Arthur's Column

Some two and a half years ago I was, to be honest, nervous when Bwin-Party announced that their then newly acquired social subsidiary Win would be releasing a social sports betting product.  Social sports betting was, after all, the main game of 2BET2 – my sports apps business.

Roll on a few years and (more than a year later than predicted) they roll out sportster on Facebook.  Now – let’s gloss over the first obvious fact – that they purloined our tagline for their name.  We used the word Sportster from day one. Now I know its just an english word, but really – could they not have been more original?

The product is OK.  Its a flash based game and covers football.  That’s football in the European sense of the word – don’t go here expecting any sports from the American side of the pond – they don’t exist.  So be it.  Bet types are fairly simple although perhaps they get better as you progress through the game.  So far – nothing game changing.

Compare European football with the selection of coverage from 2BET2 and you get an idea of what you are missing on Bwin’s effort.


When Bwin partnered with Nordeus I was anticipating something more in line with Nordeus’s market leading fantasy sports products but it seems this was not to be.  Honestly I think that was a mistake on their part – there has to be space in the market for a more fantasy/betting blended game.

Another feature which they copied invented? was the addition of virtual sports based on real world events and odds with a “proprietary result prediction engine”.  Quite frankly an exact copy of the 2BET2 Turbo Bet option.  Yes – we take real world events and odds, schedule the events for the next few minutes, and randomise the results.

Really the only difference between the Bwin/Sportster version of virtual events and 2BET2 Turbo Bet is the name, and the broader selection of sports available on 2BET2.


I wish BWin-Party all the best with their product.  They presumably have budget to promote it and no doubt will get some traction.  God knows they need it to work – their core gambling games have been declining over the past few years.

Meanwhile we here at 2BET2 headquarters are working on the next iteration of 2BET2.  Expect something different.  Something game changing.  Something that BWin Party will take longer than 2 years to copy.  We are currently in the early development and fund raise stage for the new initiative – it’s going to be huge and that takes money – but it promises to be sensational!

Until then – adios!

2BET2 Sports Apps – the future of social sports

I have been interested in the movement of money for most of my professional life, and initiated a number of businesses to ease payments in the digital world from Earthport – LSE:EPO (CTO/Founder) through to iCoins more recently.  The quest is always the same – how to move money between interested parties – whether from individual to individual or from customer to merchant – quickly, seamlessly and robustly.  By the latter I mean that transactions must settle and risk to all parties should be minimised.

This against a background of credit cards being “ruling the roost” with all their inherent flaws, unsuitability for online transactions and high propensity for fraud.  Clearly there has to be a better way.

iCoins took the approach that the interfaces to the physical world could be independent of one another, and that stored value should always be underpinned by value in the same currency in any one of many treasuries (financial institutions). To a large degree this mimics the real world.  We further saw that transactions should/could be anonymous at the time of transacting, but that sufficient audit trail should be provided to satisfy authorities concerns over money laundering and the use of the system to perpetuate crime.

The system was well engineered.  It mimiced to a large degree the real world in that it left the responsibility for looking after value and dealing with end users in the hands of the existing players, but it extended the field to include not just financial institutions, but any party who acts as a source or destination for customer funds. So it was possible to send funds instantly from (say) your Skrill wallet to (say) your wallet on Neteller. Or from Pokerstars directly to Ladbrokes to facilitate that urgent bet. Contractual arrangements were put in place between all parties in a way that could evolve and grow without the system becoming unmanaged. In a way this “feature” was an achilles heel as well.

Unfortunately we ran out of funds to commercialise iCoins.  So while the systems are all completed and were deployed in a number of scenarios, the company has had to be mothballed.

Then along came Bitcoin.  On the face of it it offers all that iCoins offers.  But it seems tidier.  End points can hook on without any contractual obligations and “money” just flows. Money is worth what it trades for – a tidy model and with the inherently limited supply of BTC a very stable model in the long term, albeit with massive volatility in the short term.  Money is stored in client side wallets – in other words wallets that are on your device be it a computer, phone or whatever.  Client side wallets in my view provide a double edged sword – while they are more secure against theft (ala Mt Gox) they are also susceptible to failure – hardware/software failure or simply lost private keys.  So with the client side wallet the currency is inherently deflationary in that coins can be lost.

