PM Poker, S.A Business Plan (Web/Mobile Development Release) 5250 South Rainbow Blvd Suite #1054 Las Vegas, NV 89118 Phone: (702) 586-7300
Table of Contents Introduction...3 Executive Summary...3 Management & Organization...3 Management:...3 Company Goals & Strategies...3 Overview and Origins...4 Product Industry Analysis...5 Opportunities...5 Trends...5 Consumers...5 Players primary considerations before joining a poker site:...6 Advantages to Consumers...6 Implementation Plan...6 Marketing Strategies...6 Popular poker-themed magazines PM Poker intends to utilize:...6 Internet marketing strategies:...6 Start-up Expenses & Requirements:...7 Expenses...7 Requirements...7 PM Poker, S.A. Potential Revenue...8 Poker Revenue...8 Ring Games...8 Tournament Play...8 Secondary Income...8 Poker Summary...8 Lottery Revenue...8 5:55 LOTTO...8 Quinto BTC Lottery...9 Scratchers...9 Bingo Revenue...9 Three-Up Bingo...9 Pull-Tabs...10 Conclusion...10 2
Introduction PM Poker, S.A. is a software development company, currently focused on the creation of Bitcoin gaming software, including but not limited to Poker, Bingo and Lotteries. In the following business plan we will be referring to PM Poker, S.A. and the poker software synonymously as PM Poker. Over the past several years, online poker has been the fastest growing segment of the online gaming industry. Due in part to the increasing number of celebrity and professional poker tournaments being televised, poker is now one of the most-watched sports events on cable television. Additionally, an estimated two million people play online poker daily. There are several online poker websites available for the prospective online poker player. However, the majority of these poker websites offer almost identical software variants, with little diversity. One key element that is missing from their poker software is the opportunity for players to experience True Vegas Style Poker SM ; the type of poker that is played in poker rooms and tournaments in Las Vegas and across the globe. Executive Summary PM Poker's mission is to create PM Poker. Our goal is to not only become part of this phenomenal trend, but to also capitalize on this previously untapped segment of the online poker industry by offering True Vegas Style Poker SM to the players. By presenting True Vegas Style Poker SM, along with innovative, customer-friendly software and other unique features unmatched by rival software makers, PM Poker will achieve and maintain an aggressive advantage over its competitors. Our goal is to raise $300,000 ( 750.00 i ) in funding in order to acquire significant staff necessary to release our web and mobile applications, and to implement our aggressive advertising campaigns. Investors will not only receive a generous Return on Investment (ROI), they will also have the unique opportunity to become a part of the extraordinary world of online gaming. Management & Organization Management: Founder/CEO: Steven Swanson Mr. Swanson has been successfully creating and programming software for over 30 years. Mr. Swanson s introduction to gaming software began with his work in Horse Race Handicapping in the mid-1980s. During the 1990s, as the Internet experienced an explosive growth in online users, Mr. Swanson saw an opportunity in online bingo. This vision was released in his most notable venture, BingoGold ; a premier online bingo game launched in 2000. BingoGold has been a profitable enterprise which currently boasts over 20,000 registered users. Mr. Swanson brings experience, knowledge and momentum to the PM Poker team. His software background, combined with his keen knowledge of online gaming, expertise in all aspects of poker, and his passion to create the best online gaming software, will give PM Poker a strong advantage over its competitors. Company Goals & Strategies Goal: Create the PM Poker team, consisting of specially-selected programmers, web developer and graphic artist. Strategy: PM Poker s primary objective, after procuring the necessary funding, is to amass the balance of its team. We will be selecting the most cost-efficient professionals in the fields of programming, web development, and graphic art. Given his own years of experience, Mr. Swanson will be able to adeptly assemble an outstanding team, as well as establish a dominant position over online competitors. 3
Goal: To become the premier online poker website, attracting Bitcoin players from across the globe to our unique and innovative True Vegas Style Poker SM software. Strategy: The first step in this goal is to bring the prospective poker player to PM Poker. Part of PM Poker's advertising campaign will be focused on attracting clients from Bitcoin-related websites as well as popular poker and gaming forums. Another extremely popular method of attracting new players is to utilize Search Engine Optimization (SEO). A prospective player, in search of a suitable online poker website would be directed to PM Poker from their search engine. After arriving at the PM Poker website, the player will be able to see, prior to downloading any software, PM Poker s unique and innovative gaming style. Once PM Poker