Peace and love at GiGse25th April 2013 8:55 am GMT
Day two of the GiGse conference was dominated by talk of scumbags and marriage. Everybody was struggling to follow yesterday’s dramatic Jones-Pappas standoff. A few panelists jokingly promised fisticuffs or nudity but nobody delivered. Shame. The most illuminating panel of the day was probably the study of the role of affiliates in a regulated US market. (Although Probability CEO Charles Cohen can take a bow for a typically brilliant and entertaining solo turn on the possibilities of mobile.) Poker Trip Enterprises CEO Jon Friedberg is the first affiliate to be licensed by the Nevada authorities. It cost him a $5000 licence fee and about $100,000 in legal fees. Friedberg seems like he’s on a one-man mission to legitimise the affiliate industry. “The gaming industry has the highest percentage of scumbags of any industry,” said Friedberg. “I want to help clean it up.” The key, of course, lies in regulation. The session highlighted the best and worst of the murky world of online marketing. The best? Caesars, for example, can advertise in Nevada and neighbouring states. It might even advertise in New York but what about the rest of the world? “No matter how much money Caesars has to advertise, there will always be gaps,” noted Friedberg. “Affiliates can fill those gaps.” And of course, some operators do not have Caesars’ marketing budget. The likes of Apple, Amazon and Office Depot were cited as massive users of affiliates. Apparently 23 per cent of e-commerce in the US is generated by affiliates. “I can safely assume that regulation will be a trend in the US and it will spread throughout the world,” predicted Friedman. However, US-focused affiliates will have to adapt to a regulated market with a smaller number of operators and a cost per acquisition model rather than revenue-sharing agreements with operators. It won’t be for everyone. “There are a few people I know that are potentially licensable,” said Jason Rosenberg of American iGaming Solutions, “but most of them aren’t – especially if they’re still taking US players.” Today’s chairman Michael Pollock of Spectrum Gaming told a similar tale when he opened proceedings. “A payment processor asked me about licensing in the US,” he began. Pollock asked the guy if he took US payments before 2006? Yes. Did he take payments after 2006? Yes. Is he still taking payments? Yes. Nope, he ain’t gonna get a licence. “No-one has a right to a gaming licence,” concluded Pollock. “It is a privilege you receive by demonstrating good policy, honesty and integrity.” The moral at the end of the story almost ruined an entertaining anecdote and it was unclear quite who Pollock was addressing. When he continued by saying that this is not a question of US vs Europe, it seemed that he was keen to continue Jan Jones’s fight but Jon Pappas was not present to raise his fists. If Pollock, who is a great and witty host most of the time, came over slightly schoolteacherly at this point it set the tone for a few speakers who were intent on delivering an idiot’s guide to online for the greener members of the US audience. The opening panel of (mostly) competitive suppliers was notable for the lack of fireworks that one delegate had predicted. Aristocrat’s Atul Bali, Yaniv Sherman of 888, Frank Pracukowski of Foxwoods and Williams Interactive COO Jordan Levin tip-toed around each other a bit. Which was a bit of a shame because there were differences of opinion, which never quite came to a head. The only pure play operator on the panel Alec Driscoll was perhaps the session’s most illuminating presence. “It is very difficult to pick someone to trust to move down the rabbit hole with if they are going to be a direct competitor,” said Driscoll. “If you are working with people who are working with multiple brands and probably in the same market, how do you guarantee there is not a conflict of interest?” Sherman of 888 did not respond to the bait. Foxwoods’ Pracucowski, who is also now operator and supplier (although probably not operating in the same markets as his clients), was another to bring up the question of trust. However, that will probably be a key part of his sales pitch going forward. “This is a true marriage,” said Pracucowski sweetly. “The worst thing you want is to get into a bad marriage.” Closing the day was the sixth Launchpad competition for intrepid entrepreneurs to make their pitch for investment and recognition. Isis Labs founder Daniel Kajouie emerged victorious but it was a close run thing with Bet Buddy just a percentage point or two behind. Interesting as his new platform might be, I think it was Kajouie’s invention of a completely new word – gamblification – that probably won it for him. Four of the five companies had a social-flavoured solution to sell. However, the real money winner was Bluebat’s Kenny Huang. Judge David Baazov of Amaya had to make a swift exit for an unspecified emergency but he left a note saying that he would like to invest in the company. Bluebat could, it seems, be the social piece of the Amaya jigsaw. If Huang can find the elusive Baazov, perhaps that will be a happy marriage.