of bodog - Christopher Shulgan

business
around the ring between rounds. One employee
even has Bodog tattooed on his shoulder blades.
Aside from Ayre, the events’ only real spectators are a couple of ringside announcers, and
Ayre’s harem of Costa Rican pin-up girls, who
arrange themselves around him, their chests
swollen with saline and their tans crispy like
Swiss Chalet chicken.
Over the next six hours, Ayre and the ladies
watch 22 fighters kick and punch and knee
their way through 11 different bouts. “We’ve
taken the sport of mixed-martial arts and
wrapped it Bodog-style,” he says. That means
injecting a healthy helping of sex appeal. The
show’s educational component involves a
fighter teaching a mixed-martial arts move to
a female student; the student then practises
the move on another female student, Ayre
says, “to bring in the whole chicks-having-sex
thing into the equation.” Plus, two of today’s
bouts are all-female affairs. “There’s nothing
like a girl fight,” Ayre says, actually rubbing
his hands in anticipation. In that one, the
fighter starts things off with a cartwheel kick
to her opponent’s face. Later, another fighter’s
nose is so badly broken he must be airlifted
to hospital. “Beat him up!” one cornerman
shouts. “Do it for your daughter!”
At one point, the local Costa Rican woman
whose hand he caresses throughout the day,
dressed in a white cotton sundress and bright
red platform heels, asks him, “Why you no
IN CASE you missed all the trappings of Ayre’s success, he had a throne built for himself
cheer?” Ayre explains he doesn’t want to be
seen favouring any single fighter. “I just want
good entertainment, and no one to get hurt,”
he explains. Then he winces as one fighter
executes an illegal tag to a particularly sensitive point on his opponent’s midsection. “Not
seriously hurt, anyway.”
Ayre and his girlfriends are featured
onscreen often through the day’s filming.
“There’s Calvin Ayre,” says the announcer.
“The reason we’re all here today. Calvin Ayre
is the man.” As an assistant mops his brow,
and periodically applies makeup, Ayre sits
on an elaborately cushioned dais, constructed
of driftwood and palm fronds. Just in case
Canadian tycoon Calvin Ayre is living a life of we missed the Hummer and the girls and
frat boy dreams, just ahead of U.S. authorities everything else, just to be extra sure we get
by christopher shulgan • photographs by naomi harris that Ayre is the star of this show, the chief
Bodog is sitting on a throne.
He so wants to be a star. Not a Hollywood indulgence under his Bulgari sunglasses, the
star. That level of name recognition, he’d like 45-year-old Ayre is on the Pacific coast of During the last year, Ayre’s name has
that. But with respect for his business acu- Costa Rica to attend a day of filming for his received top billing in a different drama, one
men as well. Like Diddy or Trump, or, better, mixed-martial arts TV show, BodogFight, with a storyline not so much to his liking—less
Richard Branson—equally comfortable in an which is broadcast in Canada on The Fight sex, higher stakes. Since it first began taking
investment bankers’ office as the boldfaced Network. He arrives in a chartered helicopter, bets in 2000, Ayre’s Bodog has become one
type of the gossip blogs. It would all be in the then is chauffeured by bulletproof Hummer of the largest online gambling companies
name of his brand, of course, of Bodog Enter- to the set. It’s a stunning location—a boxing catering to the U.S. market. His was a big
tainment Group SA, which started out as an ring set up on the beach, and serenaded by industry, with worldwide revenues of about
Internet gambling company but which Ayre the Pacific surf. Ayre’s Bodog logo saturates $12 billion a year in 2005, half of that genereverything from the fighters’ knuckles to the ated from the U.S. market. (All figures in U.S.
is looking to turn into something more.
So today, wearing an expression of patient matching bikinis of the women hired to traipse dollars.) Bodog was well situated—not the
the billionaire
prince
maclean’s apr. 2 ’07
of bodog
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biggest, but a respected player in both poker
and sports betting, with revenues estimated
in the neighbourhood of $250 million in 2006
and a profit margin around 26 per cent,
according to previously published reports.
(As a private company, Bodog discloses very
little financial information.) And the future
looked bright. Standard industry projections
suggested the online gambling market would
double in size by 2010.
