Eskanders: life in the fast lane

The name Eskander came to prominence in Melbourne racing circles when Michael worked his way up to be regarded – as The Age newspaper put it, when he was robbed at gunpoint by two men – as “one of Australia’s most powerful bookmakers”.

The terrible experience resulted in the crooks absconding with more than $1000 in cash, some red wine and jewellery, while Michael was left with his hands and feet bound.

But this man was no stranger to drama, making a name for himself with some of the most challenging punters in Australia. His battles with Kerry Packer have gone into racecourse legend.

The experience and the pedigree ultimately bred two more Eskander bookmakers with his son Alan and daughter Lisa both taking out licences. However, the clash of the Victorian world of racing and the demands of a new online age – where everything from UK soccer or football to who might win Big Brother has become fair game for the modern punter – resulted in Alan initiating a move with his dad into a new phase of the Eskander betting business called Betstar.

To get your head around the business think a new-age version of the famous UK betting shops Ladbrokes.

“The only difference between Ladbrokes and us is that in the UK the industry is online and over the phone, but they actually have a retail service as well,” Alan explains. “In Australia, the retail service – the TAB – is heavily protected by government and by legislation. So for a corporate booker such as Betstar, our avenues aren’t retail, [they’re] over the telephone, online and on the racetrack.”

Michael’s bookmaking business started 30 years ago as an on-course bookmaker.

“Back in those days, the whole notion of being a corporate bookmaker wasn’t the same as today and so bookmakers traded as sole proprietors,” Alan says. “That’s the only way they were allowed to trade, they weren’t allowed a corporate side. Dad traded as Michael Eskander.”

Over the years Michael effectively marketed himself building personal brand and the business gained as a consequence, however, there were official limitations on growth. That said, Michael built the foundations that would, with some new age innovations and a brave decision send the Eskander family betting business into the fast lane.

Alan started working with his dad when he was 18-years-old while studying commerce at university.

“I went out and got my own license and started my own thing, independently of Dad,” Alan recalls. “I was trading as a sole proprietor under my own name, Dad was trading under his name and we parallelled and it was fine. It wasn’t till about four years ago, we decided we were going to merge the two businesses and work together in partnership.”

Against the odds

Like many great businesses, Eskander’s Betstar came out of turning a threat to growth into an opportunity.

“The driving force was we were both operating in the environment of Victoria and the regulations and restrictions in the state are very stringent and in order for a business to flourish, it’s challenging,” he points out. “Some 10 or 15 years ago in the Northern Territory, they offered an environment that was much more versatile and appealing for bookmakers. And as a consequence, all the biggest bookmakers around Australia ended up converging on the Northern Territory and setting up their operations there.”

In Victoria, under that regime at the time, if you wanted to work on horse racing, you would have to be at a racetrack.

“In theory, that doesn’t sound like a big deal but in practical terms it was impossible,” Alan explains. “Because what ends up happening is on Monday night, there’s something at Stony Creek and you’d have to drive to Stony Creek. On Tuesday it might be at Warrnambool, so you’d have to drive to there. On Wednesday it might be at Sandown, Thursday you are off to Cranbourne and Friday it’s Mildura! So if you want to operate seven days a week, you’d literally have to drive around all of Victoria in order to legally take a bet off a client.”

Then there was the technological challenge of wondering whether the betting ring at Stony Creek was sophisticated enough for the betting business to service clients.

Staying in Victoria meant a competitive disadvantage but the Eskanders didn’t give up without a patriotic fight.

Being a proud Victorian, Michael worked for nearly 15 years trying to lobby the State Government to tell them about the benefits of making Victoria the sporting capital of Australia and a more attractive place for bookmakers, but it fell on deaf ears. For five years Alan joined the battle with the Government.

Alan sums up his father’s argument to the responsible Victorian politicians:

“Listen guys, I don’t want to go to the Northern Territory but you’re giving me no choice. I’m probably, at least, the biggest bookmaker in Victoria and I’m going to take my clients and my turnover and everything out of Victoria. Please don’t make me. I’d rather do it in Victoria.”

But again it fell on deaf ears and so about four years ago, Alan said to his dad: “I’m done, I actually can’t do this any longer. I’m relocating my business to the Northern Territory. I’ve tried my hardest not to but that’s what I’m doing.”

He proposed a partnership so that they could finally offer their clients a product and a service that they were proud of and which competed in the marketplace.”

Michael said yes and Betstar was born.

Nowadays, the Northern Territory air-conditioned offices have 40 computers, each with two to three screens so you can open up different web pages at the same time.

“We’ve got TVs all over the place so you can keep track of horseracing or whatever else might be going on,” Alan says proudly. “It’s cutting edge and in comparison, it’s chalk and cheese!”

A family affair

Apart from the founders, sister Pauline works in the operation and Lisa, a former HR specialist with a law firm, runs her own business and is a speaker on the business circuit as one of the few females in bookmaking.

While Alan still lives in Melbourne he commutes to the NT for the business, where he is managing director. I asked him what’s it like to officially ‘lead’ your dad and are there some controversial moments?

“Of course – there always are when you work with family, you can sometimes have a manner in which you present information that probably loses some of its diplomacy,” he admits. “With family you can call a spade a spade but if you’re dealing with someone else you may sweeten it up a little bit. Having said that, dad and I have been working together for four or five years and largely it’s been a really successful partnership, in terms of the way we work together. So everything has challenges and this is no different, but it’s been really successful for us.”

The pair defined their roles and contributions to the organisation from the outset, with both responsible for different areas.

“We come together and bounce ideas off each other but largely we can work on our own areas. With that being defined, you really limit the potential for conflict and limit the potential for crossover and misunderstandings,” Alan says. “And that was something that we found really important from the outset because obviously our relationship as father and son is paramount and we needed to ensure that wasn’t compromised. We felt the only way we could really do that is trying to have as much detail and articulate how the whole management was going to work.”

And to date it seems to be working.

Betstar now has 30 employees and has enjoyed impressive growth.

“We have a good-sized business in a short space of time and it has been a bit of good luck and a bit of good management,” Alan observes. “We’ve been really fortunate in our journey over the last four years. We’re essentially five times bigger today than when we first left and went up to the Northern Territory. I think in anyone’s books that’s pretty good growth.”

So how big can this new Eskander business grow to?

“You know, it’s not so much a question of big for me,” Alan insists. “I don’t want to grow any quicker than I feel I can service my clientele. We believe we’re the best in the business, in terms of customer service and looking after our clients and, as a consequence, we get a lot of clients from word-of-mouth and we have a really good retention rate as well.”

Given the fact that these guys understand the odds of success, I suspect they will salute the judge with their new business conveyance called Betstar.

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Tuesday, November 06, 2012
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