GPWA Times Magazine - Issue 13 - June 2010

FreeBingo.co.uk, BingoVIPClub.com, Live- FreeBingo.comandTopBingoSites.com. Last summer, PartyGaming purchased Cashcade, which owns the Foxy Bingo and Think Bingo sites, and in March Harrah’s Interactive Entertainment en- tered themarket by launching CAESARS BingoOnline in theU.K.Earlier thisyear, Paddy Power opened a bingo room and created an online magazine dedicated to bingo–believed tobe the first of its kind – calledBingoPower. “As the big get bigger, the smaller sites might not be able to compete,” Fraser explains. “This is an open market, but that isn’t something that’s going to allow for a lot of growth. Then you have companies that have never offered bingo before, but are very good at sportsbook or casinos, now getting into the bingo market. And this is muddying thewaters even further.” In turn, bingo affiliates who have seen their share of the pie shrink have taken on the “if you can’t beat ’em, join ’em”defense.Over the last year, Fraser said that a recurring trend has seen bingo affiliates be- comebingooperators. “What they’re thinking is, ‘Wait a minute.IfI’mgeneratingXamountof trafficandsending it toabingo room and getting Y as revenue, why don’t I just keep all of that traffic and get amuch,muchbigger Y figure,’” says Fraser. “Itallmakesperfect sense.” An example is Costa Bingo, whose chief executive Richard Skelhorn started U.K. casinoportal CasinoChoice in2001. Other successful affiliates such asDigital Prophets and Bingoport have also gone into the operator space during the last year. “Being an affiliate, all you do is recruit players,”Skelhorn toldE-GamingReview earlier this year. “That’s what we have done, dayandnight, for eight years…This isachallenge,butknowinghow tomarket toandget players givesus ahead start.” While Fraser fully understands the rea- soning and logic behind affiliates going to the next step and not only operating skins, but also becoming operators, he isn’t so sure that it will lead to unmiti- gated success. “I think what these affiliates are find- ing is that the grass isn’t always greener on the other side,” says Fraser. “It’s one thing tomarket bingo and generate traf- fic. But generating all of that traffic and then being responsible for retention, re- starts, registration and customer service is awholeother set of problems.” These recent developments may have slowed the overwhelming progress of the last five years, but they have far from stopped it altogether. The online bingo industry still has the potential to flour- ish, provided it generates more players through awareness, product innovation and expansion into new markets. But, Fraser points out, this could be easier said thandone. Product awareness is moving forward thanks to the well-known players in the business continuing to expand and de- velop while other non-gaming brands – such as VirginOnlineBingo– increase thegame’spopularityand reach. Product innovation, however, is a bit moreof a challenge. “The beauty of bingo is its simplicity, but at thesame time that isalsooneof itsma- jor downfalls,” Fraser says. “The fact that it’s a simple game is a weakness because youcan’tdomuchwith it.Youcall out the numbers, the players pick them off and then somebodywins. If you try to change that or complicate it, you could hurt its mass appeal. “The same goes for content. You always hear that content is king, but really, how much can youwrite about bingo? It’s not like poker where you could write count- less strategy articles. There’s no Doyle Brunson of bingo. Sure, you canwrite on and on about promotions and the like, but that’snot thekindof content thatwill generatenewplayers.” But the uncomplicated nature of bingo could alsohelp it expand into other markets. The reason online bingo was so popular in the pre-UIGEA U.S. and absolutely exploded in the U.K. is thegame’s simplicity. “It’s like a novice gambler walking into a Vegas casino,” says Fraser. “Hemayknowhow toplayblackjack androuletteandheknowshowaslot machine works. But don’t put him anywhere near a craps table or Sic Bo table. It’s just toocomplicated.” Another factor inbingo’s success in the U.S. and U.K. is that it was al- ready integrated into society. With that said, Fraser’s newest target for growth is Spain, where he launched QueBingo.com in 2008 but growth hasbeenslow foreconomicreasons. South America is also a possibility, but economic and broadband chal- lenges may inhibit the growth. The game has done well in Scandinavia, and Fraser feels the next battleground could well be Italy. But larger Europeanmarkets like France andGermany as well as the Far East are unlikely to see much traction because of the lackof historywith thegame. “The next greatest growth area has to have thesamecultureof thegame that the U.S and U.K. have,” Fraser adds. “When you’re dealing with a country like that, bingo is a natural. Despite the stagnant nature of themarket, it can still succeed. Andwe’re countingon it tohappen.” “Thebeauty ofbingo is its simplicity,butat thesame time that isalsooneof its majordownfalls.” –Phil Fraser, FocusOnlineManagement 25 Online Bingo —What a Difference a Year Makes