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Better you bet
December 2004
A corporation based 'over here' that's doing rather well 'over there' – the description fits BetOnSports to a T. Ruari McCallion spoke to David Carruthers to find out how it's done
On 14 July this year (2004), BetOnSports raised $100 million on AIM. That's one of the biggest flotations ever, and in a market where £10 million to £20 million – or less – is the norm. If a new company is going to get investors to stump up that much cash, it must have a very convincing story to tell - especially as the company's main market and base of operations aren't even in the UK. Its HQ is in Costa Rica and 98 per cent of its business is done in North America.
"BetOnSports was established in 1997 and got its first gaming licence in Antigua. It has been growing exponentially right from the start. Profit before tax has gone up from nothing, four years ago, to $27 million, on a total turnover of $1.75 billion," said CEO David Carruthers. The company was founded by a consortium primarily from the US, Carruthers is Scottish, and has been involved with betting and gaming for over 28 years in the UK. He joined in 2000, as the operation was getting going. But, if the primary market is North America, why did the company seek a listing in London?
"The UK market is very well respected around the world," he said. AIM is well-regulated and transparent, requiring proper accounting and auditing. In an industry that relies on confidence in the provider's honesty, the transparency of UK-listed companies is a significant comfort – gamers can be confident that the game is straight and winnings will be paid, promptly. The capital BetOnSports has raised is going to take the company forward, from being an entrepreneurial endeavour to a large and respected plc. That it's already well-regarded is evidenced by the fact that it has over one million registered users already, and they're overwhelmingly from the US, which restricts off-course betting so tightly. There's clearly an appetite for wagering: most of the company's customers are active in sports betting but other lines are popular, too – some quite esoteric.
"Of our total turnover, $1.25 billion is in sports: our biggest product is American football, which represents 42 per cent of our business," Carruthers said. "Almost $500 million is wagered through the on-line casino but we offer bets on almost anything. Current events, for example – and not just elections: you can even place a bet on whether celebrities are going to get married or divorced!" The fastest-growing area is on-line, multiplayer poker. "We launched our game on 8 October with a celebrity tournament, with $100,000 going to charity. Last week (end of October) our poker grew by 30 per cent over the week before." Which is an impressive rate but it depends on the starting point, which Carruthers acknowledges. "It will take time to achieve critical mass but we intend to get poker to equal the performance of our sportsbook within three years." Existing customers will, Carruthers is confident, generate a lot of crossover business into the poker game.
The restrictions in off-course betting in the US has led to a flourishing illegal, betting industry, based in workplaces, in bars and on street corners. It doesn't pay taxes and is a lot like the British industry before legalisation, 40 years ago, only a lot bigger – the value could be up to $100 billion. Carruthers, BetOnSports and others in the on-line gaming industry want and are actively seeking legislation and regulation in the US: they even want to pay taxes.
"Regulation can allow us to service our customers better. It can also meet legitimate concerns: to protect the vulnerable – those who gamble to excess, as well as youngsters who shouldn't be playing. Regulation creates certainty for the investment climate – and raises revenue for government," he said. "We're pleased the UK is leading the way with the new Gaming Act, which has been three years in the making. It will make Britain a beacon for the rest of the world."
A quick look around BetOnSports' headquarters will confirm the size of the operation. It occupies 110,000 square feet in Costa Rica, Central America, which is where its main call centre and on-line business is based. There is a second major centre in the Dominican Republic, in the Caribbean, which is a redundancy and back-up location. A third operation is based in Antigua, also in the Caribbean. The company employs over 2000 people, from a range of countries – it's a true multi-national operation – and has over 2000 incoming telephone lines at its HQ. Business is generated through the internet, by direct mail and by advertising.
"We're well-known for being aggressive advertisers in the US," he said. "We use TV, radio, billboards and posters, and we make a lot of use of advertising boards on the top of taxicabs, on trashcans and on billboards across the country."
The internet is a relatively new channel for the gaming industry. It has opened up opportunities in America – the world's biggest market for just about everything – and those opportunities have spawned well over a thousand on-line gaming companies. The time is ripe for consolidation, and it's already started. The capital raised from AIM will ensure that BetOnSports is in a position to be one of the long-term players.
"The onshore gaming industry recognises that on-line gaming doesn't cannibalise the existing market: it's a different channel," Carruthers said. "I'm expecting the onshore operations will lobby for regulatory change, because they're itching to get into this space – there are sign's they're marshalling their resources. If the US regulates and clarifies the industry, there will be further consolidation. It's about proper controls and procedures, audit trails within organisations, and safeguards for the consumer." BetOnSports has a strategy for growth, whether the US regulates or not. Either way, it will be looking to extend its American market share and to move into new markets worldwide. It will continue to grow, almost exponentially – you can bet on that.
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This company seems to have a lot going for it!!!
