Shahar Attias

iGaming History, Episode 5 Transcript

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Narcis Gavrilescu:  Hello, everyone. Welcome back to iGaming History. I have the pleasure of being joined today by the father of CRM in the iGaming industry, Shahar Attias. Shahar, thank you for joining me and dedicating the time.

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Shahar Attias: Hello to all of my children.

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Narcis Gavrilescu: I need to ask this of you before the main questions. I saw an interview where you were discussing with a friend who first invited you to an event. Your answer was "why would I share all my secrets at an event?" You've gone from that to being the friendliest person in the industry, super open, super dedicated. Was there something that created this change?

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Shahar Attias: First, thank you. Second, you should do other things with your free time than watch my videos. It's not about being friendly. I was in my first days as an independent consultant. I've always worked for someone. I didn't know what would be correct. When I first went on stage, I looked at it wisely. We have 300 people in front of me. All of them would like a project with me after my speech. So I thought I shouldn't reveal everything because they will need to pay for that.

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Coming from CRM, I missed the concept of lead generation and marketing. I learned from a good mentor that the more you share, the more attractive you are. If people bring you for a project, they bring you based on what you've demonstrated you know, not hoping to unlock the box inside your brain. That's the key. You share your knowledge. You're open to discussion with everyone. Projects come based on people connection first. If they relate to the persona, they come based on demonstrated knowledge, which we publicize with our interaction. By the end of the day, it's also timing.

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Our model is based on purely that we want to remain in everybody's heads as the leaders of CRM in this industry. So whenever someone is confronted with a CRM issue, they will have my image in their heads. That's not the nicest. There are better-looking images. But when it comes to CRM, hopefully not.

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Narcis Gavrilescu: Let's talk about CRM. But let's go back to when it all started. The interesting and funny story I wanted to bring up was the Ferrari operator.

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Shahar Attias: That's awesome!

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Narcis Gavrilescu: Maybe you can start us here.

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Shahar Attias: There's a bit of an introduction. There used to be two sets of brothers in Israel. One set were dentists, very successful. They made a lot of money. They had a chain of dental workshops and hotels. Another set of brothers, one was a software guy, one was a hardware guy. They had a small IT repair shop and were handling the dental chain.

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They got along very well on a personal level. Then in '96, the IT guys came to the dentists and told them, "there's this new thing called the Internet. It's going to be big. Let's do something." They said, "we have some spare money. What do you have in mind?" They said, "let's sell clothes online." They were going to start a website where people could virtually measure clothes and order them.

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They started development. Since there wasn't broadband, image downloading was very slow. A developer came up with a brilliant idea: send all the images on a CD to people. They would use the CD in the computer, and the website would call for the images from the CD so things would move faster. Then it still wasn't enough. So they said, "let's develop a game for them to play while the images are uploading." They said, "what kind of games?" The software guy said, "I can do this game or that game." One of them said, "can you do all that?" The software guy said, "yeah. It's all that. Like, one out of 47. It's very easy to program." He said, "well, if you can do all that, let's do a casino."

 

And that's how 888 started. Now it's Evoke, previously Casino-on-Net. The original concept was to develop a game to pass the time when images are uploading.

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The name of the company was Core. Until many years later after I left, in the database, each user had a CID, a Core ID number. That's how that started. They sent the hardware guy to Antigua to start the server farm. People started to join, everyone living in the same villa, working twenty-four seven.

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There's another story where they understood it was so successful that all they did was write addresses on envelopes because people would register and they would send an installation CD. So they said, "can you do it online completely so we won't need to send CDs?" The story says the software guy went into the room and forty-eight hours later came out without sleeping. "It's done. It's online."

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Imagine they're all living in the villa, taking shifts on the couch in the living room for support. What does support mean? A guy comes online and wants to deposit. The support agent verifies that the details entered during registration match the details entered in the deposit info. The software opened two windows, history and current. You match between them, click yes, and approve the deposit.

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But there wasn't much activity during the late or early hours. So they added the sound of a Ferrari going from right to left to wake up the guy nodding off on the couch. He would hear it and wake up.

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When I joined the company in 2000, I was a leftover. They took my wife for a position and said, "we'll find something for you." They gave me to manage this team. From a few years earlier, a guy sleeping on the sofa at night, to a team of 20 people concurrent in a small room, with that Ferrari sound every few seconds all day long. That was my routine. So that's how this sound was embedded into me.

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Narcis Gavrilescu: You got in by accident. Did you know anything about the industry?

