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Interview with Bet365USA owner John Coates – March 27, 2002
Could you give me a brief overview of bet365USA.
Bet365usa is part of Bet365 Group Limited. We operate licensed betting shops, a-24 hour-a-day, international call centre and Internet sites. We are the official bookmakers to www.cricinfo.com, the world’s largest sports site with 18 million customers; www.soccernet.com, the world’s largest soccer site; as well as appearing ‘on the rails’ at many of the UK’s horse racing courses. We also operate over 70 official betting sites for the Football League (soccer) under an exclusive deal. We have registered customers from over 100 countries. We have grown the business over the last 28 years to become one of the UK’s largest independent bookmakers with over 450 employees. Last week we took over 250,000 wagers.
How did Bet365 start? Who started it?
Bet365 grew out of two partner firms – Provincial Racing and Backhouse Racing. Provincial, the larger firm, has been in business since 1974 and was started by my father. Backhouse, however, had the more established telephone operation and had themselves been in business since 1921. Backhouse was started by the Roseff family.
John, what’s your background?
I spent seven years training to become a lawyer, partly at Bristol University and then at law school. I practiced law for a short time before I joined the family company, Bet365.
What advantages are there in being located in England?
Our Government, under Tony Blair, has issued a statement speaking of its desire to make the UK the centre of World Gaming. This continues a long tradition by successive Governments, one of the key points being the Betting, Gaming and Lotteries Act 1963, under which Bet365 has been granted a permit since 1974 to operate within a legislative framework which gives our customers peace of mind.
Added to this, of course, is the excellent technological infrastructure here in the UK. Our batch of servers are hosted in the old MI5 Building in London (think James Bond) under 24 hour guard. Further, there is a reservoir of skilled staff in the UK with its long history of legal betting.
How is the relationship between the government and the sports betting industry in the UK?
The relationship is strong. Prime Minister Blair understands that sport and sports betting are inextricably linked and both are important strands of the entertainment industry. Mr Blair’s Government has stated their intention to create an environment within the country to enable it become a centre for world gaming. Much work has already been done and the industry and Government are working hard to improve it still further. With the change in tax, I really can’t speak highly enough of the Government.
What betting organizations do you belong to?
I’m a director with the British Betting Office Association, which represents the interests of bookmakers in England. It deals with the government on issues such as taxation, and other matters that impact the betting industry. Our Trading Director, Will Roseff, is also on the Board of the BBOA as well as on the Bookmakers’ Committee to the Levy Board. He is one of the famous faces in the UK betting industry and was instrumental in the change in betting duty, which made our entrance into the North American market possible.
How did your father get involved in the betting business?
In the early ‘70s, a friend of his wanted to buy a betting shop. He asked my father to lend him some money, and my father said, ‘Why don’t I buy the shop and you run it for me?”
And it really just grew from there. That’s where it all started. About two years ago, when we launched our Internet site, we changed the name to Bet365. It was at this stage we joined forces with the Backhouse group. We wanted a name that properly describes what we do – which is, obviously, providing bets 365 days a year, 24 hours a day.
Who is on Bet365’s Board of Directors?
Also on the board is Will Roseff, our Trading Director. The other members include my sister, Denise, who’s an accountant by trade. She is a key figure in the business, and in driving the business forward. Our backgrounds are very much in bookmaking. As soon as we turned 18, we started working in the betting shops.
How did Bet365 make the transition from a company operating betting shops in the UK to one that has international, online sportsbooks?
We spent over a year designing and constructing our own software. We considered owning our own software to be important – it allows us to change it in response to new requirements whenever we wish. It has also given our site a different ‘feel’ from many of our competitors whose sites suffer from being similar to many others who have bought their software from the same source.
Why did you decide to develop Bet365USA and go after the North American market? And are you committed to staying the course?
The phones and Internet have given us the opportunity to expand internationally and the American market is already estimated to be 50% of the worldwide sportsbetting market, and this is while it’s unregulated. We consider it to be only a matter of time before Internet and telephone betting is legalized in the US. Our strategy is to become one of the leading players in the US market before that happens – when it does, our current great advantages of being legal, regulated and solid will then be shared by everyone, and getting new customers at this point will become more difficult.
