Q & A: David Sanderson, Gaming Insight

U.K.-based digital rights media and interactive gambling products business Gaming Insight plc has been busy snagging some top-notch firms in its bid to nail down profitable, long-term relationships.

On Sept. 7, GI announced a five-year partnership with Victor Chandler Group to distribute GI's GoBarkingMad online and digital television service. This follows previously announced ties with MSN.co.uk, Harrods Online and the Professional Golfers Association in Britain. David Sanderson has been chief executive of the company, which was previously known as Gaming Internet, since October 2000.

IGN: Why was the company's name changed to Gaming Insight?

David Sanderson: The reason was for that is that although the Internet is a proven vehicle for interactive gambling products, as far as we were concerned, it wasn't sufficient to reflect the diversity of our business as we see it now.

And what I mean by that is that we have already launched a digital satellite television version of our greyhound racing business … I say launched, it's into live trial mode. We anticipate it being fully interactive in November.

And on the back of the digital satellite launch, I'm fairly confident that we'll roll that round onto digital cable platforms in the U.K. and in Europe and other television platforms, digital or otherwise, elsewhere in the world.

In that sense, Gaming Internet was a bit too mild in reflecting what we're about. So we needed something that wanted to retain the continuity of the people that follow GI and we just changed it slightly to reflect the greater diversity of reach to market.

IGN: Does this change reflect a change of focus for the company?

DS: It is in the sense that it's a broadening of our point of delivery. The reason for it, the greyhound racing business is in effect a television service that we choose to Webcast. Therefore, the incremental costs of delivering that onto television platforms are minimal in the sense that all we need to do to deliver our greyhound racing content onto television is to buy or lease or secure deals with transponder owners or cable distribution platform owners and buy our slots on the electronic program guides.

So the way the Internet is converging and allowing people to interact with content, particularly with sports content … it seems a very obvious and natural step to move into television, which, by the way, was my background. Before I was CEO (of Gaming Insight) I was director of the biggest commercial TV company in the U.K.--Carlton TV.

IGN: Gaming Insight seems to have created several areas of focus, as is highlighted by the products listed in its portfolio. Can you describe what each is?

DS: The business is two things, but those two things are inextricably linked. One is digital media rights and one is interactive gambling products.

Underneath those umbrellas we've got GoBarkingMad, the greyhound racing business, and the issue there is that we're the world's biggest rights owner for greyhound racing with content from 10 countries--over a 100,000 live races a year. And that's all well and good, but dovetailed with interactive gambling applications on the Internet and television, they suddenly become extremely valuable.

Our casino business--we're about to launch our own proprietary casino software. The business is called Zap Casino. Zap Casino is, if you like, a template for consumer franchise casinos that we intend to run a great many of and Harrods is the biggest and best of the bunch so far. And in that case the rights we own are the rights to represent Harrods in the online casino market and the interactive application is the casino software.

Our third business is a business called Racing Network, which is very U.K.-focused actually. The other two are genuinely global. And the rights there are--we have the appropriate rights from the British Horseracing Board to access and assess horseracing form and race cards in the U.K. in order to provide people with a very valuable insight as to how to be better horseracing gamblers. The opportunity there is to dovetail that content with betting partners. If we can deliver educated gamblers to betting parlors, we take a revenue share.

Last, we have a business called SportsMad, which is interactive sports games where we provide cash-generative sports content to third party Web sites, again mainly U.K., but all sports, or all U.K. sport, whether it be football, rugby, cricket, golf, Grand Prix, etc. Just simple, easy-to-play games that you can play, buy units in order to win cash prizes, and you'll find those games adding a bit of depth to the partner Web sites, like FHM magazine. It's a big male brand magazine. That's a very small part of our portfolio.

IGN: Are those games free-play or real money games?

DS: They're both. It's like an online arcade. Simply play a few games--you can play them for free. If you buy units to play them you can win cash prizes if you get the best scores for that day, or that week or whatever.

IGN: Gaming Insight seems to be linking up with many companies. Zap Casino, for example, has formed 40 or so strategic relationships. Can you give some background on some of the more important relationships and how they were developed?

DS: The background to it is quite straightforward. My perspective was, from a background of being in television and media rather than gambling, that the delivery of an online casino as a form of entertainment has a chance to reach much, much bigger audiences than bricks-and-mortar casinos do, simply because there isn't that geographical obstacle or the sort of intimidation factor or the inconvenience factor or whatever there might be. Yet, to persuade non-casino gamblers to try your brand requires a great deal of money and effort and a huge amount of credibility to get people through the portal and into the gaming environment.

