Why did Mark Del and camelot go broke?

[Go Go man]

We all know why acegold went belly up but???? camelot?? mark seems to be a guy who really is on the up and up and works 16 hours a day 7 days a week.He really did not give the house away and allways was well aware who his players were betting..was it smart bettors or what?????the book had many active players..

[Jeff]

I imagine there's several reasons.

People don't understand what a tough business this is. The books don't ALWAYS win.

It runs in cycles. Having a large bankroll or access to a large roll can help get a book through the tough times.

Most people don't realize, but a few seasons ago, more than one of the very well known Antiguan books had some cash flow problems.

The borrowed.

From a bigger book.

Even the "bigger books" have cash flow problems at times.

You think CRIS never had to borrow?

Think again.

That's the nature of this business.

It's just that many times we never hear about these situations until after the fact.

Betmaker.com was all but broke several years ago. They borrowed and had a good football season after that and never looked back.

What if they borrowed and had a bad football season?

Many of the books out there have told me that early in their businesses life, they went to sleep at night many times knowing that if the games didn't fall their way that night, they wouldn't have the cash to pay the winners.....

This situation is only unique in that it was made public. For every one situtaion like this, there are 10 identical that we never hear of.

[The Insider]

I've been lurking in the shadows for some time now, but I am quite eager to give you a detail opinion as to why this happened.

I do not know Mark personally nor pretend to have particular "inside" knowledge of Mark's situiation (or Aces Gold), but as an industry insider, I'd like to think you'll find my take insightful.

--No sportsbook can expect to launch & become profitable in 1 year. Sportsbook owners need to at least budget for 3 years. There are very few books that even break a profit in 2.

Owners need to have deep pockets, & those pockets shouldn't include post-up money. There are not many books out there that keep their customers' money on deposit (only ones I can think of that can actually prove it is the Sportingbet group). The problem presents itself when they don't have the resources to continue to inject capital into their business.

I've seen too many people move offshoe with anywhere between $50,000 to $500,000 thinking they're going to make it. IT'S NOT THAT EASY!! It is too damn hard to get customers nowadays with so much competition. If an owner thinks they can go out & spend a good portion of their capital right away on marketing (w/o having deep pockets), his books isn't going to last long.

--I think Shrink's article on having a CFO is right on the button. Most books have no back end accounting. I laugh (& shake my head in disbelief) when I hear stories from owners that aren't sure how much money their credit card processor is holding of theirs. Some can't even tell you what their overhead is in a month. This is also why you don't see many of these companies getting bailed out--since they don't have a grasp on their finances, they can't even tell you where they went wrong.

--Regarding Camelot specifically, I've got a couple of ideas why this might have happened. I remember last year seeing Mark months before they opened shop on the forums telling posters all about his plans, what he was going to offer, what his limits were going to be & how he'd treat his customers.... I was SHOCKED to see how many posters said they would post up. This is not an attack on Mark--I'd like to have him do some of my marketing--but he came in and wooed all the posters into thinking he was the 2nd coming of Christ without his book having yet even opened the doors. I couldn't believe how naive the posters were to fall into the trap.

--Limits--I'm not sure what Camelot's limits were, but I'll bet they were high. Why would you want to do this? 4 out of 5 customers that bets $5k & up are sharp, no question about it. If a book thinks they can have high limits--especially before already having a solid base of squares--they're going to get killed. It sickens me to see poster complain about a book because of low limits... they should be applauded. The books with lower limits are probably some of the more financially stable.

Think about this.... would you rather have a book that has $200 million in handle & wins 2%, or a book that has $50 million in handle & wins 8% with square business. I'd rather own AND play at the latter. As an owner, you're putting yourself at great risk with the first scenario... with the 2nd scenario, your risk is much more calculated & they are MUCH MORE LOYAL CUSTOMERS, not just always shopping for the best number.

--Prop prices--I don't specifically about all of what Mark offered, but I definitely saw 20-cent golf matchups. Why would you do this? 30-cent is plenty acceptable. With $1,000 limits too, all your doing is attracting top golf scalpers & cappers. I assume this was the case with some other types of bets as well.

--I remember several months ago someone posted on one of the forums that they wanted to deposit $80k & wanted a bonus on the whole deposit. Mark stepped up & said he give 10% (I believe) with a certain rollover requirement. He must've been out of his mind. Many books I know won't even take a $10k deposit, let alone give you a bonus on it. I wouldn't even take that customer if he was going to give me the 10% bonus for taking him.

Mark's definitely aimed to please, & seems like he's pleased many people on these forum. Kudos to him for that. But he made some very obvious mistakes.

As for bookmaker's wanting to get into the offshore business, I provide you with the following advice:
1) Make sure you budget for 3 years in the red before turning a profit.
2) Don't think you can make it offering big bonuses AND reduced juice AND picking up deposit & payout fees
3) Make sure you bring a partner on board that can manage the finances
4) Don't think you can make a big splash by advertising on the forums, covers.com & donbest.com. You're going to attract more sharpies than not. Find some other places to market. The forums are ok to be on, but at least give it a year before you jump in.
5) Keep your limits low to start.... I'd recommend a dime on a side, & definitely no more than 3 dimes.
6) Don't try to be a phone book.... offering phone service as an added-value to your customers. Phone customers are MUCH MORE expensive to manage than Internet customers.
7) Don't fall into this B.S. that it's bad to be a "clone joint". What the hell is that anyways? It's abuse from the sharps on the forums to get you to post a line that's of more value to them. There can only so many numbers you're going to find out there. There's nothing worng with being middle of the road.

