January 31, 2008

J'accuse! French affiliates unhappy at Unibet

It’s not what you say but how you say it. The old saying should be drummed into Unibet’s French marketing team after it found itself in the firing line from French affiliates for telling them their commission rates would be cut by 50% due to the company expecting spikes in traffic following its appearance on a French current affairs TV show. The measure only lasted four days but left Unibet’s affiliates clearly upset, as Jake Pollard found out.

European egaming giant Unibet has been strongly criticised by French online gaming blogs over the past few days following a letter it sent to affiliates explaining it would be cutting their commission rates by 50%. The decision to drop the rates was taken because Unibet was due to appear on a current affairs programme called Droit de Savoir, broadcast on the popular channel TF1 on Tuesday 22 January.

In the email it sent to its affiliates, Unibet said it expected large numbers of new accounts to be opened and a strong boost in traffic following the programme. As a result, it would increase the capacity of its servers for the next four days and reduce its “payouts on sports betting deposits over the same period by 50%”.

The company added that it had devoted a considerable amount of time answering questions and requests from TF1 journalists. It said: “It therefore seems natural that you should continue to benefit from these requests but by subtracting the artificial volume Unibet brings (you) via this report.”

The company issued a statement: “Unibet has one of the most flexible affiliate programs and offers paying per deposit which has shown to be one of the most successful ways to deliver extra results to the affiliates. The “price list” is evaluated on a weekly basis and can vary depending on the sport and gambling actuality to keep affiliates happy all year long. Unibet will soon be offering a loyalty program for its affiliates.”

Unibet said the move was in no way a sanction but the fair price affiliates should pay when an initiative it had undertaken would triple business volumes, but the correspondence caused much anger and consternation among its French affiliates. The fact that the email was sent around 7pm French time on the evening the show would be broadcast, leaving the affected parties minimal time to react, was also seen as underhand and premeditated. One blog commented that Unibet did not recognise the painstaking search engine optimisation work undertaken by affiliates, who also represented the most cost effective method of bringing in regular traffic to operators, while others said the programme had been critical of online betting.

One industry source said Unibet had been guilty of “clumsiness” rather than anything sinister, but did not doubt that the affiliates would have found such a unilateral decision upsetting.

Party the ‘prettiest girl’ as Garber talks post-DoJ mergers

PartyGaming chief executive Mitch Garber is “extremely confident” that discussions with the US Department of Justice (DoJ) over a financial settlement with regard the company’s previous activities in the US will be concluded before the year is out.

According to Garber, such a resolution could herald a stampede of merger and acquisition (M&A) activity within the sector. “As an industry, once the DoJ situation is cleared, I believe there will be a very busy M&A market,” he said.

He added that as “the leader in online gaming, the most compliant and the most conservative” PartyGaming would be a consolidation target. “I think we are the prettiest girl at the dance,” he concluded.

Garber was speaking at the publication of the gaming giant’s fourth quarter key performance indicators which showed group revenue over the quarter rising 52% to US$120m (£60m) compared with last year. However, poker revenue declined 3% quarter on quarter. The company said this was the result of a restructuring of the groups’ loyalty programme.

In the four weeks since period close, Party said it had seen an improvement in the loyalty scheme situation with the amount of bonuses and PartyPoints deducted from revenue falling from 19% in the fourth quarter to between 14% and 15%.

Poker revenue year on year was up 23% to US$72.6m while casino revenue shot up 156% over the same period in 2006 to US$42.3m. The company said that cross-selling “remained the main source of growth” in this product area. The sports-betting operation, PartyBets, saw revenue rose 50% over the 2006 figure to US$5.1m. PartyBets has been promoted heavily in the UK within the past three months, with a series of adverts appearing on UK TV screens.

There were signs within the statement that PartyGaming was suffering alongside others from a marketing crush in Europe. “Along with a number of competitors, PartyPoker has lost a small amount of market share to those sites that continue to take bets from players located in the US and other countries from which we will not accept players for regulatory reasons,” the statement added.

