery’s latest theme is trendy zombies.

Not so fast Oregon, the student has become the master. Minnesota Lottery’s got its own zombie-themed lottery game. This one is a partnership with AMC’s The Walking Dead.

December 01, 2015

Prague to close down gambling arcades

The Prague City Assembly has voted to close all the 212 gambling sites that are overtaking the cities streets say lawmakers. The new legislation does not affect the 101 casinos within the city but the cafe or slot arcade style gaming centres.

The new law will take effect in January 2016 with a gradual closure of the gambling sites which some say could take a year or even more to happen.

“The operation of gambling is connected with a number of sociological and pathological phenomena,” Mayor Adriana Krnacova said.

Proposals were put forward back in 2008 to draw back the number of slot machines in the city from 8,358 to 2,724 however this did not happen and the new legislation hopes to address this.

November 26, 2015

Punters’ forum to tackle bookies on restricting and closing accounts

The newly created body that represents racing’s punters is to tackle bookmakers over the way firms close and restrict the accounts of successful gamblers. The issue has been a hot topic in racing’s corner of the social media world for months on end and concern that it may be undermining the sport’s appeal has spread as far as the corridors of the British Horseracing Authority.

“That’s certainly far and away the thing that’s been brought up most with us,” said Simon Rowlands, a Timeform veteran who chairs the Horserace Bettors Forum (HBF) and has been gathering the views and concerns of punters since the summer. As the Forum’s second meeting drew to a close this week, he said: “We’re not imagining that people will dance to our tune but we’ve got a few recommendations. We will be contacting bookmakers and running those ideas past them.

“Punters should know in advance what sort of activity is likely to get them restricted or closed and ideally should have a right of review if action is taken against them. The individual suddenly being knocked back is an existing or potential customer of horse racing, not just of the bookmaker in question, after all.”

Rowlands and his colleagues are concerned bookmakers are putting too much faith in “rigid trading algorithms” designed to highlight “arbitrageurs”, whose business is seen as unprofitable and unattractive by the betting industry. The fear is many of what may be termed “innocent punters” are being denied a bet for no good reason.

A “more nuanced approach” is called for by Rowlands, who added: “Should anyone be prevented from betting £100 on the Grand National just because they successfully arbed a bet on football? Racing needs that turnover and that engaged customer.

“We would also like to establish the magnitude of the problem of restrictions and closures, which would require assistance from within betting. Judged by HBF’s mail bag, it is a major concern for many punters of many different kinds but that is not sure to be representative.”

Officials at the British Horseracing Authority acknowledge account closures and restrictions as a matter of concern but feel there is little chance of a positive response, should they try to tell bookmakers how to handle their business, particularly in the present climate of tension between racing and betting over funding. So it will be up to the HBF to press racing’s case.

The Forum was set up in August as the result of a determination by the BHA’s new chief executive, Nick Rust, that punters should be given a public voice. Its first two meetings have been at the BHA’s London office but they will be elsewhere from this point as the HBF moves to assert its independence, which will also involve the creation of its own website.

“There are certain things we would want to make statements on that may not necessarily represent BHA policy,” said the HBF’s Jason Brautigam, the chief executive of British Dressage in his day job. “If it appears on their website, there’s implicit endorsement, so we’ve got to try to make sure the two are seen as slightly separate.”

The Forum’s nine members, all unpaid, still seemed enthused about the project of advancing the interests of racing punters as their lengthy discussion ended on Monday, more than one voice insisting this will not be “just another talking shop” and that they hope to have real influence over time.

“It’s not going to happen in five minutes but we all knew that in the first place,” said Steven Tilley, a local councillor. “The amazing thing is, you’ve got a whole group of people who bet, all who are opinionated and all of whom actually seem to get along together and seem to be coming up with a consensus view a lot of the time, which I think is amazing. We’re a group of contrarians here and yet we’ve managed to get a consensus.”

November 24, 2015

Teddy Sagi’s Playtech Losing Two Major Acquisitions In One Day

Major London listed gambling software company Playtech may have suffered a double reverse as it has been forced to cancel one major acquisition, with a second also, seemingly, headed for the rocks. The two deals were intended to help diversify the company away from its existing business which, while still profitable, may be facing pressures in the future if its gambling company customers start to develop their own software for their casinos.

The UK’s financial regulator is the FCA, or Financial Conduct Authority, which has to this point refused to permit Playtech’s previously announced deal to acquire Plus500, a junior London listed company, for about $700 million to go through citing certain concerns, according to a press release put out by Playtech earlier today. Cyprus financial regulators, who also have jurisdiction, have earlier already approved the transaction.

Plus500 are in the business of enabling trading for contracts for difference, or CFDs, which is a form of speculation on movements in the prices of equities without owning the underlying security. With substantial leverage available the prices of CFDs can fluctuate widely, and carry significant risk therefor and these are products generally suitable for sophisticated investors as a result. In addition to covering equity CFDs, the company trades CFDs for other financial markets including commodities and foreign exchange.

As a company engaged in such financial products, within the UK Plus500 is regulated by the FCA who, it is said by a number of news media today, may indeed be worried by the background of Playtech’s founder, and major shareholder, Teddy Sagi. Though he no longer sits on its board of directors Sagi, who still owns around 30 percent of Playtech, was apparently convicted of fraud in Israel some twenty years ago.

In addition, some analysts have noted, the FCA may have been legitimately nervous of Playtech’s lack of knowledge and experience in the CFD business itself, which occupies a fairly esoteric and specialized corner of the financial marketplace.

Israeli financial newspaper Globes reports that, after extensive representations to the FCA over the last few months, the deal finally may have cratered over demands by the FCA to significantly reduce Sagi’s personal financial holding in Playtech as a condition for approval, though this is unconfirmed.

Since it never rains but it pours, another currently pending Playtech acquisition, to buy a second, smaller, broker of CFDs, the Dublin based trader Ava Trade, for $105 million also appeared near to collapse today after, Playtech said in the same press release, concerns stated by the Central Bank of Ireland back in October.

Playtech has stated it will not incur any penalties relating to these set-backs, except to have to give up a $5 million non-refundable deposit it has made for the second, Ava Trade, deal in the event it also collapses as well.

Clearly regulators are very sensitive these days to which entities can play in the financial services game and have raised the bar, it seems, in this case to block an entity controlled currently by a complete outsider to the industry, and someone who clearly has something of a checkered past moreover.

November 19, 2015

mybet to raise €5m to fund sports betting expansion plans

German gaming operator mybet Holding intends to raise €5m through the issue of a new convertible bond, with proceeds to be used for the expansion of the company’s marketing and technology platform.

mybet will issue a bond with conversion right in the maximum total nominal value of up to €5m. The measure is still subject to a final management board resolution, which will also specify the details of the issuance and the terms of the bond.

It will also need the consent of the company’s supervisory board later this month.

The operator said that it will use the proceeds for the expansion of its marketing and technology platform, including expanding the betting range, acquiring new customers through increased marketing activities, and for advertising of games in the wider context of the UEFA European Championship in 2016.

The convertible bond is expected to be issued in December and have a term of five years.

During the term the bondholders have the irrevocable right, within certain conversion periods, to convert debentures into no par value shares of mybet, each representing a notional share of the capital stock of €1.00. The convertible bond is to attract interest at a rate of 6.25 per cent per annum on its nominal value.

The issue amount, taking into account the present share price, will represent 100 per cent of the nominal amount and will be €100.00 per debenture. The convertible bond is to be collateralised by the pledging of shares of pferdewetten.de, which is owned by mybet.

November 18, 2015

Billionaire investor opposes £2bn Ladbrokes merger with Coral

Dermot Desmond, the Irish billionaire and an investor in Ladbrokes, has urged shareholders in the troubled bookmaker to oppose its £2bn merger with rival Coral less than a week before they are due to vote on the deal.

Mr Desmond, who is thought to own at least 1pc of the bookie, has written an open letter to other shareholders in which he described the deal as “the death of Ladbrokes as an independent company”. He said that investors should vote against the merger at Tuesday’s general meeting and should call on Ladbrokes to hire an independent investment bank to help it “review all strategic options” open to it in “a very active M&A market”.

The tie-up, which the two companies agreed in July, will create Britain’s biggest bookie by betting shops with the combined business potentially owning about 4,000 sites. As well as giving Ladbrokes, which has fallen behind its competitors in recent years, much-needed scale, it also gives the bookie access to privately-owned Coral’s well-regarded online business.