As for MarkDel, I know why no one in the industry wanted to buy you out. You had 400 customers & $1 million in customer balances. That is a WHOPPING $2,500 per customer. That is HUGE!!! I know many books that have average accounts more in the range $300-700. I wouldn't want to pick up your debt either. If your new backer knew more about the industry, he wouldn't have got himself into this deal.

Keep a couple of things in mind. Mark has spent post-up once, what's to say he wouldn't do it again. I'd be very careful betting there.

There are many books out there that your money is safe at.... but be careful when choosing.

The Insider

[ShiftySheik]

I disagree Go Go Man. Camelot did give the house away. At first they offered new & reload bonuses with no limits. They offered free trips to Belize for their big players. Later they gave away big bonuses (don't remember the %) which also included cashback on net losses. I think the bonuses were given to everyone, wiseguys/sharps included. Now when I get these March Madness bonus promos in my mailbox, I look at that as a good time to cashout. Someone else will be sending in new money...the book can pay me with the new postup money.

[Jeff]

Insider. Thanks for the enlightening post.

Hopefully some future sportsbook owners out in cyberspace read it and pay attention to it.

[SportsPlayer]

A Lawyer trying to be a Bookmaker will probably be a successful as a Plumber trying to be a Dentist.

[chestrockwells]

Insiders post hit on many excellent points. I don't know any sportsbook owners, so I won't comment as to whether all this is or is not a revelation to anyone. But frankly, most of the ideas apply to all new businesses and failure to plan for them are why businesses fail.

But the "ROOT" of the problem from the players perspective should clearly be the ease in which an operator can reach into the post-up money and use it akin to a sort of "additional source of financing" or "overdraft protection", if you will. Clearly, that should not be the case.

Anyone who has started a business with limited funds has used "creative financing" in one form or another. I know of small entertainment companies who have used money from investors that were meant for a project, to pay instead for salaries or advertising. Hell, for 3 years, American Express was basically the financing arm of my start-up. And for those same years, I never really had a positive balance in my business checking acct. I'm not kidding. So I can certainly relate to "some" of the things that people like Mark have gone through. And Jeff is very correct in essentially pointing out the fine line between success and failure.

But the one crucial point here is that WE as players, agree to send in our money, believing in good faith that it is to be used for us to play against. That's it, nothing more. We are NOT LENDERS or INVESTORS..............although it increasingly seems that we are de facto all of the above. And until that changes drastically, the bullshit will continue.

[111111]

Here's a great offer for Camelot and Aces Gold customers

http://www.sisyndicate.com/camelot/

[sportshobby]

Chestrockwells, well said.

[Hartley]

Yeah but I still don't understand why they went bankrupt. Every time Mark posted on MW it was as if everything was great and they were doing well (save for NASCAR). Fortunately I never had an account first nor last at Camelot or Aces Gold. And for GCS I only have money in there that was from a free promotion anyways.

But with all the uncertainty right now I am very skeptical to sign up with any book that hasn't been around for a while. Right now I have accounts at Intertops, WSEX, Olympic, Carib, Centrebet and Bowman's. The only other places I would ever consider at this point are WWTS, Bet365, Victor Chandler, William Hill and SportsbettingUSA.

Feverpitch sounds interesting but unless they can prove viability I don't think I can justify sending them money. What can we as bettors demand as proof of viability?

[bgeorgia]

Legit Concerns?

hartley

only mark del really knows. it is most likely a culmination of many things.
your concerns about playing with books other than who you have listed is a legitimate one. with march madness on the horizon we can only hold our breath.
bworld believes this industry will survive and the recent nightmares will become a distant memory.

bg

[Hartley]

I believe the industry will survive too and I believe with all my heart that the books I mentioned are solid enough to last. I had reservations about Sports-Market when they first came on the market after a contest they ran. I didn't like their business style. There are other books on the list here and on the other forums that have been around a few years or so now that I still wouldn't send money to because their marketing and business styles lead me to believe that soon in the future they will be in the same shoes as Aces Gold or Camelot.

But I still believe that with the industry the way it is right now the onus is on the book to prove to the bettors that they can pay. The one good thing about Australian books is that they have to post a bond that will cover all outstanding accounts if they go under. Maybe the same thing should be expected elsewhere now.

One interesting note on WSEX, Bowman's, Intertops, Olympic, Carib and WWTS is that those books were advertisers on Bettorsworld from day one. In fact they were there when you guys had different sites called Oddswiz.com and BookiesHell.com. I think that says a hell of a lot!

[Checkers]

HARTLEY: WHAT THE HELL ARE YOU DOING BACK HERE? YOU STORMED OUT SEVERAL MONTHS AGO YOU DISLOYAL PRICK SO WHY DON'T YOU STAY AWAY? YOU ARE A LOSER

[Rx Web]

Mark Del is a fair and just man in our book as he paid us off before he screwed the rest of you.