Profile: Patrik Selin
It came as no surprise to Patrik Selin when Shuffle Master's 19.5m deal to acquire Ongame fell through after the US firm realised the costs of running it would outweigh its investment. Then again, he did sell it to bwin for close to £500m. Tom Victor meets the former Bodog Europe and UK CEO to discover what he plans to do next.
i would not personally have bought Ongame for that cash,” Patrik Selin reflects from his local Italian restaurant in Knightsbridge.
Little did we know that just two weeks after his comments about Shuffle Master’s proposed 19.5m acquisition of the network he once sold for 20 times that amount, the American company would pull out of its deal, with CEO Gavin Isaacs suggesting Ongame’s operations post-acquisition “would not achieve the near-term results” he initially expected and would “require a larger ongoing investment than anticipated”.
“It would take a long time to get that money back with the industry going in the direction it is with more separation, tax issues and different systems,” Selin explains. “Maybe they’ve seen something there or maybe they just had to [buy Ongame] because they needed something “ it’s like a lottery ticket, as long as you have it you can win.”
When Selin built up Ongame in the first half of the 2000s, the online poker environment was very different. The US was a core market even for listed European operators, and the boom was only just beginning to take hold. In late 2006 however, less than a year after Ongame was sold to bwin for £474m, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law. Bwin closed its Pokerroom.com brand not long after and now regularly peaks at fewer than 4,000 players on any given day, in comparison to the 260,000 active players it boasted mid-decade.
More recently, Selin has orchestrated another sale, offloading the Bodog Poker Network to Philippines-based brand licensee Bodog88. In the meantime, things have hardly improved for the first network the Swede brought to prominence.
“When we looked at the figures, we saw Ongame was losing about 20m per year,” he notes, and bwin.party’s pledge to move its entire poker player base onto the PartyPoker platform means this should continue.
“We know on top of [the losses] you will lose the liquidity from bwin “ my guess is that is around 50%. Now you have a network with half the liquidity, and with a high cost-base that is only going to get higher,” explains Selin, adding that progress towards US regulation is showing few signs of moving at a fast enough pace to justify Shuffle Master’s proposed outlay.
“With US poker looking like being state-bystate, and a similar thing happening in Europe with the dot.country markets, it’s going to be very difficult as you have to take such a long-term view “ it depends how long term you want to be: five years? 10? 15?”
Asia: a question of trust
So, if Selin’s eyes are currently far from the US, where does he think future growth will come from? For anyone paying attention to his three years with Bodog “ where he led the operator’s UK and European operations as well as its poker network “ the answer is clear.
“I am not going to do anything in Europe,” he laughs. “If you want to be successful today in terms of investment, it is Asia. I’m looking into different options and one is to get some investors into a new entity in Asia.
“What I find most interesting in Asia is B2B,” he explains, describing the market as ‘the holy grail’.
“If you do a proper B2B business there you are going to be so successful on every level. You have the growth, the player base “ it’s still like it was over here 10 years ago.”
This had some part to play in the decision to give the Bodog Poker Network the chance to make it big with Asian-facing ownership, but Selin remains wary of those who have tried “ and failed “ to crack the market in the past.
“When it comes to poker in Asia, Bodog is small right now, but before I left we signed up with a major player who we are going to launch on the network hopefully before the end of this year.
“The future growth [of the egaming industry] will come from Asia and you have to focus a lot more on getting Asian operators involved. Because of that it makes more sense to operate from Asia and we took it from a very small level to the top poker companies. Now it’s time to move to the next level.”
While undoubtedly valuable, the weight of numbers in the Asian market cannot be relied upon to produce results, something that Selin is well aware of from his experience with Ongame.
“When I worked in Ongame we had ‘Pokah!’ which was, at that time, one of the largest communities on the net with around 500,000 members, but we couldn’t transform it from playmoney to real-money… and God knows we tried,” he recalls. “Just figuring out how to move it from one side to the other is tricky, and no one has managed it yet, although I think someone will eventually.”
