Jon Strock podcast transcript

Interview with Jon Strock from Le Croupier

Speaker key:
RT: Ronan Tighe
JS: Jon Strock
RT: Hi, and welcome back to Foviance.com for another podcast in our Innovations series. This week I was joined by Jon Strock, the Chief Operating Officer of Le Croupier. Le Croupier has been mentioned in all of the previous podcasts, so it has clearly got the attention of the gaming community. I talked to Jon over the phone from his head office in Paris. I started off by asking him a little bit about his background, and Le Croupier.

JS: OK, to start off with, myself, I’m currently Chief Operating Officer of Lecroupier.com, which is part of the Lucien Barrière group. Now regarding myself, I come from the land-based gaming industry, and I’ve been in the land-based gaming industry for, actually this is my 30th year. I used to work as a croupier and then as an inspector, working my way up to casino manager just outside Marseilles in France. After that I moved to our company head offices in Paris to look after first IT, and then to look after gaming, table gaming and slot machine gaming, so once we started the project it was fairly natural as I joined the project to work on that. Now, Groupe Lucien Barrière, for whom I work, who are the owners of Lecroupier.com, is France’s largest land-based casino company, it’s also Switzerland’s largest land-based casino company, and in addition to that we have a casino in Egypt and a casino in Malta.

RT: And how long ago did you start the project that became Le Croupier?

JS: Le Croupier in itself started in mid 2006. Now this is not the first time we’ve looked into an online casino, we were pretty well advanced in 2001 and we eventually didn’t go ahead with it, because general European legislation was not favourable at the time. We’re a company, as I say, who have 40 land-based casinos, we can’t afford not to respect the law, so going ahead with the online at the time would have put our land-based licences in peril, so we pulled the plug on that. And then around 2006 we could start feeling the winds changing a little bit on a European level, and we felt liberalisation opening up was on its way, and although we were coming to the market by then pretty much late, I suppose, compared to a lot of other companies, we felt it really was the time to start working on this project, so it’s been, it’s knocking on three years now in total.

RT: And of course you launched in March – can you tell us a little bit about the new launch strategy?

JS: We launched in March in the UK, what we’ve actually launched is, I suppose what you could call a beta version, we’ve not done much advertising publicity on that, it’s only open in certain markets. The idea really was to put it out and get customer reactions, to see if there were any ways of improving it, tweaking a little bit, whilst we were finalising the rest of the development.

RT: And who are your target audience, to start with?

JS: The target audience, in terms of countries, we’re very much looking at the UK – why the UK? – because the UK is an open legal market. In terms of demographics, we’re looking for everyone from 18 to probably about 50, because the products we have is the world’s first 3D casino, which positions itself I think pretty well. We’ve been looking round at the competition, and it’s something we felt was very much lacking in the marketplace. Now, through this that will enable us to target more specifically younger, when I say younger, I don’t mean underage, I mean the 18 to 30 age bracket, those who were born and raised on Playstations and gaming consoles, and who could be moving into the gaming gambling market for the first time, if they find a product that they like. Now, we don’t feel this sort of age group will be much interested in a lot of the standard versions of casinos that are out there, which is why we chose to go the 3D route, because it does offer playability and social networking on a level that has not yet been seen in a gambling offering. In addition to that, we think it’s also a wonderful tool to actually learn the games with, rather than just putting your money in and playing as a hard gambling product, it’s primarily an entertainment product, so there is a lot of leeway there for larger than standard demographics to be interested in our product or even in our products, because 3D version is the first of several versions that are coming out.

RT: What was the biggest challenge when launching the casino?

JS: There’s been a lot of challenges, most things have been challenges, as I say, the world’s first 3D casino, which in terms of development has taken a phenomenal amount of work, we’ve got about 80 developers who have been working on this full time for over two years, integrating Flash and other products on a level that has never been done up to now. They’re having the platform, the technological platform, which has a very very high availability, has been challenging as well, as have the actual infrastructure, the fibre networks that had to be put in place for the development and for the product in itself, and various accidents that have happened, we were hosted in Malta when, just on the day when we were installing our final demonstration version, and we started testing it, and there was an earthquake just off the Sicilian coast, which broke the three cables, so we thought we had an internal problem, but in actual fact the whole of the Mediterranean had lost its internet connection. So we had a lot of challenges all along the way, it’s been very much fun.

RT: And you launched with the casino, but you also have poker in the pipeline – what else are you planning?

JS: Well, as I mentioned earlier, the access we’re putting on the products is really about entertainment more than gambling, so what we have ready at the moment and what we’ve actually released are slightly different; what’s actually in the marketplace at the moment is the 3D version of the casino, so you’ve got roulette, blackjack and slot machines there. What’s coming out next month is the poker, the idea, our strategy is to release every month or two something new, so for all the developments, the releases for this year, they’re all ready, some of them are just in the last phase of testing, but what’s coming up immediately and in the next few months, what we call the instant play version, the 2D, the browser version, of the casino. The poker’s coming out with its instant play version as well, and we have a mobile phone version as well, we’re not certain when we’re going to release that, that depends on how the market reacts to the instant play version, that’s ready anyway, we’ll probably release it a month after the poker.

