David Loveday: Some tips from a boss who backs the bookies

James Moore talks betting, gambling overseas and flotations with the head of the gaming industry's Microsoft
Click to follow
The Independent Online

David Loveday is not a conventional chief executive. He wears a short-sleeved shirt and short trousers and looks as if he's just come back from a walk at the beach when we meet.

Perhaps it's a consequence of where he works: OpenBet – formerly Orbis – employs an army of some of the brightest technology geeks Britain produces. Such people are not comfortable in suits, are in short supply, and very have saleable skills.

OpenBet might sound like an internet gaming company. In fact it's a British technology giant – one of those organisations that you've probably used without even knowing it. It makes the kit used by almost every betting company you'd care to mention. Gambling's Microsoft, if you like. Says Mr Loveday: "We supply the picks and shovels but we don't prospect for gold. That was one of two things we decided when I joined. The other – and we imposed this in contracts with all our customers – is no bets from illegal jurisdictions."

At the time that was something of an unfashionable stance, given the rate at which the offshore poker industry was growing. It looked prescient when the US cracked down.

"On one level I suppose I can say I was a visionary. But it's easy to be wise after the event. In another way I can say I was a bit lucky but we always felt that the chickens would come home to roost. We have a strong track record of compliance. If you believe that business to government is the next boom area in gaming – and not everyone does, but if you believe that – we feel we are in a very strong position. They will want to work with regulated vendors. We've never done anything that would make a government feel that they don't want to work with us."

Is he right about this? Could be. In an era of debt and deficits, governments are scrambling around for revenue. One way of generating it is by legitimising sources of gambling previously banned, competing with the offshore "grey market" that already exists, and taking in tax.

Mr Loveday has high hopes that this will happen in the US. It isn't impossible to see Asia following.

"I believe country by country and state by state in North America that governments will begin to think, hey, all this revenue is flowing out the door. There's no tax coming in. Maybe we should start operating these services ourselves. That's where we come in. Ultimately governments, either directly or through a lottery system, will become very competitive with the grey market that operates at the moment.

"Of course, just because you're the cleanest vendor doesn't mean you'll get the contract, and it will vary government by government. But we're assessing all the opportunities."

Mr Loveday's optimism is borne of his experience so far. Having previously banned online gaming, France has performed a volte-face: the PMU, the French betting monopoly, is now online and vigorously competing for a slice of le pie. OpenBet picked up the contract. British punters, who were famously left high and dry a few years ago when the PMU's system went down on the day of the French 2000 Guineas, leaving them unable to collect, have cause to be pleased to see this developing relationship.

It's not all plain sailing though. OpenBet has been working with the British Columbia Lottery Corporation, which has set up the first legal online casino on the continent of North America. The launch was not without teething problems. Even getting to stage one was hard work, at least on the compliance front. "We had a visit from a couple of detectives. I had to submit five years' tax returns. There's been a few hiccups but it will be resolved."

Even after that, it's going to be softly softly, though. In Britain, where half the nation places a bet on Grand National day, people are relatively blasé about gambling, notwithstanding the fuss about the super-casino. That's not true everywhere.

Says Mr Loveday: "I was out in Canada for the launch. What really struck me was that gaming has a much more polarising effect there. You're either for it or against it. In the UK everyone is pretty neutral."

But what about his own attitude to betting? Is he a gaming (related) executive who won't indulge?

"None of our staff are allowed to gamble on any of our customers' sites. We don't employ gamblers. Some do spend time trying to find someone who isn't an OpenBet customer. But you can't have a situation where people are developing and working on a system and then using it. It's fine if they want to go racing for a day. They can bet on track, go into a shop or go to a site that isn't a customer. But if one of our customers thought there were 200 customers here all betting on the system... Well. It's not a moral view, it just makes things easier. I like a bet when I go racing. I'm not a big gambler but I always put a bet on Watford every year, I'm an emotional bettor on football. I love going horse-racing and I'll bet trackside, when I can see the horses in the flesh. But I'm not a gambler."

Those staff members are also required to live nearby: "We have a Bournvillesque model [after the chocolate maker]. We don't employ anyone who commutes. Except me, because I didn't want to live in London." This is a strangely paternalistic approach for a private equity-owned company that could yet make just as big a noise as Betfair if it comes to the stock market. So when will that be?

"We have been subject to a maelstrom of speculation. I've even had some of my competitors ring me up and say we're buying you on Sunday. We have a laugh about it. It's because we are one of the most successful remaining independents out there. I was involved in a Nasdaq flotation before I came here. From a process and bureaucracy perspective I don't think anyone wants to do it. But if it's right for the company, we'll do it. What happens, happens."

David Loveday

* Worth betting on his longevity. He's been chief executive of OpenBet since 2002, making him the one of the longest incumbents at the top of a gambling-based business.

* A survivor of the dot.com era. He established the international business for Kana in 1997, contributing to its flotation on Nasdaq in 1999, one of the top ten IPOs that year.

* A passionate supporter of Watford, whom he bets on every year. Which means he's made money twice in the past decade thanks to the club's two promotions.

* A graduate of the University of East Anglia, he's also worked in investment banking. Enjoys going racing. Tends to be swayed by radio tips when trackside.