has generated a substantial client base; it will no longer be dependent on SEO. It should also be noted, that when comparing poker sites, the majority of all online poker site reviews provide minimal amounts of information. They are poorly written, and often the author has not even played at the poker site being reviewed. PM Poker s solution to this challenge is to inform a potential player of everything he/she needs to know about PM Poker in order for the player to make the decision to join. Showing actual screenshots of the poker tables and poker lobbies will provide players with real, useful information that will help them make their decision. PM Poker will also develop its own comparison of online poker rooms through charts and tables on its website, allowing potential customers to evaluate the features and perks offered by various online sites. The PM Poker software and website will incorporate user-friendly features, which will be beneficial to those individuals who may be less Internet-savvy, thus increasing the odds of them becoming a member of PM Poker. Goal: To incorporate secure payment options, extensive quality control and market-exceptional Customer Service into both the PM Poker website and software. Strategy: PM Poker has established an integrated Bitcoin deposit and withdrawal system. Transactions are automated and require no human interaction on the part of PM Poker. Not only is this a cost-efficient method, it will also attract even the most fastidious of players. Our team will be conducting extensive, ongoing testing of the PM Poker software to ensure reliability. The testing will provide the user with essentially no downtime, and enhance their experiences with PM Poker. This will also be a crucial element in establishing a high level of trust for the player and aid in player retention. PM Poker will offer a variety of Customer Support solutions. Players will be able to locate troubleshooting tips through the software as well as on the website. Live Customer Support will be available for those players who wish to speak to a PM Poker representative personally. Players may also email the Customer Support Team at their convenience. Every effort will be made to ensure that the player is satisfied and that his/her issues have been addressed in a timely, professional and appropriate manner. Overview and Origins In 1994, the Government of Antigua and Barbuda passed the free trade and Processing Zone Act. This essentially opened the door for many online gaming sites to operate under licenses granted by the legislation. Micro gaming began in 1995. This is where software developers in the online gaming industry became the Microsoft of the online gaming world. The first site to offer live poker against human opponents was www.planetpoker.com. In August 1997, Planet Poker opened offering play-money games. In January of 1998, they began offering the first ever live cash games against human opponents. PM Poker, S.A. is a registered legal business in Costa Rica for the purpose of developing its exclusive gaming software and administrative functions. This is where the gaming and revenue stream will take place. PM Poker, S.A. abides by the laws and regulations of Costa Rica. 4
Product Industry Analysis The online gaming industry is experiencing strong growth. Market development is necessary to obtain high growth rates and there are still several unexplored markets to penetrate. Vital factors in making growth possible are increased internet penetration throughout the world, and the emerging popularity of Bitcoin. Online gaming showed the third largest growth rate behind the radio entertainment field (live music streams). Since people can play more hands online than they can in traditional poker rooms (and even play at multiple tables simultaneously), the internet has taken poker excitement to a higher level. Without overhead costs and with a pool of millions of customers, poker websites offer a wide variety of games that casinos often cannot. Without having to worry about things like dealer salaries and a limited number of physical tables, poker websites offer a plethora of betting limits (ranging from pennies to thousands of dollars) which appeal to customers. Within this year, and in the years to come, PM Poker s target market is the rapidly expanding online professional gambler. The typical PM Poker customer is highly internet savvy, in his or her mid-twenties to early-forties, with moderate to high income figures. Because of the advanced graphic cards and faster processors that are now installed on most computers, online gaming is becoming one of the most popular hobbies among adults worldwide. To capitalize on this opportunity, PM Poker will create and implement the most innovative gaming software which will allow online players to play efficiently with no impediments. Opportunities Awareness of and interest in online gaming has grown dramatically since its inception and is expected to continue. The Interactive Digital Software Association estimates that the number of users of online gaming sites is growing 12 to 15 percent per month. Therefore, the potential opportunity for a broad and ever-changing array of new gaming is possible for enhancing the online gaming business. Trends The World Poker Exchange indicates that 39% of poker players are logging in for a game more than 5 times a month. 