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Shahar Attias: We got the offer. We didn't know what it was. The promised salary was higher than what both of us made together, for each one. They said we would get an allowance and live in the Caribbeans. Clearly, I said no. Not going to happen. It's too good to be true. We sold everything we had. We packed one suitcase each. There weren't tallies back then. We said, worst case, we have a flight ticket with a stop in New York on the way back. So we'd have a trip to New York on somebody else's dime because we didn't think it would last or even exist.

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We got there. We were picked up from the airplane. We went to the office. When we arrived, I said, "what is this company all about?" They said, "it's a normal casino." I said, "I've never been to one. Can I walk with my clothes on?" They said, "yeah." So that's how we started. I'd never been to a casino. I'd never played any game before. I didn't know what it was.

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But then three days later, one of the initial investors was running support. He came to me and asked about a specific scenario in craps. We were selling the American market, so craps was big. I said, "what's craps?" This is a very ex-intelligence Soviet army officer. "What do you mean you don't know what craps is?" So three days later, I knew all the games by heart. A month later, I was instructing all the new agents across all the games. This was their initiation process, to spend two days with me learning all the games.

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Narcis Gavrilescu: And so this is how you got in. But what made you believe in the industry? What made you say "this is it"? Was there a moment?

 

Shahar Attias: I'm not sure there was a moment, definitely not during Casino-on-Net in Antigua. We worked there for some time. We had a nice trip in Central America afterwards. Came back to Israel. I was looking for a job. I was doing instructions in a travel gear shop about my trip, and people would come every night to hear my story. I printed out my CV and handed it out, saying "if you have a friend in high-tech, I'm available."

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One of them had a friend working for Playtech. Playtech had just started a key licensee, which ended up being bought by Playtech later on. It was a team of four people. They looked for a CRM manager. They didn't know it was called CRM because the concept didn't really exist. But they knew they wanted somebody handling promotions.

So that started. After working for two large operations and then being recruited by PokerStars, I realized I really enjoyed this. I like building CRM departments. I said, "I'll go solo, and I'll do that for a living. I'll just go and build CRM departments for companies."

 

Narcis Gavrilescu: I remember you telling the story that you figured out if you sent an email every two weeks, engagement would spike. How did you figure that out?

 

Shahar Attias: Since I was a leftover, they gave me this insignificant department to manage. A year later, it didn't exist anymore. I was doing that most of the day. I'm not a technical guy with certifications, but I like working with computers. They gave me the responsibility that every two weeks, they would send a biweekly newsletter to the entire database. The content had to be uploaded to the servers in each language. So I had the key to the server room. I would take the translation, upload it to the servers. Just play with it.

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Since my day job wasn't demanding, I started to follow the numbers. I saw that when we send the newsletter, there's a spike in activity. So I started to monitor it backward and compare content and offers with engagement. I thought, "these are the best days in the month."

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A new couple joined the company. The wife had pretty much no job to do. I went to management and said, "hear me out. Give that department to her. Let me pick three people. All we're going to do is send emails based on that." I showcased the numbers. I said, "just try it." It was that easy; there were no blockers. You could do pretty much whatever you want. We started, and it was a huge success. After the initial few weeks, I said, "we cannot do the same thing again. You're going to focus on that segment." I used the word "segment," probably for the first time in iGaming. "You're going to work with these guys." We built the foundations for what later became modern CRM.

 

Narcis Gavrilescu: When I heard the story, I immediately thought about instinct. You need to have a bit of it to just say, "let me look at it." It popped the idea of instinct versus data. Do you think it was more about instinct back then? Has this changed?

 

Shahar Attias: Of course, it changed. The industry today... take every five years back: 2020, 2015, 2010. If you show the available functionality during each timestamp to the 2000 Shahar, it would slap you in the face. That's science fiction. It's impossible.

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Yes, it was instinct. One thing I've learned from the affiliate community is that what iGaming does best in the world is performance marketing. The invention of revenue share and CPA, things that relate to actual value and ROI, came to life here. The concept of how to make it more profitable existed from day one. It's a money-based industry. You had to back it up. Me backing it up was with a table I kept on paper. Today, you have all the tools to follow activity.

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Back then, it didn't exist. I think it's always instinct. Today, you have better tools to back up your instinct to make your ideas come to life with a higher level of assurance. Relying on data mechanized the process for routine work. You don't call for Excel every day to find outliers. You have a segment for that. That kills the joy of finding it yourself, but it works better. You have to divert your instincts into something else.

 

Narcis Gavrilescu: 2003, Chris Moneymaker wins the online poker tournament. Tell us how that rippled across the industry.

