IGT and US online poker
IGT and US online poker
Peter Laverick, IGT Interactive director of marketing, looks at the firm’s entry into online poker, expansion in Europe and the US market
When US-technology firm IGT bought Swedish poker network Entraction for $114 million it raised more than a few eyebrows in the poker industry. This was a major US technology firm entering into the online poker space in a very visible way. There could only be one conclusion. They knew something: online poker legislation was on its way soon.
But that is to diminish the potential for growing what was previously known as the Entraction Network, and is now known as IGT Poker, in Europe. IGT Poker is currently the 13th largest poker network on PokerScout, but as Peter Laverick, director of marketing at IGT Interactive, notes it has a huge amount of growth potential if it can target some of its rivals big clients.
Nonetheless it’s the US market that remains the biggest opportunity. With IGT having close relationships with many US casino groups it is well placed to cash in on any regulation stateside. InsidePoker Business caught up with Laverick at the recent ICE show to see how he viewed both the European and US markets.
InsidePoker Business How is IGT approaching poker in 2012?
Peter Laverick There are two very distinct businesses, the US which is very dependent on legalisation and European poker. We acquired Entraction software in August last year and we are currently in the process of rebranding the network through IGT Poker. We’ve invested heavily in product improvements and recognise the product isn’t world class at the moment. We just signed off 100 new developers for the poker products that will then work alongside new partners on the network and we hope to announce the first of them very soon. The stated aim this year is to massively ramp up the development team in Stockholm and Tallinn, start delivering new features on the poker product and to sign new partners.
IPB How tough is the European market?
PL Preparation for new markets is tough especially when very often the same resources are trying to improve the products. We treat each new opportunity on its own, we look at the benefits and costs to our shareholders and we make a decision whether we go in that market or not. The Denmark launch was successful and I think we learned a lot from that. In the space of three months we managed to get the product compliant and out of the door. We didn’t go into France because the cost outweighed the benefits and probably at the moment it’s looking like a good choice. We are seriously evaluating Italy and Spain at the moment.
IPB Why did IGT choose to partner with Entraction?
PL It was an opportunity that came up at the right time. Aside from poker, it also offered us an entry into the other verticals of sports betting and bingo. We set out looking for a poker partner and that was an added bonus that came alongside it. We think that there is tremendous potential, and potential is a key word with Entraction. By putting more developers and more investment dollars into that product, we think we can really make an impact in Europe and go forward in the US also. The IGT development team is 1,500-strong so it’s a sizeable team now and probably comparable with anybody else in the marketplace at the moment.
IPB Has poker been part of IGT’s plans for a while?
PL We have a stated ambition to be a world class leader of uninterrupted products in all verticals. We have great slot content, great table game content and poker was something we were missing and something we filled the gap with this year. I’m sure they were looking at poker clients back in 2005/06 and they never stopped looking.
IPB Is there a specific kind of player IGT is looking to acquire?
PL Yes, I think every poker network in the world is looking for the recreational player. At the moment the software is very suited to a heavy use individual, it’s very fast and it’s very slick. What we need to do is add on the extra features, the bells and whistles.
IPB What do you think those extra features should be?
PL Avatars and especially that whole social media side. We may learn some real social media techniques from our new friends at Double Down that will?work in the dot com and regulated markets. Side games are a must, that will be one of the product developments we launch very soon. The big advantage we have is we will deliver to Entraction partners, side games of some really strong IGT products, slot titles which are probably the highest revenue titles in the world.
IPB Social media side is a phrase which has been bandied around a lot but how does poker really capitalise on it?
PL I don’t know if I’m honest and I don’t think anyone knows because I think if somebody worked out the secret they would have implemented it already. What I do know is with the acquisition of Double Down we are definitely in the best place to find out what that secret is.
IPB Has the value of poker diminished across the egaming industry?
PL I think for certain operators it has. I think new products determine that as well. Mobile sportsbook has been a roaring success over the last two years. Entraction has a very small footprint in the UK, really it’s only Victor Chandler who operate in the UK of all their partners. So although we say the poker industry is flat we do see growth opportunities for IGT poker in the UK.
IPB Do you feel poker as a whole needs an injection of innovation?
PL On a broader level all products need some innovation. I think to get innovation in casino games is probably a little easier because there is a broader reach and poker is quite a narrow product but 888 managed to do it last year so it is possible. We aren’t focusing heavily on new features in the next 12 months. We are focusing on getting that product on a world class level, really fixing all the basics and making sure it can compete against all the other products in the marketplace.
IPB Who do you see as your main competition?
PL In the poker world specifically, it’s Playtech and Microgaming whose new ecology market message is very strong at the moment. We’re waiting to see what happens with Ongame.
IPB Are you planning on following Playtech’s lead and offering free play poker in the US?
PL There are a lot of people asking for free play in the US at the moment. We are developing a product and we should have a free play product available in the middle of this year but you can’t view free play on its own. Free play has to be viewed as preparing for legalisation. So to offer free play on its own as a separate product is something we are not interested in. But to offer it on long-term deals, partners who want to invest post- legalisation, that’s something we’re very interested in.
IPB So you’re confident that regulation is going to happen in the US?
PL Yes, we’ve always stated that it will happen, we don’t know when, and as a B2B provider we just have to be ready for our customers. IGT are in a very unique situation. Every casino in the United States is a customer of IGT’s already, we are very much looking to leverage our current relationships with land-based operators as that poker market opens up. If it’s state by state we will be ready, if it’s federal we will be ready and we are getting ready for Nevada which will happen this year. We’ve applied for the supply license and service license there. We are getting quite close with a couple of partners – we will have to partner with an operator so we can offer services and we will probably announce something very soon.
IPB Do you have a preference whether it will be state regulated or federal?
PL We don’t but what I would say is that state by state is something that IGT is very suited to. We have over 50 offices in the United States, 4,000 employees. Every casino in the United States has an IGT relationship, so state by state potentially would give us an advantage over the competitors but then again federal probably is easier for us to execute on.
IPB How do you think IGT can differentiate itself from everyone else?
PL We are part of IGT, a $2 billion a year company. We have the size and the strength to significantly invest in these products. You have to keep improving, if you don’t keep improving you die in this market.