57% of online players stated that skill was more important than luck, whereas 74% of live poker players thought the same. 75% of those who play online cited the ease and convenience of the online game as being an important factor, as well as highlighting the benefits of being able to find a game at any time of the day or night. The difference in the amount of time men and women play poker online is minimal. 60% of men and 62% of women reported playing up to four times a day however, 7% of women said they were serious players compared to 17% of men. Currently, the online poker industry provides amateur players with a way to practice alone, without the added pressures of conventional poker games, such as criticism from friends and family. Consumers In order to protect their interests, the majority of players test drive a game before depositing funds on a particular poker site. Many online poker amateurs spend a lot of time researching different sites before risking their money. Additionally, several online poker rooms currently allow consumers a free limited visit without depositing. However, the majority of gamblers appear to not be playing to win money long-term. The typical online poker player does it to relax, for the entertainment or excitement, or to relieve boredom or stress. These reasons heavily outweighed, to make money or to win. In essence, this fact highlights that online poker players view their pastime as simply another form of leisure activity. The average online poker player is likely to be a male (73.8%), age ranging from 26-35 (26.8%) and play 2-3 times per week. These online poker players have visited more than 6 poker sites in the preceding three months, have been playing for the past 2-3 years, play between 1-2 hours per session and play one to two tables at a time. These online players play both cash games & tournaments. 5
Players primary considerations before joining a poker site: Applicable fees Ease of Payment Payment of Winnings Customer Service Dispute resolution information Navigation capability of software Licensing of company Type of software utilized Advantages to Consumers When players find an online poker site that meets their requirements, they are required to sign in and deposit money into the online site account before they begin to play. Most players use a credit card for depositing, given the ease and convenience. The disadvantage: most credit cards backed by US banks will not process online poker transactions and others regard them as cash advances which charge the consumer a transaction fee and high APR rate. In an effort to provide the best customer service and earn the loyalty of customers, PM Poker uses Bitcoin exclusively. Bitcoin allows the player to focus on their gaming, and no longer worry about complicated payment options. Implementation Plan Marketing Strategies PM Poker plans to market its online gaming site thru a number of magazines and journals and will seek to increase those channels each year. Other marketing mediums will also be explored. The company will receive significant business through word-of-mouth referrals from satisfied players globally. PM Poker has several Internet marketing strategies which will be vital to implement for the success of ROI. Popular poker-themed magazines PM Poker intends to utilize: Poker Player (US) Bluff Magazine (US & Europe) Card Player (US & Europe) Australian Gaming Magazine (Australia) Internet marketing strategies: Search Engine Optimization Email Campaigns and Newsletters Affiliate Marketing Sign Up Bonuses Poker Blogs Twitter/Facebook Feeds Other strategies found in the industry are online site reviews and traffic exchange campaigns. Casino affiliate campaigns are now the standard for all online gaming. PM Poker will create blogs on their website and obtain forums on multiple websites for users. Affiliate Marketing, in particular, is one of the most successful forms of advertising available to online poker sites. Affiliate marketing allows the advertiser to save money while acquiring valuable targeted advertising. In a typical affiliate marketing campaign, the owner of another website advertises a particular business, service or product on their own website. Generally, the advertisements chosen will reflect the tone or topic of the affiliate s website. For example, an owner of a website devoted to best poker strategies may provide banner or text ads for several online poker websites. One of the most appealing elements of affiliate marketing is that the affiliate is only compensated when they produce a desired result. This means the business owner is not obligated to pay the affiliate unless the affiliate is successful. Success 6
