B2B
and fraud departments. The chance of success is likely much higher when this kind of resource is brought to bear. An operator (as opposed to a software company) is also much more likely to really question your strategy, as operating profitable gaming markets is their day to day business anyway.
When selecting a B2B partner you need to be as careful as if you are putting your own operation together.
What happens if a B2B deal starts to run into
issues? Most companies from the software side will effectively switch off a site if minimums have not been met. However an operator is likely to see this differently. Offsidegaming have a number of successful B2B deals, in most cases we have had to get involved in the client’s operation in some capacity to put things right at the start. This can be at a strategic level or it can involve assisting with resource and people. In some cases it has also involved financing partners to get them to full profitability. When selecting a B2B partner you need to be as careful as if you are putting your own operation together. Is the team right? Is it good enough and so on. You will spend time and precious resources on these deals, there is no point
What happens if a B2B deal starts to run into issues? Most companies from the software side will effectively switch off a site if minimums have not been met
squandering them. If you have done your due diligence correctly are happy with the strategy, are happy with the team and happy with the opportunity, you have to be prepared to get stuck in and drive the venture forward if things don’t go according to plan. This in my view is the key to getting B2B to work
for you effectively – only 10% of deals out there are worth doing, finding them and supporting them is the key. Be very selective and as strategic as possible so that the deals fit with your own strategy. Treat them as part of your own operation. Personally, I think this is where operators have the chance to be better at B2B than traditional ‘software companies’. Why do I say this? Well, operators are aligned commercially and operationally and have much more resource to make the relationship profitable.
Matt Jellicoe, CEO Matt Jellicoe is a Director and Founder of Offsidegaming. Offsidegaming are a full platform operator specialising in working with strategic marketing partners across Europe and South America by building bespoke brands and solutions for any given market.
www.offsidegaming.com
Licencing The other massive difference between software type
businesses and tying in with an operator is the type of licence you will gain access to. Jurisdictions such as Alderney and Malta have clear business to business licensing regimes for software operators. But if you want to operate this software you will also need your own licences on top of this. On the other hand working with an operator you are likely to have end- to-end licences in place – certainly from an offshore perspective.
…only 10% of deals out there are worth doing, finding them and supporting them is the key. Be very selective
Exit strategy The other area to think about is exit strategy.
Software companies that do not run their operations are far less likely to ever consider buying your business at some point – you will literally licence their software and that will be the end of it. A software company that runs its own B2C operations is much more likely to view many of its partners as potential acquisitions in the future. If you consider the way that Sportingbet or companies such as Playtech have grown this is a serious consideration. Large operators almost always buy out their B2B partners. It is much easier to sell a software-based business when large operators are already using that software themselves.
MAY 2011 31
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