A new network and desirable licensure within the European Union mean more opportunities for Devilfish Gaming.
Having last week completed the relocation of its operation from the Kahnawake Mohawk Territory to the island nation of Malta, DevilfishPoker.com, the company's core offering, has gone live on the Entraction Network.
Under Entraction's Maltese license, Devilfish Gaming may now advertise its services to residents of the United Kingdom -- an opportunity previously unavailable to the newly listed company.
Paul Barnes, chief executive of Devilfish Gaming, answered questions by telephone about the company's new offering, the state of the Internet poker industry, the well-trodden subject of liquidity, the daring use of brand attributes and more.
Q: Following last week's launch on the Entraction Network, can you make any projections, financially, about how the new offering will perform?
A: We haven't been promoting the old platform, as you know, and we're currently in the process of migrating players from that platform and acquiring new players. The business went live at 5 p.m., G.M.T., (on May 10), so it's a bit early to say in terms of our next earnings bulletin.
Q: When do you think the offering is going to begin contributing materially to revenue?
A: That's sort of a question you can get badly wrong, isn't it? (Laughs) We're rolling out marketing, and we've had a bit of good luck as "Devilfish" (Dave Ulliott) recorded a video that is doing very well on YouTube at the moment. It's had 45,000 hits since Monday, and so that's obviously showing how powerful his name is. So that's just a bonus; it's not really core marketing from our side. We are signing up affiliates, and we have service companies working on our behalf in that regard, so we're rolling out the marketing at the moment. So, it'll take a little bit of time to kick in, but it'll kick in, I'm sure.
Q: I often hear that liquidity is key to maintaining a successful poker business. Is the deal with Entraction expected to have a positive impact on liquidity for DevlifishPoker.com?
A: Well, we're on a network, so we benefit from liquidity across the entire network. Now, Entraction doesn't take U.S. players, which is one of the reasons why we joined their network -- we wanted to distance ourselves from the whole U.S. thing for now. Whereas Entraction have less liquidity than our previous supplier in total, they're very strong in Europe and they're growing. We're going to help them grow, hopefully! They're very ambitious, and I'm confident the trend in liquidity will be upwards on Entraction.
Q: Why was Entraction chosen over other Europe-facing networks with larger player pools?
A: Entraction came closest to fulfilling our stated business strategy. Entraction also gives seamless access to the Boss network (IPN), so our players can play on both Entraction and the IPN, using the same user name, with the same wallet, and with integrated V.I.P. points. If you add those two together, at peak, you're up to 18,000 players. That's pretty good liquidity. It gives our players lots of choice. Entraction and IPN have complimentary tournament structures -- different guarantees -- so there's more choice for the player. I think Entraction really has it right, the way they set up their business model. You sign up to Entraction, and your players automatically and seamlessly get a choice of playing the Entraction network and/or the IPN network. That's of course the same for the casinos -- they offer access to WagerWorks and NetEnt.
Q: That's helpful. The more I look into learning the ins and outs of the poker networks, the less I feel I understand.
A: Look, I don't want to name any names, but I was very disappointed -- my team, as well -- when we spoke to a number of the bigger networks. We felt the quality of service and the commitment to new operators was very low -- or would be, I should say.
I've heard a lot of complaints from other operators who are dealing with some of the bigger guys. The other issue there is differentiation. What's the big deal about being on the same network as everybody else is on, you know what I mean? We're getting so much more from Entraction. We're getting two completely different networks. We're getting two poker rooms. We're getting bingo and sports book very soon, and that's all seamless. And we're getting excellent partner service from Entraction, so those are all very important things. The time to market is also critical -- Entraction delivered to the day. And they opened up completely. They gave us first-class turnaround. The minute we wanted assistance, they got it to us. And they allowed us to work closely with their people in their offices in Stockholm and Estonia.
In the current climate, there's so much money and so much scrambling activity with poker that some of the big boys, they just don't offer that level of partner service. So, it's very important to us to have a reputable company to deal with that gives us very adequate liquidity, gives us upward growth trend, and gives us top support, and gives us a say in the future of the product. They want to hear our views on the poker client, on software development. They know we've been in the business for a long time and have good ideas.
Q: Will Entraction also provide customer relationship management services?
A: Well, we're doing our own C.R.M., but we're also working with a number of service suppliers. Entraction deliver us reports, and we have full access to the back office to generate ad-hoc reports, which we can then use for C.R.M. We're working with a company called Oxygen in the U.K., and they're a marketing services company that is helping us manage our affiliates, and will also help us with C.R.M. activities.
Q: Last time we spoke, you had hinted that Devilfish Gaming would be launching advertising. How do you plan to leverage the company's advertising budget?
A: Well, I think it's all about getting the mix right. The marketing mix is going to contain some higher-risk expenditure and some standard expenditure, but we are going to spend money on standard advertising this summer. We're rolling out banners, print ads -- we're already doing some, which you'll see coming out very soon. We're certainly going to do the full range. And we've reserved some cash for what you might call the more daring, more risky type of venture -- whether that's TV, YouTube, or whatever.
Q: As a newer and smaller business, how do you feel you can successfully compete in a European market that's very saturated?
A: Well, there's a number of ways to compete, one of them is to keep your cost of acquisition down, and we benefit to a certain extent on the recognition of "Devilfish" (Dave Ulliott), and the fact that his name is fairly well established.
I'm just back from Cyprus where Dave Ulliott -- "Devilfish" -- was keynote speaker at the affiliate conference. It went well, and he got a very good response. He got up there, he played guitar, he told jokes -- during his keynote speech.
I'm not making this up. I was buying lunch in Amsterdam airport, and the guy serving me -- when I handed him my credit card -- said, "Oh, you're from Devilfish." He saw my company card with Devilfish written on it. He starts asking me all sorts of questions about "Devilfish," and I ended up giving him some of our lapel pins, because he was telling me all about his friends who play poker.
I went over to England recently to visit "Devilfish," and the guy at customs was asking me, "Where are you going? What are you doing? What business are you in?" I told him I was in the poker business, and he asked, "Who are you going to see." I told him Devilfish, and he was quite excited. It's quite uncanny.
So, we want to try to use that brand recognition where we're not currently very active, but where he's very well known -- like Germany, for example. I mean, "Devilfish" is better known than the likes of Michael Keiner (a professional poker player) and other locals, some of whom are signed up to much bigger companies. So we want to use him to keep our cost of acquisition lower than the competition. We want to be more daring on what we do with the brand attributes -- being funny and irreverent, like we've mentioned with this keynote speech where "Devilfish" took out his guitar, sang and told jokes. We want to have that sort of hum about the site and about the brand that we're trying to put across.
Q: How important is being unique to the success of your business?
A: Well, with the likes of the bigger networks, sure, you can start with them if you wait long enough, but what else have you got to offer? That's one of the reasons why Entraction was interesting for us, because it's a different network and it's got its own features, and they support us the whole way.
Q: How, with regard to Dave Ulliott, will branding work across the company's casino, sports betting and bingo properties?
A: We haven't started bingo and sports betting yet, but that will be Devilfish Bingo and Devilfish Sports -- that's what we're currently looking at. But we've branded the casinos Fire and Ice. They're within the product range offered under the Devilfish.com Web site, but in terms of what the customer sees, they're clearly branded as Fire and Ice. If you were to go to Devilfish.com, you don't see WagerWorks casino or NetEnt casino -- who are the suppliers -- you see the Fire casino and the Ice casino. We've branded them differently and added different attributes to them.