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Copyright 2005 PokerNews.com

September 19, 2005

HEADLINE:
GIGSE '05: Online Poker the Star of the Show! Global Internet gaming show reflects the growing importance of poker

BODY:
The older I get, the less I seem to know. The world gets more complex, and the sum of human knowledge grows. It is communicated at the speed of light to people who build on it to expand the human view of the universe even more, and then communicate it to others, who in turn use it, and so on, ad infinitum. It’s hard to keep up. But, the more you learn, the more you know, and the more you know, the more you grow, and when you stop growing, you surely start dying. I do what I can to understand the universe around me, no matter how futile the effort may sometimes seem.

When it comes to the world of e-commerce, whatever it was you thought you learned this morning is often already obsolete by dinner. I have been part of the world of Internet poker since its beginnings, and I struggle to keep up with its manifold evolutions and revolutions. In June, I was afforded a spectacular opportunity to increase my knowledge by attending the 10th-annual Global Internet Gaming Show and Exposition — GIGSE (pronounced gig-see) ’05 — in Montreal. It was sponsored by the River City Group, which is run by Sue Schneider out of St. Louis, Missouri.

It was worth making the trip just to see Montreal, which, with its French culture, architecture, and cuisine, is a little like going to Europe while staying in North America. GIGSE will return to Montreal in May 2006, so that it won’t conflict with the World Series of Poker, as this show did. This reflects the growing importance of poker in the online gaming world.

GIGSE has grown incredibly from its beginnings. The number of exhibitors doubled from last year to nearly 100, and attendance grew by more than half from 900 to more than 1,400 people from 47 countries and representing all aspects of the e-gaming industry. The biggest participants were e-payment interests like NETeller, Gateway, and Click2Play.

Dozens of affiliate organizations were there. Online sportsbooks, the behemoth of Internet gaming, and online casinos were everywhere. Law firms, accounting firms, software developers, publishers, game designers, governmental jurisdictions that cater to online interests, and more were represented. But the star of the show, in my opinion, was the former redheaded stepsister who has grown into a beauty queen: online poker. Everybody’s seeking to take this girl to the prom.

PartyPoker sponsored the opening reception and, not surprisingly, was the most visible poker presence. Bodog.com, a gigantic online sportsbook that’s making a foray into Internet poker, generated the most buzz. Bodog’s CEO, Canadian Calvin Ayres, has a style reminiscent of Richard Branson from the UK, of Virgin Air, Virgin Music, and so on. Ayres is the brand, and the brand is hot. The most obvious thing about Ayres and Bodog is that they’re not afraid to spend money to build their business, and they’re dead serious about establishing their place in online poker. Among other things, they hosted a major online poker marketing show at Mandalay Bay during the World Series.

One of the most difficult things about the show was choosing which seminars to attend over the four days. I opted for Know Your Customer; Developing a Marketing Strategy; Protecting the Poker Player; and Internet Poker. My buddy John attended Fraud and Risk Management Solutions; Opportunities and Risks in the Chinese Market; and The U.S. Legal Climate. Some of the other topics available were Emerging Payment Concepts; Payment Processing Challenges; Distributed Denial of Service Attacks; Technology Outsourcing Deals; Affiliate Marketing Roundtable; Betting Exchanges; Institutional Investing; Case Studies in Branding Strategies; Skill Games; Jurisdictions; and Mobile Gaming. The seminar most interesting to me was Internet Poker: Protecting the Player Experience, by Andre Edelbrock and Andy Goetsch of Cryptologic. Preserving the integrity of online poker is a subject about which I know quite a bit, and I always want to learn more. The more you learn, the more you grow.

One of the things I learned is that in this “Internet Age,” people collect huge amounts of data and make it available in the marketplace. One of the more impressive exhibitors was Hitwise (www.hitwise.com), which measures Internet activity and refers to itself as “the world’s leading online competitive intelligent service.” Some Hitwise-collected data for the week ending July 16, 2005, was: Visits to gambling websites account for 0.55 percent of all U.S. visits to the Internet (by comparison, search engines accounted for 7.03 percent and visits to adult websites accounted for 16.92 percent); 23 percent of visitors to gambling sites are 55+ years of age; CardPlayer.com was a fast-moving gambling website during the week, jumping from No. 19 to No. 8; PartyPoker was the most popular gambling website visited by U.S. Internet users … the No. 2 site was FreeSlots.com and the No. 3 site was PacificPoker.com. (Note that the data is for all gambling sites, not just poker.)