Some of its features also lead to concerns.  While there is a transaction trail (good thing), there is no standard or legal identification of end points along the trail, making it tricky to satisfy regulatory AML concerns.  And the latter is a bigger problem in that there is no control over the probity of the end points, or contractual relationships with end points. Now, with the failure of Mt Gox, we see what can happen in this scenario. In many respects they behaved as an unregulated poorly managed wild west bank – placing few controls on treasury funds and allowing the bandits to make off with the money.  Arguably they would not have reached the level of insolvency that they did had they been properly regulated (although recent events in the banking world question this assessment). In any case we now see the result – the largest “bank” in the Bitcoin world is no more and gone with it are the customer funds.

Having said all that – this is no dissimilar to the US monetary system in the 19th century.  There were bank failures, insolvency and theft there too. There was volatility. The list goes on.

So – in the end – where are we?  BTC has gone through a test  phase now – has seen a significant acceptance, and is now going through the failure of an end-point.  Unfortunately that was the largest end-point which doesn’t help!  End result – end-points will be regulated entities such as wallets and the like and eventually perhaps banks.

Is iCoins a better model?  In a lot of ways yes, in that it complies with AML and provides the exact same feature that everyone likes about BTC without the drawbacks.  It provides anonymous but traceable, instant, simple, secure cross wallet/treasury/currency transactions without trying to be a currency in its own right with all the downsides of volatility and market acceptance.  iCoins can be based on any currency with an exchange rate, so we could have independent coins, indeed we could integrate BTC, but we also offer all the advantages of BTC without forcing a new currency on the world.

Too bad we ran out of steam.  Perhaps it’s time for a rethink!

Alex has totally nailed what it takes to get a decent sponsorship – and his long term agreement with Hugo Boss is testament to this. Watch this video where he once again does some crazy stuff and in the process ruins a perfectly good suit!

These stunts are more than just fun – they are serious attempts to maximise brand awareness through social media and they work!

Kudos to you Alex!

Wow!  What more can be said?  Thrilling racing and an amazing comeback for the Americans with 8 wins in a row.  This was the Kiwi’s cup to lose a week ago and now they face the prospect that that could happen this evening.

Let’s not forget that without the pre-race penalty of 2 races the Americans would already have won the cup.

Somehow Team Oracle seems to have found that extra boatspeed that they were lacking in the early races and its more than the Kiwi boat.  Tonight’s viewing promises to be awesome!

Watching race 12 of this crazy competition.  I was one of the many who thought there would be tears in this race, and to be sure there were with the sad accident that lead to the death of a crew member.  But I have to say – these boats are awesome! 

I doubt there is a sailor in the world who doesnt deep down really really really want to have a go on one of these. Beautiful, optimal, supreme racing machines. Oracle looks nicer but seems to be vulnerable with less  bouyancy in the bows.  New Zealand had wonderful balance – they really seem to have nailed the issue of balancing on these foils.

I am surprised neither boat has approached or beaten the sailing speed record.  Held until now with weird asymetrical boats (with the exception of Hydroptere) that cant really sail normally, it would be great to see one of these beasts take it out.  And I think they could. Easily.  Forget the 20knt wind limit – once this cup is decided I want to see one of these teams go out there and go for it in 25 to 30 knt of breeze.  I reckon they could find the extra 10 knt.  And what a blast that would be!!!!!

Anyway – who knows where this competition goes in the future – we still dont have a winner although its New Zealand’s to lose.  I hope they continue in multihulls. Maybe a bit smaller (although these are so frigging awesome I wonder if they arent the right boat?).

Americas Cup – New Zealand chasing Oracle – Photo courtesy ACEA/Gilles Martin-Raget

There is much talk of cutting costs. There always is.  But this is the Americas cup. I’m not convinced its that important!

In the interim I for one am loving this series.  Thanks Larry/Russell!

The IMOCA 60 class has always been a hotbed for development but I have to say these latest shots from Christophe Launay (arguably one of the best sailing photographers around) are just stunning and show what a great boat the “new” Hugo Boss is.  It’s not actually new – more like revamped – but what a stunning boat!

Stunning shot of Hugo Boss on a plane - I live for sailing like this!

But they do get wet these boats. Around the world in these conditions? Crazy way to have fun!

How We Got Here & Where We’re Going

            The United States is about to join Canada and the rest of the world on the greatest expansion of legal gambling since New Hampshire rediscovered the state lottery.  But this time, it is going to be online.

We are in the middle of what I call the Third Wave of legal gambling.  This is the third time that legal gaming has swept across both Canada and the U.S.