However, because the combined company would own so many shops the deal faces intense scrutiny from the competition regulator, which is likely to demand disposals. Investors have been unimpressed by the deal, with Ladbrokes’s shares initially jumping in June when it emerged the two bookies were in talks, but then slumping by 22pc. The stock was unchanged at 109.3p today.

“The real winners in this transaction are the Coral shareholders,” said Mr Desmond, who sold the Betdaq exchange to Ladbrokes for €30m in 2013. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral.”

He said that the company could be forced by the Competition and Markets Authority to sell as many as 1,000 sites and that “the lost profits from any such disposed shops may outweigh the unspecified synergies which the proposed transaction is hoped to yield”.

A Ladbrokes shareholder said the bookie had been aware of Mr Desmond’s views but was confident the merger would receive enough shareholder support.
"We have had significant dealings with Mr Desmond as both a shareholder and a commercial partner over recent times,” he said.

“We note his views and are not surprised by them as he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action. As a shareholder he has a right to express his view and to vote accordingly at the EGM next week.

“We remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal."

The British gambling industry has been gripped by a wave of deal-making, with Paddy Power merging with Betfair and online gambling group GVC buying rival Bwin.Party. William Hill has been left on the sidelines.

Nick Batram, an analyst at Peel Hunt, said Mr Desmond’s intervention could encourage a bidder for Ladbrokes.

“It is contradictory in places and doesn’t really put forward much of an alternative plan, other than putting the group up for sale,” the analyst said of the letter. “However, it could just act as a catalyst to encourage others to join the fray, and a competitive situation should be good news for shareholders.”

November 09, 2015

The Godfathers of Sports Betting

On Super Bowl Sunday of 1985, the FBI raided 43 locations across 16 states in an attempt to take down the Computer Group, maybe the most successful gambling syndicate of all-time. A round of follow-up indictments based on some off-kilter assumptions was all it took for the bane of sportsbooks everywhere to close up shop.

Anyone with any money tied to the daily fantasy sports (DFS) industry—especially the people implicated in its most recent scandal, wherein Draftkings employees won hundreds of thousands of dollars on FanDuel using proprietary, inside info—would do well remembering the lesson of the Computer Group’s demise.

Gaming the system is one thing, getting away with it forever is quite another.


By now, it’s become obvious that the unregulated multibillion-dollar DFS industry is headed for a reckoning. Reports of employees at the two major DFS sites—DraftKings and FanDuel—using insider information to line their own pockets has led to increased state and federal scrutiny of not just the industry’s unregulated status, but also DFS’ iffy self-interpretation as a game of skill rather than gambling per the Unlawful Internet Gambling Enforcement Act.

All good cons come to an end. The brain behind the Computer Group can likely relate.
Before becoming the secret king of sports gambling, Michael Kent spent most of the 70’s in Pittsburgh working to build a better nuclear submarine with Westinghouse, a Pentagon contractor. He also played center field for the company softball team and began using company resources to analyze the team’s statistics.

However, the data Kent compiled wasn’t comprehensive enough to pump out the results he wanted, so he started digging into college football statistics and point spreads instead. By 1979, Kent had developed a predictive program built on seven years' worth of data. That same year, he quit his job with Westinghouse and moved to Las Vegas where he would put his program up against the sharpest bookmakers in America.

They never stood a chance.

While the most successful modern sports gamblers and DFS players rely on a style of gambling that is high-volume and data-first, Kent was a pioneer in his own time and bookmakers were unprepared for his strategy. Despite some occasional losses in the tens of thousands during his first year as a full-time gambler, Kent diligently continued updating his model and was soon turning a profit on both college football and college basketball wagers.

The only problem was the raging paranoia Kent felt whenever he had to carry around duffel bags full of money. This was 1980, after all, and cash-in-hand was the only currency known to gambling.
Ivan Mindlin, an orthopedic surgeon and heavy gambler, whom Kent had met through a mutual friend, became the solution. Kent proposed to Mindlin a 50/50 split of profits in exchange for Mindlin posting and collecting on bets while Kent remained the sole party entrusted with access to the program that informed the bets. And just like that, the Computer Group was born.

Kent was all too happy to focus on his program and Mindlin was all too happy to use his gambling world contacts to expand the scope of the operation beyond anything Kent had ever imagined. During the 1983 college football season alone, Kent claims that $23 million in wagers netted a profit of $3 million. But Kent was mostly kept in the dark on the Computer Group’s true scale by Mindlin, who surreptitiously opened offices in New York and Las Vegas, staffed by dozens of employees who used Kent’s data to make their own bets.

Rumors of profit in the tens of millions soon spread and those rumors eventually reached the ears of FBI agents. Those agents became convinced that the Computer Group was an illegal bookmaking operation working in concert with the Italian mafia to manipulate betting lines.

While the Computer Group’s high-volume betting style did rely in part on manipulating betting lines, the FBI’s suspicions were wrong. Still, the Super Bowl Sunday raids uncovered a far more easily proven bit of illegality: the Computer Group wasn’t paying any taxes on its winnings.

The raids also revealed that the operation was much bigger than Kent had assumed. He was under the false impression that the Computer Group was made up of himself, family, Mindlin, and a few others who helped Mindlin place bets. However, Mindlin, who kept Kent far away from the day-to-day operations, had built the Computer Group into something much bigger and he wasn’t cutting in his partner on those profits.

Kent’s desire to remain focused entirely on his gambling program even allowed Mindlin to con Sports Illustrated, which ran a credulous piece on the Computer Group in 1986 that claimed Mindlin had designed the Computer Group’s program himself. Nowhere in the story is Kent’s name even mentioned.

By then, Mindlin’s exploitation of Kent’s genius had left their relationship beyond repair. Kent secured his own legal representation, brought a civil lawsuit against Mindlin, and chose to cooperate with the FBI’s investigation in exchange for immunity.

With the information provided by Kent, the FBI soon realized that instead of busting the world’s biggest mafia-run illegal bookmaking operation, it had simply caught a few dozen gamblers using off-shore bank accounts to shield their winnings from taxation. Still, the Computer Group folded in 1987.

Kent went on to form a three-man gambling group with his brother and a friend that actually bothered to report its winnings to the IRS. He eventually left the gambling world altogether in the mid-’90s and now lives in seclusion. Mindlin still lives in Las Vegas and recently spoke at a sports betting conference. He claims he uses Kent’s program to this day and earns a good living as a full-time sports gambler.
In this case, the FBI made a fool of itself by pursuing a glorified conspiracy theory, but it did put an end to the tax-evading Computer Group. The syndicate had simply grown too big, too fast, and too reckless to avoid scrutiny.

The DFS industry—now the largest advertiser on TV and a multibillion dollar industry—might be no different.

October 29, 2015

Betfair Doubles Probability of Brexit

The chances of the UK leaving the European Union have almost doubled in just three months, if the odds from Betfair Group Plc's gambling exchange are any indication of sentiment.

The probability of a majority vote for leaving the EU has jumped to 36 percent, from 18.5 percent at the end of July, based on the odds given to bettors on the outcome of the referendum.

While bettors are following the momentum of the polls, it would require a huge swing for so-called Brexit to become the favorite outcome.

"A vote in favor of staying in the EU is still the firm favorite at 1.56 (4/7 or a 64% chance), in much the same way as the Scottish Referendum market was predicting a No to independence from very early on," Betfair spokeswoman Naomi Totten said by e-mail. "The price for a vote in favor of leaving the EU is the shortest it has been since June, currently trading at 2.76 (7/4 or a 36% chance), but in the context of the market it is still very much assumed that Britain will vote to remain within the EU."

UK Prime Minster David Cameron has said a referendum on Britain's membership will be held by the end of 2017 - though a date hasn't been set yet. The Conservative government wants the U.K. to stay part of a reformed EU and is currently in negotiations with regional leaders to secure chances before the vote.

October 28, 2015

Bet365, Coral and Totesport tweets banned over Jordan Spieth images

Bet365, Coral and Totesport have hit a triple bogey after the UK advertising watchdog censured the bookmakers for using images of US Open champion Jordan Spieth to promote betting.

Under the UK advertising code it is illegal to use people aged under 25, or someone who appears to be so, to play a “significant role” in promoting gambling and betting.

Images of Spieth, who is 22, featured in Twitter campaigns for the bookmakers.

Coral said the photo of Spieth was used to illustrate the odds available rather than promote specific bonus offers, but it had made changes to ensure that similar tweets complied with the code.