Problem was, the U.S. Department of Justice said it was illegal to accept wagers over
the Internet. Technically, in Canada all gambling is illegal except for specifically cleared
instances, such as provincial lotteries and
casinos. However, legal experts say it’s unclear
start of calendar ’07 and barred U.S. financial
institutions from processing gambling-related
transactions. Also last year, the U.S. Department of Justice began arresting executives who
worked for online gambling companies. The
first, David Carruthers, the CEO of Londonbased Betonsports PLC, was nabbed at Dallas/Fort Worth airport on a layover on his way
to Costa Rica on charges of tax evasion and
racketeering; after several court appearances,
he’s still being held in the States under house
arrest, ankle bracelet and all. More recently,
just as the company stood to make millions
from betting on SuperBowl XLI, American
authorities in January nabbed the two Canadian founders of NETeller, a $3-billion publicly
at the start of 2006. It, along with such major
publicly traded competitors as Sportingbet
PLC and BetonSports PLC, all of whom
derived most of their business from the U.S.,
have either exited that market or are in the
process of leaving.
Where does the privately held Bodog fit in
all this? Ayre cancelled the online gambling
conference he threw annually in Las Vegas,
then followed the rest of the industry in
announcing the refocusing of his expansion
efforts to Europe and Asia. Ayre also is moving his operational headquarters and residency to the former British colony of Antigua.
Unlike Costa Rica, its government has demonstrated a willingness to protect its online
the day’s events include two all-female
fights, ‘to bring in the whole chickshaving-sex thing into the equation,’ he says
whether placing bets online is a criminal act—
especially when the bets are placed with an
offshore company. Ayre and his competitors
got around such technicalities by basing their
companies offshore, typically in Antigua or
Costa Rica. Many, including Bodog, also housed
their servers on Canada’s Kahnawake reserve,
where the Mohawk Indians argue their native
sovereignty places them outside the jurisdiction of the laws of both Canada and the U.S.
All of which bugged the Yanks, who passed
a law last year to make it tougher for their citizens to gamble online. The Unlawful Internet
Gambling Enforcement Act took effect at the
traded e-wallet, similar to PayPal, which functioned as a payment vehicle for gaming firms.
The men, former Calgary residents John
Lefebvre and Stephen Lawrence, are charged
with laundering billions of dollars in transactions through NETeller.
The combination of the arrests and the
new law roiled the online gaming industry.
“It’s caused havoc,” says Alex Igelman, a lawyer specializing in gambling law. Stock market valuations have tumbled to fractions of
what they were a year before. The industry’s
largest outfit, PartyGaming PLC, is trading
at less than a third of the price of its shares
gambling industry from U.S. law enforcement. In fact, Antigua recently won a gambling-related trade dispute at the World Trade
Organization, providing its companies with
a modicum of legal protection if they continue to accept bets from Americans.
Ayre will need the protection. So far as the
U.S. Justice Department is concerned, the
chief Bodog has got to be one of America’s
most wanted. The reason is visible to anyone
who takes a tour through Ayre’s Costa Rican
home. Located a half-hour helicopter ride
away from the coast, on the outskirts of San
José, the Costa Rican capital, the Bodog “compound” is a 10,000-sq.-foot, $3.5-million
bachelor pad. The centrepiece is the pool
with a swim-up bar and a waterfall where
Ayre likes to perform backflips for admiring
guests. An interior bar, this one chrome-plated,
features photos of King Bodog with such famous female celebrities as Paris Hilton and
Jennifer Love Hewitt. Then there’s the custom Harley with front forks that spell out
“Bodog” in tiny rubies. Tanning by the pool
is Ayre’s requisite eye candy—this time it’s
Lindsay, an Arizona “model” Ayre flew down
to San José after she sent him photos of herself through email.
A blown-up copy of his cover appearance
for the 2006 billionaires issue of Forbes magazine occupies a large slab of wall space in the
maclean’s apr. 2 ’07
Bodog Fight, Ayre’s latest venture, takes mixed-martial arts fighting and adds a healthy dose of sex appeal and minimally clad women
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business
The only spectators are the fighters,
families and the Costa Rican pin-up girls
maclean’s apr. 2 ’07
hall by the kitchen. Additional copies of the
issue decorate horizontal surfaces throughout the house. When a visitor asks for one as
a keepsake, Ayre is only too happy to oblige.
“Cyber bookie Calvin Ayre sticks it to Uncle
Sam,” reads the cover tag line; the headline
for the story inside blares, “Catch me if you
can.”