The betting tax change didn’t come in until 6 October 2001, so we did not start our American marketing campaign in earnest until after that. We felt it necessary to have a separate site, bet365usa, in order to display the odds in the way US customers expect them and to change the emphasis on sports (soccer is the leading sport for our international customers who bet through bet365.com, but is less important for bet365usa.com’s customers).
We have been delighted with the progress we have made in terms of bets, turnover and margin. Obviously figures for the last year would be meaningless as our North American business only started in October. However in the 4 weeks to 10 March, with no NFL, American sports contributed 16% of the number of internet/phone bets and 25% of turnover (obviously this excludes our shops, so the Group figure would be much smaller). The average bet on American sports was £73 (about $103) – the average bet on other sports was £30 (about $43). So you can see that the larger stake per bet compensates for the lower theoretical margin.
I know we can do a lot better, as we have made a number of silly mistakes like putting the over and under on the wrong side of the page. It is a learning process – for years we have looked at soccer matches with the home team on the left, we’ve now got used to American sports with home and away the other way round. We will be re-launching our software prior to the next NFL season to better cater for the North American sports betting market.
What payment options do you offer for opening an account and receiving payouts?
Currently, we offer bankwire, credit cards, PayPal and NeTeller. We are looking to add Western Union sometime in the near future.
What payment method would you recommend to our users for setting up an account, or for cashing out winnings?
All are solid payment methods. We offer 15% bonus on all initial deposits and will pay the fees (subject to conditions) for deposits over $300.
How fast do payments to and from usually take?
Payments from credit cards should be instantaneous. Payments for Bankwires take a few working days.
What currency can I bet with?
We accept 13 international currencies including US Dollars, Canadian Dollars and Pounds Sterling.
What is your minimum deposit for new customers?
The minimum deposit by card on the Internet is $50 with no minimum bet size. By telephone the minimum is $100 with a minimum bet of $25. There are no charges.
What type of bonuses do you offer to first time depositors?
They receive a 15% bonus on initial deposits of $300 or more. Also, on a client’s second bet, they can place a 3-team parlay of up to $25. If it loses, they get another shot for Free. Also, we have the SportsClubUSA where there are draws for free trips to all clients every week. This started with a trip for two to the Super Bowl, another to the Daytona 500, and just recently a package for two for all three games at the Final Four in Atlanta.
What are your betting limits?
They vary between sports and bet types, but we aim to be very competitive. Payments are limited to $150,000. This is for all bets apart from US horse racing and bets at Pari-mutuel odds where lower maximum payouts apply.
What type of teasers do you offer on various sports?
We allow our customers to create their own teasers so they can choose the number of points they wish to buy for each selection. For example, they buy 7 points for the Jets and combine it with buying 6 point for the Broncos. If a customer wishes, he could do this for up to 12 selections, buying a different amount of points each time.
We’ve had a tremendous amount of interest in this flexible teaser. We have also had a great deal of interest in our parlays. We offer from 2 team parlays all the way up to 12 team parlays and we only taken the standard juice from each selection. So, for example, you get 47/1 instead of the usual 40/1 for a 6-team parlay.
Being British based, you must have really good coverage for soccer leagues?
Our European soccer coverage is, we believe, the widest available anywhere in the world. We have extensive betting coverage of all the European leagues ranging from straight match betting to correct scores and many exotics. We bet in-running on the major EPL and Spanish games. Of particular interest to our North American customers, we also feature Asian Handicap betting on major European soccer games. I have always felt this type of betting on soccer would appeal to North America. I’m sure you’ll let me know! We also extend this extensive coverage to all international sports, including golf and tennis.
What interesting betting options does Bet365USA offer that would encourage players to sign up?
We have been offering in-game betting on soccer for some time. We are extending this to US sports. We give the customer the ability to sell, as well as buy, up to 7 points on spreads and totals. This has proved very popular. True odds parlays, and the facility to create your own teaser.
Do you offer overnight lines?
Yes.
Do you offer both moneyline and runline on baseball?
Yes.
Are you going to offer a “dime” line for baseball?
Yes, we offer a 10 cent progressive line on baseball (a dime line up to –135).
What new sports or betting options do you see bet365USA providing the gambler in the near future?