Bet365 said its tweet reported on a major sporting event and therefore did not breach the code, while Totesport said Spieth was neither a young person nor vulnerable and the ad did not show him gambling or indulging in juvenile or loutish behaviour.

The Advertising Standards Authority said the tweets were designed to promote each bookmaker’s brand and referred to future sporting events on which the public might consider betting.

“We considered the tweet[s] [were] directly connected with the supply or transfer of goods,” said the ASA. “We therefore concluded that the ad was irresponsible and breached the [advertising] code. The ad must not be shown again in its current form.”

October 27, 2015

Lessons from William Hill: Adapting to modern customers in a traditional industry

The evolution of the gambling industry has always been intrinsically linked to the diversification of its channels.

From the racecourse, to telephone betting, retail shops, online and now mobile, industry players have faced the need to adapt each time a new channel has presented itself.

3.7m people a year in UK now bet online via their smartphone, desktop computer or tablet - and digital growth certainly isn’t slowing down, either.

A recent study by Juniper suggests that by 2019, nearly 10% of the adult population of the planet will have gambled online or on a mobile device, and the biggest concentration of these gamblers will be in the UK and Italy.

Crucially, however, our industry is one of the few that doesn’t see one channel replace another over time.

Rather, they co-exist, creating an audience of customers that's genuinely omnichannel. In our case, at William Hill, these multichannel users today represent a striking 22% of our customer base.


This rise of digital and omnichannel customers has caused issues in all areas of retail, issues that have been covered extensively on this site in the past.

But in the case of the gaming industry, the size of the omnichannel segment of our customer base has meant this sector has faced more pressure in responding to the challenge quickly.

While this has required significant investment and effort, the industry has ultimately benefitted from tackling this head on; it’s enjoyed additional growth, an expanded competitive set, and enhanced experiences for customers.

Initially this was simply to meet user demand, opening up a new, alternative avenue for betting and gaming online.

However, whilst location remains a key driver of customer loyalty for our retail stores, online is a completely different story.

There are far fewer barriers to stop digital customers from switching between competitors, meaning the industry has had to shift its approach towards a concerted effort to develop a truly compelling customer experience.

Like the rest of the industry, William Hill has created a unique internal culture, which has played an important role in nearly a century of success.

However, to tackle this new challenge, it was recognised that William Hill needed to look at innovating its own management structures and internal culture.

At the same time, it needed to preserve the proven business structure that had served it and its staff well.

It’s no secret that real innovation often comes from small, nimble technology startups, rather than out of huge, decades-old PLCs.

The rise of digital has forced bookmakers to become somewhat more innovative, but nothing has come out of these organisations in recent years that has really disrupted the betting market.


Similarly, the best organisations - in terms of digital experience and responding to the insights generated through user analytics - are those that can quickly adjust their approach and experiment with potentially risky new strategies.

It was to this end that we pursued a unique strategy in establishing WHLabs, designed to embody a dramatic cultural and management shift away from the traditional structures of William Hill the FTSE company.

By establishing WHLabs as a self-contained experimental division, we can provide the right environment for innovation in an agile, ideas-driven culture, without fear of impacting the core William Hill business.

Once a development has been shown to be beneficial to the user experience, it can then be incorporated in to the wider business.

One of the key principles behind the new division is that projects should not be target and statistic focused; experimentation is important and taking risks should be encouraged.

At the same time, we still need to be able to gauge just how effective and popular our developments have been with customers.

At the heart of this has been a need to enable modern, data-driven marketing efforts.

Building a detailed profile of a customer has always been a fundamental challenge for the marketing departments of bookmakers, and indeed most retailers.

Now in the digital and multichannel age, bookies are tasked with building a profile of a customer using data from disparate devices, the customer’s in-store betting habits, and wider data on the customer’s general likes and preferences.

To make the most of this, we need a site that can efficiently adapt to what we learn about these customers, which is why Project Trafalgar was initiated.

A modern, responsive new front-end web and native app platform, it gives a more consistent experience across devices and, crucially, takes control of code drops in-house.

That empowers our development teams to assess and react to our users’ experiences, making site changes, running A/B tests and quickly deploying new features.

It's about taking the profiled data and turning it into actionable insight that improves a user’s journey.

Through Trafalgar we can make those changes and deploy new things quickly and in-house, ultimately delivering a host of intelligent touch and conversion points at the right moment in the user’s journey.

Personalisation has been a major topic in recent years throughout the retail sector. What started as a tool for encouraging sales and driving loyalty has become an expectation of customers, with those businesses that fail to accurately tailor their services falling behind the competition.

With more than 1.3m sports betting opportunities available on the William Hill site each day and the increasing usage of mobile devices, surfacing the right content at the right time is critical.

WHLabs is therefore working to develop a sophisticated personalisation system that uses betting history and behavioural patterns to recommend.

To understand the scale of the task, think Netflix recommendation capability and multiply that challenge by a “product” set (prices and markets) that updates minute by minute.

Crucially, WHLabs is aiming to bring together both customer data and contextual big data to build a definitive picture of its customers.

Intelligent use of the information from across our owned channels can only go so far.

This is a major investment to tackle a challenge that is faced by all digital marketers, not just those in the gaming sector.

“Why would a bookies care about tech?”

The scale of our technology capability and ambition takes people by surprise if they’re never used our products.

We get interesting reactions at events and in conversation from people whose perception of what our business does is very wedded to old memories of waiting outside a betting shop for their granddad as a child.

In reality the gambling and gaming business is a technology game and has been for a long time.

The complexity of delivering and transacting across millions of products is huge.

Add to that our investment in digital marketing and our commitment to improving the customer experience and it suddenly becomes clear that not only do we have to run a brilliant core business, but we have a need for the innovative capabilities of WHLabs as a standalone unit.

Not only because we share the same customer expectations as any other retail sector - personalisation, new and enhanced user experiences - but also because the need to be innovative in how we approach all elements of our existing proposition is driving a cultural shift towards an agile, data-driven ethos.

The story of Pinnacle Sports is a case study in how bookmaking sites, illegal in the United States, manage to operate on American soil

Hard by the High Line, in a vintage industrial building with a Romanesque arch, lights flash on powerful computers in row after row of metal cabinets and cages. Power lines connect the equipment to diesel generators on the roof. Cables route data through the building to conduits beneath New York City streets.

This is one small corner of the Internet, unremarkable except for the confluence of two facts: Sports betting is largely illegal in the United States. And this Manhattan building, on 10th Avenue in Chelsea, is one node in a vast network used by a major offshore sports book — ever faster, ever more sophisticated and harder to track or regulate.

The network is traversed by United States customers of pinnaclesports.com, a hugely successful Internet sports-gambling company with headquarters until recently in a shopworn hotel in the tiny Caribbean island nation of Curaçao. The unlikely chief of Pinnacle Sports is a granddaughter of a former North Dakota governor who famously engaged in a bit of Cold War diplomacy with Nikita S. Khrushchev.

For years, offshore sports books like Pinnacle have used technology and other means to keep prosecutors at bay. In the United States, field agents are arrested, money is forfeited and the illegal gambling rings are seemingly dismantled. Yet they rise again, with different street soldiers and a new arsenal of deception. The one constant is the Internet, which allows for the electronic brain of these sports books to evolve, beyond the reach of American prosecutors.

This pattern raises a persistent question: Are the successes of law enforcement tantamount to cutting off a lizard’s tail only to see it grow again, and if so, is the battle even worth fighting? Is the better way — with gambling increasingly woven into the fabric of American sports — to simply legalize it so it can be regulated?

That question is playing out in the rising controversy over betting on daily fantasy sports — the now-ubiquitous business that was given life by a 2006 federal law that tried, and largely failed, to stamp out old-school sports betting. Fantasy sports received an exemption on the ground that it is a game of skill, not chance — a contention being examined by a growing number of investigators.

The story of Pinnacle — pieced together from documents and interviews as part of The New York Times’s investigation of unregulated online gambling, in collaboration with the PBS series “Frontline” — is a case study of how more traditional, and far less public, offshore sports books operate and, at least for now, survive on American soil. Indeed, experts say illegal sports betting remains a considerably larger business than its legal cousin, fantasy sports.

In a statement, Pinnacle said it “pulled out of the United States in 2007,” after the passage of the federal online gambling law, and since then had “never knowingly taken bets from the United States.” The company says it is fully licensed in Curaçao, where online gambling is legal.

