Newspaper Industry Looks to Online Gambling to Boost Profits

Written by:
Greg Tingle
Published on:

Mainstream newspapers in Australia and the United States are starting to plug into the streets paved with gold - online gambling, following the lead from our United Kingdom based media mates.

Media Man and Gambling911 probe the situation in an Aussie - Yankee double investigation, with earlier indicators showing that newspapers are seeing the "green", following the money trail to gambling, be it in AUD, USD, GBP or monetary other denominations.

New York based media baron Mort Zuckerman, top brass at The New York Daily News, US News and World Report, last year publicly advised that online b2b and advertising deals in the gambling - gaming sector could be a way for mainstream newspapers to loose their sinking feeling - diminished revues, and in extreme cases, some newspapers going out of business, unable to compete with their online counterparts. Zuckerman was largely referring to sports betting (which can also include a sub group in what's commonly known as "Fantasy Betting").

Let's face it, Media Man and Gambling911 don't have the overheads of The Sydney Morning Herald (Fairfax Media), The Daily Telegraphy (News Limited), The Sun or The New York Times for that matter.

Let's take a look at the landscape of the land...

Google - a few years ago headlines like "Google follows the money trail to gambling' were the order of the day, however the business model is getting more complex, as Google deals with both technical and legal considerations.

Though Google CEO Eric Schmidt and seemingly everyone else is telling publishers they should place some bets on potential new business models, The Philadelphia Inquirer  venture may not be exactly what they had in mind. Google is also working on some gaming and igaming models for its YouTube platform and top ten website, so maybe Google is working a deal with The Philly behind the scenes. Stranger things have happened.

Philly.com, the online arm of the Inquirer and "sister" newspaper the Philadelphia Daily News, has recently launched an apparently legal online betting service called Instant Fantasy Games. The firm advised last week that they are the first in their industry to make a foray into online betting, according to a report in Editor & Publisher, a newspaper trade journal. Gambling 911 and Media Man thinks this may be correct for the U.S sector, but certainly not taking into account the U.K newspaper industry, who appear to be light years ahead, with bingo, poker, sports, fantasy and more.

"We're trying to serve two goals," said Yoni Greenbaum, VP of Product Development at Philly.com. "Those are content differentiation and revenue. If you're looking at the sports sites out there, a lot of them have the same stuff...The challenge that this creates is we need to offer more. In this day and age, sports fans have insatiable appetites."

FanDuel, a British wagering company helped Philly.com launch Instant Fantasy. Part fantasy league and part sports book, the service enables bettors to pick groups of players from professional baseball, hockey, or basketball leagues. It operates much like the fantasy leagues from Yahoo.com, CBSSports.com (parent company of CNET), and ESPN--except those games are just for fun.

With Instant Fantasy, players pay $5 to $50 a game with the chance to win as much as $90, Greenbaum said. It's one-on-one, and players can compete with a friend or family member. If they don't have anyone they want to play against, the game's system will match them up with someone five minutes before competition begins. Games are held daily.

Internet gambling is current illegal in the United States (depending who you want to believe as opinions vary, even from legal eagles) but in 2006, the government made some exceptions involving fantasy sports leagues, Editor & Publisher reported.

Last Sunday evening, Google's Schmidt addressed a group of newspaper execs in Washington D.C. at the American Society of News Editors. "We have a business model problem," Schmidt told the crowd. "We don't have a news problem."

Schmidt said newspapers are "fundamental" to democracy and predicted they would find a new business model based on advertising and subscription revenue. Maybe he should have included creating a sports book.

Our friend Mort seems to share a few similar thoughts on the newspaper - gambling model as Schmidt.

Zuckerman goes on record with "There is something that can be done, and the federal government ought to do it: allow sports betting on newspaper Websites. That would save every newspaper in America. The New York Times.com could do it. Plenty of British papers do this; for them it's a crucial part of their net revenue stream. I know a major newspaper in London that makes $15 million a year from sports betting alone".

Australia Update

New Limited newspapers (hard copy and online) continue to ramp up with both advertising a range of sports betting brands, in the past 2 months pushing their own in-house brands which look to be white label and things are strongly featured next to online sports news and on the world famous Fox Sports (Australian version) website.

'Fantasy NRL' looks to be their prime white label brand and they are also accepting a number of online sports betting adds, with Packer 50% share Betfair featuring prominently. Packer is also a huge fan of Premier Media Group, which has also has an investment in as we understand.

Fairfax Media (inc The Sydney Morning Herald and The Age) newspapers websites, along with their online only sites including Brisbane Times and WA Today. 'Pro Tipping' by all accounts is the Fairfax Media white label sports betting branding.

Media Man remains independent, despite having grown to over 20 website portals. The group has previously declined offers to by all or part of the company, still riding a wave of growth. The company is considering "white label" deals, but has enjoyed excellent results "teaming up" with a handful of the world's leading igaming brands, mixed in with some traditional and new media publicity campaigns, so has stuck to the a global based business model that is working well on a marketing, branding, legal, financial and overall basis. Media Man sees Google, PartyGaming, Betfair, Crown Limited, Virgin (and maybe Tabcorp and NextGen Gaming) being a big part of its further development in the gaming and igaming sector, with Crown and Tabcorp moving forward casino travel and tourism ventures. Media Man remains in close liaison with GenerationOne, the Indigenous Australian employment initiative championed by Andrew "Twiggy" Forrest and James Packer, as to how to best collaborate, grow the business, and employ a few more hard working Australians in the progress.


