Wireless Sports Betting Makes It Big in Asia
January 17, 2001
Business and Finance - Asia
Wireless Sports Betting
Makes It Big in Asia
By H. ASHER BOLANDE
Staff Reporter of THE WALL STREET JOURNAL
HONG KONG -- Ada Tse watches the horses near the starting gate at the Shatin race course, and gets ready to bet. After considering the field, she decides on Indigenous, a former champion now paying 15-1 odds. However, instead of running to the betting booth, she picks up her cellular phone and, from her perch on the living-room couch, locks in her $50 Hong Kong dollars (US$6.41) bet with a push of the "OK" button.
The city's racing monopoly has put its multibillion-dollar franchise on the mobile handset. While the service is still in its infancy, more than 22,000 gamblers have signed up so far -- a quarter of what it took the Hong Kong Jockey Club eight years to net with past devices for personal remote betting.
Analysts for years have labeled sports wagering, with its real-time news elements and passionate fans, a potential "killer app" for mobile data. High-tech and gambling companies talk about the day when soccer or basketball fans make wages from stadium seats or their bedrooms.
But whether wireless wagering spawns a new population of bettors -- rather than cannibalizing from the existing group -- remains to be seen. Petri Kajander, who used to market a soccer oriented mobile-betting product for Finland's MatchOn.com (www.matchon.com1), predicts it will happen, but not for years.
Nevertheless, the Jockey Club's service has become a fascination for entrepreneurs readying their own wireless betting businesses. TAB Ltd., an Australian horse-racing monopoly that also runs sports-wagering sites on the Web, is tracking the service closely, having already tested a mobile-betting technology that was too slow and unreliable. Similar interest is echoed in interviews with mobile executives from the Philippines to Britain.
Former operator Cable & Wireless HKT, now part of Pacific Century CyberWorks Ltd., launched the service -- which also includes Hong Kong's lottery, the Mark Six -- just before the current racing season began in September. Hutchison Telecommunications (Hong Kong) Ltd., the city's largest carrier, joined in late November, and other rivals say they plan to follow suit.
Subscribers can use their existing phones because the service relies on so-called "SIM toolkit" technology rather than the standard WAP (Wireless Access Protocol) system. The SIM toolkit technology is older but more practical. Data shoots back and forth in the form of SMS, a text-messaging capability that is built into the carriers' existing networks.
Users are asked a series of questions -- for example, which race, which horse, and how much. To each question, they punch in a numerical answer from a list of options. An average of three seconds after they confirm their choices, the bet is complete. Users can auto-transfer funds from their bank account to cover bets.
The service is a clear improvement over WAP's snail-like sending and downloading speeds, and there is no need to log into the system. But, in its current form, the Jockey Club service is primitive: Graphics are absent, and punters still need a newspaper to find out the odds and which jockeys and horses are in a given race, not to mention news and analysis. Eventually, the aim is to keep track of individual bettors' tastes and interests, automatically prompting them when natural wagering opportunities arise.
And for all its short-term merits, SIM-based technology has problems. Manufacturers can, for example, place only one service or application on a given SIM card, so users are unable to sample offerings from multiple companies without swapping cards. For the Jockey Club and its new wireless service, that means a technology upgrade is in the cards.
It won't be the first time. In 1992, the Jockey Club introduced its own device for remote interactive betting -- a terminal that looks like an oversized Palm PDA and can be plugged into a regular phone line.
Ms. Tse tried it because she found the track too crowded and noisy. It wasn't a total solution, however. "Sometimes you can't get a telephone cable," she says. So she signed up for the mobile service soon after its launch and now plunks down about HK$1,000 a week. "It hasn't made me bet more money, but it's certainly more convenient."
One of the issues with WAP-based services is that they have plenty of subscribers but few actual users. For the Jockey Club, though, usage among a small subscriber base is frequent. So far, one-third of the 22,000 subscribers have used their phones to place bets on each race day, with each averaging nearly six transactions. That is only a tiny percentage of the US$1 to US$1.5 billion in bets the Jockey Club handles on a given race day. But it is a start.
Industry figures say the fast growth of Internet betting is an indicator of potential near-term demand. Eurobet.com (www.eurobet.com2), for example, says its revenue has grown more than 500% in the past year -- and that it now pulls in 10 million British pounds (US$14.7 million) in bets from 80 countries each week.
Those numbers scare some people in the region. Social activists in many Asian countries -- most of which either ban or tightly restrict gambling -- are alarmed about technology's power to turn desktops and hand-held devices into mini casinos. "You find many, many news [items] about broken families in Hong Kong where gambling is the main reason," says Choi Chi Sum, secretary general of Hong Kong's Society for Truth and Light. "We don't think it's suitable to promote more and more kinds of gambling."
Even if such groups can keep governments on their side, however, some legal experts say authorities might not be able to enforce the laws. Betting sites often avoid regulation by locating offshore.
The Jockey Club project won't resolve that debate. But it could help get mobile commerce off the ground in Hong Kong, say those in the industry. Because of speed and security concerns, WAP has been a nonstarter with e-commerce. If done right, services like the Jockey Club's may reignite public interest in wireless commerce, says Chris Lau, the interactive business director at SmarTone Mobile Communications Ltd. "Getting a taste of the technology, the consumer will eventually want more," he says.
Write to H. Asher Bolande at hyam.bolande@awsj.com3
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