The Mobile Gaming Climate Is Right - For Digital Orchid, It's Time to Bloom

11 February 2005

San Diego-based wireless solutions provider Digital Orchid is beginning to make its presence known in the media and entertainment industries--a shift that has also included the company's arrival in the I-gaming space.

It has started by making inroads in Latin America, Europe, Asia and other jurisdictions where remote gambling is becoming more and more accepted, and has been particularly active in the Latin American markets, where developers are putting the finishing touches on a wireless version of the popular numbers game "Melate," a product of Mexican lottery operator Pronosticos De Mexico. The mobile game will be tied into the GTECH network, which includes terminals at 9,000 agencies throughout Mexico. The original game is a top seller for Pronosticos De Mexico.

In delivering the Mexican product, Digital Orchid has teamed up with Telcel, the mobile carrier of choice for more 30 million of Mexico's 52 million cell phone users. With that kind of user base to draw from, along with the vast popularity of Melate, the company's senior vice president for Latin America, Nour Dean Anakar, is confident sales will skyrocket.

"We are going in with some conservative goals in mind," Anakar said. "If we can get 10 percent of their users (3 million) to spend $1 a month on a ticket, and if they increase it to $2--they will be alive in both weekly draws--we will be very happy with that."

Anakar said the Melate deal is a perfect example of how success in this area relies on a collaborative effort.

"The key is for us, as the provider, is to team up with the right brands and then to get on board with the best carrier in the market," he said. "If any of those parts don't pull their weight an entire campaign could fail."

Finding willing carriers is a major component in getting mobile gambling products off the ground, and Anakar believes carriers are warming up to gambling because of the revenue potential.

"Carriers don't want to be in the gambling business," Anakar said, "but they see the voice and data packages that mobile gamblers will spend money on and the SMS fees alone are enormous for them."

There's also the issue of delivering a user-friendly gambling product wirelessly without sacrificing too much.

"It has to be different from what a customer can get on the Web," Anikar said. "It shouldn't be a burden to them with a lot of data, but we are limited in what we can do with the dimensions of the screen and what a customer can see."

Digital Orchid will roll out additional gambling products, including wireless casino and sports betting platforms as well as more lottery games, more than likely in the third and/or fourth quarter of 2005. It already has a contract with sports book operator in Chile.

A US Presence?

Despite striking a deal to provide a wireless platform for U.S.-based race betting company, legal barriers have made it difficult for Digital Orchid to gain a strong foothold in the U.S. gaming market. They are overcoming these hurdles, however, by leveraging partnerships with NASCAR, the National Hockey League, and Champ Car World Series to get their free-play games in front of mass audiences in the United States.

And while free-play is the safe route in the States for the time being, the company is preparing the acceptance of real-money mobile gaming.

"I think it will come in much the same way that it did with racing," Anakar said. "Racing knew it had to embrace the new technologies and delivery platforms in order to stay competitive. In a few years you might see state and regional lotteries looking to wireless channels to increase their sales."

But with or without the United States in the thick of things, Anakar is sure that wireless channels will be the driving force of the interactive gaming industry for a long time to come.

"Europe, Asia and Latin America will set the trend, and wireless gaming will grow more than online gaming in the future," he said. "The investment from carriers is creating an infrastructure that makes these games more reliable and appealing than they ever have been, and it is only a matter of time before they overtake what is done in the online world."

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