Everyone wants a piece of the Asian market, but the mystery lies in how to go about doing it. Patrick Jay is a sports betting professional who has been in the game for over ten years, having spent five years with Ladbrokes and five years with the Hong Kong Jockey Club (HKJC).
Now working as a consultant, Jay comes with the unique experience of successfully running a European facing book and an Asian facing book, two incredibly different challenges.
I had the opportunity to talk with Jay at the iGaming Super Show in June and with the Macau Gaming Show kicking off next week, thought it would be appropriate to focus on the Asian market for the next two editions of Becky’s Affiliated. This interview with Jay is one of the most engaging I’ve conducted all year, so I encourage you to have listen and hopefully you’ll learn something new about the Asian market.
Biggest Challenge: Enormous Numbers
There are many challenges Western companies face when attempting to make a jump into the Eastern market, but when it comes to the biggest challenge of all, Jay believes its all in the numbers.
“The first challenge you face is the numbers are so big, you can’t believe it”, he said.
Jay elaborated by telling a story from his days at HKJC. “So the guy I took over from in Hong Kong was a 30 year professional in London- this guy was a legend in the gaming industry, his name was Colin Miles. We had a six month hand-over period in Hong Kong and on three different occasions I had to go into his office during hand-over and go, ‘Are they making this up?!’ That is the biggest challenge, you can’t believe how big the numbers are”.
Competing with Giants
Big numbers are the exact reason why so many companies in the West are itching to get a foothold in the East. However, with Asia-facing giants such as HKJC and SBO Bet, how could a company come in from the West and ever expect to compete? Here is Jay’s answer.
“Its really hard. I sat in the office of the HKJC for four and a half years telling everybody you have no chance of being a European firm in Asia, none. You have no culture, you have no language, you have no idea of how these things work, you may have the probity, you may have the security, you may have the product, but how are you going to get the money out?”, Jay reminisced.
He continued, “When you go and sit around the Ministry of Finance in Beijing as I did every three months for five years, sitting there and going, ‘Guys, that’s the CEO of Betfair, that’s the CEO of Bet365, that’s the CEO of Ladbrokes, that’s the CEO of William Hill…all these companies and you’re going to say to them, what are you going to do with the profits and they’re going to go, ‘Well we’re going to repatriate them’, and you turn to the HKJC and say, what are we going to do with your profits, and you’re going to say, well we’ll leave them here in China and we’ll build hospitals and schools, and they go, ‘how can you compete’? How can you possibly compete?
And here is the answer. For four and a half years I sat there going, ‘no one can compete with that’. You can’t compete with that, right? Its impossible.
Well here’s the answer.
The market is SO big that the combined forces of the local state monopoly and the government or go to China, the ministry of finance in Beijing, the HKJC, their combined forces are not big enough to look after this market. The market is too big. Its like the banks, you need four or five banks dominating the equity market, four or five banks dominating the bond market, etc, etc, its too big. You’re running billion US dollar liabilities on Man United games, Arsenal games, Chelsea games, Lakers games…that’s absolutely unappealing and cannot be done by the governments and by the local bookmakers.
So answer will be because the market is so big, when they realize its so big, the European and the other operators will be invited in. Its going to take time, but it will happen”.
Top Advice for Western Companies
The Asian market’s enormous size and scope is something us Westerners have a hard time grasping, but we know it’s true. Here are Jay’s two top pieces of advice for Western companies when it comes to preparing to enter the booming Asian market.
“The top piece of advice – the absolute number one piece of advice is this- in fact, can I give two because they are joint- the first one is you know nothing. You know nothing, OK? However smart you are, how ever cute you think you are how ever brilliant you think you are what ever your training is, what ever your experience is, how ever long you’ve been in the game. You. Know. Nothing.
So come with more humility than you can possibly imagine and the second thing is have patience. You are not going to have a positive revenue stream until, are you ready, [gasp] 5 years.
This market is incredible, its going to have a huge impact on the rest of the world, I think everyone should position themselves correctly, but understand that it will take time and what I’ve been saying today is that we need a world anti-corruption agency to help support bookmakers, to help support governments, help support regulators, etc, etc, because otherwise if football falls over, and we really only are talking about football, then the market is in deep, deep problems”.