Inside Asian Gaming

35 34 What, Me Worry? Calvin Ayre and Bodog.com continue to prosper despite the US government crackdown on Internet gaming alvin Ayre is a lot of things. Daring, flashy and ostentatious are just some of the words that quickly come to mind when de- scribing him. One word you won’t find attached to Ayre, however, is stupid. That’s why he prob- ably won’t ever set foot on US soil again until the Unlawful Internet Gambling Enforce- ment Act is either abolished or liberalized. This means no more million-dollar parties like he threw at Las Vegas hotels in 2005 and 2006 in conjunction with his online gam- bling conferences, the last of which had to be cancelled although the party still was held complete with celebrities, open bars, circus acts, models giving massages and gymnastic exhibitions. To those who follow Internet gaming, Ayre is a visionary maverick with a flair for publicity that has turned his online company, Bodog.com, into a billion-dollar worldwide entertainment empire. To the US Justice Department, Ayre is a modern-day John Dillinger. At least it seems like that with the way the Justice Depart- ment has gone after Internet wagering. They especially don’t seem to care for in-your- face-type companies that go to great lengths to draw American bettors through creative marketing. David Carruthers knows that all too well. He was the CEO of BetonSports, one of the largest Internet sportsbooks in the world whose base consisted mainly of American customers.BetonSports did heavy advertising in the United States, even going so far as driv- ing their own bus around New York City with big banners advocating sports betting. Tech- nically sports wagering is illegal in every state except Nevada. The Justice Department went after BetonSports and arrested Carruthers on a brief layover in Dallas during a flight fromhis home in England to the BetonSports office in Costa Rica.Carruthers was charged with crimi- nal racketeering and wire fraud and BetonS- ports ceased its US business. The third-party payment processing company Neteller has felt the brunt of US law enforcement, too.Their two owners have been arrested and charged with money laun- dering. Now Neteller, a US$3 billion publicly traded business consisting mainly of trans- ferring funds for gambling, no longer accepts customers from the United States and Cana- da. Some gaming analysts speculate Neteller probably won’t survive this year. So you can imagine US Justice Depart- ment’s ire when, last March, Ayre appeared on the cover of Forbes magazine’s 2006 bil- lionaire issuewith a headline that read:“Catch me if you can … Calvin Ayre sticks it to Uncle Sam.” If this wasn’t enough, Ayre also made People magazine’s hottest bachelor list. This kind of loud attention isn’t appreci- ated by many Internet bookmakers operat- ing offshore trying to be low-key, hoping the Justice Department backs off its zealous cam- paign against online wagering. They believe Ayre is creating a backlash against them. Cer- tainly the US government didn’t enjoy read- ing about Ayre either, or that Bodog handled US$7.3 billion in Internet wagers from 16 mil- lion largely US-based customers, according to the Forbes article. It probably wasn’t a coincidence that the day the Forbes article hit the news stands, Ayre’s 10,000-square-foot, US$3.5 million, bachelor-pad home in Costa Rica was raided by local police. No charges were filed, but following that incident Ayre moved his com- pany from Costa Rica to Antigua, a country at serious odds against the United States’ anti- Internet betting stance, which it claims cost them millions of dollars in tax revenue and hundreds of jobs. The 45-year-old Ayre says he has done nothing illegal. Bodog not only is licensed in Antigua, but also in the United Kingdom and Kahnawake, which is Mohawk Indian terri- tory in Canada. Bodog accepts online wagers in places where it is legal. “The phrases you’re using are not mine,” Ayre said about the Forbes headline via an e-mail communication. “They were invented by reporters and editors to sell their publica- tion.We do not circumvent the law.In fact,we have gone to great lengths to ensure we are compliant with the law in the jurisdictions we operate. “We are a legal and licensed international digital entertainment company and that is the one message I give to all the media. A company as big and influential as Bodog has to engage the media,and the media engages us because we are a good story and a feature on us will bring them notoriety.” Modest beginnings Ayre was born in Canada and raised in the Saskatchewan community of Lloydminster, to a Scottish couple who earned their living raising pigs. Ayre’s first job was raising a litter of pigs. He graduated from the University of Waterloo inOntario and in the early 1990s got a job as president of a heart-valve manufac- turer, Bicer