may be defined as generating traffic to the website, resulting in a sale, or even resulting in the Internet user registering on your website and becoming a Bitcoin customer. Start-up Expenses & Requirements: Expenses As with any enterprise, PM Poker requires additional investor capital to achieve its goals. We estimate this phase in our continued development will require $300,000 ( 750.00) additional funding. Below are the estimated expenses for our web/mobile development, and the advertising/promotions. PM Poker will ensure that only the best, most cost-efficient personnel are recruited by carefully selecting professionals who have the knowledge and skills necessary to create our gaming and web presence. Considering the high caliber of personnel PM Poker will require; we anticipate an overall payroll expense of $146,940 ( 367.35) for 2 months. This total payroll figure accounts for 49% of all expenses for the development and testing. The success of PM Poker is dependent on an aggressive marketing campaign aimed at the online poker community. Therefore, it is our intent to advertise PM Poker extensively via Internet, and print media. Web/Mobile Application Expense Table 2 Month Proje ction Monthly Cash Needed BTC Cost % of Monthly Costs Expense to Start ($400 UDS) Total 400 Administration (Staffing: 1) $ 4,500 $ 9,000 22.50 3.0% Web/M obile Developer (Staffing: 3) 38,970 77,940 194.85 26.0% QA (Staffing: 1) 4,000 8,000 20.00 2.7% IT (Staffing: 1) 7,000 14,000 35.00 4.7% Payroll Taxes 19,000 38,000 95.00 12.7% Office & Utility Expenses 3,000 6,000 15.00 2.0% S ubtotal $ 76,470 $ 152,940 382.35 51.0% Advertising/Promotions thru 2014 Advertising $ 50,000 125.00 16.7% Promotions 60,000 150.00 20.0% Cash Reserve (15% Overrun) 37,060 92.65 12.4% S ubtotal $ 147,060 367.65 49.0% Totals $ 300,000 750.00 100.0% Requirements With the immediate need for development and release of the PM Poker software our team requires an initial outlay of $300,000 ( 750.00). We anticipate a time-line of two months to complete all web/mobile development for release. 7
PM Poker, S.A. Potential Revenue Poker Revenue Ring Games PM Poker estimates it will manage 10 to 20 tables within the first year of its operations with 35 raked hands per hour and an average rake per hand of 0.00046. Therefore, within the first year, PM Poker plans to generate approximately 2,000.00 conservatively. With this in mind, PM Poker plans to generate a 6.0% growth rate per month during the first three years of operation. Subsequently, PM Poker should expect to generate estimated gross revenue of 6,000.00 in the third year of operations, and will have managed at least 50 tables. Total 3 year gross revenue is 11,000.00 for ring games. Tournament Play PM Poker anticipates reaching an average of 150 tournament players within the first year, with a conservative growth rate of 1.25% per month thereafter. Accordingly, PM Poker should expect estimated gross revenue of 750.00 during the first year of operation, while managing an average of 35 tournaments per day. PM Poker should also expect the number of daily tournaments to grow substantially as players request more and higher paying tournaments.. World's Largest Poker Tournament Additionally, within the next year we will be promoting our "World's Largest Poker Tournament", in an effort to drive the greatest number of online players to PM Poker. In order to attract the largest volume of players possible, this tournament will have a minimal entry fee (if not free) to all participants, with a guaranteed first prize of 250 and overall prizes totaling 500, depending on the number of entrants. As a result, PM Poker will acquire an attainable player base within our first year, and the potential future revenue received from these players will more than offset the expense. Secondary Income In addition to Ring Games and Tournament Play, PM Poker will also have the ability to generate additional revenue through sit and go tournaments, as well as the sale of branded online merchandise, such as t-shirts, hats, bags, poker game kits for home play, etc. Poker Summary By factoring the combination of Ring Games, Tournament Play and secondary income opportunities, PM Poker should anticipate gross sales of 3,500.00 by the end of the first year of operations, and 25,000.00 during of the third year of operations. Therefore, PM Poker plans to achieve estimated overall gross revenue of 40,000.00 for all three years of operations combined. PM Poker expects 40% expense over the three years for advertising and administrative expense. With this in mind, PM Poker overall Net revenue estimate is 24,000.00 for all three years of operations. Lottery Revenue 5:55 LOTTO PM Poker offers a daily 5:55 LOTTO that absolutely has best lottery odds of any lottery game. A player picks five lucky numbers from 1 to 55, or may play randomly generated numbers with Quick Picks. 5:55 LOTTO offers the best odds on winning, with winning picks only requiring one matching number to win. Picks with more winning numbers pay increasingly higher, depending on the combinations. All payouts are Pari-Mutuel. Pari-Mutuel payouts vary, based on winning combinations and accumulated funds for a specific winning combination. Each winning combination accumulates funds in a separate pool until won. The jackpot is won by matching all five numbers. The overall odds of winning a prize in 5:55 LOTTO is approximately 1 in 2.56. 8
