GPWA Times Magazine - Issue 25 - June 2013

tiplayer gaming. We realized that we were in an ultra-competitive marketplace. We are always going to struggle in the context of Microgaming and Playtech and others. But these are companies that, in the context of the United States, have their own peculiar difficulties, which really origi- nated or are consequent to their activities in the United States as very substantial op- erators – in some cases, up until relatively recent times. Q: Which is why you turned your focus toward the U.S.? SMURFIT: That’s absolutely right. Regulation created opportunity for us. So when Italy regulated, we marched in there. Then we parlayed that reputation and credibility into a platform-provision relationship with Rank Group for their Spanish regulated business, which is up and running and is a very big part of their future expected growth, particularly now that slots are expected to regulate in Spain this year. So we’ve gone from taking a technical as- set, which took a long period of time to build and develop, to building a business on top of that. The first stage was what we had – business-to-business skill games. The second stage was business-to-business casino table games. The third stage was a platform. And that’s how we’ve built and structured the business. We “product-ized” the Internet gaming system – the product platform– in 2009. And we went tomarket in 2009, and we secured our first corporate customer in 2010 for the platform. So over an 11-year period, we’ve had the process of going down a blind alley in skill games, but then repurposing it and devel- oping it to pursue the opportunities which we knew existed, which we knew we could address faster than the competition. It’s us and it’s Playtech in Italy and nobody else. And in Spain, we have delivered for the largest land-based casino bingo operator, which is Rank and the group of 13 sites that attract 2.5 million visits from unique customers every day. Now, that pales in comparison to the context of the U.S., and particularly in the context of Foxwoods, which is a sub- stantially larger organization with a much larger reach in the United States. We have always felt that the regulation of Internet gaming has been a very substan- tial driver and catalyst for the growth in our business. And we’ve always taken the view that, whatever we make today, we will very happily invest in the future in or- der to be a larger, more structured opera- tor in what used to be a very busy market. But in the context of the U.S., it’s a very different situation. Q: So you set your eyes on the U.S. next. SMURFIT: We set our eyes broadly on North America. And in late 2009, we spent a lot of time and energy winning an RFP for supplying games content to Loto- Quebec. We hope to be integrating and launching if not this year, then certainly early next year. National lottery operators move at more a deliberate pace than com- mercial operators, we’ll be ready when they are. So winning an RFP doesn’t necessarily re- sult in income today or tomorrow. In fact, it may be the day after or the day after that. But, from an experiential standpoint or from an asset standpoint, it was an enormously beneficial experience for us to go through that process. And that was the very first real RFP that we went through and we won. Q: Now you have the Loto-Quebec RFP – what were you looking for as you evaluated the market? What were you looking to accomplish? What were you looking for in a business partner? What were you looking to move forward doing? As you envisioned it, what was your two-, three-, five-year plan? SMURFIT: So the immediate market-en- try strategy was to go knock on the door of the casino operators and say, “Hey, here we are, guys. How about doing something today, well in advance of regulation?” This – to put it in context – was in 2009, a time where I suspect, Frank, you were probably only just starting with Joe the process of learning about Internet gam- ing, preparing for it, really understanding who the players were in Europe, what the technologies were, what the challenges were of operating. At that point in time, we were knocking on the door of casinos – small, medium, large – and we were saying, “Hey, we’re GameAccount. We’d like to do something with you. We’re pretty certain it could be free play, it could be real money further down the line or it could be an interna- tional real-money website – something like that. How about it?” The first reaction to us was “GameAccount who?” So we spent about a year knocking on doors, getting lots of meetings, a lot of interest, a lot of learning. But at the end of that period, a lovely guy called Kevin Sullivan, who works at Boyd, suggested we should strongly consider partnering with somebody who was already in the space as a licensed and regulated provider of casino gaming equipment. Q: What time-frame are we talking here? SMURFIT: Autumn of 2010. And we had what I can only describe as a bit of a bake- off between a couple of the larger manu- facturers. And ultimately, Aristocrat was our nominated casino-management system provider and vendor that we partneredwith. The strategy behind that was to partner with somebody who already had relation- ships in the marketplace, because we knew that we had technical credibility – which, if anybody looked under the bonnet, was self-evident – and we had the ability to deploy an Internet gaming system and we had a wide range of diverse Adobe Flash and mobile gaming Apps. We had the ability to integrate third-party remote gaming servers provided by the land-based manufacturers, if they had one, or locally deploy land-based casino manufacturers’ slots within the Internet gaming system. And over time, we developed the capabil- ity to integrate with a land-based casino management system, which is a key part of our corporate DNA, and which the gen- tlemen at Foxwoods found uniquely in- triguing because there really hasn’t been anybody who’s achieved convergence in the online experience with a land-based casino management system. So really, for us, a casino management system provider was an interface with the market. There were four big operators and providers of casino management systems, and we partnered with one of them. Q: The next big break for you was Maryland Live! SMURFIT: We launched the Maryland Live! website with Aristocrat, in May of COVER STORY The anatomy of a deal