eCogra ownership change

Back in 2003 three of the bigger players in the online gambling industry founded eCOGRA.

Those founding members were Casino-on-Net (now 888), Bwin and software developer Microgaming.

eCOGRA’s mandate was to serve as a fair gaming advocate, offering players an avenue for dispute resolution and ensuring members bearing the eCogra seal (around 145 online gaming sites) adhere to acceptable standards of commercial conduct.  But their true independence has always been questioned given the fact that they were owned by the some of the very organizations they were imposing standards of conduct over.

Blind Freddy can see that there’s an in-principle conflict there; not that that necessarily means that they acted or omitted to act under the influence of that conflict but it’s a certainly a fact that eCOGRA opponents have always been quick to bring up.

Microgaming, Bwin, 888 out…Management in

As of this week, the founding members have disposed of their ownership interests in a management buy-out lead by eCOGRA CEO Andrew Beveridge.

In a press release on the development Beveridge explained that the new ownership structure will not include online gambling industry software or other service providers or operators, enabling it to be truly independent.  Aside from the ownership change, eCOGRA’s mission and the services it offers will be largely unchanged:

“We will continue to offer unbiased player dispute mediation through our Fair Gaming Advocate, and our TGTR (Total Gaming Transaction Review) outcomes-based software monitoring system is proving increasingly popular with non-accredited entities and will if anything be expanded.

Our policy of independently assessing operators for the award of the Safe and Fair seal, and subsequent review and monitoring activity, will remain in place, and the provision of professional business services and advisory consulting remains a key element in our commercial offering and will become an increasing important part of the services offered.”

A new board of directors will be appointed, including:

• (Chairman) Michael Hirst OBE – former Ladbrokes Group director, former Chairman & CEO Hilton International;
• (CEO) Andrew Beveridge
• Bill Galston OBE – former Chief Inspector for the Gaming Board of Great Britain;
• Frank Catania – former Assistant Attorney General and Director of New Jersey Division of Gaming Enforcement;
• Bill Henbrey – former partner BDO.

Buy-out of a not-for-profit?

I’m no Gordon Gecko, but this is the part that I find commercially unusual.  I mean when management takes on the considerable financial risk of buying out some enterprise, it’s usually done with the aim of making gains from improving the profitability of that enterprise and therefore the value of their ownership interest.

What’s the motivation to take on financial risk with a non-profit organization?  Is eCogra management so altruistic that they are happy to take on this risk simply to improve the level of service that eCogra give to the online gambling community?

These aren’t rhetorical questions – I really don’t understand.

But hey, as long as they look after the interests of players going forward, the financial stuff  is something I don’t need to understand.