 

Shahar Attias: It had two huge impacts on online poker. First on online, because we had a dead box. We never had poker before. It was very minimal. The impact on poker was bigger because poker was a closed community of veterans who played between themselves. This is how WSOP started. I think it was like 11 people, just determining who is the best poker player in the world. Very American, like the World Series of baseball. The world is the US. It grew to where it was in 2003, which was a few thousand.

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Chris won a ticket to the WSOP, which is $10,000. He deposited $630, bought into the tournament, and won the ticket for PokerStars. The impact on poker was way bigger. The industry grew so much after the TV coverage. On online, it existed, but it was very minimal.

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If you want the story about how PokerStars started... A Jewish guy living in a communist country came to Israel. He got a place at a small settlement. He was excellent, so he got recruited by IBM and was sent to Canada for work. During his trips, he started to recruit people and started his own company. They were close to launching the product. He came back, took his two managers, and told them, "you're going to invest $100,000 each in my new project, and I'm going to make you billionaires."

 

Narcis Gavrilescu: A very compelling pitch.

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Shahar Attias: They said yes. They quit IBM and joined the company. He started the company with Pyr. They built the product and launched free money. It was built by poker players. Everybody in the company was an excellent veteran poker player. So it was a poker product for poker players. They went live, free money, huge success. They switched to real money and saw no activity on the website. They thought they messed up. Then they realized that 09/11/2001 was not a good day to start the product online.

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Anyway, they did the relaunch a few months later. It was good, but they had bigger competition in the US. Chris Moneymaker was a huge jump start to that activity. But the day PokerStars became the largest gambling operator in the world was with UIGEA, Black Friday, when George Bush signed the decree. Then PartyPoker and all the public companies went outside of the US market. PokerStars just became number one and became the Goliath it is today.

 

Narcis Gavrilescu: UIGEA and Poker Black Friday are years apart.

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Shahar Attias: I mixed them. So that day was big. Everybody walked in the corridors with puzzled looks, not knowing what would happen. All the public companies went out. We didn't know what to do. Then around midday, we added pokerstars/uigea. It was a short paragraph saying PokerStars believes poker is a game of skill. We will always allow poker players to play wherever they are. Kind of deflecting the charges that you're not allowed to fund a gambling activity online in the US. Not referring to that at all. It was like, "we will allow poker play because we love the game as much as they will allow us." And yes, that skyrocketed us.

 

Narcis Gavrilescu: Overall, PokerStars had a very good run, not just in growth, but in how they handled everything. They bought Full Tilt and refunded all the players. It was a beautiful execution.

 

Shahar Attias: Yes. Again, I'm talking about the Scheinberg era, prior to the sale. For example, no casino. Why? Because that's not poker vibe. It was always... I was the only guy who was not a poker person. I didn't know poker before I joined. We had clashes daily. But it was a company built on poker ethic. Everything was done to provide the best possible product for poker players. Seeing the way Full Tilt left players hanging without money was painful to them. They saw it as wrongdoing. So they took over the operation to fix that bad activity.

 

Narcis Gavrilescu: By the time this was happening, you had all these licenses pop up like Gibraltar, Malta. These were licenses for Europe, non-US mostly. In the end, did this legitimize the industry more? Or did it hinder innovation and slow it down?

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Shahar Attias: It allowed the industry to grow beyond the black status or image it had. For the early years, licenses were just an excuse so you could transact. You were holding a Kahnawake license. Good. Do you want to have your players on Kahnawake, a village with one slate and below it an internet hub? No, you don't. That's not the purpose. Do you want to serve your product to all the magnificent people in Gibraltar? You could have a better business plan.

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The case was we're going to have the server and license in a place which will give us the legal opinion that we can walk anywhere because the act of gambling happened where the server is. So you're betting on an activity that happened where jurisdictions allowed it. Malta, Gibraltar, Isle of Man, Kahnawake.

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Until the dot-country licenses started to emerge with Italy being first, it was a legal chicken game. A good name for a fast-food restaurant. It was like, "yes, we're licensed over there, so we can waork in Germany." All the countries that hadn't added a strict "no" in the system, the entire world was a gray ocean waiting to be tapped. When the US passed the law, that was it for all the public companies.

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You couldn't have imagined a public company before the era of licenses. That allowed companies to grow more. That allowed more people in the industry. That allowed advertising. That allowed going public. That allowed being existent on social networks. The industry grew dramatically due to that factor.

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Has it limited innovation? Has it limited, for me as a CRM guy, the way you interact with players? Clearly. What's preferable? I don't see any other way. There's too much money in it to keep the states away from possible taxation. That move grew the industry by many, many folds.