However, American and European investigators have determined that since 2007, Pinnacle has had thousands of betting customers in the United States, documents show.

What’s more, using advanced Internet technology, The Times found that Pinnacle, along with other gambling sites, had quietly developed a direct digital presence in the United States, allowing it to communicate quickly with its potential customers. Speed is the currency of today’s Internet, where users expect a website rich with graphics and interactive features, but may abandon the site if it takes more than an instant to load.

How many of Pinnacle’s users are actually betting or simply visiting the site cannot be known. What is clear, though, is that by 2014, vast amounts of gambling data, once housed legally offshore, were being delivered to the United States from equipment in New York, Miami, Chicago, Dallas and elsewhere.

This represented a new and pervasive domestic presence, one that investigators have largely overlooked.

“For them to knowingly collect data in New York for the purpose of furthering a bookmaking enterprise, if that’s what they’re doing — that would be a significant exercise of brazenness on their part,” said Gerard Brave, the chief of the rackets bureau for the Queens district attorney, Richard A. Brown, who has prosecuted Pinnacle operatives in recent years; the company itself has not been prosecuted in the United States.

Mr. Brave added, “That would be very interesting to us, and we would certainly be looking into that.”

In its statement, Pinnacle said: “All content is delivered legally from Curaçao. We use U.S. traffic acceleration companies, which is fully in compliance with all U.S. laws.”

But last week, as this article was nearing publication, United States traffic to the Pinnacle website abruptly shifted from equipment on American soil to servers in Europe and elsewhere, according to an analysis by Dyn, an Internet performance company.

Each online sports book has its own DNA. Some are run by Mafia associates or are part of larger criminal enterprises. Pinnacle is different. There has been no shortage of old-time bookmaking techniques, including operatives making street drops with bulging bags of cash. But some of its senior operatives have had an unusual social conscience, attuned to gay and environmental groups, and campaigns to protect whales, dolphins and children in need. And it has often been ahead of the pack, and of investigators, in its use of the Internet.

To understand how betting rings employ the Internet to navigate around legal traps requires a journey to places that, for most people in the online age, are far more foreign and remote than a Caribbean island — places where the virtual and physical worlds intersect.

October 23, 2015

Sixers, PartyPoker end partnership amid daily sports fantasy surge

The Philadelphia 76ers and PartyPoker have ended what both sides said in 2014 was a groundbreaking partnership between an NBA team and an online gambling business.

Sixers CEO Scott O'Neil confirmed Wednesday night that the partnership had ended, but declined to explain why the two businesses parted ways, other than to say that even multiyear partnerships such as this one have "triggers" that allow for "adjustments based on market opportunity."

Someday, sports gambling - online and otherwise - might be a hot market opportunity nationally, as it is in Las Vegas now and in other countries such as the United Kingdom.


But today, the hot sports market opportunity is the explosion of advertising and attention devoted to daily fantasy sports - and the Sixers were the first NBA team to sign a sponsorship deal with DraftKings, a fantasy-sports operator.

In fantasy sports, people choose real players for an imaginary team. Points are awarded based on the real statistics of real players.

Along with FanDuel, DraftKings has spent millions on advertising on television screens, social media, billboards and other places capable of displaying their name. In recent days, the AT&T SEPTA station, which is where fans get off to watch all four Philadelphia teams, was plastered with DraftKings advertising.

Sixers owner Josh Harris also owns the New Jersey Devils of the NHL and the Devils' home arena, the Prudential Center in Newark. O'Neil serves as CEO of the company that overseas all three operations.

The PartyPoker deal remains as is with the Devils and the Prudential Center.

PartyPoker gained approval to run online gambling - not involving sports - through casinos in Atlantic City in 2015.

On Jan. 9, 2014, at a news conference in Newark, O'Neil announced the deal with PartyPoker's parent company, Bwin.Party Digital Entertainment Plc.

"This is our flag in the ground that we do things differently," O'Neil told Bloomberg News on the day of the announcement. "We're looking for groundbreaking opportunities with companies willing to take chances."

In a statement issued that day, Norbert Teufelberger, CEO of Bwin.Party Digital Entertainment, said, "We are excited to be working with the Devils and 76ers and to be able to offer their fans great digital content and unique game-day experiences. They are two of the most iconic names in American hockey and basketball with huge and loyal fan bases throughout New Jersey and the surrounding metropolitan areas. There is an affinity between playing in online poker tournaments and sports - winning is about having intense focus, stamina, and a great competitive spirit."

Bwin.Party could not be reached for comment Wednesday night.

What changed in less than 12 months is that daily sports fantasy exploded in the United States.

In December 2014, the Sixers announced that DraftKings would become the "presenting partner" of several of the team's digital platforms, including the official website, newsletter, mobile app, and radio broadcast.

On Feb. 2 of this year, DraftKings and PartyPoker were part of a Sixers contingent that rang the opening bell to start trading on the Nasdaq stock exchange. But PartyPoker is not part of the Sixers' sponsorship lineup for the 2015-16 season that starts Wednesday.

Meanwhile, the daily sports fantasy surge has prompted debate about whether it is any different than gambling, which is prohibited in all but four states and meaningful only in Nevada. The Justice Department and other authorities are looking into FanDuel and DraftKings, though the area has little in the way of regulation.

Also, PartyPoker's parent company, Bwin.Party, was sold in September to GVC Holdings for $1.4 billion. Speculation in the online gambling media is that GVC might sell PartyPoker to Amaya Gaming, a Montreal-based company that owns PokerStars and Full Tilt Poker. Amaya also has a sports fantasy division called StarsDraft. Amaya said recently StarsDraft will operate in only four states, one of which is New Jersey.

EU's top court slams German licensing regime

The European Union’s top court has issued an opinion that says Germany can’t prosecute unauthorized sports betting operators because the country’s gambling regulations run contrary to European law.

On Thursday, the Court of Justice for the European Union (CJEU) released an opinion by Advocate General Maciej Szpunar in the case of Sebat Ince, a Turkish national residing in Germany.

Ince ran a ‘Sportsbar’ which provided technology that allowed German bettors to connect with a Malta-licensed online betting operator. German authorities wanted to prosecute Ince for taking bets without a license but a Bavarian court asked the CJEU to rule whether the prosecution violated EU prohibitions on the restriction of trade.

Germany passed its federal interstate treaty on sports betting in 2012 and issued 20 online betting licenses in 2014 following a widely criticized application process. However, court challenges by rejected applicants have prevented the licenses from taking effect and the European Commission is currently considering whether to launch infringement proceedings against Germany due to its suspicion that the regime is incompatible with EU law.

Szpunar’s opinion can be read here, but in a nutshell, the ruling says Germany can’t prosecute private betting operators operating without a license because the chaotic and inscrutable tender process that capped the number of available licenses at 20 had failed to live up to EU standards of transparency.

A full ruling by the CJEU on Germany’s licensing regime is expected later this year. The German Sports Betting Association (DSWV) issued a statement saying it hoped Szpunar’s opinion would be enough to convince the German government to convene meetings with stakeholders to create a “fair and legally compliant” gambling regime.

Earlier this week, a court in the German state of Hesse rejected the appeal of an earlier ruling that prevented the issuance of those 20 sports betting licenses. The Hessian Administrative Court upheld a lower court’s ruling that the ‘Gambling College’ that was established to vet the license applicants represented neither the federal nor state governments, creating, in effect, a third unaccountable level of government that the court called a “breach of the principle of democracy.” Ouch.

The Hessian court also determined that this Gambling College had disproportionately favored German companies over equally qualified firms from other EU member states when it came to deciding who made up the lucky 20 license recipients. The Court concluded that Germany would be far better off forgetting the whole sordid episode and starting the process over from scratch. Amen.

October 21, 2015

North Korea running online gambling sites

According to a new report by the South Korean National Intelligence Agency North Korea is running online gambling websites targeting South Korean gamblers.

At the recent National Assembly audit the National Intelligence Service said that more than 1,100 North Korean computer experts are running online gambling websites from locations such as China, Malaysia along with other Asian countries.

It is estimated that each one of those sites generate a minimum of $20,000 per year in profits, not much singularly but put together makes a lucrative business for the North Korean government. The intelligence agency also believes this could be the tip of the iceberg and much more could be generated they do not know about.