We are always trying to offer our customers additional betting products and we are constantly developing our site to improve the customer overall experience.
We are looking to have an improved baseball, hockey and basketball offer up in the very near future.
We try to offer our customers a huge variety of betting opportunities on all the international sports we cover. To give an example on each NFL match we offer Match Betting, Half Time/Full Time betting, First Scoring Play, Highest Scoring Quarter and Specials. In addition, we allow our customers to create their own teasers at true odds and to buy and sell points for both Spreads and Totals. We will be offering this type of range on all US and international sports and don’t forget, we are a 24 hours a day operation both on the phones and the Internet, so our lines are always available.
What is the biggest advantage to using bet365USA over other books?
As you can see from my answers above, the fact that we are a long established operator from the UK and that our customers get paid promptly is of the utmost importance. If you add in the huge variety of betting opportunities, both on US and international sports, the innovative bets such as the ability to create your own teasers and to buy and sell points, the 24 hour call centre and excellent customer services, hopefully, this will make us popular in the US.
Some sportsbooks are trying to limit their exposure to professional gamblers. Some choose not to pay players. What is your policy on taking "sharp" action?
Like any other business, bookmaking is all about getting the balance right. Across all our sports we have both professional gamblers and ordinary players. I’ll be honest that we will try to limit the size of the wager for professional gamblers when we feel the balance is wrong.
Why should a sports gambler use bet365USA over the other books that are out there?
Hopefully, I’ve given enough reasons above, but I would also point out that we are members of IBAS, that’s the Independent Betting Arbitration Service, who are a National Body here in the UK. If you have a dispute with us, then we have agreed that it will go straight to IBAS and we will be bound by the independent decision. At the end of the day we, as bookmakers in the UK, are bound by the permit issued by the Government that says we are fit and proper people to be bookmakers. Without this, we cannot operate anything – our shops, our telephone operation, our Internet site, etc.
Where do you see the international sports-betting industry going in the next five years?
I see the market continuing to grow rapidly over the next 5 years, but with a move towards well-regulated, secure regimes such as the UK, where the Government encourages an open regulated environment for international gaming. There is a very interesting report by Merrill Lynch on the subject, which was published last year. It offers good reading for any of you insomniacs out there. Customers also want sportsbooks that can guarantee good bets, provide good customer service and know that they can get their money out.
So you see a lot of growth ahead?
This business is very much in the growth phase. I feel the sports-gambling market is still very under-developed, both in terms of the product being offered out there, and the systems —the software and platforms.
What are Bet365’s key strengths that will allow it to take advantage of these opportunities?
First of all, there’s the communications infrastructure, which is very strong here in the UK. Our servers are in the MI5 Building in London. We have very good bandwidth. So we can offer a very, very reliable service.
Then there are the regulations here in England. We operate in an environment where sportsbetting has been well regulated for many decades. When you work in that professional, regulated environment, it gives you a head start over other jurisdictions. We’ve been around for 28 years and have carefully built up our business within this environment. The bottom line is that during 28 years all our customers have been paid. For example, I have to have a permit that says I am a fit and proper person to act as a bookmaker. And I wouldn’t do anything to put that in danger.
When you look at the four major areas for sports betting – The UK, The rest of Europe, Offshore, and Australia/New Zealand – what is the advantage that the UK-based companies have in presenting its product to the largest potential sports-betting market, the United States?
In addition to the reasons already mentioned, one of our directors, Will Roseff was one of the prime movers in getting the government to repeal the betting tax. He actually sits on the Betmakers’ Committee to the Levy Board.
Will (Roseff) told the government why people were starting to bet offshore – because of the tax – and explained to them the huge opportunities open to this government in terms of revenue, and asked them to grasp the opportunity of making the UK the center of worldwide legal sports betting. And here I think is the key. The government here has grasped the opportunity, and has actually publicly stated that it is their policy to make the UK the center of worldwide legal sports betting. So, in England, we have a government that is actually helping the industry. In Australia, the government there is introducing laws that may limit sports betting.
We have a long history and tradition of sports betting here in England. And I think having the government on board gives us a significant advantage. Merrill Lynch has actually done a report that says the UK is in the best position to take advantage of the international sports betting market.
