Q&A: Richard Phillips, the World Poker Tour

The recently announced partnership between the World Poker Tour and WagerWorks brings another major land-based brand into the online gambling space.

The duo's decision to block play from U.S. customers will make the Internet venture a challenge, but if anyone's up to the task, it's the WPT. Many credit the company and its highly rated telecasts on Travel Channel as being the driving force behind the meteoric rise of the online poker industry over the last two years. But does the company have what it takes to succeed where others, such at MGM Mirage and Harrah's, have failed?

Richard Phillips, the company's executive director of online gaming, believes it does, and the key, he says, is that the WPT poker site will be an enhancement to its land-based brand rather than a separate revenue producer.

Phillips recently shared his thoughts on the road ahead with IGN.

IGN: Was WagerWorks part of your Internet strategy from the get go or did you consider other suppliers?

Richard Phillips: We were familiar with most of the software vendor offerings in the marketplace, but selected WagerWorks for its advanced features and functionality, user friendliness and licensing by the Alderney Gaming Control Commission--a jurisdiction that assures the highest regulatory oversight for our customers.

Looking at all the software vendors, our choice was quite simple, as no other vendor fit our package selection criteria as closely or had a comparative offering that we felt was of any better quality or performance.

Of primary importance was the acknowledgement that WagerWorks' other customers do not take U.S. bets, and in WagerWorks we will have a partner that is as sensitive and compliant as we are in restricting bets from the U.S. and other prohibited jurisdictions. That coupled with rigorous age, ID and location-verification functionality made WagerWorks the vendor of choice for us.

IGN: Major U.S. brands have tried to bring their brands online without taking bets from U.S. customers and have failed. How do you intend to avoid this same fate?

RP: We will not be accepting cash bets from any prohibited jurisdictions--including the U.S.-- in order not to compromise the shareholders of our parent corporation and not to preclude subsequent participation in these markets if regulations subsequently relax. Our management is aware that we have a large market excluded from us for conventional wagering, which precludes certain opportunities for revenue and scale economies, which means we will just have to adjust our scale and scope accordingly. For regulated jurisdictions as the U.S., we will be hosting a "non-cash wagering" gaming model that imparts alternative value offerings in the forms of entertainment, information, and content, including skill-based and fantasy games to the resident players who prefer the WPT brand. A primary objective of WPTonline is to support and promote the global World Poker Tour brand in order to capture consumer viewership in the markets we broadcast our show. In this we are different from other sites where gaming revenue is their core business driver.

IGN: The WPT has relationships with Party Poker, Poker Stars and a few other online poker rooms. How will the WPTonline affect those relationships?

RP: We see little conflict with any of our other partners with the launch of WPTonline, and we wish them continued success. Our markets do not entirely overlap, so we do not view ourselves as direct competitors, and what competition we have will be healthy competition, as we are all promoting the WPT brand as the choice of players throughout the world.

The market is also expanding, so we do not have a zero sum game, all sites can expect growth provided they fulfill the wants and needs of their dedicated customer base. Where customer growth is limited, product extension and diversification can compensate. One of the guiding principles with the launch of WPTonline was to acknowledge and respect the partner network relationship established by WPT.

IGN: Heavy advertising restrictions put in place by the U.S. Department of Justice resulted in Travel Channel pulling ads for online poker rooms during WPT broadcasts. Will this policy change when the WPT has a site of its own?

RP: We do not see this as a limitation, as we are looking at conventional Internet marketing tools rather than advertising as a primary way of extending our brand coverage online. Our goal is to be associated by the public with the flagship brand that WPT has become. This does not require advertising as much as it requires adhering to the same WPT values of player opportunity, quality of service and customer care, innovation and raw fun and entertainment.

IGN: Will the WPT lobby for legislation to regulate online poker in the United States?

RP: We watch carefully legal and regulatory development in all the markets we have entered, both to ensure regulatory compliance and to track any changes that would impact our operations in these jurisdictions.

We do not currently lobby to enact favorable legislation for gaming within the U.S., as it is not our market, and it has previously not been our desire to take a leadership position on social issues, but rather to follow public sentiment.

We represent a sport and abide by the normative administrative rules established for that sport in the jurisdictions we operate in. Yet being an important stakeholder in our industry, we have also not precluded ourselves from becoming involved in constructive discussions regarding regulated gaming and its legislation.