Changing The Game

Life in the Bodog world is many things, but it is never boring. In the past few months the firm has announced the withdrawal of its brand from the US market, the granting of a UK remote gambling licence and the proposed launch of brand new poker software. And yet there is still a feeling that we are waiting for Bodog to do something big, not least in poker. Patrik Selin, Bodog Europe's CEO, admits he may have made promises the firm has not been able to keep. Yet.

'I have to criticise myself for that, because you always try to be optimistic,' Selin says with a smile. But apparently there is a new version of Bodog's poker software due in November, one that is sure to make some headlines. Certainly the market could benefit from a shake-up in its current languorous state, and a long overdue blaze of Bodog marketing around a relaunch would be much welcomed. Things are changing at Bodog, however. As a firm, Bodog is still retaining that edgy consumer facing brand. And its approach to player sponsorship in the poker world shows its not going to change its brand values just yet. But interestingly, in the business world Bodog seems to be trying to change its perception. There is a real will within Bodog to position itself as a credible, respectable company.

The 2011 Bodog has a slightly more serious side than the one displayed on the 2006 Forbes cover. It's a side Selin says has always been there, but that many in the industry are reluctant or unwilling to acknowledge. 'From a B2B perspective many people can't separate Bodog as a brand from Bodog as a business. They think we are drunk all the time and there are 20 girls in the room,' Selin says. The firm has become the first major brand to obtain a UK remote gambling licence (in casino and sports betting so far while it waits on the Gambling Commission to set the parameters for a poker licence).

It has also altered its corporate structure so that the Bodog brand is licensed out to operators in various territories. And it has told its US licensee that it won't be renewing its brand-licensing deal in 2012. Selin insists that structurally, Bodog's European and Asian operations share nothing with the US-facing Bodog site beyond a name, but perception is everything in business. We wanted to take away the only issue they had to beat us with,' he says. No longer will the Bodog brand take US bets.

But what exactly will the Bodog brand be doing in 2012? Its CEO has shown a sharp eye for future trends in online poker to date and it will be fascinating to see how they attack both the poker and the wider online gaming space at a time of real change. InsidePoker Business sat down with Selin to find out his expectations of the future of the industry and what the sleeping giant will do when it wakes up.

InsidePoker Business What's the rationale behind the UK licence for Bodog?

PATRICK SELIN The UK is the largest regulated betting market in the world by far. It's a massive betting market that you have to have a presence in if you are going to succeed. It's also a market that has the longest tradition of betting in the world. As soon as you are in the UK you create a lot of trust for both players and partners, and if you want to be a global player you have to have a presence in the UK. For us we are recruiting a lot of people and we see it as very important for our credibility to have a licence.

IPB Is it important to be a big player in the UK?

PS It would be presumptuous to say we are going to kill Hills and Ladbrokes. We're not. They have been around forever. We are going to have a presence in this market, it's going to be a profitable business, but is it going to beat Ladbrokes? Probably not. Our business plan is based on having a big enough presence in the UK to sustain a marketing and technology presence in the UK. It's so important to be a credible organisation. It's not only a bottom line, cash decision.

IPB If the UK is not the be all and end all, where is?

PS For Bodog UK it is the UK. For everybody else it has to be Asia. There is nothing competing with Asia. A gambling company with no presence in Asia is not going to be a major player in a couple of years. End of story. At least in casino and sports betting.

IPB What does the repositioning in the US [where Bodog's licensee agreement will not be renewed in 2012] mean for the wider business?

PS When we got the UK licence things changed. Now we have a licence in the most reputable jurisdiction in the world, our brand is becoming so valuable to us we don't want to get that tainted by a licensee taking US bets. It's not the same business, they are simply licensing the brand. But I was one of those pushing to stop the US licensee using the Bodog brand as it's not worth it. By removing the US problem we will move ahead of the curve.

IPB Do you think Bodog is unfairly characterised in the industry?

PS Bodog is demonised in this industry. And we play up to it, as it gives us some credibility with the consumers. But for 17 years we have always paid the players, and everyone has been paid according to the rules. By removing this US stigma, even though nobody is demonising those companies taking bets from Turkey or Greece or Germany, my competitors have no issue they can beat us with anymore. I can go to a newspaper in the UK and negotiate a deal without the issue of credibility hanging over our heads.

IPB Where does the industry go from here?