Could you give me a brief overview of bet365USA.
Bet365usa is part of Bet365 Group Limited. We operate licensed betting shops, a-24 hour-a-day, international call centre and Internet sites. We are the official bookmakers to www.cricinfo.com, the world’s largest sports site with 18 million customers; www.soccernet.com, the world’s largest soccer site; as well as appearing ‘on the rails’ at many of the UK’s horse racing courses. We also operate over 70 official betting sites for the Football League (soccer) under an exclusive deal. We have registered customers from over 100 countries. We have grown the business over the last 28 years to become one of the UK’s largest independent bookmakers with over 450 employees. Last week we took over 250,000 wagers.
How did Bet365 start? Who started it?
Bet365 grew out of two partner firms – Provincial Racing and Backhouse Racing. Provincial, the larger firm, has been in business since 1974 and was started by my father. Backhouse, however, had the more established telephone operation and had themselves been in business since 1921. Backhouse was started by the Roseff family.
John, what’s your background?
I spent seven years training to become a lawyer, partly at Bristol University and then at law school. I practiced law for a short time before I joined the family company, Bet365.
What advantages are there in being located in England?
Our Government, under Tony Blair, has issued a statement speaking of its desire to make the UK the centre of World Gaming. This continues a long tradition by successive Governments, one of the key points being the Betting, Gaming and Lotteries Act 1963, under which Bet365 has been granted a permit since 1974 to operate within a legislative framework which gives our customers peace of mind.
Added to this, of course, is the excellent technological infrastructure here in the UK. Our batch of servers are hosted in the old MI5 Building in London (think James Bond) under 24 hour guard. Further, there is a reservoir of skilled staff in the UK with its long history of legal betting.
How is the relationship between the government and the sports betting industry in the UK?
The relationship is strong. Prime Minister Blair understands that sport and sports betting are inextricably linked and both are important strands of the entertainment industry. Mr Blair’s Government has stated their intention to create an environment within the country to enable it become a centre for world gaming. Much work has already been done and the industry and Government are working hard to improve it still further. With the change in tax, I really can’t speak highly enough of the Government.
What betting organizations do you belong to?
I’m a director with the British Betting Office Association, which represents the interests of bookmakers in England. It deals with the government on issues such as taxation, and other matters that impact the betting industry. Our Trading Director, Will Roseff, is also on the Board of the BBOA as well as on the Bookmakers’ Committee to the Levy Board. He is one of the famous faces in the UK betting industry and was instrumental in the change in betting duty, which made our entrance into the North American market possible.
How did your father get involved in the betting business?
In the early ‘70s, a friend of his wanted to buy a betting shop. He asked my father to lend him some money, and my father said, ‘Why don’t I buy the shop and you run it for me?”
And it really just grew from there. That’s where it all started. About two years ago, when we launched our Internet site, we changed the name to Bet365. It was at this stage we joined forces with the Backhouse group. We wanted a name that properly describes what we do – which is, obviously, providing bets 365 days a year, 24 hours a day.
Who is on Bet365’s Board of Directors?
Also on the board is Will Roseff, our Trading Director. The other members include my sister, Denise, who’s an accountant by trade. She is a key figure in the business, and in driving the business forward. Our backgrounds are very much in bookmaking. As soon as we turned 18, we started working in the betting shops.
How did Bet365 make the transition from a company operating betting shops in the UK to one that has international, online sportsbooks?
We spent over a year designing and constructing our own software. We considered owning our own software to be important – it allows us to change it in response to new requirements whenever we wish. It has also given our site a different ‘feel’ from many of our competitors whose sites suffer from being similar to many others who have bought their software from the same source.
Why did you decide to develop Bet365USA and go after the North American market? And are you committed to staying the course?
The phones and Internet have given us the opportunity to expand internationally and the American market is already estimated to be 50% of the worldwide sportsbetting market, and this is while it’s unregulated. We consider it to be only a matter of time before Internet and telephone betting is legalized in the US. Our strategy is to become one of the leading players in the US market before that happens – when it does, our current great advantages of being legal, regulated and solid will then be shared by everyone, and getting new customers at this point will become more difficult.
