Several weeks ago CalvinAyre.com put out a call for up and coming innovators in the online gambling industry and Victor Espinosa, the CEO of laJuega.com, was one of the many entrepreneurs to respond. Espinosa’s product stood out for us because it will change the online gambling landscape in the Colombian iGaming market, not to mention Central America is a region full of promise that we’ve all got our eyes on today.
Espinosa and his team have developed a betting platform for the Latin American market where customers without bank accounts are able to bet using cash. To get their money online, laJuega has a relationship with physical payment points or “Postal Wires” that accept the cash from customers in person, enabling these customers to bet with (and cash out of) laJuega.
To find out more about this innovative product, Espinosa’s background and what he has store for the coming months, I had the opportunity to speak with the innovator himself and learn what it takes to stand out in a crowd.
Becky Liggero: Victor, thank you so much for joining me and for sharing with us your innovative product. Can you tell me about your professional background prior to the launch of laJuega?
Victor Espinosa: I’m a serial entrepreneur in social organizations and gaming industry. I was Strategy Director for “A Liter of Light” NGO, where I helped to illuminate the homes of more than 1000 families in extreme poverty condition, by using a self-sustainable model that does not require the presence of the NGO for people to light their homes. People learned how to light their homes by themselves, using the resources they had at hand.
In gaming industry, I have more than eight years of experience. My initial stage was as a client. As a teenager, I fell in love with NLH poker. When I was old enough to bet legally, I went to Las Vegas back in 2006 to play as a professional. That experience helped me to learn the details of the game structure. I came back to Colombia in 2007 and started to organize and run tournaments in the main social clubs of Bogota, as Tournament Director. This last experience helped me to know better gaming clients and to establish business contacts.
When tournaments season ended, I funded “The Strip Gaming Supplies”, a company that manufactured, imported and commercialized casino infrastructure (chips, cards, tables, slots, etc.). That company helped me to build relationships with gaming operators and knowing more about the LATAM opportunities in the gaming industry.
Currently, I am CEO of laJuega.com, a gaming project backed by the Colombian Government and Universidad de Los Andes, the best university in the country. In laJuega, we are developing a betting platform for the LATAM market, were unbanked people are able to bet. At the same time, I am fostering cultural entrepreneurship as a Lead Consultant for the Secretary of Boyacá for Culture.
BL: That’s quite an impressive background, can you pinpoint when you came up with the idea to launch laJuega?
VE: In the boom of poker, I had a problem when I tried depositing money in a poker website. This place –and the rest of them- required credit card for depositing money and I did not have one (it is a luxury since only 2 out of 10 people own a credit card in Colombia). I thought that it wasn’t right at all.
Studying my professional career in Business Management, I became passionate for Finance (I love it as much as poker). Since Financial Markets and Sports Betting Markets have so much in common, the idea of doing a sportsbook website that did not rely on the willingness of Financial Institutions to operate, just came to me. I started working on it on 2011 and it has been my life ever since.
BL: I really like that your heart is truly in this, Victor. So without credit cards, can you explain how players will be able to get their money in and out of laJuega?
VE: For depositing money, players will be able to use established physical payment networks that work as Postal Wires, that together add up to one hundred thousand (100,000) points of operation in Colombia. Players buy virtual currency by going to any of these physicals points of sale, where they provide their user ID number of laJuega. Once this is done, the Postal Wire company reports the payment to us and we credit the funds to the user in his player account.
To withdraw money, players pick the amount they want and the nearest physical point of sale relative to their location. Once we receive in laJuega the order from them, we do a postal wire to the player to the chosen physical point. They claim their money by showing their ID.
BL: I know you’ve been working on the development of artificial intelligence to determine bets for customers based on their risk preference, can you elaborate on this technology?
VE: Last year with the Ministry of Technology of Colombia, we had the opportunity to go to Silicon Valley in California. We witnessed how the artificial intelligence industry (e.g. machine learning) was the state-of-the-art in rapidly growing technology start-ups.
Afterwards, I became interested and started a Data Science Specialization in Johns Hopkins University in the US, where I began working on an AI system that will allow preparing, interpreting and crossing data in a dynamic and automated way. This process helps to identify betting patterns and preferences, generating system responses that make easier management decision-making.
In context, the AI system make possible to implement a marketing strategy tailored to the customer profile, obtaining benefits such as predicting customer behavior, generating deals at opportune times, offering bets according to the risk preference of the customer. These benefits improve relations with customers, increasing their retention and minimizing the cost of marketing campaigns. This creates a competitive advantage for laJuega.com.
BL: This sounds like a pretty effective retention strategy, well done. More generally speaking, why have you decided to focus on the LatAm market?
VE: There is a huge momentum for sports betting industry in LATAM, with the 2014 World Soccer Cup that will be held in Brazil in upcoming weeks. It will be the most visible sporting event in years in LATAM and there is a high expectation for it in Colombia, where soccer is the national sport. The Colombian Team didn’t qualify for this event since 98’ and finally made it this year. People, media and government are just happy about it, which creates the perfect mix to develop the sports betting market in the region, which will improve the entertainment experience of the people.
BL: Best of luck to the Colombian Team! As you are based in Colombia, can you tell me what kinds of online gambling opportunities are available in the region?
VE: The market is composed mainly by traditional brick-and-mortar companies with physical distribution channels, in product lines such as lotteries, casinos and lotto. Gaming consumers developed faster that the supply side of games, and this is evident by looking at the stagnant sales of the industry for the last five years, since it hasn’t shown growth.
There is an opportunity for developing digital betting channels for this unsatisfied new generation of consumers. Our objective is to give the best of us as company to serve them.
BL: Yep, digital gaming is the way forward for sure. Before we wrap up, what top piece of advice do you have for innovators and entrepreneurs who are looking to succeed in the online gambling market in LatAm?
VE: In LATAM, gambling is now beginning to be perceived as a mass entertainment product, leaving in the past its “bad habit” stigma. It is an uncertain and risky business region, that offers opportunities for entrepreneurs that are tough, ambitious and long term oriented. Dramatic regulatory changes will happen in the next few years, as governments are starting to learn how to regulate online gambling. Entrepreneurs will have to roll with the punches and stick with their business while this happens.
My advice: Get to know customer culture in detail in each country, prior to launching any new gaming venture. This will really help shaping a business model that will fit the market in a fast and accurate way.
BL: Victor, it has been a pleasure. Congratulations on everything you’ve accomplished so far and our best wishes for your success in the future.