Hitwise data indicates that the dominant demographic group visiting gambling sites are men (51 percent), ages 35-44 (around 25 percent), with household incomes of $30,000-$60,000. Also, there is significant customer churn; around 20 percent of those who visit a gambling website then go to another gambling website. Around 14 percent of those who visit a gambling site are search-engine driven. (Actual numbers vary from week to week.)

Part of the growing demand for data is the growing number of magazine titles dealing with the industry. Probably a couple of dozen publications had a presence at the show — not just Card Player wannabes, but publications about casinos, sports betting, and most particularly e-commerce in its infinite variety. Some of the more impressive were Poker Biz, E-Gaming Review, I-Gaming Business, and Online Gambler.

For me, one of the more exciting elements of the show was the introduction of 3-D interfaces for poker sites. It is my long-held belief that most sites underestimate the importance of their interfaces, and don’t do enough to make them user-friendly. French software developer Mekensleep (www.mekensleep.com) had a 3-D unit on display. Bodog is scheduled to go live with a 3-D interface later this year. I suspect that it won’t be long before 3-D interfaces are the norm.

Those who follow this column know that the issue of integrity and site security is one that I work with and care very much about. Greg Pierson, the principal founder of UltimateBet, has a new venture, Iovation, which develops new software not only to catch cheaters, but to protect poker site users against a variety of other evils, including phishers and hackers. Pierson strikes me as one of the smarter people I have ever met, and he somewhat reminds me of Microsoft co-founder Paul Allen, one of those guys who has made a bundle but whose mind demands that he continue innovating.

There was much discussion of networks of skins at the show. PartyPoker is, of course, the biggest poker network, with its Empire skin being bigger than most independent sites. When it comes to network philosophy, there are two basic concepts: full-service networks like Cryptologic, whose skins tend to be more expensive, and bare-bones networks like PrimaNetwork, whose skins tend to be cheaper. The full-service networks provide backroom support, including customer service, deposits and withdrawals, security, and so on. According to John Docherty, the man behind PrimaNetwork, you can get into a bare-bones network skin these days for less than a hundred grand.

With around 40 rooms, PrimaNetwork has more operators than anybody in the network marketplace. One of its premier rooms is Royal Vegas, run by Lou Kelmanson. Ladbrokes uses Prima Network software, but doesn’t participate in its network. Because skin owners have to provide their own support and infrastructure, Docherty qualifies them carefully, as each skin owner in a network needs the other skin owners to do their marketing job or the concept fails. PrimaNetwork sponsors a team of poker players, primarily for European marketing: the Hendon Mob — Ram “Crazy Horse” Vaswani, Barny Boatman, Joe “The Elegance” Beevers, and “Rocky” Ross Boatman.

Besides promoting industry shows like GIGSE, River City has an executive search division and a publishing division. This being the 21st century and all, some of the publications are available principally or only in electronic format. Of particular note is “Internet Poker — The Real Deal,” a guide to the online poker industry. A portion of this was excerpted as an article by Mark Balestra in the spring ’05 edition of industry periodical Poker Biz, (www.ggbmagazine.com), and it is the best, most comprehensive discussion of the online poker industry I have yet seen.

Besides GIGSE ’06 in Montreal, River City has upcoming e-gaming shows in ’05 and ’06 in Nice, France; Macau; New York; and the Bahamas. I’m scheduled to be a speaker at the December show in Nassau — I-Gaming in Depth: Online Poker. You can get more info on River City’s shows and publications at www.rivercitygroup.com.

The growth of the Internet was driven first by adult sites and then by gaming, two of the biggest e-commerce industries by dollar volume and hits, even today. Poker has grown to be a significant share of the e-gaming market, and that share will only grow. Shows such as GIGSE are an important part of establishing a cohesive industry that can grow even more by cooperation.

Roy Cooke played winning poker for more than 16 years. He is a successful real estate broker/salesperson in Las Vegas. His books are available at www.conjelco.com. His longtime collaborator, John Bond, is a free-lance writer in South Florida. Roy may be contacted at: RealtyAce@aol.com.

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