The betting tax change didn’t come in until 6 October 2001, so we did not start our American marketing campaign in earnest until after that. We felt it necessary to have a separate site, bet365usa, in order to display the odds in the way US customers expect them and to change the emphasis on sports (soccer is the leading sport for our international customers who bet through bet365.com, but is less important for bet365usa.com’s customers).
We have been delighted with the progress we have made in terms of bets, turnover and margin. Obviously figures for the last year would be meaningless as our North American business only started in October. However in the 4 weeks to 10 March, with no NFL, American sports contributed 16% of the number of internet/phone bets and 25% of turnover (obviously this excludes our shops, so the Group figure would be much smaller). The average bet on American sports was £73 (about $103) – the average bet on other sports was £30 (about $43). So you can see that the larger stake per bet compensates for the lower theoretical margin.
I know we can do a lot better, as we have made a number of silly mistakes like putting the over and under on the wrong side of the page. It is a learning process – for years we have looked at soccer matches with the home team on the left, we’ve now got used to American sports with home and away the other way round. We will be re-launching our software prior to the next NFL season to better cater for the North American sports betting market.
What payment options do you offer for opening an account and receiving payouts?
Currently, we offer bankwire, credit cards, PayPal and NeTeller. We are looking to add Western Union sometime in the near future.
What payment method would you recommend to our users for setting up an account, or for cashing out winnings?
All are solid payment methods. We offer 15% bonus on all initial deposits and will pay the fees (subject to conditions) for deposits over $300.
How fast do payments to and from usually take?
Payments from credit cards should be instantaneous. Payments for Bankwires take a few working days.
What currency can I bet with?
We accept 13 international currencies including US Dollars, Canadian Dollars and Pounds Sterling.
What is your minimum deposit for new customers?
The minimum deposit by card on the Internet is $50 with no minimum bet size. By telephone the minimum is $100 with a minimum bet of $25. There are no charges.
What type of bonuses do you offer to first time depositors?
They receive a 15% bonus on initial deposits of $300 or more. Also, on a client’s second bet, they can place a 3-team parlay of up to $25. If it loses, they get another shot for Free. Also, we have the SportsClubUSA where there are draws for free trips to all clients every week. This started with a trip for two to the Super Bowl, another to the Daytona 500, and just recently a package for two for all three games at the Final Four in Atlanta.
What are your betting limits?
They vary between sports and bet types, but we aim to be very competitive. Payments are limited to $150,000. This is for all bets apart from US horse racing and bets at Pari-mutuel odds where lower maximum payouts apply.
What type of teasers do you offer on various sports?
We allow our customers to create their own teasers so they can choose the number of points they wish to buy for each selection. For example, they buy 7 points for the Jets and combine it with buying 6 point for the Broncos. If a customer wishes, he could do this for up to 12 selections, buying a different amount of points each time.
We’ve had a tremendous amount of interest in this flexible teaser. We have also had a great deal of interest in our parlays. We offer from 2 team parlays all the way up to 12 team parlays and we only taken the standard juice from each selection. So, for example, you get 47/1 instead of the usual 40/1 for a 6-team parlay.
Being British based, you must have really good coverage for soccer leagues?
Our European soccer coverage is, we believe, the widest available anywhere in the world. We have extensive betting coverage of all the European leagues ranging from straight match betting to correct scores and many exotics. We bet in-running on the major EPL and Spanish games. Of particular interest to our North American customers, we also feature Asian Handicap betting on major European soccer games. I have always felt this type of betting on soccer would appeal to North America. I’m sure you’ll let me know! We also extend this extensive coverage to all international sports, including golf and tennis.
What interesting betting options does Bet365USA offer that would encourage players to sign up?
We have been offering in-game betting on soccer for some time. We are extending this to US sports. We give the customer the ability to sell, as well as buy, up to 7 points on spreads and totals. This has proved very popular. True odds parlays, and the facility to create your own teaser.
Do you offer overnight lines?
Yes.
Do you offer both moneyline and runline on baseball?
Yes.
Are you going to offer a “dime” line for baseball?
Yes, we offer a 10 cent progressive line on baseball (a dime line up to –135).
What new sports or betting options do you see bet365USA providing the gambler in the near future?