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December 2004
A corporation based 'over here' that's doing rather well 'over there' – the description fits BetOnSports to a T. Ruari McCallion spoke to David Carruthers to find out how it's done
On 14 July this year (2004), BetOnSports raised $100 million on AIM. That's one of the biggest flotations ever, and in a market where £10 million to £20 million – or less – is the norm. If a new company is going to get investors to stump up that much cash, it must have a very convincing story to tell - especially as the company's main market and base of operations aren't even in the UK. Its HQ is in Costa Rica and 98 per cent of its business is done in North America.
"BetOnSports was established in 1997 and got its first gaming licence in Antigua. It has been growing exponentially right from the start. Profit before tax has gone up from nothing, four years ago, to $27 million, on a total turnover of $1.75 billion," said CEO David Carruthers. The company was founded by a consortium primarily from the US, Carruthers is Scottish, and has been involved with betting and gaming for over 28 years in the UK. He joined in 2000, as the operation was getting going. But, if the primary market is North America, why did the company seek a listing in London?
"The UK market is very well respected around the world," he said. AIM is well-regulated and transparent, requiring proper accounting and auditing. In an industry that relies on confidence in the provider's honesty, the transparency of UK-listed companies is a significant comfort – gamers can be confident that the game is straight and winnings will be paid, promptly. The capital BetOnSports has raised is going to take the company forward, from being an entrepreneurial endeavour to a large and respected plc. That it's already well-regarded is evidenced by the fact that it has over one million registered users already, and they're overwhelmingly from the US, which restricts off-course betting so tightly. There's clearly an appetite for wagering: most of the company's customers are active in sports betting but other lines are popular, too – some quite esoteric.
"Of our total turnover, $1.25 billion is in sports: our biggest product is American football, which represents 42 per cent of our business," Carruthers said. "Almost $500 million is wagered through the on-line casino but we offer bets on almost anything. Current events, for example – and not just elections: you can even place a bet on whether celebrities are going to get married or divorced!" The fastest-growing area is on-line, multiplayer poker. "We launched our game on 8 October with a celebrity tournament, with $100,000 going to charity. Last week (end of October) our poker grew by 30 per cent over the week before." Which is an impressive rate but it depends on the starting point, which Carruthers acknowledges. "It will take time to achieve critical mass but we intend to get poker to equal the performance of our sportsbook within three years." Existing customers will, Carruthers is confident, generate a lot of crossover business into the poker game.
The restrictions in off-course betting in the US has led to a flourishing illegal, betting industry, based in workplaces, in bars and on street corners. It doesn't pay taxes and is a lot like the British industry before legalisation, 40 years ago, only a lot bigger – the value could be up to $100 billion. Carruthers, BetOnSports and others in the on-line gaming industry want and are actively seeking legislation and regulation in the US: they even want to pay taxes.
"Regulation can allow us to service our customers better. It can also meet legitimate concerns: to protect the vulnerable – those who gamble to excess, as well as youngsters who shouldn't be playing. Regulation creates certainty for the investment climate – and raises revenue for government," he said. "We're pleased the UK is leading the way with the new Gaming Act, which has been three years in the making. It will make Britain a beacon for the rest of the world."
A quick look around BetOnSports' headquarters will confirm the size of the operation. It occupies 110,000 square feet in Costa Rica, Central America, which is where its main call centre and on-line business is based. There is a second major centre in the Dominican Republic, in the Caribbean, which is a redundancy and back-up location. A third operation is based in Antigua, also in the Caribbean. The company employs over 2000 people, from a range of countries – it's a true multi-national operation – and has over 2000 incoming telephone lines at its HQ. Business is generated through the internet, by direct mail and by advertising.
"We're well-known for being aggressive advertisers in the US," he said. "We use TV, radio, billboards and posters, and we make a lot of use of advertising boards on the top of taxicabs, on trashcans and on billboards across the country."
The internet is a relatively new channel for the gaming industry. It has opened up opportunities in America – the world's biggest market for just about everything – and those opportunities have spawned well over a thousand on-line gaming companies. The time is ripe for consolidation, and it's already started. The capital raised from AIM will ensure that BetOnSports is in a position to be one of the long-term players.
"The onshore gaming industry recognises that on-line gaming doesn't cannibalise the existing market: it's a different channel," Carruthers said. "I'm expecting the onshore operations will lobby for regulatory change, because they're itching to get into this space – there are sign's they're marshalling their resources. If the US regulates and clarifies the industry, there will be further consolidation. It's about proper controls and procedures, audit trails within organisations, and safeguards for the consumer." BetOnSports has a strategy for growth, whether the US regulates or not. Either way, it will be looking to extend its American market share and to move into new markets worldwide. It will continue to grow, almost exponentially – you can bet on that.
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This company seems to have a lot going for it!!!
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