October 19, 2015

Binary options introduced to TotoGaming portfolio

Armenian-based bookmaker TotoGaming has released a binary options product from SpotOption onto its proprietary platform. Following the significant improvement in its in-play offerings, the bookmaker is planning to diversify its product range by integrating the best content available in the market, and to provide an exceptional and innovative service to its partners.

Through the partnership with SpotOption, one of the leading binary options platform providers, TotoGaming aims to deliver to its customers the opportunity to experience binary entertainment. World leading currency pairs, major company stocks, top traded commodities and major world indices are represented on a simple and user-friendly basis.

The web-platform has been developed to meet the needs and interests of the traders and opens the industry to everyone, from expert to novice. Trading options represent a large variety of betting possibilities from super-quick 30 seconds, to long-term bets up to one year, along with other attractive trading features.

To support its new product, TotoGaming is planning to launch a special advertising campaign with a TV star walking through all the new possibilities, pointing out the simplicity of success by using quick thinking and logic.

By the end of the year, TotoGaming is planning to enrich its portfolio with more innovative products and services and looks forward to new collaborations and synergies with world-class, state-of-the-art content providers.

“It was high time introducing such a product in our market,” commented TotoGaming Board Chairman Suren Khachatryan. “We have created a safe and secure trading environment for everybody and welcome our customers to enjoy the new Binary Options platform.

“TotoGaming stays in line with its major strategy of providing its customers with the best offerings, high quality products and forthcoming surprises.”

“We are proud that our valued partner, TotoGaming, chose our platform for binary options in the region,” commented Ran Amiran, CEO of SpotOption. “We trust that our partnership will only strengthen in time, and we will continue to do our utmost to ensure that user expectations from the binary product are surpassed.”

October 13, 2015

New Jersey ordered Amaya Gaming to fire four senior execs connected with PokerStars and Full Tilt

The New Jersey Division of Gaming Enforcement (DGE) ordered Amaya Gaming to fire four senior execs connected with PokerStars and Full Tilt as a condition of receiving a license to operate online gambling in the state.

On Friday, the DGE released a report of its investigation of Amaya’s $4.9b acquisition of the PokerStars and Full Tilt online gambling companies. The previous week, the DGE announced that it had approved Amaya’s new brands to operate in the state’s regulated online gambling market via its partnership with Atlantic City’s Resorts Casino Hotel.

The announcement came one year after Amaya acquired the Oldford Group, the parent company of both brands, and filed a petition seeking to operate the brands in New Jersey. The report (read it here) details the lengths to which the DGE went to ensure that Amaya has sufficiently distanced itself from the principal figures associated with Stars and Tilt.

Amaya’s petition to the DGE said it had succeeded in “irrevocably and totally extinguishing the ownership interest of Isai and Mark Scheinberg” and had ensured that the Scheinbergs and other tainted execs “will have no further involvement in the operation or management of their former companies.”

Isai was Stars’ founder and one of the 11 individuals indicted on April 15, 2011 (aka Black Friday) for continuing to serve US customers following the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA).

The DGE says it examined over 45k pages of documents relating to Stars’ business dealings and conducted 71 sworn interviews with 64 former employees of Stars, Tilt and Pyr (Stars’ software division, since renamed Amaya Software) who were kept on following Amaya’s acquisition.

The DGE says it is satisfied that Amaya’s acquisition of Oldfod had “permanently and irrevocably severed all of the ownership interests” of the Scheinbergs. The DGE said Amaya’s acquisition had achieved the “significantly changed circumstances” benchmark laid out in the two-year suspension the DGE had slapped on Stars’ application to operate in New Jersey back in 2013.

However, the DGE ordered Amaya to “separate from employment on or before January 30, 2016, four individuals identified by the Division as having failed to establish the requisite good character, honesty and integrity required by the [New Jersey Casino Control] Act due to their involvement in the business activities of the PokerStars Entities between the enactment of UIGEA and Black Friday.”

The DGE didn’t identify the four individuals by name, but it did say it had conducted plenary investigations of four senior execs with ties to the previous regime and who remain with Amaya following the Oldford acquisition.

Those four execs are: Michael Hazel, Stars former CFO; Israel Rosenthal, director of operations for the Rational Group and a “long-time friend of the Scheinberg family;” Charles Fabian, former head of games systems development at Full Tilt’s parent Pocket Kings Consulting; and software manager Serge Bourenkov, who began working at Pyr following Black Friday, so he would appear to be in the clear.

Amaya also has to keep the DGE in the loop in case any of the former Stars and Tilt principals attempt to “influence, suggest or communicate with any employee of Amaya” regarding the company’s activities. Additionally, Amaya has to provide the DGE with minutes of all future meetings of its board of directors and compliance and audit committees.

The DGE says it has required other companies to sever ties with or forego hiring “at least 10 senior executives” since the state authorized online gambling in 2013. Sadly, these names also weren’t disclosed.

The DGE reported that PokerStars generated $44.3m in revenue from New Jersey players between Oct. 13, 2006 (the effective date of the UIGEA) and April 15, 2011.

When Stars reached its civil settlement with the Department of Justice in 2012, it returned just over $5m in deposited funds to its NJ players. Incredibly, the DGE says there remain an undisclosed number of open New Jersey PokerStars accounts containing nearly $428k as of January 2015. This sum will now become property of the state. Score!

The DGE’s opinion is that Amaya will not enjoy “an unfair competitive or economic advantage” based on Stars’ history in the New Jersey market. The DGE noted that Stars’ New Jersey database is over four years old and that the state’s existing online licensees have a 22-month headstart on Amaya. The DGE also claimed that some of these licensees were “large companies with powerful brand names that are well positioned to challenge” Stars and Tilt. Sure they are…

In the five-year period spanning 2010 to 2014, the Rational Group operations saw revenue go from $863.6m to $1.13b, while profit went from $188.9m to $416.2m. The company recorded a nearly $424m loss in 2011, but this was the financial year in which the expenses from the $731m DOJ civil settlement were booked.

The operations benefited from their home base in the Isle of Man, which imposed an effective tax rate of 1.1% in 2012 and 1.3% in 2013. The DGE said it examined tax records the company had filed in Australia, Malta, the UK, Ireland, Austria, Costa Rica, France, Macau and Russia and found no items that required further investigation.

As for Stars’ ongoing tax problems in Italy, Amaya told the DGE that it remains in discussions with the Italian tax authorities. Should Stars be found liable for a back tax payment, Amaya says indemnity provisions in the acquisition deal would allow it to pass the buck to Stars’ former owners.

It seems Amaya’s recent acquisition of daily fantasy sports operator Victiv, which has since been rebranded as StarsDraft, didn’t cost Amaya anything. The DGE says Victiv exchanged its assets for an undisclosed percentage of a joint venture, to which Amaya contributed branding and marketing, as well as access to its player database.

It seems former Full Tilt payments director Nelson Burtnick, who pled guilty in 2012 to conspiracy and accepting funds in connection with unlawful Internet gaming, was sentenced on September 16 to time served and one year of supervised release. Burtnick also forfeited approximately $300k.

Romania ONJN blacklists bwin.party services

bwin.party brands have been blacklisted by the Romanian online gaming regulator despite the operator having re-paid €8 million in back taxes and having been approved an igaming licence by authorities.

Romania’s regulator ONJN published a new blacklist of offending operators (click here to view list), which featured bwin.com, partycasino.com and partypoker.com.

ONJN informed that the bwin.party brands had breached national gambling polices by promoting their services to Romanian consumers, whilst government authorities were carrying a review of the country’s online gaming framework.

The regulator stated that bwin.party brand should have terminated all marketing activity for Romania during this period. ONJN did not inform the media whether bwin.party brands would be removed from the list having gained licensing provisions following the repayment of taxes.

bwin.party governance did not comment on the actions taken by ONJN regarding its services for the Romanian market. The operator was one of the first operators to receive igaming licensing for the market, along with leading European operators bwin,bet365, Sportingbet and PokerStars


October 09, 2015

Playtech confident on acquisitions despite CBI opposition

Playtech remains confident it would receive the necessary regulatory permissions for its two proposed financial trading acquisitions despite the intervention from Ireland’s financial watchdog with regard to one of the deals in question.

The announcement by Playtech on Monday that the Central Bank of Ireland (CBI) had notified the company of its opposition to the AvaTrade buyout late the previous week came out of the blue for both Playtech and the analysts who follow the group.

The company said on Monday it would be “seeking clarification from the CBI” and will “engage with them in order to discuss certain issues raised in the letter which the company believes can be addressed to the CBI’s satisfaction”.

