The Victor Chandler brand is well known in UK High Streets as a bookmaker, but internationally the brand is something else again, an online betting brand that's setting the pace in its industry in many ways.
Victor met with Casino International recently to discuss the business and its similarities to land-based operations, and much more besides.


Casino International: You're the third-generation in the family business, is that right?
Victor Chandler: Actually, I'm the fourth; my great-grandfather was also a bookmaker, but I can't find many details about him. He was a street boookmaker in London's East End – Hoxton, actually. So really there's four generations of bookmaking. The company has only been in existence for 60 years, because my grandfather's company was taken over by my uncle's, and that failed in the late 1940s, early 1950s. My father then went into business on his own. Despite all of us being in the same business, it's not exactly a straight line.

CI: What's the core of the Victor Chandler business now?
VC: Clients. That's what we're all about.

CI: Define a client for us…
VC: The best sort of client is one that bets on sports and plays the online casino and poker.

CI: So you offer a full service package for an online gambler under the Victor Chandler name. Within that, what are you most recognised for with your players?
VC: Sports betting, especially within the UK. Our players are mainly high-end still, our stake per bet is probably higher than the majority of our competitors.

CI: How long have you been taking bets online?
VC: Seven years.

CI: What's the growth been like over those years?
VC: Very good. I mean, it's been patchy in that we've been successful or extremely successful in some territories, and had problems in those territories. As a result we've never had a smooth line on the graph going up.
Our biggest success historically was Korea, which lasted just over a year. We had a licence there – or we thought we had a licence with a partner. We were the operators for a company that had obtained a licence which was a subsidiary of a big Korean company. That grew at an amazing rate, from nothing to thousands of customers coming to the site daily and playing everything. We were then shut down by the authorities who claimed that the licence was invalid… It's not all been easy.
Hong Kong was a huge territory for us, we had offices there with 70 or 80 people working for us - then when the Jockey Club got the exclusive licence we had to close down. It's a bumpy ride; the growth hasn't been smooth but it's held up because we've gone into other territories.
When things like that happen, you just move on. There's no use crying about it.

CI: Has that kind of thing resulted in significant losses for you or have you usually had time to recoup your investment?
VC: We had a long time of good times in Hong Kong, so that was certainly profitable; Korea was profitable after six weeks. We got our investment back after five weeks and were in profit after six. We were fairly lucky with that.

CI: Many companies struggle, especially when trying to break into Asian markets, because they assume either an English-language product will work, or they simply translate their product without paying attention to cultural differences. How do you approach different, new markets?
VC: You take a partner. That's what we've always done. After our initial mistakes, which were what you've mentioned, we have taken partners.
The benefits are that they understand the culture and how to market their own territories, and how to deal with the authorities, importantly.

CI: So how do you recognise those new markets?
VC: Suck it and see. You're never, ever certain with these things. We've gone the 'legitimate' route in Spain, where we hope to launch in the second or third quarter of 2009 with a partner. We've gone through due diligence as required by the Spanish authorities, we've had our software investigated by their specialists, and we're nearly there. That's the same way we've proceeded in Israel and with our Far Eastern site.
The most important thing is to get the product right; in parallel to developing the product, you have to make sure that in that territory you can get paid, because in some areas you can't use a debit or credit card online.
That's what's changed in China recently, historically it was very difficult for people to use credit and debit cards online, but for the younger generation it's now more commonplace.

CI: Where's your technology base, your developers?
VC: Mainly here in Gibraltar, and also in Brazil. We have 'pods' in Brazil, which is six-man teams that work on specific developments. We also have three pods here. All the development for our Far East site was done over there, however, because they could develop what was needed for that market.

CI: With having a higher stake per bet from your customers, does that mean you actually have less players but you look after them better?
VC: We have a lower-end business that's run perhaps slightly differently but we still cater for the big players, and perhaps our only competitor online for that is Ladbrokes.

CI: How does good customer care work with an online casino? It's surely not as simple as it is with a face-to-face client as you'd have in Vegas, Macau or Monte Carlo.
VC: It depends on the client really. It can be as easy as getting them to the football match they want to see. You do a lot of what's called CRM, customer relationship management, these days.
We have a team of people that manage those relationships, that's their job, in the exact same way as it would work for a land-based casino, except it's done a lot online and by telephone.
It's what I always did when I was a bookmaker at a racecourse. You're entertaining people. You take them to dinner, to a football match, to the races; it's the same thing. It's the opening contact that's the difficult one. Once you've established a relationship… These people are going to play somewhere, it's a matter of keeping them playing with you rather than elsewhere. The difference with us is that I'm prepared to put my name on the door, and I can still entertain people personally when it's required. I'll do golf days or whatever's necessary.

CI: What do you do that's so different to your rivals, then? What keeps the customers and brings in new ones?
VC: We try to look after our customers in a better way than our competitors and we're quite good at it. We keep our customers for longer than most of our competitors.

CI: Is a customer at www.VictorChandler.com a customer for life then?
VC: No, of course not. We have as much of a problem with retention because of people bonus-seeking as anyone else in the industry, but we try and understand our customers as much as possible, especially at the higher end.