PS The industry is going to change because it seems like a lot of legislation is there to protect the government-run organisations. France is an example of that, where there are only going to be a couple of companies who survive to the end game. When you have a government-run company there are no shareholders and you can run a much tighter ship as you don't have to pay out a dividend. A state-run company also normally has higher levels of trust so we are losing out on many levels.

IPB Will that lead to more consolidation?

PS People are talking about a surge in consolidation, but so far we haven't seen much activity. Two major companies have merged, but it's not been well received in the market and so far you could say it's been a failure. It's only very small parts of the market that are consolidating and long term there is going to be a break-up of the market due to the local pressures.

IPB How do you mean a break-up of the market?

PS What may happen long term is that if the stock price gets low enough then it is of interest to private investors to delist the company and take it private. It's good to be listed in many industries, it gives you value, trust and money to buy other companies. But I don't think a customer focused business should be listed in our industry today. I think we are going to see less listed companies.

IPB Do you think there is going to be a greater move by land based companies into online gambling?

PS The land based companies have to go online. So far we haven't seen it yet. So that is also a trend we are going to see, but the success of Asia will distract them. If you look at Singapore, with just two casinos, it is already bigger than Las Vegas. And there are a lot of other Asian countries looking to open casinos, so the land based operators are not going to look into online because they have new land grabs to deal with. What is also going to happen though is that European companies are going to discover the potential in the Asian market.

IPB Who is the industry leader at this point?

PS I don't see any clear market leader in the industry. Before, we could say PokerStars, but I think now it's even more open than it was before. A year ago we would say the market leaders were PokerStars, Full Tilt and the bwin.party group. Today we can see none of these three have really succeeded so far.

IPB Why do you think bwin.party have not done what we expected?

PS They don't control their own destiny. They are relying on legislation and hoping that the US and Germany will give them the legislation they need. They hope someone is going to give them the perfect market where they can be profitable, and that's not going to happen as the government doesn't want to give cash away. None of the listed companies seem to have a future plan that they control, and if you buy a listed company it's a bit of a lottery ticket.

IPB There are a lot of negative statements about online poker from CEOs at the moment. Do you think the people at the top understand the business?

PS I can tell you when I started to work for Ongame I hadn't played poker before, but I was a gambling man. And I realised that to understand the business you have to understand what you are selling. I spent a lot of time learning poker. So many business decisions are taken based on an understanding of the business. Otherwise it just becomes squeezing more out of the player base and you become less innovative. The industry has grown so much and it's become more corporate, which is not bad, but that has seen companies taking different decisions in different areas that conflict against each other. They don't understand the delicate player balances.

IPB Poker always seems to be 'coming soon' at Bodog. When are you going to really start marketing the site in earnest?

PS When we bought the code base there was no knowledge within the group. And hiring people who understand it takes some time and then it takes even longer for them to understand the code base. So it's taken longer than we thought, but we have been working very hard on the new software we are going to launch. We will hopefully have completely new software up in November. That is the goal, and we think it is going to be top three in the industry from a software perspective and depending on what happens it may even be top two.

IPB Is poker a priority for you?

PS Poker is very important, but if you are going to do a lot of marketing you need to have good software or you are just training up players for one of the bigger sites. So until now we have kept a lower profile, and after we get it up in November it's going to be a really big step forward. And then you are going to see much more poker marketing from us. We've already signed up a couple of new female pros.

IPB How has the poker market changed?

PS The poker market has shifted and not everyone has realised this yet. A couple of years ago we thought we would become poker pros. Do we believe that today? No. But has the marketing changed? With rare exception, no. I see it over and again from all the sites, but I don't think anyone believes it. The poker marketing has to change and we are going to adopt a new tactic and everyone is going to follow. They have to shift, because nobody believes in their marketing anymore. It's hard work to become a pro and the marketing has to change.

IPB Do you think people are wrong in not focusing on poker?

PS Poker is an important product, although it's not going to have the growth it once did. But people want to have more than one poker site, and if you can be an alternative to the big ones then you have something. Poker is important for the future, and why say no to a fixed margin product. If you know what you are doing in poker then you can have big success.

IPB What is the Bodog poker philosophy?

PS We have a different poker philosophy. We are going to make sure nobody can read our numbers anymore. It's net gaming revenue (NGR) that is important and the only thing the sites are measuring is gross gaming revenue (GGR). They have no idea how much money the sites are making due to bonuses, rakeback and marketing. The NGR in the Bodog network has increased 50% and I mean pre Black Friday. We are getting more out of our players, they are playing for longer and having more fun. That is what we have been doing, and we are confident we are doing it right.