The First Wave started before either country existed.  Lotteries in England helped finance the first settlements.  In the colonies, government-approved and private lotteries were actively encouraged.  But great scandals–mostly privately run lotteries where the operators absconded with the loot–led to lotteries being banned by most state and provincial constitutions.

The Second Wave began with the opening of the Western frontier, where gambling was tolerated, and often expressly authorized.  The Civil War devastated the South, and legal gambling is seen as a painless tax.  But by the 1890s scandals and a reawakened morality once again led to a crackdown.  The Louisiana Lottery, “The Serpent,” led to the first strong U.S. federal anti-lottery laws.  By the turn of the 20^th century, all state lotteries had been shut down.  Casinos and racetracks soon followed.  Even Nevada outlawed casino gambling in 1909.

The Third Wave started with the Depression.  In 1931 Nevada re-legalized casinos.  Every year since, there has been an expansion of legal gambling.  Racetracks reopened in the 1930s; low-stakes charity bingo spread in the ‘40s; social games in the ‘50s.  Then, in 1963, New Hampshire Legislature authorized the first state lottery of the century, labeled a “Sweepstakes” and tied to horseraces to avoid 70 year-old federal anti-lottery statutes.

U.S. federal laws are designed to help the states enforce their public policies toward gambling.  The federal anti-lottery laws were enacted in the 1890s to help states like New York keep out The Serpent.  But the prohibitions were so great, states had to ask for exemptions once they started running their own state lotteries.

In 1961, Congress enacted the Wire Act, designed to cut “The Wire,” the telegraph that illegal bookies used to get the results of horseraces before their patrons.  Betting on horseraces is obviously legal in many states, so, like the federal anti-lottery statutes, the Wire Act applied to state-legal gambling that crossed state lines.

As with state lotteries, when states started authorizing remote wagering on horseraces, the federal laws had to be changed.  Congress first enacted an Interstate Horseracing Act.  In December 2000, it amended that Act to expressly allow states to decide for themselves whether they would let their residents bet on races by phone and computer.

There is only one other federal statute that could apply to state-legal gambling.  When the State Lotteries of Delaware and Oregon began taking bets on National Football League games, Congress passed the Professional and Amateur Sports Protection Act (“PASPA”), preventing new state-authorized sports betting.

The history of the Unlawful Internet Gambling Enforcement Act (“UIGEA”) is well known:  A failing politician, Bill Frist (R.-TN), used his position as Majority Leader of the U.S. Senate to ram through a bill that he hoped would boost his chances to become President.  This was in October 2006.

The largest publicly traded company taking online bets from the U.S., PartyGaming, home of Party Poker, believed the UIGEA made their activities illegal.  The announcement that it was cutting off its major customer base resulted in a 60% drop in the price of the company’s stock.  Other publicly traded online gaming operators were hit as hard:  The UIGEA was like a terrorist attack, instantly wiping out more than $7 billion on the London Stock Exchange.

The UIGEA did not actually change any substantive state or federal anti-gambling laws.  It did create a new federal crime, but only for operators who were already violating American anti-gambling laws.  And it called for new regulations on payment processors.

Those regulations actually turned out to be quite useful for legal businesses, such as skill games, fantasy sports, free alternative means of entry poker and pure intra-state gaming.  The last turned out to be the most important.

The federal Department of Justice (“DoJ”) has been waging a war of intimidation against all Internet gambling, but especially Internet poker.  But the DoJ is missing the two essentials for a successful prosecution: a statute that clearly makes the activity illegal and a defendant who can be brought to trial in the U.S.

For a statute, the DoJ has been relying upon the Wire Act.  Using a law designed for telegraph wires on horseraces against Internet poker is like using stone tools to perform brain surgery:  It might work, but it is awfully messy.

The DoJ took the position that the Wire Act covered all forms of gambling, even state-legal gaming, so long as a wire crosses even temporarily into another state.  But courts, including a federal Court of Appeal hearing consolidated class actions brought by losing players against MasterCard, ruled that the Wire Act applies only to sports events.  And now a new federal statute, the UIGEA, expressly stated that intra-state online gambling is legal under that statute, even if wires cross temporarily into other states.

After the MasterCard decision, Nevada and the American Virgin Islands passed legislation to allow Internet casinos.  Nevada regulators went so far as to begin holding hearings.  But the DoJ wrote them letters, threatening to arrest any licensee who took a bet online.

