ENTREPRENEUR
PROFILE

Dermot Smurfit

GameAccount Network plc

Business Purpose

GameAccount Network is a leading provider of Internet Gaming Systems capable of being deployed anywhere in the world, containing a vibrant suite of proprietary award-winning Internet games and integrated third party games.

 

Personal Bio

Before Game Account Network, Dermot worked in the European Investment Banking team of SoundView Technology Group. Dermot has operational and management experience in online gaming through his experience with GameAccount Network, together with M&A, strategic advisory and private equity financing experience in the gaming technology industry. Dermot is a qualified (non-practising) UK lawyer specialised in corporate finance. Dermot’s education encompasses an LLB in Law from Exeter University, the Legal Practice Course from the College of Law (UK) and the Investment & Corporate Finance Advisory qualification from the UK’s Financial Conduct Authority. Dermot is a non-executive director of Powerflute Oyj and is a member of its audit and remuneration committees.

 

Company Profile

GameAccount Network has a breadth of experience and knowledge in online gaming. The company has evolved since 2002 into a recognised gaming industry leader delivering Internet Gaming Systems, bespoke and off the shelf, with experience in creating high quality online games both flash, mobile and native app.  The in-house expertise has worked with many leading European operators to deliver certified high quality gaming content across a broad spectrum of casino table, slots and skill games.

Headquartered in central London, the growing team of over 70 gaming experts are equipped to be very responsive to the demands of the current and newly regulated markets. The highly qualified team consists of game developers, technical engineers, integration experts, client support & multi-lingual commercial services teams. Expertise in HTML 5 and Flash development combined with Java developers gives a full service game development offering.

As the gaming landscape changes, GameAccount Network are equipped to meet demands in both Europe and the US, through providing localised content.  Strategic and operating highlights include the launch of a real money gaming platform in New Jersey via Betfaircasino.com under the Trump Resorts International brand as well as a partnership with Foxwoods Casino in Connecticut in advance of the launch of their Simulated Gaming product.  GameAccount Network have also secured game development and distribution deals with KONAMI Gaming, Multimedia Games, Reel Time Gaming and Gamomat.

The company has seen significant growth in higher margin revenue streams including a major platform sale and increased third party game development deals.   They have also increased gross income in the Italian market from the distribution of third party slots content, signing new partnerships with Net Entertainment for game distribution in Italy in addition to Osage Casinos in Oklahoma and New York’s Empire City Casino in the United States.  GameAccount Network continues to invest in their Internet Gaming System software platform as well as in the US market through the recruitment of US management and the opening of their Las Vegas, Nevada office.

 

– ENTREPRENEURIAL INSIGHTS –

What vision/lightbulb moment prompted you to start-up in business?

Being fired from my role in technology investment banking, where I’d been exposed to the emergence of Internet poker companies.  I wondered ‘If people will play poker online, I wonder what other games they’ll play online such as backgammon, solitaire and rummy?’

 

How did you secure your first investment?

First investor was me, with my own money in Autumn 2002, with some family members investing modest amounts in early 2003. The real first investor round was in Spring 2004 when the founder of Betfair Andrew Black, who I’d met as a banker in 2001, decided to invest which assisted in attracting more professional (but still private) investors including Dermot Desmond and Sean Paterson, the former Finance Director of Betfair.

 

What was your “back-to-the-wall” moment and how did you overcome it?

In early 2006, we sought to evolve the product into more complex multiplayer card games, led by Gin Rummy, which has better economics than simpler games of skill. This major evolution, accompanied by significant marketing investment, largely failed. By September 2006 we were burning cash at a significant rate by attracting players who wanted to play the games online but were not willing to play for enough money to cover the cost of acquisition and generate a profit. In response, the company parted ways with over thirty per cent of our employees, renegotiated salaries with senior-to-junior managers and cut all customer acquisition marketing by the end of the year. Our B2C business at this point was dead, and the Company completely transitioned to the B2B software & services model we are today.

 

What moment/deal would you cite as the “game changer” or turning point for the company?

The acquisition of our first corporate customer willing to adopt our technology as its primary platform for registering customers online, fulfilling banking and customer management. Rank Group Plc nominated us as their chosen platform for the regulating Spanish Internet gaming market. This gave us credibility when marketing our platform in the US.

 

Were there any interesting or unusual circumstances surrounding the inception of the company or its evolution?