January 18, 2008

No silence to honour Munich crash

There will be no minute's silence during England's game with Switzerland on the 50th anniversary of the Munich air crash, the FA says.
England play Switzerland on 6 February, the date in which 23 people, including eight Manchester United players, died.

"The FA has liaised closely with Manchester United over appropriate arrangements," said an FA spokesman.

"Images of the players will be shown on the screens before the game and England players will wear black armbands."

He also strongly denied newspaper reports any other types of tribute had been scrapped because of worries about whether fans would respect them.

The game at Wembley against Switzerland will be new coach Fabio Capello's first game in charge of the England team.

Manchester United will mark the anniversary during their match with Manchester City on 10 February where there will be a minute's silence.

United will wear a special replica of their 1958 kit on the day, devoid of the players' names or shirt numbers on the back, while City's kit will incorporate a black ribbon with their sponsor's branding removed.

Bwin first to advertise in Argentina?

Bwin is rumoured to have become the first online gambling operator to advertise nationally in Argentina in recent years, after a deal with one of the country’s leading publishers.

The daily newspaper Clarin, which has 44% of the market share in Buenos Aires, has carried Bwin adverts on its website. Bwin operates with a license from the Provincia de Misiones in Argentina and is allegedly the first company to advertise since Yahoo! and others were instructed to remove gambling adverts some years ago.

Bwin was the second operator to obtain a legal license in Argentina, following Victor Chandler in November 2006.

Tim Phillips, from Buenos Aires-based Tamarind Media, told eGaming Review that the legal structure, whereby licenses are provincial rather than national, leaves advertising in a potentially grey area. “Bwin has a license to operate from a provincial gaming board, but not from the national gaming authorities, so technically, under Argentine law they are not allowed to advertise in any provinces other than the one they have the license from, and certainly not nationally,” he said. “However, if Bwin has started to advertise with the largest media owner in Argentina, then for sure others will follow. For Bwin to have taken the risk, it must have felt able to do so. This could signal a change.”

Manfred Bodner, co-chief executive at Bwin said that he would not comment on the news “for competitive reasons.”

The legality of advertising regulation has surfaced in the past. In 2005, Bwin announced it had completed a shirt sponsorship deal with Buenos Aires-based football team Boca Juniors. This was cancelled after Argentina’s National Lottery claimed that the US$13.5m deal was illegal as Bwin was unlicensed at the time.

Recent violent disturbances on two ‘floating casinos’ outside Buenos Aires have put into sharp focus the issue of gambling law in a region which has been called the “sleeping giant,” but still presents sizable challenges for operators looking to new territories.

Though riverboat casinos, owned by Barcelona-based Cirsa, and Casino Club, an Argentine company, are reported to have re-opened after a dispute with casino workers over union representation, there is still no schedule for new legislation in the country.

Ramón Moyano, partner at Buenos Aires-based legal firm Estudio Beccar Varela, told eGaming Review that regulations, while possible in the coming year, are not inevitable.

He said: “The issue is stuck at the moment because of political fighting. As far as the casino riots it is a labour-driven conflict.” He added that there have been many predictions that with a new administration, new regulations will follow.

888’s head of Latin American region, Andres Bzurovski, said that its partnership with Tower Torneos was “going strongly”. But he added that there are still difficulties in the region. He said: “The Tower Torneos partnership has proven to be an excellent relationship and we can say that it the largest local community of poker players in the region, creating the trends and culture Latin American Poker. In 2008 we will increase our cooperation and support towards Tower Torneos with the objective of having the two most important brands in the region, each one on its segment.”

He added: “LATAM it a difficult region, where a company needs a great amount of flexibility. It seems that gambling will be part of the political agenda, but you have to remember that there are local interests which are close to the government that do not want to openly discuss anything related to gambling.”

