Q & A: Peter Kjaer, DrHo.com

Asia's leading online gaming company, DrHo.com, is in the middle of a transition period with its parent company. In 1961 Dr. Ho and its founder, Stanley Ho, won a monopoly for casino gaming in the Portuguese territory of Macau. The deal expires on Dec. 19 when Macau is turned over to the Chinese government. Although competition will be introduced, DrHo.com still finds itself in a good position.

Macau is a Special Administrative Region (SAR) in China, and Stanley Ho is chairman of STDM, the Sociedad de Turismo e Diversoes de Macau. In addition to its casinos, STDM owns hotels and undeveloped property in Macau and operates the world's largest jetfoil ferry fleet that runs between Hong Kong and Macau 24 hours a day.

The company was also one of the first major land-based players to bring its brand online when it launched DrHo.com. Upon its loss of the monopoly in Macau, many have speculated that the company's Internet efforts will hit high gear.

IGN spoke with the CEO of DrHo.com, Peter Kjaer, to discuss the future of STDM and the role DrHo.com will play in that picture.

IGN: Once the monopoly in Macau is broken up, will the company put a bigger focus on its online ventures?

Kjaer: Not really. The Internet casino started well before any of these issues came up. This is just a natural extension of the empire, and (we're) taking it global and capitalizing on the reputation of the brand.

Dr. Ho has spent the last 35 years building a good reputation, so the online site wasn't related to an insurance package or anything like that. Will we continue to focus on it more? I don't think so. We will continue to plug away on it, but I don't think any added effort will be put in to it as a direct result of what is going on in Macau. The bottom line is that the competition will add a new element to the business in Macau.

IGN: So it sounds like Dr. Ho isn't too worried about losing the stronghold the company has in Macau?

Kjaer: If anything it will make them a little sharper because we all know how monopolies become after a while. Often times they get slow and lackadaisical. I think it will be an improvement for Macau. If you look at Macau and Las Vegas, 15 years ago they looked about the same. Now Las Vegas looks very different from Macau because of competition, and Macau didn't change much because there was no need to. The audience kept coming back. I think it could improve the gambling industry in all of Southeast Asia. Macau has seen competition rise in Malaysia and Southeast Australia, and even in Las Vegas. A lot of Asians go to Las Vegas because there is more variety there. In the long term I think it is a good thing for Dr. Ho and his business and for Macau in general.

IGN: Certainly Dr. Ho has had more than enough time to build a strong brand in the region before the monopoly was broken up.

Kjaer: That is the thing. STDM owns so much just in Macau, whether it is the hotels, the real estate or anything else. Anyone else who comes into town for competition knows that Dr. Ho is still the big fish in town. Other people will come in, but what it will do is sharpen STDM's edge and that is good.

IGN: Is everything going along as planned with the online venture, and are you able to brand that with the brick-and-mortar casinos?

Kjaer: We don't spend as much on marketing as a lot of the other online casinos and we have found that we have gotten a great response without having to spend a whole lot of money on marketing. We get a lot of press because people just like to write about Dr. Ho in general so we get a lot of recognition that way. We have also found that the customers who do find us are very loyal. I think that is because they know who they are playing with so they don't have to bounce around as much form one site to another.

IGN: A lot of industry experts feel the Asian online market is one that really hasn't been tapped into yet. Is that your main area of focus? Have you been able to imprint the Asian marketplace with your brand?

Kjaer: That is definitely our strong hold. We are very different because our player base is 90 percent Asian. The other 10 percent are Asian Americans or Asian Europeans. They see our banner or they hear about us or read about us and know who they are dealing with immediately and they come right to us. We are also finding that our players' habits are exceeding what others in the industry have.

IGN: Are you saying that there is proof that Asian players are bigger spenders online, much like the way they spend money at land-based casinos?

Kjaer: Our customers on average spend about $1,200 a month. In Vegas they are always saying that one Asian gambler is worth seven Americans or whatever. We can say that in our case one Asian gambler is worth about nine or 10 American gamblers.

We welcome American gamblers and European gamblers, but the reality is that the brand recognition has really worked for us and we have been able to cater to the Asian player. The next job of course is to start marketing to North America and Europe and educate them on who Dr. Ho is.

IGN:B Are there other plans for the site and its expansion?

Kjaer: We will continue to grow the games and add to them. But the main thing is to grab more market share in the places where we aren't more recognized; that is sort of the main object here.