How to survive regulation's natural selection
The upcoming regulation of major markets is good news, but for the smaller operators it will also mean having to work out how best to carve out their position in these new environments. Chilipoker's founder and chief executive Alexandre Dreyfus explains his own strategy.
WITH an increasing number of European countries regulating their online gaming sectors there is little doubt that only a few major brands will survive and thrive in these new regulated markets.
As a Frenchman and founder and chief exec of Chilipoker.com, I am in the process of applying for a licence in France and am following closely what is happening in my home country at the moment.
Once the market is open in June, French players will be offered a choice between pure-play operators and the gaming sites of major media/communications groups.
Chilipoker is a medium-sized company that will operate its .fr poker site in partnership with Iliad-Free, the second biggest internet service provider in France.
But like most medium-sized operators, what we won’t be able to do is compete with the likes of Bwin, PartyGaming or PokerStars.
The challenge we have to address, therefore, is how we make sure we build a strong business that can survive the inevitable marketing war that is going to be unleashed and offer our players the best possible egaming product in a regulated environment.
At the moment, the majority of the B2B deals being signed feature suppliers offering their technology with the gaming sites launched under the client’s brand.
Personally, I believe these sites should be launched with the gaming firm’s brand, and this is what we have done by launching Chilipoker in Ireland with Setanta and in France with Iliad-Free.
This way we take on all the marketing, CRM and security tasks for these partners and at the same time, build up our brand recognition across different markets.
Major operators such as PokerStars aren’t going to offer B2B services, but for a company like Chili it makes sense, since we already have the content, events and assets that can be pooled and utilised across different countries.
In this way, we offer our expertise and content to our partners, while not presenting a threat to them because we don’t have the weight of a giant like Bwin, PartyGaming or PokerStars.
I believe a company that medium-sized company like ours will grow in regulated markets by licensing its gaming brand and building up a network of ventures launched with strategic partners who provide their support and reach across different markets.
This is what 888 did recently with Endemol Italy, what we have done in Ireland and France, and what we are currently working on with agreements in eastern Europe, Asia and Latin America.
Outisde egaming, it is also what travel specialist Expedia did in France with the national train operator, SNCF, allowing it to have become the country’s leader in online travel.
Such a strategy will enable medium-sized companies like ours to carve out a place in regulated markets. Just watch.