William Hill says sportsbook technology not up to in-running; signs up to Turf TV

A failure on the part of William Hill’s in-house sports-betting platform to be able to handle in-running betting largely lies behind the announcement of a switch to a third-party provider, according to finance director Simon Lane.

Orbis is believed to be the new supplier to the UK high-street bookmakers online operation, following the announcement last week that the Leeds-based bookie was scrapping its in-house NextGen sportsbook technology.

“Technically, the system at present can handle some in-running, but it doesn’t deliver the slickness of some of our competitors,” Lane told eGaming Review. “We had originally stolen a march on our competitors, but the market has moved on. You need agility in your technology. Then to a lesser extent there were the demands on the international side.”

The admittance from William Hill points to how important in-running betting has become to the major bookmakers.

Lane said that as 2007 progressed there was growing concern within the company that it was falling behind its competitors in its provision of its in-running offering. “We have made a bold decision. It has been hard, washing your dirty linen in public. It's been embarrassing. But we needed certainty. We had to put our hands up.”

In a trading statement last week, the company admitted that alongside “competitive issues”, it was the impact of technology issues that led to performance at its online operation to continue to be “disappointing”. After a review conducted last November, it was decided to terminate the company’s NextGen technology platform.

The company said the decision would result in an exceptional non-cash impairment charge in relation to the existing technology programme of £22m and restructuring costs of around £4m.

As exclusively revealed by eGaming Review last week, an agreement with Orbis is thought by industry insiders to be a “done deal”. Orbis already supplies the online sportsbook technology to Ladbrokes, Paddy Power and the UK’s Tote.

William Hill saw its share price hit by the news from its trading statement last week. Despite saying that its retail division had performed strongly, traders took a dim view of the company’s short-term prospects. The share price has now fallen over 40% since its autumn high of 672p to its level at the end of last week of 390p.

The market concentrated on the downgraded earnings guidance. William Hill said full-year earnings before interest, tax and exceptional items to be around £285m. This is around 2% less than previous estimates.

However, the share price recovered some ground on Monday following the announcement that William Hill had signed up to TurfTV. The bookmaker will now receive coverage for its 2,275 shops from the 31 UK racecourses which had been unavailable in William Hill shops since 1 January.

William Hill is the latest high-street firm to sign up to the joint venture between the racecourse and Alphameric following similar deals with Coral and Ladbrokes at the turn of the year. It is not known how much the deal is worth.

Alan Morcombe, chief executive at Alphameric, said the deal with William Hill “signifies a milestone in the development of our business”.

January 10, 2008

Orbis in the frame to provide William Hill with new online sportsbook platform

Orbis is rumoured to be the name in the frame to provide William Hill with its new online sportsbook platform after the UK high-street bookmaking and gaming giant announced it was scrapping its own in-house programme.

According to high-level sources within the bookmaking industry, the agreement with Orbis is “a done deal”. Orbis was unavailable for comment.

A spokesperson for William Hill said it could not comment on the speculation.

William Hill sparked speculation with the announcement this morning in a trading update to the London Stock Exchange where it admitted that performance at its online operation had been “disappointing”.

It added that this reflected legacy technology issues “as well as the competitive market environment”.

Overall, the company said that in the 53 weeks to 1 January its retail operation had performed “strongly” and that the telephone business had “delivered a stable performance”. The firm expected full-year earnings before interest, tax and exceptional items to be around £285m. This represents a fall of around 2% from consensus estimates of around £292m. The share price fell over 6% on the morning of the announcement, down 28.5p to 404.75p.

William Hill already outsources its poker, casino and bingo technology provision form companies such as CryptoLogic and Virtue Fusion.

Back in November, William Hill instigated an independent review of its online sportsbook technology which concluded it should terminate its own NextGen technology programme and implement a third-party solution. The company said the decision would result in an exceptional non-cash impairment charge in relation to the existing technology programme of £22m and restructuring costs of around £4m.