There are Third World dictators who have
been deposed by the U.S. for less. Making
Ayre even more of a target is the fact that,
almost alone among his major competitors,
Bodog continues to accept bets from Americans who have figured out ways to circumvent the new laws, including using other,
offshore-based e-wallets to process their transactions. “Look, any entity taking bets from
U.S. citizens is on a list for prosecution,” says
Michael Tew, a New York-based online gambling consultant. “[Ayre] is in the top 10,
particularly given his media profile, and his
flamboyant way of doing business. Bodog is
now the 1,000-lb. gorilla taking bets from
U.S. citizens.”
Legally dubious capitalism is nothing new
to Calvin Ayre. He was born in 1961 and
raised in Lloydminster, Sask., the second of
four children of Ken and Wilma, a Scottish
couple who made their living as grain and
pig farmers. The couple instilled an entrepreneurial streak in their children by assigning them a litter of pigs to raise each year.
When it was selling time, Calvin and his siblings kept the cash—an excellent lesson in
nurturing a business, he says. When Ayre
was in Grade 6 his family moved to B.C.’s
Okanagan Valley, where Ken Ayre founded
a water purification business. After high
school, young Calvin went east for a science
degree at the University of Waterloo. Next
was Western, for law school, but Ayre’s grades,
he says, got him kicked out in the first year.
In 1987, when Ayre was 25, his father, Ken,
and several friends became embroiled in a
marijuana-smuggling scheme. The plan,
ayre is no stranger to dubious business.
in 1996, he was barred from working with
public companies in b.c. for 20 years.
according to one of the participants—a B.C.
drywall contractor named Bill Roberts, who
has two kids with one of Calvin’s sisters—was
for Bill’s brother, Paddy, a licensed pilot, to
fly a plane from the Bahamas to a small New
Brunswick airstrip. To make the long journey,
the men arranged to outfit a plane with longrange gas tanks. Problem was, the company
that installed the tanks was a front for American law enforcement, which outfitted the
tanks with a transponder. When Paddy Roberts landed, on Oct. 3, 1987, the RCMP were
waiting. In 1988, Paddy Roberts was sentenced
to five years in prison. Ken Ayre and Bill Roberts later got four years each.
Asked about the incident, Ayre says only:
“I was in university at the time.” He would
soon have his own legal entanglements to
worry about. In 1990, Ayre had just finished
his M.B.A. at Seattle’s City University when
Paddy Roberts was paroled from prison. Ayre
had gotten a job as president of an ailing
heart-valve manufacturer, Bicer Medical Systems, then listed on the Vancouver Stock
Exchange. Ayre hired as marketing director
a friend Roberts knew from prison: Erich
Brunnhuber, a notorious Vancouver stock
promoter who’d just been paroled from a
seven-year sentence for fraud, for falsely
inflating the share prices of a half-dozen Vancouver Stock Exchange companies. Regula-
tors forced Ayre to fire Brunnhuber. But
according to the results of an investigation
that spanned several years, Ayre continued
to associate with Brunnhuber; he also misrepresented Bicer’s affairs to regulators and
committed insider-trading violations. As a
result, in 1996, the province’s securities commission fined Ayre $10,000 and barred him
from working as an officer or director with
publicly traded companies in B.C. for 20
years. “That was my first professional venture, outside of university,” Ayre says. “Two
main lessons I learned from that—to pay a
lot more attention to detail, and to be a lot
more cautious about the quality of the people
I associate with.”
Which brings us to Bodog. The company
grew out of an investment Ayre made in the
wake of his stock-trading debacle, in the mid’90s, just as the Internet was revving its economic engine. Several Vancouver outfits were
setting up offshore operations to accept sports
bets over the Internet. Styling himself as a
software consultant, Ayre snagged a couple
of contracts to build programs to run the betting sites, then began licensing his program
to other companies. His biggest deal, he says,
was a $4-million contract with a Vancouver
outfit called Cyberoad. But as he whipped
his program into shape, he realized there was
far more money in running a gambling site
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King Bodog travels around Costa Rica in
a chartered helicopter and bulletproof
Hummer, but he dares not go to the U.S.
of his own. He happened upon the name
Bodog because it was a short, catchy and
slightly rude moniker with, most importantly,
a free dot-com URL. It’s grown to include a
music label and a poker lifestyle show, Calvin Ayre’s Wild Card Poker, plus BodogFight,
which also stages pay-per-view live events on
top of the cable show. But the big money still
comes from gambling: seven years after it
began operating, Bodog is the largest company still accepting sports bets and for-money
poker wagers from the U.S. market.
ayre insists he doesn’t miss going to the
united states. ‘my life’s improved . . . i’m not
a fan of those celebrity parties anyway.’
crackdown has probably helped his revenues,”
says Michael Tew, an online gambling consultant who says Bodog has attracted American punters as its larger competitors have
left the U.S. market.