There are one or two ways to try and address that situation. You can either spend a lot of money and build a brand in your own right, or you can be prepared to share the revenue flows that casino operations might generate by partnering brands that already have years and years of the trust and integrity that big brands around the world have.

To my mind, there are a great many brands that do have the opportunity to legitimately extend their franchise into online casino gaming. Harrods is the first and best and biggest of those. We also have a similar deal with FHM and we're about to launch something similar for the Ritz Paris and for also the Professional Golf Association here in the U.K.

To partner brands like that you've got to do a number of things. First of all, you've got to make sure you don't breach American regulations because every big brand regards the American consumer market as important. So, we don't take American bets.

Secondly you've got to operate in a very proper fashion, which we do with all the sort of probity of a U.K. plc-status company. We were the first plc to run online casinos. (Plc stands for public limited company.)

And thirdly, you've got to offer a software solution that can reflect those brand partners’ aspirations. Currently, the front end of the Harrods casino does that, and we hope to significantly enhance that aspect of our business going forward.

IGN: Can you elaborate on how the deal between Harrods and Gaming Insight works out? Is it the GI subsidiary company that actually operates the Harrods casino?

DS: Yes, that is right. There is a necessary and perfectly acceptable legal structure that we have to put in place to ensure that we don't breach any U.K. rules and regulations which require that casinos be run ostensibly offshore.

IGN: Where is Zap Casino licensed to operate?

DS: Costa Rica.

IGN: What do you think are the greatest challenges facing Gaming Insight?

DS: The greatest challenge is really in the interactive television arena with reference to the greyhound racing business. To preface that comment in regards to GoBarkingMad--GoBarkingMad as a business is a sports content business with the greatest frequency of events on which you can bet anywhere in the world. We have 100,000 live races a year, which is one every seven minutes on average. The great thing about greyhound racing is that it's in essence three things: it's fast, it's very simple--beautiful colors and either six or eight dogs depending where you're watching it, and most importantly, it's absolutely synonymous with betting.

Therefore, when we present it as a sports content company to cable companies, to ISPs, and explain to them the nature of the business model as one where there's a revenue share that they can be party to--in answer to the question "do they want to?" the answer is always yes.

The question is, how sensible of a negotiation can we have about revenue share. And those have been quite entertaining conversations to have over the last few months.

The real challenge, in having established what is an absolute world's first, is we are the first company on the planet to launch a 24-hour interactive, live sports content betting business on the Internet. The services have already been live trialed on television in the U.K. and I'm confident that well before the end of this year we'll have fully interactive television service where individuals, from the comfort of their own armchairs, press buttons on their remote control, open accounts, investigate the form, place bets and watch the results unfold within minutes right in front of them.

So that's the biggest, biggest challenge because to get that right is very difficult. It involves a network of leading-edge technology partners, it involves tremendous commitment and energy from our team to coordinate all of those various suppliers to deliver a product that is just tremendously compelling.

But the great thing about reaching that challenge or meeting that challenge is that we then have a product that is totally transportable anywhere in the world.

IGN: You're offering GoBarkingMad via the Internet and interactive television. How about wireless services?

DS: In its simple sense, because it's in effect a 24-hour radio station as well with live audio commentary, we're doing deals with radio stations to try and drive business. In terms of 3G wireless--yes, it definitely fits, in terms of offering the Internet directive elements with obviously live audio coverage that they can listen to on their phones.

I'm not sure that the nature of the way you film greyhound racing--if you think about it, the camera sort of pans to the right and to the left—means there's a lot of pixelation being moved around all over the place and that's quite bandwidth heavy. And that might be beyond the realm of 3G for the foreseeable future.

IGN: The name "GoBarkingMad" is really great! Who came up with it?

DS: Well, "barking mad" is a bit of a colloquialism in the U.K., specifically in London. It's a sort of Cockney phrase and actually, I think the chairman's sister came up with the name.

The one thing to point out about GoBarkingMad--we're mindful that it's a quirky name, and we're keen for it to have a lot of cut through in mass-market audiences. It's important that we deliver a product that engages greyhound racing fans, but more importantly we need to deliver a simple numbers game racing product that will engage people who are currently interested in playing the lottery or bingo or scratch cards or whatever it might be. That means it's got to have a fun aspect to it, and the branding feature is an orange bunny rabbit because we don't want to have cartoon dogs, we want greyhounds to be seen as the serious sports athletes they are.