Good Companies - Bad Countries

This is not true for industry in general and is even less true for online sports betting business. I do agree that this is a factor for consideration, but it is certainly not something that should be considered in isolation. I think the Nike business model is a good comparison to how all the international Sports Betting companies are structured. Anyone who owns a pair of their shoes knows that they are manufactured in a number of countries in South East Asia including China and Vietnam. Is Vietnam a name that naturally springs to mind when you are asked for a jurisdiction that manufactures world-class brands (even though they actually do)?

Most likely you think of the United States or maybe Germany if you need a premium car or a good pint. Does anyone reading this article go into a shoe store and turn their noses up at the Nike section as they hunt around for a good pair of “Made in the USA” running shoes? Of course not, you are very happy to take what experience has taught you is a well-manufactured product that was specifically designed for you as a consumer, the Nike model. The reason Nike manufactures in South East Asia is entirely based on costs and availability of a core set of essential resources specific to their industry. The more optimized the jurisdiction, the more competitive the company will be located in that jurisdiction. Yet when it comes to online sports betting, there is some notion that the rules of the rest of the world’s industries do not apply. The less regulated the environment a company operates in and the lower its cost base, the more competitive it will be if it has good corporate governance and fiscally responsible management. In plain English, for our industry, many of the largest and most dominant companies are located in the least regulated markets with the lowest cost of operations. As an example, I established the BoDog.com group in Costa Rica back in the mid 90’s entirely because of the criteria that I suggest Nike uses. It has a natural cost advantage over all other markets and has good quality resources, including people, for this cost. In addition to us, Costa Rica also has two other post-up (prepaid wagering) Sportsbook monsters ( Sportbook.com and BetonSports.com). I believe we are the three largest post- up sports betting operations in the world and it is no coincidence that we are all located in the same jurisdiction.

To create a competitive advantage, all of us combine North American and European technology and management with the cost advantages of the best legal base of operations. So if a player cannot rely on the rule of thumb that the jurisdiction the company operates in is an indicator of corporate strength and reliability, what are they to do? I would start with another rule of thumb that actually does have some validity. The rule is that the longer a business has been in operation, and the higher its profile in the industry, the safer your money is! This rule is independent of jurisdiction for reasons mentioned above. But since this is not the only factor to consider, players will need help and for this you need to get in contact with watchdog sites. Players looking around this space will quickly find themselves in a game of snakes and ladders since all watchdog sites take advertising from our industry. Even the ones that say they don’t take advertising will in fact be getting paid. How else do they keep the lights on?

As you can imagine there is lots of room for abuse in this area, so it’s the classic case of “caveat emptor” (buyer beware). Start by finding one that admits that it is being paid by the books it recommends. Then find out how much travel they do. In order for a watchdog site to be able to give true advice to their readers, it is necessary for their top management to go to the gaming companies offices and do physical inspections. The competency of management and fiscal solvency of the gaming companies are the main issues that they should be focusing on, and this is not easily judged sitting behind a computer. By reading material on sites and talking to their management, you will get a better idea of who the strong (safe) companies are in today’s market. You will also be in a better position to find the gaming companies that offer the best value for your style of wagering. As the industry matures, there should be less of the Wild West and the top companies will become common names to us all. The more mainstream the industry goes the better protected the consumers will be. This is what we are pushing for as an organization, and is why I write these articles. For more articles by BoDog.com CEO Cole Turner check out www.coleturner.com

© Copyright 2004 Gambling Online Magazine This material may not be published, broadcast, rewritten, or redistributed.