Agency bets on the gambling industry
Offshore sports books muscling in on Loto-Quebec

If ten years ago you had asked Anthony Varvaro, president of Inet-e-media, where his career might take him, running an advertising agency that specializes in promoting the gambling industry, is the last thing he would have guessed.

"I am a chartered accountant, and worked for seven years at PricewaterhouseCoopers, (one of the big five accounting firms) before getting into advertising," said Varvaro who is responsible for promoting the launch of Internet gambling house VegasWay.com, in the Montreal market. "The gambling industry is a long way away from auditing."

Although Loto-Quebec has a monopoly on sports betting in our province, the advent of the Internet is giving gamblers new options. Companies like Grand Central Sports, which runs VegasWay.com, are taking advantage of the medium to market their services to gamblers, who are fed up with the usurious odds and limited options given by state monopolies.

Varvaro, whose firm is using traditional marketing tactics such as telemarketing, direct mail and radio advertising to promote its clients, got his idea to specialize in this niche industry while attending the Online Gaming and Supply show in Las Vegas last year.

"Offshore gambling is growing at an incredible pace as companies try to get around government restrictions by locating in more convenient jurisdictions," said Varvaro. "In ten years, the industry is going to be ten times the size it is today."

To promote VegasWay.com, Varvaro booked an extensive radio advertising package on CJAD. In addition, he compiled a list of people who have gambled in the past, by getting access to data files of tourists who have gone on gambling junkets or who were customers of defunct offshore operations. Telemarketers working out of an Old Montreal call center contacted the prospects, who were then offered free literature.

The response rate has been impressive. "About 10 per cent of our prospects eventually end up depositing money in a gambling account," said Varvaro. "It's a very high rate."

There is a tinge of roguishness associated with offshore gambling. For one, officials at Grand Central Sports, -- a private company which operates four racing and sportsbooks on the island of Margarita, located off the coast of Venezuela - refused to give information about its investors, except that they are "prominent Venezuelan businessmen."

But according to "John," a VegasWay.com gambler, who asked that his real name not be used, getting access to his winnings has never been a problem. John places bets with VegasWay, "mostly every day, especially during football season."

"I don't bet very much money, -- maybe $200 a game, and usually just two games at a time. When I win, they send me a check by FedEx the next day." said John, a real estate accountant. "I have received checks of $5,000 to $6,000."

When John began betting with VegasWay.com, the company was not yet fully Internet ready, and he would phone in bets to a 1-800 number. But the Net has made it much easier for gamblers to get access to schedules of teams playing and the latest odds.

While the offshore houses are going to have to work hard to establish their credibility, they have a clear advantage over their state-run competitors. For one, because they compete with one another, they have to keep their prices down. That means that the odds they give, the betting options, and the payouts, are far better than you would get with many government run operations such as Loto-Quebec.

"If I ran my (bookmaking operation) the way many of these agencies run theirs, I wouldn't have any customers," said Peter Jacoby, sportsbook manager at Grand Central Sports. "Take Loto-Quebec's Mise-au-Jeu, they don't even offer a two-team parlay (betting on two games at the same time), and their three-team-parlay pay-outs are much lower than ours."

But running an Internet server on an island is not easy. For example late last week, VegasWay.com had a problem with a part for its server, which was down all weekend. "It's not like you can just go down to a Radio Shack," said a spokesman noting, that the island was a 20 mile boat trip from Venezuela - itself not exactly a high tech haven.

According to John, the server problem did not interfere with his betting. "I just placed my bets over the phone, like I did before the Internet was here."

Despite the VegasWay.com server problems, Jacoby remains optimistic, noting that customers who did not want to use the phone, could still place their bets using the parent company's GCSports.com site.

Varvaro concurs. "Many gaming sites just come and go, but the people under the Grand Central Sports umbrella have deep pockets."

 

E-mail can be sent to Diekmeyer at: peter@peterdiekmeyer.com

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