If you want to know more about St. Minver and the people behind it, there was a good article in the Telegraph yesterday which provides another insight to how the company started out.
Read the Full Article at the Telepgrah website
The kings of online gaming
Sometime last year, suddenly ads for online poker were everywhere. Someone who foresaw the success of online gaming could have done really well out of it.
Someone did: Gary Shore. An internet veteran, Shore’s first start-up, in 1994, integrated back-end systems for banks; he sold it in 1999, at a discount to get cash rather than inflated stock. He needed to do something new.
“There were two markets making a lot of money,” he says. “One was sex, and one was gaming.” Gaming required complex systems and “I tried to find a brand I recognised, and there wasn’t one.”
Also, there was no customer service. “At that point, I thought one day the brands will enter this market.” His idea: to create a white label-managed gaming service.
He joined Victor Chandler, to learn the business, and built its online gaming operation, aiming to leave to set up his own. Taking seven or eight people with him, Shore left to set up St Minver, staking it with £150,000 of his own capital.
Gaming isn’t easy to get into. The key is the licence, usually issued in the world gaming headquarters, Gibraltar. No licence, no banking. He had to buy a company. The opportunity came in 2003, when he bought bingo operator Gala’s money-losing online operation, licence included, which required a deep financial audit and regulatory approval. Three shareholders, including himself, put up the necessary £2m.
“It took about a year to get the infrastructure growing. We burned through the cash, then launched a poker network, then a bingo network.” Their first customer was Gala itself. It was slow going.
By spring 2005, Shore decided he needed someone to drive the company’s growth. His choice: Leigh Nissim, already experienced in white labelling. Nissim had done his own start-up, which provided businesses for sale ads to well-known sites all over the web.
In fact, says Nissim, there wasn’t much wrong with St Minver’s operation, except for one thing. “They hadn’t really built enough deals or partnerships into the business.” It helped his cause that the market saw a dramatic change a year ago.
“About a year ago, everyone was saying they were not going to touch poker or gambling. Then, as they saw more and more ads, you saw the boards and executives of these large brands changing their minds.”
A key turning point was when Party Poker went public. For the first time, the world could see how much the company was making: $2m a day. All of a sudden, everyone wanted in, and not just for the financial returns.
They also wanted to keep their customers from going elsewhere. “It’s a very fundamental shift,” says Nissim. The big brands quickly discovered that Shore’s original notion had been correct; they had to partner with specialists. So my first attention was on improving the sales pipeline.” He focused first, logically enough, on closing the bigger ones.
Now, St Minver supplies the service behind bingo and/or poker games at Lastminute.com, Yahoo!, Virgin Games, Wanadoo and Littlewoods. The company works to retain customers with classic online techniques. It sends weekly email to players keeping them informed of recent winners and new developments on the site.
The key element is not that customers gamble huge amounts. “Our sweet spot is someone playing 12 hours a week and spending £7.” Instead, it’s that customers stay on the sites, chatting to each other: entertainment and community.
The company has become profitable in the last year and is now growing so fast that Nissim says it has tripled in size in the past 12 months: its growth is now shaped like the “hockey stick” coveted by all technology start-ups.
Even losing Gala, which recently bought Coral Eurobet and with it a gaming licence and is opting to move its online operation back in-house, hasn’t stopped it.
Shore feels fairly safe from competitors. “The barriers to entry in our market are quite high now.”