At least six states began taking orders for subscription tickets for their state lotteries online.  Illinois and New York asked the DoJ whether they could use out of state payment processors.  The UIGEA would allow that, since the customer and operator were in the same state.  But the DoJ’s interpretation of the Wire Act would not.

In early 2011, state-legal Internet gambling looked like it was going to explode, despite the DoJ and the Wire Act.  Caesars Entertainment received permission from Nevada gaming regulators to team up with 888, which had taken poker bets from the U.S.  The District of Columbia legalized Internet poker and other games.  So, Harry Reid (D.-NV), the majority leader of the U.S. Senate, and Jon Kyl (R.-AZ) the minority whip, wrote the DoJ, asking it to reaffirm its position that the Wire Act made everything illegal.

Two days before Christmas, the DoJ issued a formal announcement that it was reversing its position on the Wire Act.  To reconcile the apparent conflict with the UIGEA, prosecutors would from now on limit the Wire Act to sports bets.  It therefore would not be a problem for state lotteries to use out-of-state payment processors.

The DoJ had to also know that this reversal meant Reid and Kyl got their answer: There is no federal law preventing any state from authorizing almost any form of intra-state gambling.  PASPA still prevents new sports betting, but that is being challenged in the courts by New Jersey.

The gambling must be legal under state law.  On April 15, 2011, the DoJ announced the indictment of the principals of the five largest poker sites then taking real money bets from America.  But the Wire Act was never mentioned.  Instead, the UIGEA and federal organized crime charges were based on violations of New York state anti-gambling laws.

Once a state decides to legalize Internet gambling, there is almost no limit to what it can do.  Small states should be able to compact together to create player pools in the millions.  Even without a compact, a state could authorize its licensees to accept bets from foreign nations where the betting is legal, such as England.

In March, the Illinois Lottery starting selling individual tickets online: more than $1.14 million the first week.  Every lottery is now looking to see whether it can join the three Canadian Lotteries that are already operating Internet poker games.  More than half the states allow at-home betting on races.  Nevada has two online sports operators, one accepting credit cards, and will start issuing its first Internet poker licenses this summer.  Landbased operators are paying outrageous amounts for Internet expertise, while social game companies, like Zynga, are openly saying they want to join.

The question is no longer whether Internet gambling will be made legal, or even when.  The question is who is going to ride the Third Wave.

© 2012, I. Nelson Rose.  Prof. Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments and industry.  His latest books, Internet Gaming Law (1^st and 2^nd editions), Blackjack and the Law and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.

This article is reprinted with permission from Rene Carayol – a friend and inspirational business thinker.

“IT CAN ONLY BE A QUESTION OF LEADERSHIP”

The media is in its usual frenzy as Roman Abramovich seeks his eighth manager in his eight year reign as the owner of Chelsea Football Club.

“It was a player’s cabal”

“The ugly excess of player power”

“He was only given eight months, surely that’s not long enough?”

We see this situation far too often in the world of business.  The new incumbent leader has brilliant credentials, has a strong intellect and it looks like the dream ticket, but something’s clearly wrong.

The top team they have inherited is clearly unsettled and we start to see some resignations, some firings, and a wholesale drop in morale.

The new leader is adamant that they have the correct blueprint, and more importantly the backing of the Board of Directors.  They will not be denied.

We would say that perhaps the most underestimated competency that a new leader needs to bring to the party is perhaps the aura of being ‘easy to do business with’, not intellect or strategy!

Think culture not strategy.

The ten things that AVB perhaps got wrong:

1.   Far too many of his press conferences were all about him and HIS project – it would have served him better if he talked about the great players, the great fans and the great club.  It doesn’t help to alienate your stakeholders at every opportunity you get.

You need them more than they need you.

2.   He should know better than anyone that age doesn’t matter, its talent that counts.  Paul Scholes and Ryan Giggs are 5/6 years older than any of Chelsea’s stalwarts but are still contributing magnificently.  And Abramovich was prepared to give AVB a chance despite being only 33 years old.

In the final analysis the elder statesmen he severely alienated were the same people he became dependent on to save his career.

3.   Every player who made a genuine mistake on the pitch was summarily dropped.  From Lampard, Anelka, Alex, Romeu, Torres, Essien, Malouda, Kalou and even his own recent signing, Cahill.  Some never came back; others sat festering, not even making the bench.  This is no way to build team spirit and it was obvious they felt isolated and humiliated.

4.   Standing on the side-lines at every game, whistling and shouting at all the players with sharp instructions and feedback, which clearly should have been communicated long before the game started.