The idea for GameAccount originally started as an in-house venture within Cantor Fitzgerald in 2001. As a result of 9/11, the London arm disbanded its in-house technology projects resulting in the two founders emerged in Summer 2002 looking for financing to establish itself as an independent entity, which is where I came into the picture.

 

What are the biggest challenges you face now?

Scale to meet demand for our technology and services in the United States where we have a unique proposition.

 

What is your biggest business achievement to date?

The admission to the London Stock Exchange was an incredible moment in time, having made the decision to float in Summer 2013 as a direct result of turning down an offer from a public company to acquire the business.

 

What were the best & the worst pieces of advice you received when starting out?

Best: From Sir Michael Smurfit: “You only get to sell once” which means never be in a rush to sell your business. We turned down five serious offers to buy the business over a period of several years, and I don’t regret a single decision.

Worst: Also from Sir Michael Smurfit: “Don’t raise more than you need” because, in hindsight, the company suffered from a drip feed of capital through the formative years which hindered the company’s ability to turn on a dime without having to engage with investors for incremental capital which dramatically slowed down the company’s evolution.

 

What top tips would you give entrepreneurs starting out today?

Raise as much cash as you can, in order to give you breathing room in the event you need to pivot the business. We pivoted GameAccount not once, not twice but three times over ten years before finding our key role in the industry.

 

Were there any early signs that you would eventually follow an entrepreneurial path?

In the 90’s, a form of multiplayer gaming on a game called “DOOM” became a phenomenon but required expensive computers to play the game. At university I bought a small number of powerful personal computers and set them up as a DOOM multiplayer gaming network. I was able to rent out time to people who wanted to play that game against each other on these high-performance personal computers. I sold time playing the games on computers that students couldn’t afford. The rental income covered the cost of the computers and gave me beer money. Valuable lesson.

 

Has anyone acted as a mentor to you?

My cousin Tony Smurfit, COO of Smurfit Kappa, has maintained an incredibly active and supportive role in mentoring me and helping figure out where GameAccount’s sustainable competitive advantage is within the market. He’s 11 years older and whip smart.

 

Has your “Irish-ness” contributed to your success?

Definitely, particularly in the US where the Irish-American connection is still very strong. Everyone likes the Irish in America!

 

How do you generate new ideas to stay ahead of the curve?

By listening to our younger guys and girls, and seeing what they’re playing, which websites they like to engage with, and trying to figure out where the migrant pack of consumers are heading before the competition.

 

When making a new hire, what key characteristics do you look for?

That they’re smarter than me! And have proven experience and a track record of success in delivering what the company needs delivered. Young companies cannot afford to allow people the luxury of time testing & learning.

 

Have you started to feel the effects of the economic upturn within your sector/industry?

There’s an economic upturn driven by regulation of Internet gaming worldwide. Today less than 2% of all real money Internet gaming (blackjack, roulette, slots) takes place in regulated markets where the activity is legal, taxed and subject to suitable regulation. The regulatory cycle is still only beginning, and most excitingly, began in 2013 in the United States where Nevada, Delaware and New Jersey now allow their residents to play real money gaming online, legally. That’s set to continue…

 

What do you believe it takes to be a successful entrepreneur?

Stubborn. Be stubborn. Don’t give up but do be willing to give up on the original vision if it simply doesn’t work. Change & change again until you get it right – but just don’t ever give up!

 

If you were to invest in a sector, what would you consider the next “big thing”?

The Internet of things, where connected devices are controlled remotely and communicate across the Internet to end users intelligently. Something moving inside your house late at night while you’re on holiday? You should have a webcam supported by an app that alerts you that something unusual is happening and presents you with an image to respond/react to.
What do you believe is your company’s competitive advantage?

People first, technology second. We have spent ten years and tens of millions of euro building a leading enterprise solution for Internet gaming in regulated markets with enough flex to fit the future requirements of any new regulator, no matter how crazy their requirements.

 

What sacrifices have you had to make to get your business where it is today?

Like most entrepreneurs I have invested a substantial amount of my own personal wealth in the business and have never sold shares. But money is only one dimension – time is more important. I have worked harder for longer than I ever thought possible, proving that some people find themselves to be their harshest taskmaster.
How do you recharge your batteries?

Pike fishing in the river Liffey at the K Club, where the Pike grow to an astonishing 15lb. Forget trout fishing, I like to hook the river’s apex predators!

Year: 2014
Category: International
Sector: Technology