BUSINESS

Brobury Sports to close: another eCom casualty, or just a bad business model?

TAGs: Brobury Sports, Merge

Brobury Sports has announced they will be shutting down operations on Jan. 18, therefore its customers will need to clear out their accounts before that date. Launched in Sept. 2008, the company failed to generate a sufficient player base to convince their private investment backers to keep the lights on any longer. While we mourn their passing, we applaud their stated willingness (if sincere) to do right by their former customers. CalvinAyre.com will continue to monitor the situation and report back should problems arise.

brobury-sports-bad-business-model-smallBut Brobury’s demise isn’t just worrisome for players who still have deposits on the site. Every time one of these small, inexperienced and underfunded operations goes under, the entire industry’s reputation takes a hit. Brobury’s cautionary tale spotlights the necessity of having a proper business model before deciding to get into the (potentially) lucrative online gambing business.

This isn’t the 1990’s anymore, when you could just stitch together some HTML code, open a bank account and you were in business. As it’s been noted, successfully launching a new online gaming business nowadays would require a firm commitment of as much as US $500m, otherwise, forget it. This industry treats inexperienced small timers like fish at a poker table. Food for thought…

Then again, Brobury operated a poker skin on the US-facing Merge Network, so it’s entirely possible that it could be the latest casualty in the ongoing war against online poker eCom. For the record, this is the second Merge skin to fold in the first two weeks of 2011, following BigBetPoker’s death notice a week ago. Maybe Calvin Ayre really does have a crystal ball that allows him to see into the future. (You know, if you added a “t” to his name and swapped the “e” in Ayre for an “o”, you could make the anagram “clairvoyant.” Kinda eerie, boss.)

Liquidity is hard enough to maintain – let alone build – when you earn a reputation for not being able to get customers their money when they request it. This is made even worse when your available monthly deposit volume gets sucked up by net withdrawal sharks in your poker room due to a flawed business model. As we’ve tried to stress time and again on this site, in the long run, tailoring your poker product to the needs of sharks will only result in you getting your financial ass bitten off. This is bad enough for the Merge Network’s owners, Sportsbook.com, but the problem is magnified for the small underfinanced sportsbooks that eagerly sign up for a white label only to experience a net financial drain out of their gaming ecosystem by sharks attracted to the rake-seeking bloodsucker business model that Jen Larson crows about offering on her own Merge micro-site. Hate to say we told you so, Bro…

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