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It also allowed a parallel universe where people still use the same methodology: get a commercial license and be creative with what it allows and where you work. But still, the legal side of the business is at least as big as the non-legal one. The illegal online market in the US exists, I'm certain, but it's nothing by comparison to the legal market, which is huge. It's still attractive to any European operator because it's so big. It's a huge market.

When you put that into the mix, it changes the picture in terms of sizes. That's how it went. Creative people know how to work with restrictions. You just need the tech to support it.

 

Narcis Gavrilescu: Going back to CRM, I started seeing people hire CRM more aggressively around 2012. Why did it take the industry a decade to understand how important this is?

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Shahar Attias: In 2005, I was with Nation Traffic in Playtech. We launched a new brand. We had Casinos Topaz, MegaSlade, Casinos del Rio, and then we started Europa Casino. That brand grew 1000% every month for a year. Do you need CRM? The world is empty. You hardly have competition. You can walk in any market you want. Nobody knows how to spell regulation.

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Yes, you want to be efficient and get more out of every lead that passes through the door. But if you don't have that player, you'll have 10,000 others the next day. It was an acquisition industry for the better half of my career, and I'm twenty-five years in business. That's what people cared about. Everything else was secondary.

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I used to have monthly arguments with my CEO at Nation Traffic. He would come to my office and shout, "you've spent so much money on promotions and bonuses last month." I would go, "you want me to stop promotions for a month to see how it goes?" Exactly. There were no blockers. It was big enough for everybody to fly.

 

Narcis Gavrilescu: Was it like a process of conquest? You conquer the entire world, and at some point, the world is conquered, so you say, "how do I retain the players I conquered?"

 

Shahar Attias: There's a saying about Julius Caesar that when he reached the boundaries of his kingdom, he wept because there was nothing left to conquer. So yes and no. It still was market dominant. For example, Bwin was huge in France. Betfair was huge in the UK. We were weak in Asia because Asia worked with a different system; payments were done in cash based on people you trust. It wasn't a pure online experience. But in Europe and the US, it was. Traffic kept coming.

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Bad days, bad deals would spark innovation to find new affiliates that could send you Finnish players or whatever. But the concept of CRM fits this industry so much because of the ROI concept and performance marketing. For example, with some brands, when we had a certain deal with an affiliate, we would treat these players differently. Why? If it's a CPA, we've already paid for the traffic. Let's try to get as much as possible. If it's a revenue share, let's wait until we strike a cost-share with the affiliate for different promotions. It's making the most out of what you have.

When it comes to efficiency, I think we're world leaders in this regard. I have a degree in logistics and efficiencies. It's basics.

 

Narcis Gavrilescu: You spoke about real-time automation when people thought it was sci-fi. What made you think this is the future?

 

Shahar Attias: Because I've worked for so many years in CRM, I knew the biggest challenge is win-back. What is win-back? The way the funnel works: there are people in the world who are not players. They type something on Google or see an ad. Somehow they reach a website, which could be your homepage or an affiliate. They reach your homepage. If they like what they see, they register. On registration, they can convert into making a first deposit, and then they are playing. Now you have them online.

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The biggest churn happens after day one. How many players return for a second day of gaming? Not too much. Probably half or less will return for the second day. That's the biggest drop. How do you win them back? After they've left your casino, they are just people in the world again. Now you need to convince them to log in to your website again.

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At this point, you have an advantage versus the other 150,000 casinos online because they are registered. Maybe they even have cash left in their balance. But you're fighting for their attention against all the others because they will go online and get additional ads. Somebody will promise them 1001% on their deposit. You also fight for attention versus Netflix, Apple TV, and speaking with family. There are a lot of distractions preventing them from logging in again.

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The only time you have their full attention is when they are logged in. So when they are logged in, you can utilize real-time technology and communicate with them when they still have you in mind. Why do they have you in mind? Because you're in front of them. They're playing the game right now. You will not distract them from the game, but when they're back at the homepage, you can project a message. You can offer another chance for a reward, extending their gameplay.

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Will that change loyalty dramatically? No. For that, you need to work hard on branding and public image. But can you gamify the experience and get them to spend another two minutes or deposit another ten? If you do that across your entire active database, that's huge. It's amazingly huge. But you cannot do that without real-time.

 

Narcis Gavrilescu: Shahar, we're getting close on time, and I know you are super busy. I want to thank you for dedicating the time. I also want to announce that Shahar has agreed to come for a second episode. So stay tuned, everybody. We will be back. Shahar, thank you very much. We'll keep in touch.

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Shahar Attias: Thank you, Narcis.

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Narcis Gavrilescu: Thank you.​​​

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