From Dot Com to eGaming: Manfred Bodner, Bwin
The past ten years have changed everything for the online gambling industry. In the first of a series of blog posts from experts and industry leaders looking back over the decade, Bwin co-chief executive Manfred Bodner describes challenges, excitement and growth...
IN THE LATE 1990s, gambling was largely a state-owned industry with lottery companies and some casinos.
Then new technology reached a lot of industries, such as the music and newspaper sectors, and also gambling. It triggered a paradigm shift in an industry that didn’t really have exciting growth rates anymore.
The new technical possibilities allowed us to reach out to new potential customers – a younger, more affluent, more sophisticated audience – who did not really interact much with the offline gambling world.
On the other hand, there were many legal limitations. Because of the complexity of the legal issues, large companies didn’t care to dig deeper. This mix of new technology and extremely complex legal requirements created a perfect growth area for start-ups.
The 2003 Gambelli judgment was a decisive moment for the industry – for the first time the European Court of Justice stated that protecting the markets for purely financial reasons, tax reasons, was not legitimate. This was a big turning point, and really released oxygen into the European scene.
In 2006, UIGEA was a big shock, but the biggest impact coming from this was the lack of execution of a law that was put in place three years ago.
The public companies pulled out of the market but some other private entities decided to stay. They picked up all the business of the other companies that left, and don’t seem to be facing any sanctions.
These companies pour enormous amounts of money into the European market, and it is very hard for us to compete with them. They overpay on media, they overpay for staff and aggressively headhunt our personnel. These companies have hundreds of millions in free cashflow because they work illegally in the US.
That is the real bottom line of the US problems. I am a big fan of the free market, but only if it is free under the same conditions for everybody.
We at Bwin believe that, eventually, most of the world’s countries will regulate online gaming one way or another. The Italian example of full onshore regulation has shown how much market potential there is for online distribution, and it is considerably bigger than it is today.
Thoughts? EGR welcomes pitches for blog posts of 250-350 words on topical issues in egaming. Email online editor Jon Parker for details.