Premier Bet Hopes Low Margins Is a Recipe for Success

Premier Bet Ltd. last month unveiled new features to its year-old football-only site last month in preparation for another exciting season of English Premier League football action.

The biggest hit among those features has been Asian handicapping options, which enable punters to bet on favorites, underdogs and point spreads--wagers similar to those that are popular in the U.S. The options are the betting norm in Asia.

Marketing Director Mark McGuinness said the Asian handicapping service operates at margins of about 104 percent, making it very appealing to price sensitive punters.

Traditional football betting schemes offer margins of 122 percent. In theory, an operator would hold $12 for every $100 bet.

"Consumers want to invest their buck and get the biggest return on investment as possible," McGuinness said. "With us they can do that."

The challenge is to drum up enough business to offset the low margins. McGuinness said traditional bookmakers can push products with higher margins and not worry about volume. With PremierBet, however, enough bets have to be placed to balance out the lower margins.

"We believe in offering the end-user value for their money," he said. The new service is just the latest development for a site that is trying to win over a niche segment of the betting industry by only offering football betting on its site.

Tony Bloom founded PremierBet in May 2002, prior to the World Cup kicking off in Korea and Japan. Prior to starting PremierBet, Bloom was the trading director for Victor Chandler International and played a key part in developing the bookmakers offshore betting system. McGuinness

McGuinness, formerly the marketing director for betinternet.com, said PremierBet is getting a head start on other small to medium-sized sites that will need to be specialized to survive in the future.

"The online space is growing, we all know that," he said. "The customer is becoming more discerning. The market is very competitive, but we believe the key to survival in this space is to either specialize or be the one-stop shop that the bigger brands can't be."

McGuinness doesn't see PremierBet as a direct competitor of larger sites carrying multiple sports, but the early numbers for PremierBet show there are enough football-only bettors punters looking for the best value for the dollar.

"If you see all the financial figures from William Hill and Victor Chandler, they are making their profits off the back of their consumers," he said. "They aren't actually offering them intrinsic value. We believe we are offering the traditional punter, the one who is only used to a fixed-odds style of betting, value. We are gaining a large client base through that."

He added, "The online gambler is becoming very price sensitive and we are hoping to take advantage of that."

McGuinness is hoping this English Premier League season will be springboard for bigger business. Last year's World Cup wasn't as successful as hoped, mainly due to the time difference in Asia, which made it hard to capitalize for punters.

But next summer will mark the Euro 2004 competition in Portugal, which McGuiness said will represent 50 percent of the site's annual turnover.

That will only prepare PremierBet for the next World Cup in 2006 when the world's biggest sporting event will be played in Germany.

McGuiness said the company is marketing the service aggressively in the United Kingdom and throughout Europe.