Global Perspectives - Interview with Kate Kozak

Kathryn (Kate) Kozak is an expert at marketing IGaming products, and also has expertise in understanding Global Markets.   In 1998, she was the Celebrity Marketing Manager at WorldGaming before moving onto being the VP Marketing at WireMix Media.  In 2001 she founded Eclipsicom Media, a very successful interactive marketing agency.  Whilst she ran Eclipsicom Media, the company Localized and Translated Software for a Tier One Publicly Traded Gaming Company into 8 languages. Recently Kate has been working for a large online Poker operation, building out their global localization.

Gaming Public:

Thank you for taking the time for this Kate.  China seems to have so much buzz about it lately.  What can you tell us about the prospects on online gaming in China?

Kate:

Sheldon Adleson put it best, ""For Westerners, gambling is about entertainment and probabilities.  For the Chinese, it's a battle with Destiny“ But, he also warned, "In a Caesar salad, the anchovy is the first thing to get chopped up.  That's what we foreigners are in China: the anchovy"

China singularly represents the big one.  The number of Web users in China, the world's second largest Internet market, grew by 9 million people in the first half of this year to hit 103 million.

While more than 67 percent of the U.S. population, about 135 million, have access to the Internet, in China the percentage is only about 7.9 percent

Someone once said, "Never fight a land battle in Asia".   I say, "Expect a big battle for initial IGaming dominance in Asia".

Gaming Public:

But what about credit cards?  How are people going to deposit money?

Kate:

Credit card usage remains a thorn in the side of the industry, and China is no exception.  Not only do you have to deal with the usual suspects such as fraud and collusion; you also have to contend with the fact that very few Chinese have credit cards. 

Gaming Public:

We hear a lot about prepaid cards being all the rage in Asia.  Is that true?

Kate:

According to Susan Lynch, director of Global Debit Fraud Management for MasterCard International, prepaid cards are estimated to be a $2 trillion industry. An according to Visa Asia Pacific executive vice president and general manager, marketing and product sales Rajiv Kapoor, "Prepaid Cards have massive potential in Asia Pacific, offering a convenient payment tool for the 1.5 billion adults who do not have a bank account and another 360 million banked adults who are not eligible for credit cards."

And a new survey from Aite Group predicts that by 2009, the market for prepaid card processing will be as large as that for debit and ATM card processing in 2004. Beyond 2009, Aite predicts prepaid card processing to redefine competition among card issuers, with third-party processors well-placed to take market share as the card networks continue to struggle to handle prepaid card processing.

Any company that wants to get into the marketplace must adopt some sort of prepaid distribution and the ability to integrate with their legacy systems.

Gaming Public:

Is it true that the Chinese government is anti-gambling with its recent crack down on casino's?

Kate:

No - that's not it.  Rather than eradicate gambling, the war on illegal punting has just cleared out some of the competition to the government's own lottery agencies. Rather than eradicating gambling, the campaign has cleared out some of the illegal action in favor of the government's own duopoly - China Welfare Lottery and China Sports Lottery.

It's no different than say, a provincial government run gaming corporation in Canada or a State lottery in Europe. 

Neither wants competition to a lucrative tax base.

Gaming Public:

So, what's your prediction for next year Kate?

Kate:

I believe that NETeller will begin building long term solutions for processing from it's Hong Kong subsidiary, and will launch them successfully next year.  Gaming companies will follow with localization of sites and marketing.  And if Beijing loosens the bounds on the lottery agencies, there may be even more room for Internet Gaming operators to flourish.

Gaming Public:

Thank you Kate and good luck in the coming year! 

If you want to know more about the Chinese market, Kate can be reached at katekozak @yahoo.com