US regulation just two years away

At just 45 years old Mitch Garber, the chief executive of Harrah's Interactive, is already a veteran of the online gambling industry having headed up two of the biggest brands in the industry. His stint as PartyGaming CEO during the tumultuous post-UIGEA period has given him a few war wounds as well as a perspective of the business few can match. And now he sits in charge of arguably the largest brand in poker as head of the new WSOP online poker room and all Harrah's online activities.

Based in Montreal, Garber has spent the past six months quietly building up Harrah's Interactive ready for a marketing push alongside the WSOP Europe this September. The site has gone live in the UK and tested some truly unique promotions, such as a qualifier to the Tournament of Champions at the 2010 WSOP in Las Vegas. Garber says we should expect more of this kind of marketing as the firm ramps up its activities and hints at the launch of Italian and French bracelet events in the near future. Most tantalisingly of all the very well connected Garber suggests US regulation may be closer than anyone thinks.

InsidePoker Business How have things been going since you have launched WSOP.com in the UK?

Mitch Garber: Things have gone according to plan so far. We wanted to spend the first few months making sure the platforms were robust and the brands were being properly portrayed and customer service levels were up to the standards that Harrah’s customers expect and deserve. So far, we have been able to manage that very well. Launching in the UK was important and we intend to market alongside the World Series of Poker Europe in September and have a few other campaigns tied to strategic events. Then our next focus is on France and Italy.

IPB Have you applied for a licence in France and Italy yet?

MG: We haven't. Our strategy right now is to link-up with strong local partners and we are talking to people right now. I don't think we have the infrastructure or local expertise to operate on our own in each of these countries. You have to set up offices, servers, marketing and customer service in each one of these locations. Rather than think you know every local market, it makes more sense for us to partner with strong local businesses. They could be lottery, gaming or media businesses. Those are the kind of people we are talking to.

IPB What kind of partnership deals are you talking about setting up?

MG: We could take a skin of an existing poker platform and do all the marketing ourselves or we could licence our brand to an existing platform and have that operator do that marketing for us.

IPB Where else can Harrah's Interactive look to expand within Europe?

MG: The French and Italian model seems to be becoming prevalent and you have a number of countries that are working on similar infrastructure for licensing in a closed environment in their country. This is obviously inconvenient for existing operators, but it creates opportunities for companies like Harrah's who have very strict regulatory and compliance regimes.

IPB How confident are you of other opportunities in Europe?

MG: It is clear to me that every country will have their own licensing programmes and we intend to be in every country where there is a licensing regime and a broadband internet market. And we are strategically planning for a US regulatory change in the next year or two.

IPB What gives you the confidence change will come that soon in the US?

MG: If I look at the momentum it is in favour of regulation. In 2006, there were three bills being presented to make internet gaming and poker unlawful. And then in September of 2006 the UIGEA passed. If I flash forward to 2010 there are at least three bills to make internet poker lawful, and I think the environment has changed and the momentum is in favour of licensed and taxable internet poker. And this is not unrelated to the global economic downturn. I don't know of any country, state or province that is not in need of additional revenue. And since they all have gaming in them already, allowing for a new form of gaming is not at all a stretch.

IPB Is that a personal view or have you had positive feedback from the people involved in these decisions?

MG: It's both. There is not a secret there are Congressmen and Senators starting to support this initiative and understand the potential revenues behind it. It's not a hunch at all. Firstly, there have been conversations about it and we have been quite active both financially and vocally in our lobbying efforts. It's a combination of my observations and discussions that have taken place.

IPB Do you think there will need to be remedial action against operators currently in the market?

MG: I think a clear licensing regime leaves no room for ambiguity and no room for operators who are not clearly licensed to do business. But until we see a regulatory framework we can't comment on which businesses will be included. At the moment, it is in everyone's interests to have a bill passed that creates a regulatory body similar to the ones we have in several states in the US that do a very good job of licensing and regulating the market. We shouldn't put the cart before the horse. We need a bill and a regulatory framework and the rest will work itself out.

IPB How closely do you work with the WSOP?

MG: Very closely. My main focus is on letting the team who have run the WSOP so well continue to run it and leverage that brand online.

IPB How do you keep the WSOP the number one brand in live poker if you are directly competing against sites who send their qualifiers to the WSOP?

MG: We can strike a good balance. Customers of Wynn and Venetian come to play in the WSOP and we welcome them, yet Harrah's competes with them. At the same time customers of Harrah’s go and play poker at the Bellagio. This is just a case of the online world catching up with the land-based world in terms of how the customers move around from one place to another.

IPB Are there plans to tie the brands more closely together?

MG: It's a huge focus and in the next several months you will see it. We have just taken back control of our own website and you will absolutely see that.

IPB Will the WSOPE be a launch pad?

MG: Yes. You will see a lot more marketing from us and attempts to tie in the TV and tournament to the website and getting customers from that.

IPB Looking beyond the UK, how easy is it to gain traction in the Italian market?

MG: The WSOP brand is fairly well known, but it is going to be difficult. Even if the regime is not perfect, and it's not, it is a good example of a country that has taken control of the industry and kept out unlicensed brands. We will go in there respecting the licensing regime and we think we can be a meaningful brand because we do differentiate from the other brands. We will be the only chance to qualify for the most meaningful tournament in Italy.

IPB Will you be the only place to qualify in Italy? MG: We haven't established that yet. There isn't even an Italian WSOP event yet. IPB Are you looking at WSOP Italy and France as being separate from the WSOPE?

MG: We haven't figured it out yet. We know we would like to strategically expand the bracelets beyond the US and the UK. It's a question of structure and what form it will take. We haven't figured out if they will be individual events, or part of the WSOPE or tied to a larger series. In the next six months we intend to decide and announce our plans.