RT: It’s very interesting, the link that Le Croupier has with land-based casinos, and you’re clearly taking advantage of that at the moment, to the design of the 3D casino, but how else do you intend to take advantage of your cross channel abilities in the future?

JS: Well, what we’re seeing at the moment is the activities that are totally separate, you have land-based casinos who do land-based casinos, you have online casinos who do online casinos; we have a different vision on that, we think that ultimately, we don’t know when, but ultimately the two will be completely interchangeable, so we’ve put this in place and working on development, so there’s really a great deal of convergence between the two, so you can go into a land-based casino and play online, or you can be at home and play in a land-based casino – that’s the level of integration of the two we’re looking at, and that’s obviously not for straight away, that’s a couple of years down the road and will depend on various laws, so we have various countries where we have the casino where we can actually start testing that, although it’s a bit early to do that, and really integrate the two together. The idea is that you can be sitting on a lap table in one of our casinos in France, playing on the same table as someone who’s online. Now, that’s a couple of years away, what’s coming up in the more immediate future is poker tournaments, I think we have accepted the idealist, do qualification online with the land-based final, or have a qualification in the casinos and have an online-based final for the poker competition, they’ll be launched probably around the end of the year, we have the casino application ready, we have the land-based casinos to do that inside, we have the authorisation from the regulatory bodies to do that, so that’s coming up fairly soon.

RT: And of course, you’re a French company, but you chose to launch first in the UK – what was the thinking behind that decision?

JS: Well, what I mentioned earlier on, about being a land-based casino company with 40 land-based casinos, in each case we have a licence which goes to the local authority, which goes through central government, central government in any country likes its casino owners to respect all laws, and for the moment reading of the French laws, our lawyer’s reading of the French laws, says that gambling in France online is not legal, unless it’s with the state-owned monopolies. The UK is a market we know well, we have quite a few English people in the company, and the market is open, legal, it’s also the most competitive market in the world, so if you want to test your product out, it really is the best place to try it, you’d have no guarantee of commercial success, but you know if you can make it into the UK in online gambling, you can really make it in the US.

RT: And what other markets are you looking at in the near future?

JS: Legal markets, so it’s probably easier to talk in terms of what markets we’re not looking at, we’re just not going into the United States until the laws change there; France will be opening up next year from the beginning of 2010, so we’ll be in the French market from 2010; and other legal markets, which is a lot of the Scandinavian countries, we’re mainly European-based, European-focused at the moment, we’d like to get into Asia, we’d like to get into South America, but our real priority is to establish ourselves in Europe before going on to that.

RT: Do you think the difficulties people have with regulations throughout Europe and the world are hindering innovation that could take place in the industry?

JS: Oh very much so, on two levels: one, we originally had a project for online gambling in 2000/2001, and we pulled the plug on that because we had no visibility on being able to actually use it or launch it legally, we’re not the only company in that position, this is mainly the position of the land-based casinos, which is one of the reasons why offerings from the land-based casinos up to now have been so average, shall we say, because they never had the visibility, or a legal go-ahead to go to move into this sector of the activity, and one even bigger example of this is the United States, where the United States really, obviously I’d say, is the leader in internet technology in just about every sector, and they are completely absent from the online gambling, at least the online casino market – why’s this? – because they cannot launch or run their products legally in the United States, so that’s actually been quite a big boost for the companies that exist, the European companies that have launched over the last few years, because they haven’t had this competition from the Americans as of yet, and so the opening of the American market in the next couple of years really will be a double-edged sword, in one case that’s going to open up the largest market in the world, but it’s also going to start bringing in tremendous competition on a level we have not even seen in the United Kingdom for the moment. But there will be a lot more companies putting money into projects, creating new products, once they have the visibility of being able to use them in the marketplace.

RT: And do you think other land-based casinos are going to start heavily investing in online?

JS: I don’t know if many are going to be investing in software, we speak to our competitors in conferences, there’s quite a lot of conferences arranged every couple of months, we know their positions and most of them tend to be looking more into buying off the shelf software rather than going the creation way. I think we really are one of the few companies that have actually gone for the development our own software, I think most others are definitely looking at off the shelf, more standard, because it’s so much quicker and easier to bring to market, and probably cheaper as well.

RT: Would you consider white labelling your software to other people, if they were interested?

JS: Yes, we have a B2B business model ready, we are going to be doing it, we’re not going to be doing it yet, because we obviously want customers to see it from us before they see it from anyone else. We have quite a few discussions with chosen partners on launching white label versions. With the 3D downloadable applications, that is actually a lot of work, there’s a tremendous amount of … because we won’t be just pushing out, if you see the existing casino in Deauville that we’ve done, to third parties, we’ll actually be creating specific casinos for them, so there’s a lot of development work that goes into that, but yes, we are fairly close to signing our next two contracts for that, so they won’t be in the marketplace this year.

RT: And that’s it for this week. Please come back to Foviance.com to download the next podcast in our Innovations series. Alternatively, you can subscribe to the feed to automatically download them every week. I’d like to thank Jon again for his time, I hope you all found his advice and insights interesting. Please leave any comments or feedback on the site, or email me directly.

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