Calvin Ayre and Bodog.com continue to prosper despite the US government crackdown on Internet gaming
Calvin Ayre is a lot of things. Daring, flashy and ostentatious are just some of the words that quickly come to mind when describing him.
One word you won’t find attached to Ayre, however, is stupid. That’s why he probably won’t ever set foot on US soil again until the Unlawful Internet Gambling Enforcement Act is either abolished or liberalized.
This means no more million-dollar parties like he threw at Las Vegas hotels in 2005 and 2006 in conjunction with his online gambling conferences, the last of which had to be cancelled although the party still was held complete with celebrities, open bars, circus acts, models giving massages and gymnastic exhibitions.
To those who follow Internet gaming, Ayre is a visionary maverick with a flair for publicity that has turned his online company, Bodog.com, into a billion-dollar worldwide entertainment empire.
To the US Justice Department, Ayre is a modern-day John Dillinger. At least it seems like that with the way the Justice Department has gone after Internet wagering. They especially don’t seem to care for in-your-face-type companies that go to great lengths to draw American bettors through creative marketing.
David Carruthers knows that all too well. He was the CEO of BetonSports, one of the largest Internet sportsbooks in the world whose base consisted mainly of American customers. BetonSports did heavy advertising in the United States, even going so far as driving their own bus around New York City with big banners advocating sports betting. Technically sports wagering is illegal in every state except Nevada. The Justice Department went after BetonSports and arrested Carruthers on a brief layover in Dallas during a flight from his home in England to the BetonSports office in Costa Rica. Carruthers was charged with criminal racketeering and wire fraud and BetonSports ceased its US business.
The third-party payment processing company Neteller has felt the brunt of US law enforcement, too. Their two owners have been arrested and charged with money laundering. Now Neteller, a US$3 billion publicly traded business consisting mainly of transferring funds for gambling, no longer accepts customers from the United States and Canada. Some gaming analysts speculate Neteller probably won’t survive this year.
So you can imagine US Justice Department’s ire when, last March, Ayre appeared on the cover of Forbes magazine’s 2006 billionaire issue with a headline that read: “Catch me if you can … Calvin Ayre sticks it to Uncle Sam.” If this wasn’t enough, Ayre also made People magazine’s hottest bachelor list.
This kind of loud attention isn’t appreciated by many Internet bookmakers operating offshore trying to be low-key, hoping the Justice Department backs off its zealous campaign against online wagering. They believe Ayre is creating a backlash against them. Certainly the US government didn’t enjoy reading about Ayre either, or that Bodog handled US$7.3 billion in Internet wagers from 16 million largely US-based customers, according to the Forbes article.
It probably wasn’t a coincidence that the day the Forbes article hit the news stands, Ayre’s 10,000-square-foot, US$3.5 million, bachelor-pad home in Costa Rica was raided by local police. No charges were filed, but following that incident Ayre moved his company from Costa Rica to Antigua, a country at serious odds against the United States’ anti-Internet betting stance, which it claims cost them millions of dollars in tax revenue and hundreds of jobs.
The 45-year-old Ayre says he has done nothing illegal. Bodog not only is licensed in Antigua, but also in the United Kingdom and Kahnawake, which is Mohawk Indian territory in Canada. Bodog accepts online wagers in places where it is legal.
“The phrases you’re using are not mine,” Ayre said about the Forbes headline via an e-mail communication. “They were invented by reporters and editors to sell their publication. We do not circumvent the law. In fact, we have gone to great lengths to ensure we are compliant with the law in the jurisdictions we operate.
“We are a legal and licensed international digital entertainment company and that is the one message I give to all the media. A company as big and influential as Bodog has to engage the media, and the media engages us because we are a good story and a feature on us will bring them notoriety.”
Modest beginnings
Ayre was born in Canada and raised in the Saskatchewan community of Lloydminster, to a Scottish couple who earned their living raising pigs. Ayre’s first job was raising a litter of pigs. He graduated from the University of Waterloo in Ontario and in the early 1990s got a job as president of a heart-valve manufacturer, Bicer Medical Systems, which was then listed on the Vancouver Stock Exchange. In the mid-1990s stock regulators charged Ayre with insider trading. The government fined Ayre C$10,000, banning him from working as a director for a publicly traded company in British Columbia for 20 years.
Resilient, Ayre soon realized the potential of the Internet and online sports wagering. Building up software and programs with which to run such an operation, Ayre bought the Bodog.com URL because he liked them sassy name. The site launched in April 2000. The main target was recreational bettors from the United States. The business model was to draw smaller-stake players. Bodog did that by running lots of pictures of beautiful women, using off-the-wall proposition bets and getting publicity through aggressive advertising and stunts. In one such stunt, Ayre called himself Cole Turner and got one online gaming portal, Gambling911, to feature his Indiana Jones-type jungle exploits into various countries, including Thailand.