It followed that up with another stock exchange announcement on Tuesday saying it had heard back from the CBI and “following this communication and having taken legal advice, the company intends to formally challenge the decision”.

Nick Batram at Peel Hunt suggested the CBI news was “undoubtedly a setback”, particularly given that the AvaTrade deal is commonly thought to be less contentious than the Plus500 deal, where Playtech is also currently engaged with the regulators across various jurisdictions to gain deal clearance.

“In the grand scheme of things AvaTrade is not a material transaction,” Batram said of the US$105m deal in a note to clients on Monday.

“However, it clearly creates uncertainty around the Plus500 deal. We don’t know whether the (UK’s Financial Conduct Authority) will be influenced or not by the CBI, but the Plus500 deal is already taking longer to complete than originally expected.”

For its part, Playtech remained tight-lipped over the details of the CBI objections, but sources close to the company suggest it is set to vigorously defend the deal and added that it is “very, very surprised” at the intervention.

It is understood the company received the notice late on Friday evening, after the markets had closed, and that up until that point there had been minimal contact with the regulator.

It will be appealing through the official regulatory process and it is thought that recourse to further legal avenues is available should it become necessary.

Combined, the AvaTrade and Plus500 deals mark a further evolution of Playtech’s march into financial trading (paywall), a move that began at the start of the year when it bought TradeFX, a company owned by Playtech’s majority shareholder Teddy Sagi.

The “opportunistic” Plus500 acquisition came after that company fell foul of the UK’s financial watchdog over its client ‘onboarding’ techniques. The FCA intervention saw Plus500’s share price take a 50% tumble, at which point Playtech stepped in with its takeover offer.

The original completion date for the Plus500 deal was pencilled in for September, but in a stock exchange announcement in mid-September, the company said that the necessary regulatory approvals were “taking longer than… originally anticipated”.

It said at the time that it was “currently not aware of any issues which would give rise to the required regulatory approvals not being granted in due course”.

The US$105m AvaTrade acquisition is the lesser of the two deals, compared with the £460m deal for Plus500. Playtech sees the AvaTrade deal as a bolt-on acquisition that had been agreed upon by TradeFX before the Playtech deal.

Goodbody analyst Gavin Kelleher said “in its own right AvaTrade is not huge driver of the investment case”. But he added: “However, given the delays with the Plus500 deal, which is a significant driver of the investment case, the market will be looking for that deal to complete within the next month.”

Playtech is understood to remain confident it will gain clearance from the UK’s FCA and other regulators involved in the Plus500 deal, including Singapore and Australia. The company noted at the time of the publication of the Plus500 buyout prospectus that further enquiries regarding Plus500 had been received from an unnamed regulator.

The deal already has clearance from the Cyprus Securities and Exchange Commission (CySEC) and from the British Virgin Islands, however, analysts from Cannaccord Genuity pointed out that the news of the Irish issues “will clearly raise some concerns over the potential for the FCA to block the Plus500 deal”.

Batram at Peel Hunt pointed out there were questions about whether the FCA would be influenced by the Irish central bank’s intervention. “The Plus500 deal is already taking longer to complete than originally expected,” he added.

Playtech said this week that both deals were proceeding in line with regulatory guidelines and would be completed either this month or in November.

Canaccord Genuity said it believed the “heightened concerns over the timing and certainty of completion” of the two deals could cause some share price uncertainty. The Playtech share price suffered on the CBI news, falling from around 840p last week to 784p as of Thursday (yesterday).

In tangential news, financial trading rival IG Group announced on Wednesday it had settled a compensation deal with clients over events at the beginning of the year related to trading on the Swiss franc.

The company has accepted the Financial Ombudsman Service’s decision that the company could have settled certain ‘fill orders’ at a more beneficial price than that given to some of its clients. It said the decision would cost it £1m to rectify all accounts affected.

This stands in contrast to Plus500, which said at the time of the extraordinary movements in the Swiss franc that it had made money from the movements caused by the Swiss National Bank decision to end its currency peg to the euro (paywall).

October 07, 2015

Two Singaporeans charged for match fixing in Turkey

Two Singaporeans have been charged with corruption for involvement in match-fixing in Turkey in 2013, court documents showed Wednesday.

In a fresh case that highlights the global reach of football-rigging syndicates in the city-state, Rajendar Prasad Rai, 42, and Shree Manish Kalra, 22, each face three charges at a district court.

Two were lodged on Monday and the other in late September.

One accuses Rai of “instigating” Kalra to give 25,000 euros (US$28,185) to a Macedonian national, Marjan Stojanchevski, and two countrymen to fix the outcome of a match between SC Charleroi of Belgium and VVV Venlo of Holland on January 11, 2013 in Antalya, Turkey.

Another charge says Rai asked Kalra to give 15,000 euros to the same Macedonians to fix a game between Steaua Bucuresti and Dynamo Moscow on February 3, 2013 in Antalya.

The third charge alleges Rai asked Kalra to give 27,000 euros to the same people to fix a match between Sturm Graz and Steaua Bucuresti on February 1, 2013 in Antalya.

Kalra allegedly handed the money to the Macedonians in all three instances.

The charge sheets did not give details of the Macedonians, but a Marjan Stojanchevski is described as a linesman or referee on several football sites.

Each charge is punishable by imprisonment for up to five years or a maximum fine of Sg$100,000 (US$70,315) or both.

Rai is on bail of Sg$300,000. In a separate case he and another Singaporean are accused of trying to bribe three or four players of a local football team, Singapore Recreation Club, in the local S. League in July 2014.

Singapore has a long history of match-fixing scandals, a stain on its reputation as one of Asia’s least corrupt countries for business and government.

Last month a Singaporean man described by state prosecutors as “a criminal match-fixer extraordinaire” was sentenced to four years in jail for conspiring to rig a match in the recent Southeast Asian Games.

Rajendran R. Kurusamy, 55, pleaded guilty to bribing the manager and players of East Timor’s under-23 football team to lose a preliminary match against Malaysia scheduled for May 30 in Singapore, which hosted the games.

In 2013 police arrested Dan Tan, the notorious alleged mastermind of a global match-fixing ring linked to hundreds of rigged football games worldwide.

He is still being held under a law, usually applied to members of criminal gangs, which allows for detention without trial.

Singaporean businessman Eric Ding is serving a five-year jail sentence for providing prostitutes to Lebanese football referees to try to influence international matches in April 2013.

Experts have said that easy international transport, a passport accepted around the world and fluency in English and Mandarin have helped Singaporean fixers spread their influence – with the support of external investors, most believed to be from China.

October 02, 2015

partypoker Set to Make Changes to Level the Playing Field

The debate on whether third-party software should be allowed is almost as old as online poker itself. Players tend to be in one of two camps: (1) Third-party software should be allowed or (2) third-party software should be banned. There tends to be no middle ground on this subject.

Over the coming weeks, partypoker is taking steps to prevent players from using third-party software with a trio of changes to the partypoker client in a move that it believes will level the playing field for all partypoker players regardless of their skill levels.

In short, the changes taking place are:


  • Players will be able to view the last 12 months of their own hand histories within the Missions icon in the partypoker software, but hand histories will no longer be able to be downloaded and saved to their local devices
  • Players wishing to wait for a cash game will join the room-wide waiting list and be randomly seated when a seat that matches their preference becomes available
  • Players joining a cash game will see the names of their opponents only once their first hand is dealt


These changes will stop players from using poker tracking software and their associated Heads Up Displays (HUD), prevent players from sharing hand history databases and halt the use of seating scripts that some players use to target lesser-skilled players by automatically seating them in what is commonly referred to as the “God seat.”

Tony Dunst, a World Poker Tour champion and partypoker Ambassador, believes the upcoming changes will benefit both recreational players and professionals alike by preserving the quality of the games.

These changes at partypoker are designed to create a more hospitable environment for recreational players. Unfortunately, many of the tools and tactics that professionals use to maximize their edge have made the games too difficult for new players to survive. Without them, grinders will merely pass money back and forth while being raked, and games will inevitably dry up. I think these changes will help level the playing field for casual players, and preserve the quality of games for professionals.

”It is our duty as an online poker operator to provide a level playing field”

We put it to partypoker’s Head of Poker BI and Network Operations, Jay Kanabar that the upcoming changes to the partypker software may be seen radical to some section of the poker community, but Kanabar disagrees.

