The Business of Poker - Interview with Ray Bitar, CEO of TiltWare
Ray Bitar is one of the founders, and currently the CEO of TiltWare, which is the software and marketing company for Full Tilt Poker.
Full Tilt made a huge splash when it entered the online poker market a little over one year ago. The roster of top players assembled to be part of 'Team Full Tilt" was unprecedented.
Just over one year into its life as a company, I got a chance to sit down and talk to Ray in the Full Tilt lounge, an exotic themed suite decked out with leopard skin couches, and lamps and tapestries, instead of fluorescent lighting and bare tan walls. Ray & I spoke about year one of Full Tilt, the lessons learned, and where he sees his company, and this brave new industry of online poker going in the future.
John Caldwell: Tell me a little about your background, and how you got started with Full Tilt?
Ray Bitar: Well, from a Poker perspective, I started playing poker when I was about 12. I started playing tournament poker when I was about 20 or 21. Professionally, my background was trading equities, and I have been doing that since I was about 16. I traded on the Pacific Stock Exchange in Los Angeles for about eight years, and I was a market maker. From there I partnered up with a company, and formed an office with about 35 traders, and ran that office. That's where I met Chris Ferguson for the first time, in 1999. He came into my office, and I helped him with his trading. We really hit it off, and he helped me get my poker game to another level, and I helped get his trading up to another level.
I traded equities until September 2003, and then I took a hiatus to come and run Tilt Ware.
JC: One thing I noticed the minute I walked in to the World Series of Poker was this suite (Full Tilt have a suite right outside the WSOP tournament room where players can lounge, and mingle with fans). What was your thinking behind the suite, and do you think it gives you an edge?
RB: I definitely think it gives us an edge. It gives us a presence. This idea goes back to before last years WSOP. I wanted a place where people could come and meet the players. The core philosophy behind our business is to educate, to have there be a common bond between our professional players, and the public. This suite is something we have been working on for months before we got here. It gives us a chance to show our brand, and really show the class at which our brand is at.
When I spoke to Harrah's, it was all about promoting the WSOP, giving fans access to the players, and putting something on that would allow Harrah's to hold their heads up high as well.
It was a challenge to get Harrah's to approve this, because in the past some other operators have come to tournaments, distributing CDs, and not put on a very classy show. The casinos here have licenses, and we have to be sensitive to that, and what the [Nevada Gaming] commission says. It was a long road, but at the end of the day, I think they are happy with it.
JC: You recently launched a new full tilt poker.com, which has a significantly different look. Talk about the thought process behind that upgrading, and why you made the changes
RB: When we first launched, we thought it would be really cool, and good looking with black, and red, and what we realized is that our original website was very dark, and many of the players had scowls on their faces, etc. People found this somewhat intimidating, so we wanted to do something with different colors, and a more friendly feel, which is more consistent with our pledge.
JC: Can you give me your thoughts about regulation, specifically in the US with respect to online gaming.
RB: I'm very positive about that. I think the main concern, at least from what I have heard in the past is that no one thought that you could regulate online gaming, or online poker. I think with the passing of the U.K. Gaming Act, it shows that you can regulate, and tax online gaming. Personally, I think it's a matter of time until that happens here. It won't be tomorrow, but I think its going in that direction. I also think there are 50 million Americans who want to play poker, and it is becoming accepted as a game of skill.
Our leaders are concerned with other things like feeding tubes, and what have you. So, I have a very positive outlook, but I think it will take time.
JC: Obviously, this industry is booming right now. I have heard counts as high as 500 as far as the number of active online poker rooms at the moment. Does the crowding in this space alter your strategy, or make you adapt.
RB: Not really. When we started, there were about 200 rooms that we knew of. We knew that Full Tilt had a competitive advantage. We also knew that if we delivered on our promise with good software, and good marketing, the players would come. I think there are really only about 20 rooms out there, probably 15 major rooms. The rest are skins [rooms that run off the software of another room, but appear to be different], and skins of skins. The barrier to enter this business is not high, from a cost perspective, but the barrier to achieve critical mass is very high. Differentiating a brand is also very difficult in such a crowded space.
[B]JC: In that model we just discussed, where there are 500 online rooms, but only 20 or so significant ones, what happens to the other 480 in the coming months and years?[/B]
RB: I think what is going to happen is already happening. Of these 480 rooms, there are many sites that try to give it a shot for a little while, and they try to market, and maybe things don't go their way, and they wind up selling to another skin, and consolidating. I have seen that happen, and it is continuing to happen.
Going with a skin, you do have that security as well, because what usually happens is another skin comes in and takes it, and players aren't in any danger of losing their money.
[B]JC: Back to Full Tilt. Clearly, your strategy is to feature the pros. Obviously, this has helped you. What have been the challenges with this strategy?[/B]
RB: The biggest challenge has been that there are a lot of people who don't believe the pro players actually play on the site. That has been the biggest challenge, to convince people that, yes - that is Howard Lederer playing, yes that is Phil Ivey. These players have a huge amount of integrity, and they would never enter into something where they would have someone play for them. That has been a huge challenge.
Also, I think initially our website was a bit intimidating. Some people would think to themselves 'why do I want to play against the best in the world? They are going to beat me out of my money'. I think we have overcome that, people now come online, and meet the pros, and have a positive experience, and actually wind up following the pro. Plus, our pros like to give action, and that translates to a more fun experience for the player.
[B]JC: Recently Party Poker went public on the London Stock Exchange. Is this a possible exit strategy for Full Tilt?[/B]
RB: Its really too early to tell, and that is really up to the operators, Full Tilt. As Tilt Ware, we are considering all options, and I think we are taking a wait and see attitude with not just Party, but 888, and Empire, which recently went public. We will see how those play out, but at the moment, we're leaving all options open.