It is clear he was a micro-manager who wanted to make every decision, and call every tactic and this was never going to work given his lack of people skills and a lack of exposure/experience at the senior levels of the game.

5.   He was certainly a radical moderniser but as we all know the four most powerful words in any organisation are ‘what do you think?’

Just by being human and humble enough to elicit the opinions of those around him would have gone a long way into keeping many on board. Instead, he lost all ‘corporate memory’ and any goodwill, whilst attempting to stamp his authority.

6.   The moment he declared publicly that he didn’t need ‘the backing or favour of his players’, he was clearly sunk.  He certainly didn’t need their approval, but he needed to get them ‘on the bus’ but he either didn’t care or didn’t know how.

7.   Some recent outbursts against the media highlighted his inexperience, his naivety and his hubris. By starting to blame the media, they helped create a feeling of ‘death row’ and he became ‘dead man walking’.  It became only a matter of time.

8.   The petulant and harsh dropping of three of his star players, in probably the most important and public match of his reign against Napoli in the Champions League backfired spectacularly.

It felt like he was ‘stamping his feet’, and staring down the very people who could deliver his salvation.

He would later call them back into the team – and win, and drop them again!

9.   He ‘rode into town’ declaring for all to hear that everything his mentor and previous boss, José Mourinho had achieved at Chelsea was now outdated and wrong. In one fell swoop he was making a huge statement, and ensured there would be many eyes watching and waiting to see what he could deliver or not.

10.  Finally, ‘never bite the hand that feeds you’.  It was obvious that Roman Abramovich was trying to give him as much support as he possibly could.  It would never be vocal, and it would never be public, but it was certainly there.  Once AVB started to pine for public backing it was clear that even he had lost belief in himself.

Never follow a tough act into a leadership role, unless you are prepared for the toughest of rides. Charm, listening skills and honouring the past are key ingredients of success.

His predecessor Carlo Ancellotti was revered and loved by all, but AVB never mentioned his name or paid homage to the great legacy he inherited. It was far too much about his inherent ability. He ‘made his bed’.

Having recently had lunch with Dr Adrian Atkinson, Chairman of Human Factors International and my favourite business psychologist one of his many telling insights was “emotional intelligence is really not much more than great interpersonal skills.”

Now many may argue at the margins but he makes a terrific point.

“Good leaders create followers, great leaders create leaders”.

Time to ask ourselves the straight and unavoidable question –

“Why should anyone be led by you?”

Maxi trimaran Banque populaire has smashed the round-the-world record, completing a circumnavigation from France to France in 45 days, 13 hours and 42 minutes.

The 40m trimaran screamed around the world with average 620 mile days – truly exhilirating! Having had the good fortune to cross the Atlantic on a smaller trimaran I speak from experience when I guess that all the crew are at the same time excited, exhilirated and more than a bit happy to have made it back in one piece!

The Jules Verne record was named after the book “Around the world in 80 days” at a time when it seemed unlikely to be possible to achieve a circumnavigation that fast. Here we are nearly twice as fast not more than 30 years since the original 80 day record tumbled.

Now we just wait for a foiler such as Hydroptere to take it to a new level …

Renewing domain names is a commercial transaction heavily weighted in the seller’s favour. When your domain name expires you cannot reactivate it except through your exitsing registry for up to 4 months, and of course you stand the risk of losing the domain name.

I recently had some domain names come up for renewal at Eurodns. The domain names actually expire on 6 January (tomorrow), but I got a number of emails from Eurodns warning about expiry and soliciting my renewal fees stating that the renewal was due 31 December. As I was away I checked the actual expiry date (using whois at network solutions), saw that it expired 6 January and chose to renew on the 2 January when I was back in the office.

Eurodns then chose to charge me Euro 25 per domain name (there were a number of them) for “reactivation”. Their rationale is that they have a cost to reactivate a domain name. Given that the domain names had not yet expired I queried this from their support. Their response was “The expiration date at eurodns is not the same as the expiration date at the registry. The expiration date at eurondns is the one indicated in your domain list “renew before”. As already explained to you there is always a difference between the expiration date at eurodns and at the registry, which varies depending on the tld extension. This is necessary in order to make sure that we can renew the domain.”

I find this “explanation” to be simply bullshit. What they are doing is extorting “reactivation” fees from customers when they are left with no alternative. At this stage you have no alternative – its lose the domain name or be ripped off.

I have not had this treatment at any other registry. Shame on you Eurodns!