Innovation in the gambling industry into 2007

SENIOR GAMING PROFESSIONALS TACKLED ISSUES RELATED TO INNOVATION IN GAMING AT THE APRIL 2007 GAMBIT GAMING FORUM

GAMBIT MEETING APRIL FORUM RECAP
VENUE: CASS BUSINESS SCHOOL, LONDON - 11 APRIL 2007

The impressive panel above (left to right), Brian MacSweeney (Endemol Gaming), Michael Caselli (Lyceum Publishing), Wim Vernaeve (Gottabet.com) and Tom Johnson (Betfair).

INNOVATION IS A CUSTOMER LED INITIATIVE
-Report Prepared by Mark McKeown of Paymedia Ltd.

Moderated by Gaming Industry Expert and Publisher Michael Casselli, the April Gambit Forum brought together a diverse panel of industry veterans to explore key aspects of how to best differentiate their products and services and indeed their companies going forward via innovation. The well-balanced panel included Brian MacSweeney, Creative Director of ENDEMOL GAMING, Tom Johnson, Head of API Product Development, BETFAIR and Wim Vernaeve, Founder of the recently launched GOTTABET.

Brian MacSweeney, lead Creative of Endemol's newly formed gaming unit kicked off the evening by explaining why a large and very successful entertainment company like Endemol had decided to focus on the Gaming Sector. Brian detailed the newly formed unit's vision of bringing the mass market to Gaming by drawing on the entertainment experience of a company that has had huge television successes with the like of formats such as Big Brother and Deal or No Deal.

Brian demonstrated some of the very successful product extensions to the Deal or No Deal format that his team has developed in the past year. Brian pointed out that the Deal or No Deal branded fixed odds and slot games had brought new money and new revenue streams to the Gaming Market and had forced traditional operators to sit up and take notice of the potential of these kinds of products by virtue of using the TV show as a recruitment vehicle.

Mr. MacSweeney was keen to demonstrate that Endemol Gaming were not just about a single TV format such Deal or No Deal and his presentation regarding their newly developed Live Sports Betting product named ViVo went a long way toward doing to achieving his objective.

Brian defined what the "TV Effect" meant to bookmakers - that it is well known in the sports betting industry that if an event is televised the turnover related to that event increases significantly. Brian gave a demonstration of how the ViVo product provided the punter with an improved user experience by providing them with live text and rich statistical data and information that harnessed the power of entertainment driving the punter to bet more than they otherwise would. Via the ViVo framework for offering content, Brian demonstrated how the TV effect can be achieved without video - he stated that is what Vivo is all about for Online Bookmakers going forward.

Tom Johnson, Betfair's Head of API Product Development, was able to give the Gambit Forum an excellent overview of the decision making that led Betfair to begin to offer an Application Programming Interface (API) two years ago which allows third parties to build their own apps that plug into the Betfair Transactional Engine in part due to his long tenure there having seen it grow massively since the days of Flutter.com.

Although Betfair needs little introduction to those in the Gaming Industry, some of the statistics Tom offered regarding the size of the Transactional Engine that has been developed at Betfair are important to consider and nothing short of incredible:

-In a given day, Betfair will process 15 times the amount of transactions of a typical day on the London Stock Exchange

-During a race day of the Cheltenham meeting, Betfair will process more transactions than all of the European Stock Exchanges put together

Mr. Johnson explained that for the first few years Betfair had to focus on ensuring scaleability to deal with the sheer volume of transactions that punters were making on their site. Once that had been successfully achieved, they moved forward with developing an API that gave their customers the tools to build their own interfaces through which they bet. By first showing the standard Betfair interface and then one built by a 3rd party, Tom demonstrated the widely different ways in which users might choose to use the Betfair Transactional Engine.

Tom stated that there were currently 100 active licensed software vendors to the Betfair API programme and approximately 15 products that had been built that a punter could currently subscribe to.

Tom finished by forecasting the plan for Betfair's API business going forward by stating that Betfair would do the following in an effort to ensure that they continue to give their user base the interface and tools they really want:

-actively continue to support 3rd party applications
-pursue the development of historical data licensing (Previously settled Betfair sports markets) - a hugely underdeveloped area in Tom's opinion
-focus on helping new customers learn how to use the API
-expand the developer community
-ensure a broader use of the API internally

Wim Vernaeve, Founder of the recently launched www.gottabet.com gave a fascinating look at the innovation that his social networking and user generated betting website had brought to the gaming sector.

Wim gave the Gambit Forum a detailed tour of the website and described the kind of markets that users can create as Bets, Challenges and Dares. He then showed how punters can bet for money, peanuts (the Gottabet non-money currency) and prizes (things like who has to unload the dishwasher). He showed how portions of winnings can be set up automatically to be donated to charity.

Mr. Vernaeve described how bets can vary from the serious side of sports like "Who is going to win the Super Bowl" to the humorous "Will George Bush be kicked out of the White House this year?". He demonstrated how the person who establishes the market acts as the referee of their own bets and indeed how that person acts as a referee impacts their overall GottaBet rating.

Wim went on to explain how his site allowed its user base to link their GottaBet markets and pages with other social networking sites such as Myspace, Facebook, Youtube, etc. via the use of widgets than can be installed and executed within its pages.

Wim finished by detailing the new business's revenue model which includes revenues on the rake on bets, interest on deposit and most significantly advertising and detailing how the business planned to grow via the use of Gottabet VIPs and the development of its API for use by third party vendors.

In moderator Michael Casselli's conclusion, he clearly set out that although all three of the presenters had different business strategies that drove their innovation:

Betfair wishes to extract more money from an established user base

Endemol Gaming wishes to extract new money from many new users

GottaBet wishes to appeal to a brand new type of punter with the betting possibly being of secondary importance to the social networking side of the experience

what ties all three together is that the all of the innovation for these businesses is CUSTOMER LED.

It was an important message for the Forum to hear - Never forget to consider the costumer and how they behave when deciding how you are going to build your strategy and determine how to innovate.

FurtherNetworking photos below:

• Speakers on the night:

  Brian MacSweeney, Head of Endemol Gaming, on Gaming opportunities presented by Live Entertainment. (confirmed)

  Tom Johnson, Head of API Product Development, Betfair, on case study of Befair's development & successes of the market first Application Programming Interface [API], did it achieve what it set out to do? (confirmed)

  Wim Vernaeve , Founder of GottaBet, focusing on the new business model of P2P betting and their API. (confirmed) - Why gottabet.com is not a traditional betting company
  - How to build a community using tools such as widgets
  - Why 'simple for the users' means 'complicated for the developers'

  Drinks Sponsored by:

  Gambit-Special Event media partners:

promotional partner:

Speaker Profile:

Wim Vernaeve, Co-Founder of Gottabet.com

Background: - Investment Banking at Morgan Stanley
- Co-founded an online DVD rental start-up
- Educated as an Aerospace Engineer
- Belgian national

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