But with Ayre, there’s more than just hokum. He also had the foresight to come up with Bodog’s own online type of e wallet checks so bettors would have alternative means of transferring money to fund their account. This is especially relevant now with last October’s passage of the Unlawful Internet Gambling Enforcement Act. This is the US government’s way of combating online betting by severely limiting financial transactions linked to Internet betting. The law makes it illegal for banks, payment processors and other financial institutions to transfer money from gambler accounts to wagering Web sites.
Asked about the affect of this law, which has impacted the offshore industry, Ayre said, “We’re studying the current landscape to determine what, if any, ramifications this piece of legislation might have on our gaming channels. We are, however, extremely confident in the strength and flexibility of our unique business model, which is neither confided to one particular market nor to one particular form of entertainment. We remain confident that we’re better positioned now than ever as we continue to expand all our entertainment product channels, including gaming, into markets such as Europe and Asia. This is a major reason we’re refocusing our offline gaming marketing efforts in Europe.”
The big picture
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Another early business strategy Ayre had was to offer more than just sports wagering. Diversification has been the key to Bodog turning in worldwide revenues of around US$12 billion in 2005, according to the research company Christiansen Capital Advisors. “We’re a private company, so we don’t release these numbers,” Ayre said. “What I can say is that we’re finding a lot more of our online gaming customers are coming from Europe and that we’re on track to exceed US$300 million across all entertainment channels, including gaming, music, television and mixed martial arts productions.”
The US crackdown has caused great hardship for many offshore sportsbooks. Those just relying on taking sports wagers from US customers have had to scale back their expenses. Some have closed their post-up business to US bettors, which was the bulk of their trade. Bodog hasn’t had these problems. They’ve even done some consolidation, acquiring the American customer database from Bowman’s, a long-time British book that had been operating in Mauritius.
Ayre has been able to cope with the ups and downs of the Internet gambling industry by offering much more than just sports betting. Bodog’s poker room gives away more than US$1.5 million in prizes every month. Their horse race book offers 80 tracks to bet on and weekly rebates. Their online casino has a download version featuring more than 75 casino games, including progressive jackpots. Ayre has opened a whole entertainment division featuring music, mixed martial arts fights and international television shows.
Bodog Fight, for instance, is broadcast on the Fight Network in Canada. The Calvin Ayre Wild Card Poker show can be seen American television. Bodog has its own international recording label called Bodog Music.com. One feature of that is a band search competition with a US$1 million top prize. Bodog has a publishing division, which prints an online magazine and blogs.
Ayre is not through, though. He has more ideas. The combination of gambling and entertainment is Ayre’s model of the future. Those two needs are never going to go away no matter how repressive the US government can be regarding online wagering.
“For Bodog you can expect to see more international expansion of its entertainment products, with the Bodog brand making headway into Europe and Asia,” he said. “You can also expect to see more Bodog TV—including reality shows and documentaries. Bodog TV concurrently is working on fourtelevision series, including Calvin Ayre Wild Card Poker II and season’s three and four of Bodog Fight. Bodog’s Music’s band search competition, Bodog Battle, will be airing on TV and broadband in the next few months. Further out, you will see the Bodog brand continue to branch out into other areas of digital entertainment and lifestyle products.”
By Stephen Nover, a Henderson, Nev.- based freelance writer.Sidebar by Paul Doocey, Editor of International Gaming and Wagering Business magazine. Reprinted with permission fromIGWB.
Spreading the Wealth
In addition to establishing a diverse and highly-successful Internet-based gambling and entertainment empire, Calvin Ayre has found the time and money to create the Calvin Ayre Foundation, an Antigua-based private and independent philanthropic organization with a charter to do charitable works worldwide.
Currently, the foundation focuses on promoting greater equity in five broad areas: environment, education, social development, child welfare and animal welfare. Among the causes supported by the Calvin Ayre Foundation:
• The ongoing support of Saigon Children’s Charity, an organization with the goal of helping the city’s poorest children escape from the cycle of poverty through education and training.
• Providing the funding needed to create The Tale of Two Nazanins, a documentary about Nazanin Mahabad Fatehi, a woman who was sentenced to death in Iran after she stabbed one of three men who attempted to rape her and her 16-year-old niece in March 2005.
• Leading the charge to eradicate bear farming, the cruel practice of raising caged bears in order to extract their gall bladder bile, a popular Asian folk medicine. It is estimated that 14,000 bears are involved in this industry.
Most recently, The Calvin Ayre Foundation has sponsored underprivileged young adults, offering them an opportunity to attend world-class universities in countries such as Canada and the Philippines. While ensuring that these students are afforded the best possible academic opportunities, the foundation aims to ease the financial burden felt by their families back at home.
For more information on the foundation, visit www.calvinayrefoundation.com.
– Paul Doocey