The business model of newspapers (and other media companies) has changed... it had to, just to see its survival, with owners and editors even advising their journalists that they are to adapt their style for the internet, and some who failed to change have indeed lost their jobs. Some high up in the Murdoch and Fairfax Media empires even refer to their journalists and "content writers" or "content producers"... so much for the good old days when Clark Kent "Superman" types paved the pavements in search of a good story!

The bottom line is what counts to owners, bean counters and investors, and while media purists have a case to be "Not Happy Jan", it is part of the evolution of media, for better of worse.

One of the main dangers to the credibility of print newspapers is when too much focus is given to the bottom line and advertisers, and not enough on hard nosed journalism.

For these reasons and more Gambling911 readers can be assured that more hard nosed articles are on the way, sourced from the worldwide "freelance" contacts and relationships formed over many years. Freelance and independent generally means less PR spin jobs (as often found in some mainstream press) and a more gutsy, in your face style... the sort of stuff that sometimes sees legal eagles writing in trying to save face for their clients! (when the truth gets out). Media Man recently dealt with a couple of these sorts of scenarios, hard news being the catalyst, so we knew were were doing a great job.

We foresee a continuation of mainstream media companies plugging into the gaming and igaming sector, just at PartyGaming top brass Jim Ryan has rightly predicted would happen almost 2 years ago... that's why Ryan takes home (and secures for Party) the big bucks... the man is a visionary. Ryan has also smartly got in place a number of strategic alliances and purchased solid businesses such as the World Poker Tour.  The combination of these things has made PartyGaming very appealing to Government departments, be it in France (hello our friends at PMU), Canada (poker tour on the radar) and Australia. The Party deals with Marvel Entertainment and Paramount Pictures also continue to serve the company, partners and affiliates well. Strong branding and even stronger financials, see PartyGaming stand head and shoulders about the rest in the igaming sector on a global scale. Virgin (Games) has the potential to be a real challenge to PartyGaming, in our opinion, as Richard Branson and his group have developed such a strong a loyal Virgin following over the years. When Virgin expand into new markets they automatically pick up new customers who were waiting for them. Virgin thinks this may be the case with their AWOMO (A World Of My Own) platform, a deal they have with Game Domain International, however Virgin is seeking more investors before taking the project ballistic and entering new markets. Rupert Murdoch's Sky (Vegas and family) is strong in the UK but is hardly on the radar in Australia (or anywhere else) from what we can make out. Sega and Sony have the potential to be major top ten players in the igaming space, but as of this writing, PartyGaming is our top pick, on a global scale, with Betfair sitting pretty for strong growth down under in Australia.

Readers may recall that earlier in the week that Australia media entrepreneur and and racing horse owner, Alan Jones, spoke at the Asian Racing Conference in Sydney. Jones called for united, as his certainly smart enough to see the potential threat from overseas based companies "invading" Australia, and doing it better. Australia's TAB isn't exactly known for having world class efficiencies, however they had previously enjoyed an almost monopoly and stranglehold in the Australian sector, however its no longer the case. TAB legal eagles are going to remain busy in the months ahead and Betfair is well prepared for a lengthy and expensive war, Betfair pink pigeon birdies have told us.

For dynamic media - new media enterprises such as Gambling911 and Media Man, the future continues to look bright. Low staff overheads, quick turnaround on articles, and business relationships in place with some of the world's top gaming, igaming, poker and sports betting brands. Just as important, the websites are Google and Google News friendly, and they don't discriminate against Yahoo! or Bing either, as well as being referenced in "bible" and top ten sites like Wikipedia. Social media brands such as YouTube, Facebook and Twitter continue to be a benefit to the agile business models, and mobile / WAP looks to be a logic area to develop in the months ahead... can't wait for that Google mobile phone, that looks likely to take a huge bite out of Apple. Google is clearly the internet giant in the prime position to best capitalise on the growth of the gaming and gambling sector, at least by Media Man estimations (sorry Richard Branson, Yahoo and Wikipedia).

If good business is about adapting to the times and spreading risk, we think a number of American newspapers like The Philly and Aussie titles such as The Tele and The Herald, are doing a mighty find job... we're pretty happy with our own efforts also.

Wild cards that may potentially develop a significant gaming business down under include Network Nine Australia (perhaps with a Hey Hey It's Saturday 'Pluka Duck' tie in along with the possibility of a rumored 'Underbelly' online and offline slot machine offering which punters are crying out for). The late Big Tim Bristow and George Freeman would have loved to see what's come of the igaming and gambling business now, we're certain.

Loyal readers, until next time, keep it legal, stay safe, bet with your head, not over it, know the odds, and above all, have fun.

* Greg Tingle is a special contributor for Gambling911

* Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company

* The writer owns shares in Crown Limited and Virgin 

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