Case study: The Mobile Betting Revolution - September 2004  

Gibraltar-based bookmaker Victor Chandler aims to revolutionise betting with the launch of its new sportsbook service - VictorMobile. With £150,000 ($269,000) of PR and advertising spend to support its roll out, VictorMobile claims to be the first in the industry to offer a full mobile sports betting service through java-based technology. S&T spoke to Joe Coughlin, product development manager at Victor Chandler, about the new service.

VictorMobile allows the customer to bet on all sports, with singles and multiples, browse the latest prices, make deposits or withdrawals - all from a mobile phone. VictorMobile uses a 64-bit private key encryption algorithm to encrypt all data sent between Victor Chandler and the punter's mobile phone. Each application sent is branded with a unique 'private' key that is used to encrypt or decrypt all sensitive data sent between the user's phone and VictorMobile. Additionally, VictorMobile links a user's account to his or her specific phone type, prohibiting anyone accessing their account from a phone that isn't theirs.
The security is there, but are the punters? Victor Chandler thinks so and feels the timing of the launch of VictorMobile is just right. "We have kept our eye on technology for a long time and especially the mobile channel," explains Coughlin. "Mobile has now reached a point where the technology is ready and there's customer demand. This couldn't have happened two years ago when many mobiles weren't java-compatible." Coughlin is confident that within a year, 80% of mobile phones in the UK will have java-based technology "which makes gambling on a mobile phone much easier. The connection to the internet is a lot quicker and GPRS offers a better user experience."

The web, but better

The VictorMobile service is a pared down version of the main Victor Chandler website that includes all the content from the main site in a version that sits well on a small-screened mobile phone. "We wanted it to be in a java format because everyone up until now has launched WAP sites. Java is much better and we expect to see many of our competitors moving into this area soon."
With first mover advantage though, VictorMobile can expect to snaffle the lion's share of more tech-savvy punters surely? "We have been acquiring new customers already," confirms Coughlin, "although we don't expect to see any significant changes in demographics. We expect users of VictorMobile to largely be the ones who already gamble through the internet."
The culture at Victor Chandler is very entrepreneurial according to Coughlin, which is of course conducive to developing and launching new products. The eponymous chairman, Victor Chandler himself, is bullish about new technology as well. "We are leaders in the industry for new innovation," explains Coughlin. "We can mobilise new ideas quickly and deliver them speedily which is an advantage in such a competitive market."
With competitors in mind, Victor Chandler is constantly looking at new products. "We launched online poker a couple of years ago," says Coughlin, "and the virtual racing gaming has been popular on our website. We definitely see the mobile side growing the fastest though."

Interactive issues

One area that Victor Chandler is constantly monitoring is interactive TV, although the bookmaker won't be rushing into anything too quickly. "It's possibly the next area we consider moving into, but we feel mobile is a couple of years ahead of iTV," say Coughlin. "With VictorMobile, we have been able to create a product that makes us stand out. It's different in iTV, where we would just be one of the crowd. Also we feel that gambling is less appealing through a television than through a phone. The mobile experience is a very private one compared with sitting in from of the TV with your friends or family," explains Coughlin.
An interesting challenge for Victor Chandler will be moving peer-to-peer exchanges, popularised most notably in the UK through Betfair, onto mobile phones. "This will be very popular once the speed of the networks and bandwidth are there," believes Coughlin. "But this is a challenge for the technology companies and networks rather than the bookmakers."

Looking to Asia

VictorMobile has taken a platform-neutral route for the product to increase revenue potential, rather than hooking up with a single mobile network provider, which seems a sensible strategy in the UK's competitive and high-churn market.
But there is another market that Victor Chandler is keen to move into. "Asia is a key market for us," confirms Coughlin. "We expect mobile to become the preferred method of gambling in Asia due to the high penetration of mobile phones there. The Hong Kong Jockey Club already sees more bets placed on mobile phones than the web."
According to research company TNS, around 83% of Hong Kong adults use mobile phones compared with average penetration of 67% across the region for those aged 16 to 69; 66% of adults use mobiles in China's 12 main cities; 82% in Australia; and 80% in Tokyo, Osaka and Nagoya in Japan. Opportunities are therefore abundant for Victor Chandler and its VictorMobile service if it continues its Asian mobile ambitions. But one thing is sure - the odds are short that the bookmaker's competitors will be hot on its heels.

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