From Sports Leagues to Sports Books

31 October 2001
In any business, gaining an edge on the competition can be the difference between surviving and dominating an industry.

That adage rings loud and clear in the online gaming business as more and more companies enter a sector that's been able to weather the economic storm.

SportingArena saw the writing on the wall earlier this year and decided to adapt itself to not only compete, but pave the way for the online sports betting world.

The two-year-old company got its start marketing a service called "My Sports Pages," which was designed to help sports teams and leagues at amateur levels. The original product made scheduling, tournament hosting, statistical tracing and even building Web pages with text and photos a snap for coaches, players or cities with youth and adult leagues.

The product was a success, but Ravin Nawalrai, the CEO of SportsArena, said the company knew the growth potential for the market was slim. As more and more Internet-related companies went under during the past year, the company stepped back and reevaluated its plan.

"With the bubble bursting, it was obvious that the only two (Internet) industries which were making money were the adult porn industry and the gambling industry," he said.

In June the company decided to undergo a change.

With a crack staff of IT professional and developers, Nawalrai and his crew spent more than a month working out the wrinkles on MySportsbook, a cutting-edge odds comparison program. But the program doesn't stop there. Users can access a host of statistical information and analysis on different games and the next version of the application will include alerts when lines move that can be delivered via e-mail, pager or mobile phone.

Nawalrai said the creation of MySportsbook is an example of a company changing its direction because of market demand.

"We had built some great technology, but the business just wasn't growing like we wanted it to," he said. "We tried to figure out a way in which we could target gambling by using some of the technology we had already established."

The first version of the product was demonstrated in June and was an immediate success.

"We had about 20 to 30 companies calling us up saying they wanted to jump on board," he said.

Version 2 is due to be released Nov. 15. With its launch, SportingArena will have gone through a major metamorphosis in less than six months.

"In under four months we have been able to penetrate the market and become one of the leaders," Nawalrai said. "There are a couple of companies that have been doing this in the U.K. but there aren't too many in the U.S., and we have already got over 100 Web sites to sign on to use version 2."

The $19.95 fee users pay for the service should be an easy sell, Nawalrai said, considering what other services charge.

"Most of the gaming portal and handicapper sites are used to charging their users anywhere from $10 a day to $500 a month for their services," he said. "With this they can charge them $20 a month. That validates that people will pay for this."

Nawalrai said a lot of sites told the company to increase its price. He said the software would be updated on a monthly basis with new features and add-ons. Price increases will be relative to how in depth a site chooses to integrate the software.

A main selling point for SportingArena is the mass reach of its service. The company hopes to partner with 40 of the top international sports books to provide the live updated lines. The service will then be listed through various betting portals and other gaming related sites.

"These are B2C sites that have to spend a lot of money to bring people to their sites," he said. "They are destination sites. With our product it can be branded for the operators and then put out there in front of 10 million users per month."

Nawalrai said the company already has agreements with 20 sites to launch version 2 of the software and hopes to have that number up near 100 by the end of the calendar year.

With the SportingArena system it costs the sports books nothing to be tapped into the live-odds system. Most affiliate models are designed to incorporate a certain percentage of the net loss or the average bet up front.

"We decided that that there was a lot of money to be made here and what we really wanted from the bookmakers was a long term relationship," Nawalrai said. "We give them all of the gambling revenue. They agree to give us their live odds and they deal with the betting and we get the fees from the users."

The system is hard for the bookmakers to pass up, Nawalrai said, because they can get their name and odds in front of 10 million users a month without ever spending a dime.

The product has mass appeal to both hard core sports bettors and casual punters.

"Most sports bettors have accounts with two or three different bookmakers," Nawalrai said. "These guys would love an application that would give them the scores and stats right away for all the games that are happening."

Gaming portals and betting sites are the company's main focus right now, but Nawalrai said the company is also trying to target more of a mainstream consumer base.

"We don't want to just get this on the gaming portals," he said. "We want to get it on and and freeserve in the U.K. By doing that we can get in front of a whole new audience. If we can do that, then the bookmakers will make a lot of money and we will make a lot of money."

Skeptics claim that odds checking and updating systems will bring the lines to the same level, but Nawalrai is certain that won't happen, as operators are concerned with making sure their books are even and not worried about what other bookmakers are doing.

"Some of the bigger operators are paying up to $100,000 a month to market their site," he said. "Small bookmakers can't do that. If we can get them on the same playing field that is great. A lot of people are afraid a tool like this will make all the lines one, but we have spoken to the bookmakers and we know that isn't going to happen."

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