by Michael Rand, Star Tribune - 03/15/2006
Simply put, the Internet has changed sports wagering immeasurably. Online gaming generated more than $8 billion in revenue in 2004, a number projected to nearly triple by 2009. Operating from protected locations, these sites offer odds on just about everything -- including, of course, the NCAA men's basketball tournament, which begins today. Mickey Richardson, CEO of BetCRIS, which prides itself on being "where the line originates," chatted with the Star Tribune about the omnipresent industry.
Q When did BetCRIS get started?
A The company started in late 1985, early 1986, and it's transformed into different areas. We relocated to Costa Rica in 1993, and we changed our name to BetCRIS in 1997 or so.
Q Do you have problems with legal compliance?
A There's some compliance, but it doesn't snuff out the business. We have some of our own policies here that go above and beyond what the law requires. But the way the law is set up, it's business-friendly. Let's put it that way.
Q This might be an understatement, but I imagine the Internet has changed what you do in many ways?
A Years ago, we were just a big call center. You were restricted to offering certain products -- betting on futures, entertainment products -- over the phone in order for the product to be cost-effective. But here comes the Internet and we find any time a customer requests something, it's very easy to put up and offer online, and the client isn't forced to make a rushed decision over the telephone. It gives the customer a time frame. I never thought I would be in the poker business or casino business. But now we're offering a more well-rounded service instead of just hard-core sports and race bettors. To satisfy a client without even talking to them is something we didn't even dream of 10 years ago. A lot of people doubted whether people would be willing to participate online. ... It used to be we would come in and be open four hours a day (before the Internet) and have the next 20 hours to ourselves. Today, it's definitely a competitive, tough business, and if you lack vision, it's hard. There's a big market, but there's a lot of people trying to get into the marketplace.
Q How has that influenced the way you do business?
A The industry has matured, and it's still maturing. Years ago we had to explain what we do, tell people the money is safe. Now the industry is cleaner, people are more comfortable dealing with companies like this. I don't know where it's going to go, but there are a lot of mergers and acquisitions, companies going public. There's a handful, a good group of big players. And a lot of medium to small players. Eventually, you're going to see the big gobble up the small. Years from now, you'll go on Google and not see 10,000 gaming sites show up. The industry will be smaller.
Q Who are your clients?
A We'll study trends, but our company is a little different than others in that we cater to a professional base and a recreational base. We monitor our numbers more than anyone else in the world, but I wouldn't say we're handicapping the events. We're pretty conservative. But we're always looking for trends to post better numbers.
Q The posting numbers part always interested me. How do you set the betting line?
A We come up with what we think the average line is going to be ourselves. Then we outsource the work to four or five independent handicappers and they come back with their numbers, and we look to see if there are any numbers that don't seem right. Then we put it up there, and let people come in and take their whack, which is what they do. It's a lot of work. You have to be very careful because it can affect your bottom line. More or less when we're developing our numbers, we're trying to find the right number to get two-way action. Whether you win or lose is irrelevant to us. But if we post a [point spread] at 10 and it ends up at 14, we know we didn't do our job right. But you're bound to make errors, and you know right away when you make a mistake.
Q I've seen you put out gimmicky bets before, such as what NFL coach will be the next to get fired or what an athlete's next stunt is going to be. Are those just for publicity, or do people actually bet on those types of things?
A It's 50-50. You would be surprised. Next to the Super Bowl, our single biggest event was the elections. There are more people that have an opinion on that, so when we did that, which we never did before, we saw there might be a true market for the crazy celebrity props -- the "Will Chad Johnson have a big end zone celebration" bets. There is a market, and we do accept wagers. Some is to get our name out there, but to be honest there is a demand for it.
Q Is this a peak time?
A It's definitely an exciting time of the year. It never stops. NFL, Super Bowl, by then, college basketball and the NBA are getting more competitive. Then right into March Madness, personally one of my favorite times of the year. It appeals to everyone. Football is the highest volume, but March Madness appeals to every demographic, it seems.