“To be honest, I don’t think there are radical changes, we are just doing our duty as an online poker operator to provide a level playing field and ensure that we strive to provide the fairest and most ethical environment for all poker players to enjoy the game that we all love.”

According to Kanabar, discussions about the changes have taken place over a 12-month period, during which time consultations with different sectors of the poker community have been had and analysis done on a plethora of statistics before reaching the decision to make the technical changes necessary to implement the aforementioned changes to the partypoker client.

Both Unibet Poker and Sky Poker prohibit the use of HUDs, with Unibet Poker taking things one step further by allowing players to change their screen name. Some sites, such as those on the MPN (formerly Microgaming), have tables where players remain anonymous throughout their session, but this last feature is not something that partypoker considered.

“I think it would be a real shame if online poker had to become completely anonymous, it wouldn’t be much fun to enter a WPT with everyone playing blindfolded. Our Poker for the People mission is about developing the partypoker community where players can play online and meet each other face to face at our live events. I think this is really important so I don’t feel that repetitive changing of screen names is good for partypoker or our players. I actually think this would be a defeatist solution and somewhat the easy way out.”

Comparisons will be drawn to the recent changes at Full Tilt where players can no longer select which tables they sit at, instead they choose which stakes they want to play for and are seated at a randomly selected seat.

Cash game traffic dropped significantly shortly after Full Tilt implemented its recent changes, something that Kanabar and his team are aware of, but believe that the changes set to come into force will benefit the site and its players in the long term.

“I think the changes we are making are more fundamental that other operators have so far implemented. We are not jumping on the recreational player bandwagon, we are making these changes to benefit all poker players and of course, we hope that partypoker will also benefit in the long term by making sensible, fair and balanced changes although it’s possible we could experience a drop but we want to be brave and not sit on the fence. If I walked into the Bellagio Poker Room in Las Vegas, I could not ask the Card Room Manager, “Who are your worst players? Can you lock me a seat up to the left of one of them? Where do I get the printout of all the hands everyone here has played over the last 6 months? When my juicy seat comes free can you give me a shout, I’m just nipping into Bobby’s Room to take some notes on the hands being played in there!”
Kanabar admits he has no issue with players who like to use third party software, but has received “overwhelming feedback from players that they would prefer not to use this software but are forced to because they would be at a disadvantage against the players that are deploying it against them.”

Players who are worried about their opponents trying to bypass these changes can rest assured that Kanabar and his team have thought of everything possible and steps are in place to prevent those players attempting to gain an advantage over others.

“We have made sure that we all our homework has been done before pushing the go button and delivering these improvements.”

October 01, 2015

Sky Bet moves into eSports with Betgenius

Sky Bet has become the latest bookmaker to get into eSports after launching a full eSports betting service including both pre-match and live betting through its partnership with Betgenius.

According to the recent report by Eilers Research, there are currently 2.3m eSports viewers, which is expected to rise to 19.5m by 2020. The report further claims that the current eSports betting market pulls in revenues of USD$24 million and that by 2020 this will reach USD$1.81 billion worldwide.

Ben Wright, Head of Sports Trading at Sky Betting & Gaming, said: “The eSports sector is such a fast growing market that we see great potential in this new offering. Our partnership with Betgenius and the new opportunities it provides for our customers is a key part of our vision of making betting better.”

Mark Locke, CEO of Betgenius, added: “Sky Betting & Gaming has been a critical partner in our journey to success, and the launch of their eSports product through Betgenius’ technology solidifies our long standing partnership. We are looking forward to what will be a very exciting time for both teams and carving out another profitable revenue stream.”

PokerStars back in the US - NJ Regulator approves Amaya Gaming

The New Jersey Division of Gaming Enforcement has granted Amaya Gaming the right to offer online poker in the state with its brands PokerStars and Full Tilt Poker after some two years of trying to enter the fledgling internet business in New Jersey.

Amaya which will link up with Resorts Casino Hotel in Atlantic City to offer online poker to state residents is seen as a positive to boost the sector there.

With PokerStars entering the US again with its 95 million registered users many observers say it will reshape the state’s fledgling online betting industry which has 17 websites currently offering online gambling.

Now with the world’s largest online poker operator allowed back it is expected to boost revenues in the state which had $122 million in revenues last year, and for the first eight months of this year brought in $96.7 million, an increase of 15.6% over the same period a year ago.

Amaya’s chairman, David Baazov, said he was pleased to add New Jersey to the list of regulated markets that have found PokerStars and Full Tilt suitable to offer real-money online gambling.

“We look forward to bringing our popular brands, innovative technology, marketing prowess and world-class security and game integrity to the growing New Jersey online gaming market,” he said.

The Division of Gaming Enforcement confirmed Wednesday it had issued waivers to six Amaya subsidiaries to operate PokerStars, the world’s biggest poker website, and Full Tilt in New Jersey through a partnership with Resorts Digital. Resorts president Mark Giannantonio said he didn’t know when the sites planned to go live.

PokerStars left the US online gambling sector back in 2011 and with the entry back into New Jersey many expect the company to apply for any state that legalises online gaming in the future.

September 26, 2015

Eldery Japanese in Kobe banned from playing pachinko

Elderly residents at day care centres in Kobe Japan have been banned from playing cards, Pachinko and other forms of gambling as the city’s Municipal Assembly voted to ban those forms of activities as they foster a self-reliance on the part of the elderly.

This week the Kobe Municipal Assembly unanimously adopted a local ordinance as the country’s first municipality to ban day-care centers operating under the public nursing-care insurance system from letting elderly people play such games.

Under the ordinance, day-care centers cannot regularly provide activities such as pachinko and mah-jongg that may “stir up the passion for gambling.”

Also companies offering those activities will be banned from advertising to the elderly there.

Kobe city officials said day-care centers pitching these “casino type” activities are springing up nationwide, running counter to the spirit of the public nursing-care insurance system, which is partly funded by taxpayers’ money.

September 25, 2015

Sport betting spawns Kenya’s newest brand of millionaires

George Mwangi, who earlier this week won the Sh29.5 million Sportpesa jackpot prize is a living testimony that sports betting is alive and well in Kenya.

Mwangi became the newest millionaire in town after placing a bet and rightly predicted the outcome of a series of football games. He spent a sum of about Sh16,00 before hitting the jackpot, having started placing bets in May.

“I do not consider this gambling otherwise I would not have wasted my money on it. I take it as a game of fortune where you combine luck and commitment to succeed,’’ said an elated Mwangi during the unveiling on Tuesday.

“I recall the starter was 2/13 and the most games I won were 8/13 in multiple bets. I deployed computation skills and analysed every game for three hours beforehand. There was no guesswork.”

He is just one of a growing crop of middle-class Kenyans who are taking up sports betting as a hobby and while at it making money. Besides Sportpesa, other recognisable betting sites in the country include Elite Bet, Kenya Gold Bet, Just Bet, Bet Yety, Royal Kenya Bets and Go-Bet.

The industry has grown in leaps and bounds overtime to become a money-spinner, attracting the attention of authorities with the National Treasury recently imposing tax on winnings.

Cabinet Secretary Henry Rotich in his budget statement in June announced that there would be between five per cent and 12 per cent tax on gross earnings by every 20th day of the following month from participating bet firms.

The betting industry drives its business mostly through online platforms and the mobile telephony networks. Sportpesa, that has been in operation for just under a year, was established by Pewans East Africa at a cost of Sh300 million and commands around 800,000 registered users on its online platform.

It focuses on soccer only and has a variety of markets to choose from. One of its unique features is that unlike other Kenyan bookies, Sportpesa alongside Royal Kenya Bets has a jackpot. The Jackpot value keeps on increasing on weekly basis until there is a winner.

The approximate growth rate of the Sportpesa Jackpot is Sh2 million. Sportpesa Jackpot is played at a cost of Sh100 per jackpot pick. The sports betting industry arguably continues to earn hugely as a result of exceptionally well researched interest points.

In Kenya, the focus is mainly on football which has a large following, especially the English Premier League. According to Kiko Dewal, an industry expert, betting firms are shrewd in calculations and understand the market dynamics.

“The business has liquidity and is very fluid. Money is always moving in and out seven days a week and like traders in the stock market, firms understand the intricacies involved to detail,’’ he said.

From soccer to Formula One and even horse-racing, all punters and betting organisations know how to strike the right chord by offering such incentives such as a consolation prize to losers.