Why Europeans get it wrong
Even within the relatively smaller European market Selin is vocal about the mistakes he believes have been made by some of the largest operators.
“We have no one to blame for that other than ourselves,” he says. “We have to look at ourselves in the mirror and realise we were only focusing on the winning players instead of realising that the players driving it are the recreational ones.”
This is a key facet of Bodog’s recreational poker model, progressed by Selin during his three-year tenure alongside vice-president of poker Jonas Odman and set to be brought forward by his former colleague following his departure.
“Jonas Odman is ready to be Batman rather than Robin,” adds BodogBrand press officer Ed Pownall. “He has worked with Patrik for nine years, the last three of those covering the recreational poker model, which has been Jonas and Patrik’s joint vision, so he’d naturally step into that role anyway.”
Selin is keen to point out that Bodog’s model, which received a mixed response upon its introduction, could be seen to have influenced subsequent decisions from other networks to gear things more towards the recreational player. While the anonymous table aspect has not quite won widespread appeal, rake changes and an outward movement to reassess the value of the net depositing player has been apparent in Microgaming’s ‘True Value’ rake allocation system and iPoker’s new network rules, both introduced in recent months.
Selin recognises that cracking Asia will not be poker model will help gain a foothold in a region where trust is paramount. This trust aspect is common to poker across the world, tying into the move towards a recreational model, with Selin adding: “Now that the poker boom is over, and we are in a phase where we have to first of all re-establish who are the drivers of the industry, it’s the casual players, and I think everyone can agree with that. Then in order to attract casual players we need their trust.
“It might seem boring to talk about trust but that’s such an important aspect, especially in Asia, as you can see from the fact that 90% of the casino revenues there are from live dealer rather than RNG. On top of that, most of the sports bets placed are on the bigger games in the trusted leagues because customers are afraid they might get cheated which, given the recent allegations coming out of Italy, is understandable. The bulk of the betting is on the Premier League and Bundesliga.
“Once you have established their trust “ everything from collusion to fraud to money segregation to trusting the random generator and so on “ then after that it’s a question of how you will attract the casual players. I don’t have a clear idea of that yet and I haven’t seen anybody indicate they have a clear idea of that. Some people are trying but I haven’t seen anyone get it right.”
Stars of the industry
Although convinced that the future of egaming lies in Asia, Selin recognises that a number of European operators can be considered stars of the industry and identifies three in particular.
“There are a lot of companies doing fantastically, but I do not think there are many shining stars in this industry,” he asserts.
“PokerStars never changed its strategy and has continued competing and doing a fantastic job. In sports betting, Paddy Power is keeping to its strategy too and doing well, while bet365 has a completely different way of doing things “ much less creative but no less effective, proving there is no ‘right’ way of doing things. These are the three I think are doing the best in Europe.”
Perhaps reflective of his views about what is needed to succeed in Asia, Selin also compares the value of trust in the banking industry to that in online gambling, saying: “I think that one company doing a good job on the trust issue is PokerStars, and that’s one of the reasons why it is successful.
“In banking you need trust but in that industry they are not supposed to be responsible for the outcome of the stock market, whereas in our industry we are in charge of the outcome of the events you are betting on when it comes to casino and poker, so you have to trust even more that our random generators are fair,” he adds.
Selin notes that success in Asia is harder to come by, but appreciates there are a few players beginning to make their mark on the growing market. “There are some Asian betting companies we believe are far bigger than all the listed European companies combined but as they are not known here they get dismissed too easily. It’s very low margins but very efficient organisations doing great work.”
So, what will Selin turn his hand to now? “I love this industry and will hopefully always work in it,” he says.
“It is a fascinating industry, but at the same time it has gone through a big transformation during these past 10 years, becoming far more mature. Some parts have begun to get boring but other parts have become even more complicated than they were before, so it’s more exciting in many ways and there are now different challenges.”