CI: What's the ideal customer for you?
VC: What you don't want, the worst thing for us, is people getting in too deep. We try to manage people. People that treat gambling as entertainment are what we want, and people with the income to afford that entertainment; so we try and manage people within those boundaries.

CI: How does that fit with your site in the Asian market and the high-volatility gambling Asians enjoy?
VC: They're not much different, really. On the lower levels, they're restricted by their credit cards. On the top level we do a lot of entertaining in Asia as we do everywhere else.

CI: How do you look after those high rollers? Most of the casinos in Macau tried to do it the US way and it didn't work because of the cultural differences, have you had to change how you operate with high rollers there?
VC: We've been operating in Asia since 1996, and it took a long time to become a trusted name there. We had a small share in the Legend Club in Macau, which was a high roller club before the laws changed and all the American investment came in to the area. We got introduced to a lot of clients through that in the area, and of course we learned from our partners.

CI: Were you the first gambling company to hit Gibraltar from the UK?
VC: No, Ladbrokes were, they came a couple of years before us and were dealing with high rollers from the Far East and Middle East. They thought they had an exclusive licence, but what happened was that when the casino licence was granted here to a Greek gentleman, they granted a betting licence with it as well, which lay dormant, though he paid the licence fee every year. I bought that licence, and here we are.

CI: What effect has the 'credit crunch' had so far on the business overall?
VC: So far, not a lot. Turnover's held up across the board. We've seen no real signs of it hurting our bigger players. I don't think anyone knows how bad it might become; the newspapers are full of conflicting stories and opinions. It depends how deep the recession is, and how long it goes on.
CI: Have you been affected by the collapse of the US online gaming market?
VC: It touched us because we were on the predominantly-American Tribeca network. We were their biggest customer outside the US. What it meant to us is, the majority of our players were sharks, feeding off the fish in America. We would have a cheque to come every month from Tribeca, because our customers had won… Now we're on the Playtech network outside the US, it can go one way or the other on a monthly basis. Because the US was so big, and it gave a huge liquidity, our business fed on it; poker's become considerably harder since then.
Talking to my employees, many of whom used to play four times a week or even more, they're bored with online poker now, they've lost interest. I think that is hitting the figures for some of the online poker companies now.
It was a fad, a fashion for a time, everyone wanted to play, it was in the newspapers every day, but I think it's had its day. Like the hula hoop, one year it's fashionable, the next it's not.

CI: Even if you don't spot the trend though, if a company is positioned to take advantage of a gaming trend, to move quickly, you can still benefit enormously.
VC: Something will come along in the next few years and whoever is first on the bandwagon will reap huge benefits. I wish I'd thought of BetFair, and been the first to go into poker in America, but I wasn't.
Being in the right place at the right time, something just clicking in your head, that's all part of it. But we're pretty agile, and able to move quickly because we're a private company and intend to remain so. I don't have to refer to shareholders or a huge board of directors, it's basically a few of us that make the decisions, depending on what the decision is it can take just one hour, where other companies might take three months. That's one of our strengths.

CI: How long have you been doing this?
VC: I've been in the business since I was 22, so that's 35 years. And I still enjoy it.
I went to a hotel management college in Switzerland after I left school, then I joined a management consultancy company in Barcelona. I worked for them in the Balearic Islands, where they were trying to sort out a hotel chain in financial trouble. Then my father became ill and died, and I took over the business.

CI: That must have been hard.
VC: It wasn't easy the first few years, but there was no choice. There was no-one else to do it.
There were lots of ups and downs early on. You learn about people very quickly; people let you down. I was lucky to have one or two very loyal people working alongside me. One taught me bookmaking, the other was the finance director and he stayed with me until I left the UK. It's people that help.
You learn, you evolve and change.

CI: Did you have to make any significant changes to the company?
VC: What I hadn't realised is, because my father had been ill for quite a long time the business wasn't in the best shape and the management of the business had been a little lax. We were also going through a recession at the time; things weren't great. We were nearly insolvent when I took over. We owned about 30 betting shops – I sold 10 of them and that kept the business afloat, and I rebuilt it from there.

CI: Sounds like quite a pressure situation…
VC: You don't think of it as pressure though. I like working. I enjoyed most of it. If you take it day by day, you'll survive; if you look at the big picture, you're in trouble.

CI: That may have been the best education for you – coming into the business when it was struggling.
VC: It would have possibly been the worst thing if I'd gone in there and it was making lots of money. You learn to value it. The only thing that leads to success is hard work and a lot of thought; you learn the most by making mistakes. And if it costs you money, don't do it again!

CI: Is there a company motto?
VC: Not as such. But if there was, it would be 'Understand the client'.

CI: You're looking at South Africa, I understand, as an online casino market…
VC: It's very early days. There are no licences being granted yet, we're waiting to see what happens. We have started marketing with a very good partner for the future there. But like everything we do now, we're trying to go the completely legitimate route because we value licences. Once licences start being granted there… Well, we have the same problem in Spain. Our software is being looked at right now, though I'm not optimistic we'll be opening there sooner than six to eight months. It's one of several territories we're looking at.

www.victorchandler.com

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