So wouldn’t that mean his net worth has
actually gone up? Well, no. Despite increased
revenues, Bodog’s value has likely decreased
because its industry has grown far more risky.
“The risk has increased tenfold,” says Tew. “Anyone wanting to acquire Bodog would discount
their offering price because the whole market
is so difficult to predict.” If it was acquired
today, Tew says Bodog would get far less than
the billion it was valued at last year. Forbes
agrees; Ayre didn’t make the 2007 list.
In the meantime, Ayre insists not being
able to go to the United States hasn’t affected
his life whatsoever. “I didn’t go there much
anyways,” he says. “Actually, my life’s improved
since I stopped going to the United States.
I’m not a fan of those celebrity parties any-
way.” Minutes later, Ayre is talking about his
plans for BodogFight when he mentions plans
to stage a pay-per-view event this summer in
Los Angeles. “Of course,” he says. “I won’t
be able to be there.”
The smirk that follows is a little forced. It’s
apparent he’s still coming to terms with his
new situation. His fate seems redolent of the
short story about the monkey’s paw, whose
wishes, once fulfilled, force its owner to regret
ever making the wish. The mechanism that’s
responsible for his success, online gambling,
has made it impossible for him to become
the sort of figure he’s always aspired to be. So
long as he’s barred from the United States,
Ayre will never be able to build his celebrity
profile to the extent that he craves. “Who
knows,” Ayre says poolside at his Costa Rican
bachelor pad. “Perhaps this whole thing will
even help build the myth.”
Perhaps. In the meantime, he’d better get
comfortable in that palm-backed throne.M
MOTHER AND CHILD DOING FINE BUT TEAM ISN’T
University of Nebraska at Kearney women’s basketball coach Carol
Russell isn’t one to miss a game. Last week, five hours after giving
birth to her first child, Russell was out cheering her players on.
She’d travelled to Grand Forks, N.D., to have her baby expressly
because that’s where the team was playing, and after watching her
Lopers lose to North Dakota she said her team looked tired in the
second half, then added it was something she could relate to.
maclean’s apr. 2 ’07
Cruising at about 500 feet in a chopper
over the Costa Rican coast, Ayre points below
him at a hilltop manse that has an entire
island all to itself. “I bet that guy can play his
music loud,” he says, sounding envious.
Sounding, in fact, a bit like a male in early
adolescence. Ayre has built an empire by
residing at that level of maturity. Still, there
is something prototypically Canadian about
Ayre’s pursuits. Like the Bronfmans in the
days of prohibition, or any number of Canadian entrepreneurs since, Ayre is making
reams of money using the U.S. border, and
the gap between what’s possible, and what’s
legal, to make money from American vices.
What’s remarkable now is his decidedly
un-Canadian absence of self-consciousness.
“I got into mixed-martial arts because I liked
it,” he says. “That’s how I decide to get into
anything. I’m the brand; if I like it, I figure
the people who like Bodog will like it too.”
Ayre says with Bodog he’s catering to males
between the ages of 18 and 40. That’s aiming
a little higher than he hits.
There remains one form of rebellion Ayre
doesn’t dare to transgress. He will not set
foot in the U.S. His situation has some irony
to it. Throughout his life, Ayre’s aspired to a
certain breed of success. You can see it in the
celebrity photos he’s fixed to the wall of his
house. You can see it in the way he’s engi­
neered his own persona as the public face of
the Bodog brand–the Casanova soldier of
fortune as comfortable pulling a pen across
nine-numeral contracts as pulling the trigger
of the Heckler & Koch 9mm handgun he
brags about keeping in his desk. He aches to
be seen as a Hugh Hefner for the poker-playing, post-Maxim age.
Is he still a billionaire? Well, that’s complicated. On his own frequent press releases,
Ayre’s name is seldom mentioned without
the adjective “billionaire” preceding it. And
since the crackdown, Bodog has clamped
down on the financial information it discloses,
so any discussion of his revenues is unverifiable guesswork. But for what it’s worth: “The
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