Skrill – from Online Payment Processor to Gambling Affiliate

Recently, online payment solution provider Skrill was acquired by Optimal Payments. The €1.1 billion acquisition deal will see two of the most preferred payment processors by online gambling customers – Skrill itself and NETELLER – being managed by one and the same parent company.

It could be said that both providers of payment services rely quite a lot on Internet gambling operations, as a substantial amount of their revenues is contributed by those same operations. Upon the transaction’s completion, executives for Skrill and Optimal Payments said that they intend to further increase proceeds from online gambling, as the market is known to be growing at an extremely rapid pace.

Since it was founded back in 2001, Skrill has undergone a number of changes in order to turn into what it is now. Although the company started as an online payment processor, it gradually became much larger and is now involved in other activities as well. The following paragraphs represent a somewhat brief overview of Skrill’s establishment, development and relations to one particular industry – online gambling, which, as already mentioned, has been gaining a lot of popularity over the past several years and is expected to further increase its influence and to attract the attention of more and more gambling customers of different nationalities and social status.

A Brief History of Skrill

Skrill, or Moneybookers as it was initially named, was founded back in 2001 by Daniel Klein and Benjamin Kullmann. Although registered that year, the online payment and money transfer website moneybookers.com officially commenced operations in April 2002. Over the first year and a half of operations, Moneybookers had about 2 million registered users. In other words, it seems that the company gained popularity and customers’ trust quite quickly.

In 2008, or six years after Moneybookers started offering its services, it reported to be handling more than 6 million customer accounts and to be operating in a total of 200 countries around the globe.

In 2010, the company was ranked UK’s fastest growing private equity business entity based on its profits. In 2011, it announced that its customer base has reached a total of 25 million. As of 2015, Skrill employs more than 560 people from as many as 30 nationalities. Those work in the company’s London-based headquarters as well as in its offices across Europe and the USA.

Skrill currently handles more than 36 million accounts. Its customers are able to both receive and send money to and from 200 different countries and as many as 40 currencies. The website also provides its services to 156,000 businesses around the world.

Customers of Skrill are able to send and receive money, deposit funds on various international gambling sites, own and use Skrill’s prepaid MasterCard in a number of locations around the world, etc. Speaking of online gaming, the e-wallet was given the green light by the New Jersey Division of Gaming Enforcement to go live with its services in the state, which is only one of three to offer Internet gambling options. This happened in 2013, when six poker operators were allowed to launch such operations within the state’s borders. Thus, Skrill turned into an indispensable part of the gaming experience of New Jersey-located gambling customers.

As it could be seen, the online payments processor grew quite quickly and became one of the leaders in this constantly expanding niche. Over the course of its development, Skrill or Moneybookers went through a number of alterations and important changes that contributed and are to contribute to the company’s popularization and expansion. Two of those significant changes were the e-wallet’s re-branding announced in 2010 and its acquisition by rival Isle of Man-based online payments company Optimal Payments, which was finalized in August 2015.

Change of Name

As mentioned above, Moneybookers announced its planned re-branding in 2010. Back then, the company explained its move with the fact that everything in life changed and it considered it was the right time for such a major change. Its new name – Skrill – has a number of definitions in different slang dictionaries. However, it seems that it has been gradually coined as another term for money.

Moneybookers explained that it had chosen that particular name as a means to best introduce what it has always strived to offer to its customers – innovative and safe ways to pay for their online purchases and to send/receive money, flexibility, choice, “reliability and peace of mind.”

Back then, some assumed that the re-branding from Moneybookers to Skrill could be seen as the company’s attempt to further expand its services within the online retail sector and to limit its operations related to online gambling. Yet, it turned out that this was not the case at all. At the time of the changeover, Moneybookers was among the preferred payment methods on the websites of some of the world’s biggest gambling operators. Now, five years later, Skrill is among the preferred payment methods listed on the websites of even more online bookmakers and card rooms. What is more, it is generally considered by gambling customers among the most efficient providers of ways to transfer money for the purposes of Internet gambling.

Here it is important to note that being founded and headquartered in London, Skrill is administered through UK’s Financial Services Authority and is subject to the country’s financial laws. It also could be said that over the past several years, the site has been a direct competitor to giant PayPal and NETELLER.

In August 2015, Skrill’s competition with the latter e-wallet provider was put to an end after the completion of a key acquisition deal.

Optimal Payments’ Takeover

In March 2015, Optimal Payments, owner of renowned providers of various payment services, such as NETELLER, NETBANX, Net+, etc., proposed to buy Skrill for the amount of €1.1 billion ($1.2 billion). The deal was not finalized until August, as it has been subject to both shareholder and regulatory approval. The FCA gave the green light to the transaction as it considered Optimal Payments had met all the necessary takeover obligations. CVC Capital Partners, which bought a majority stake in Skrill Group for the total amount of €600 million back in 2013, also gave the nod to the acquisition.

Executives of the two business entities pointed out that the merger marked the beginning of “a global fintech champion” and “a powerful force” in “the fast growing digital payments space.” They also noted that deal is transformational not only because it creates a leader in the digital wallet services but also because it gives Optimal Payments the chance to further expand its presence in the constantly growing online gambling market.

Prior to acquiring Skrill, the company had said that revenue from services related to online gambling operations accounted for almost 46% of its overall revenue. Adding yet another leader in the provision of payment options for this swiftly and constantly growing market to its portfolio means that this figure has every chance to go up in future.

Analysts predicted that the acquisition deal will be quite profitable for Optimal Payments. The combined entity is expected to post annual EBITDA of about £117 million. The figure is expected to increase to £160 million in 2017. In comparison, Optimal Payments’ standalone EBITDA was £58 million.

The Many-Faced Skrill

Apart from the traditional services that every self-respecting e-wallet platform offers, the options offered by Skrill are not just limited to that. Being one of the most preferred providers of payment solutions for the online gambling industry, it is not a surprise that the company has made its foray into the world of gambling affiliate marketing, offering exclusive gaming and betting options and bonuses for some of the world’s biggest gaming sites.

But what exactly is affiliate marketing and how does it work?

Affiliate Marketing in a Nutshell

Generally speaking, affiliate marketing is a rapidly growing market and it is quite a useful means for retailers and other types of businesses to popularize their services and product offering through their affiliates or in other words, companies that advertise them on the Internet by means of various approaches. Those approaches could vary broadly – from the orthodox ones, such as organic SEO, e-mail and content marketing, etc. to less traditional ones.

This particular industry has four main players – the retailer, which offers certain services or products and seeks proper advertising for those, the network, which features a wide variety of affiliates to choose from, the publisher, also known as the affiliate itself, and the customer, whom affiliate marketing addresses. The affiliates’ purpose is to bring visitors to the retailer’s website and typically, they get rewarded for this.

Skrill as a Gambling Affiliate

A quick tour around Skrill’s website makes it quite clear that the company has not been involved only in the provision of payment solutions for individuals and business organizations. Yes, it is true that it gives customers the opportunity to quickly and conveniently send and receive money, pay what they need to pay via a 1-Tap mobile optimized payment solution, and many more. Yet, apparently, the company has also decided to delve into the world of affiliate marketing.

Skrill itself features its own affiliate program, which many consider quite alluring. The company promises money rewards to websites that have brought new customers to its own website. But Skrill’s involvement is not limited to this. Its recently introduced Promotional Centre or Exclusive Offers, as the section has been named after the website’s latest update, is just what a typical affiliate offers to customers.

Skrill’s Exclusive Offers is particularly oriented towards two groups of people – gambling customers and traders. For the purposes of this article, we will pay more attention to the gambling customer and what he or she could find in the section.

As a gambling affiliate, Skrill has resorted to a number of marketing approaches in order to draw the attention of people who are already into online gambling as well as of potential gambling customers. In the first place, the website features banners of some of the world’s biggest and most popular gambling operators that provide their services on the major regulated online gaming markets.

Skrill also provides comprehensive reviews on what they offer. Gambling customers as well as potential ones can choose from several gaming options, including sports betting, casino games, poker, and bingo.

Being an affiliate of some of the major online gambling companies on a global scale is quite indicative of Skrill’s involvement in an industry that is expected to further grow in the years to come. With operators constantly expanding their presence and introducing their services to new regulated markets, it seems that the future of the popular online payment processor and its new parent company Optimal Payments is to be even more closely related to the gambling industry. And as it turns out, this involvement is to be related not only to the provision of reliable payment solutions but also of securing operators with successful affiliate marketing activities.