Medical Systems, which was then listed on the Vancouver Stock Exchange. In the mid-1990s stock regulators charged Ayre with insider trading. The government fined Ayre C$10,000, banning him from working as a director for a publicly traded company in British Columbia for 20 years. Resilient, Ayre soon realized the poten- tial of the Internet and online sports wager- ing. Building up software and programs with which to run such an operation, Ayre bought the Bodog.com URL because he liked the sassy name. The site launched in April 2000. The main target was recreational bettors from the United States. The business model was to draw smaller-stake players. Bodog did that by running lots of pictures of beautiful women, using off-the-wall proposition bets and getting publicity through aggressive ad- vertising and stunts. In one such stunt, Ayre called himself Cole Turner and got one online gaming portal, Gambling911, to feature his Indiana Jones-type jungle exploits into vari- ous countries, including Thailand. But with Ayre, there’s more than just hokum. He also had the foresight to come up with Bodog’s own online type of e-wal- let checks so bettors would have alternative means of transferring money to fund their account. This is especially relevant now with last October’s passage of the Unlawful Inter- net Gambling Enforcement Act. This is the US government’s way of combating online bet- ting by severely limiting financial transactions linked to Internet betting. The law makes it il- legal for banks,payment processors and other financial institutions to transfer money from gambler accounts to wageringWeb sites. Asked about the affect of this law, which has impacted the offshore industry, Ayre said, “We’re studying the current landscape to de- terminewhat,if any,ramifications this piece of legislation might have on our gaming chan- nels. We are, however, extremely confident in the strength and flexibility of our unique business model, which is neither confided to one particular market nor to one particular form of entertainment. We remain confident that we’re better positioned now than ever as we continue to expand all our entertain- ment product channels, including gaming, into markets such as Europe and Asia. This is a major reason we’re refocusing our offline gaming marketing efforts in Europe.” The big picture Another early business strategy Ayre had was to offer more than just sports wagering.Diver- sification has been the key to Bodog turning in worldwide revenues of around US$12 billion in 2005, according to the research company Christiansen Capital Advisors.“We’re a private company, so we don’t release these numbers,” Ayre said.“What I can say is that we’re finding a lot more of our online gaming customers are coming from Europe and that we’re on track to exceed US$300 million across all entertain- ment channels, including gaming, music, tele- vision and mixed martial arts productions.” The US crackdown has caused great hard- ship for many offshore sportsbooks. Those just relying on taking sports wagers from US customers have had to scale back their expenses. Some have closed their post-up business to US bettors, which was the bulk of their trade. Bodog hasn’t had these prob- lems.They’ve even done some consolidation, acquiring the American customer database from Bowman’s, a long-time British book that had been operating in Mauritius. Ayre has been able to cope with the ups and downs of the Internet gambling industry by offering much more than just sports bet- ting. Bodog’s poker room gives away more than US$1.5 million in prizes every month. Their horse race book offers 80 tracks to bet on and weekly rebates. Their online casino has a download version featuring more than 75 casino games, including progressive jack- pots.Ayre has opened awhole entertainment division featuring music, mixed martial arts fights and international television shows. Bodog Fight, for instance, is broadcast on the Fight Network in Canada.The Calvin Ayre Wild Card Poker show can be seen American television. Bodog has its own international recording label called Bodog Music.com.One feature of that is a band search competition with a US$1 million top prize. Bodog has a publishing division, which prints an online magazine and blogs. Ayre is not through, though. He has more ideas. The combination of gambling and entertainment is Ayre’s model of the future. Those two needs are never going to go away no matter how repressive the US govern- ment can be regarding online wagering. “For Bodog you can expect to see more international expansion of its entertainment products, with the Bodog brand making headway into Europe and Asia,” he said.“You can also expect to see more Bodog TV—in- cluding reality shows and documentaries. Bodog TV concurrently is working on four C

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