With drawings held daily at 5:55pm UTC, low entry fee of 0.00055 (0.55 mbtc), and the high payback ratio, we believe the number of picks could reach up to 15,000 per drawing. With 20% withheld for expenses, and 25% going to charity, 5:55 LOTTO has the potential to net PM Poker 445.50 annual income. Quinto BTC Lottery Quinto BTC Lottery ( Quinto ) is the most exceptional, innovated Bitcoin lottery available. Unlike most traditional number-based lotteries, Quinto players select their picks based on a standard deck of cards. Player chooses 5 cards, and wins are determined by both the number of matching cards, as well as their position in the pick itself. The object of Quinto is to match your picks with the game draw. Prizes are based on how many matching cards, and how many are in the correct position. This allows Quinto to offer 18 ways to win (including Jackpot). There are two distinct payout types: Fixed and Pari-Mutuel. Fixed payouts have guaranteed payout amounts, whereas Pari-Mutuel payouts vary, based on winning combinations and accumulated funds for a specific winning combination. Each winning combination accumulates funds in separate pool until won. The overall odds of winning a prize in Quinto are approximately 1 in 7.39. Quinto drawings are held on the 5, 10, 15, 20, 25, and 30 th of every month (expect February) at 11:00pm UTC, the entry fee is 0.001 (1.00 mbtc), and with the potential jackpot reaching over 10 Million mbtc, we believe the number of picks could deliver up to 125,000 per drawing. With 20% withheld for expenses, and 25% going to charity, Quinto would net PM Poker 1,331.25 annual income. Scratchers Scratch tickets are a very popular lottery game due to their potential for an instant win, as opposed to waiting for the next lottery drawing. PM Poker offers a unique twist to traditional lottery tickets. Several of our scratch tickets are guaranteed to win every time, with a 25% minimum return on each ticket. Like most scratch tickets, you must match three like symbols to win, but we do not stop there. The more matching symbols on a ticket the more you win. If all six symbols match, you win 1000 times the amount shown. At present, we are uncertain as to the amount of play scratchers can generate, but given the known popularity of scratch tickets in the real world, we anticipate the combined total of both 5:55 LOTTO and Quinto to equal the net revenue for scratchers. Bingo Revenue Over the next two years, PM Poker will convert all BingoGold games to accept Bitcoin. BingoGold games are very successful and already have a huge following. By converting these game to Bitcoin, we open up a revenue stream from both past and future bingo players. Three-Up Bingo Three Up bingo is a fast-paced poker style bingo game using 3 numbers on a card from 1 to 60. The major difference in Three Up bingo is the payout, where players use poker chips to cover numbers. When a player covers a number on their card, the overall payout drops. Therefore, the faster the win, the larger the payout. The amount won is determined by the number of poker chips not in play from all the players. Additionally, Three Up Bingo offers jackpot prizes for covering all three numbers on a card within 3 numbers called. There is also a traditional Bonus Ball jackpot, which is won if player wins bingo on the specific Bonus Ball. Three Up Bingo s goal is to average 100 cards in play per game, with each game lasting approximately 2 minutes. With those figures in mind, Three Up Bingo could potentially generate annual revenue of 775.00. 9
Conclusion Pull-Tabs Pull-Tabs can be found in most bingo establishments to pass the time between games or during session breaks. Pull-Tabs will be another project brought over from BingoGold because of its huge popularity. Pull-Tabs offer multi-way winners and multiple winning combinations. At present, we are uncertain as to the amount of play pull-tabs can generate. However, in regard to their performance at BingoGold, pull-tab revenue has generated a 5 to 1 ratio to bingo revenue. By combining the previous online gaming experience and success of Mr. Swanson, with a dedicated and efficient staff, PM Poker will most assuredly become the world s premier poker site. PM Poker will be one of the fastest growing online poker rooms, offering its prospective players with exceptional games and excellent 24/7 customer support. Incentive bonuses will allow PM Poker to capture new customers and have the potential to attract the world s top professional poker players. Periodic incentives will be implemented to maintain existing players. Innovative and secure payment solutions will allow PM Poker to preserve its competitive advantage. PM Poker will create a strong, positive reputation among its customers, and will obtain additional customers over time from its competitors. PM Poker s mission is to become a significant part of the fastest growing segment of the online gaming industry, and to make PM Poker become the poker site of choice for the online poker enthusiast. 10
i Bitcoin amount is based $400 USD per Bitstamp (price as on Sept 28, 2014 @ 10:00am UTC)