We are always trying to offer our customers additional betting products and we are constantly developing our site to improve the customer overall experience.
We are looking to have an improved baseball, hockey and basketball offer up in the very near future.
We try to offer our customers a huge variety of betting opportunities on all the international sports we cover. To give an example on each NFL match we offer Match Betting, Half Time/Full Time betting, First Scoring Play, Highest Scoring Quarter and Specials. In addition, we allow our customers to create their own teasers at true odds and to buy and sell points for both Spreads and Totals. We will be offering this type of range on all US and international sports and don’t forget, we are a 24 hours a day operation both on the phones and the Internet, so our lines are always available.
What is the biggest advantage to using bet365USA over other books?
As you can see from my answers above, the fact that we are a long established operator from the UK and that our customers get paid promptly is of the utmost importance. If you add in the huge variety of betting opportunities, both on US and international sports, the innovative bets such as the ability to create your own teasers and to buy and sell points, the 24 hour call centre and excellent customer services, hopefully, this will make us popular in the US.
Some sportsbooks are trying to limit their exposure to professional gamblers. Some choose not to pay players. What is your policy on taking "sharp" action?
Like any other business, bookmaking is all about getting the balance right. Across all our sports we have both professional gamblers and ordinary players. I’ll be honest that we will try to limit the size of the wager for professional gamblers when we feel the balance is wrong.
Why should a sports gambler use bet365USA over the other books that are out there?
Hopefully, I’ve given enough reasons above, but I would also point out that we are members of IBAS, that’s the Independent Betting Arbitration Service, who are a National Body here in the UK. If you have a dispute with us, then we have agreed that it will go straight to IBAS and we will be bound by the independent decision. At the end of the day we, as bookmakers in the UK, are bound by the permit issued by the Government that says we are fit and proper people to be bookmakers. Without this, we cannot operate anything – our shops, our telephone operation, our Internet site, etc.
Where do you see the international sports-betting industry going in the next five years?
I see the market continuing to grow rapidly over the next 5 years, but with a move towards well-regulated, secure regimes such as the UK, where the Government encourages an open regulated environment for international gaming. There is a very interesting report by Merrill Lynch on the subject, which was published last year. It offers good reading for any of you insomniacs out there. Customers also want sportsbooks that can guarantee good bets, provide good customer service and know that they can get their money out.
So you see a lot of growth ahead?
This business is very much in the growth phase. I feel the sports-gambling market is still very under-developed, both in terms of the product being offered out there, and the systems —the software and platforms.
What are Bet365’s key strengths that will allow it to take advantage of these opportunities?
First of all, there’s the communications infrastructure, which is very strong here in the UK. Our servers are in the MI5 Building in London. We have very good bandwidth. So we can offer a very, very reliable service.
Then there are the regulations here in England. We operate in an environment where sportsbetting has been well regulated for many decades. When you work in that professional, regulated environment, it gives you a head start over other jurisdictions. We’ve been around for 28 years and have carefully built up our business within this environment. The bottom line is that during 28 years all our customers have been paid. For example, I have to have a permit that says I am a fit and proper person to act as a bookmaker. And I wouldn’t do anything to put that in danger.
When you look at the four major areas for sports betting – The UK, The rest of Europe, Offshore, and Australia/New Zealand – what is the advantage that the UK-based companies have in presenting its product to the largest potential sports-betting market, the United States?
In addition to the reasons already mentioned, one of our directors, Will Roseff was one of the prime movers in getting the government to repeal the betting tax. He actually sits on the Betmakers’ Committee to the Levy Board.
Will (Roseff) told the government why people were starting to bet offshore – because of the tax – and explained to them the huge opportunities open to this government in terms of revenue, and asked them to grasp the opportunity of making the UK the center of worldwide legal sports betting. And here I think is the key. The government here has grasped the opportunity, and has actually publicly stated that it is their policy to make the UK the center of worldwide legal sports betting. So, in England, we have a government that is actually helping the industry. In Australia, the government there is introducing laws that may limit sports betting.
We have a long history and tradition of sports betting here in England. And I think having the government on board gives us a significant advantage. Merrill Lynch has actually done a report that says the UK is in the best position to take advantage of the international sports betting market.
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