Extreme’s Leblanc gets in the game with Karma
September 06, 2012 | Chris Powell | Comments
New venture bring executive changes to Halifax-based agency
Paul LeBlanc has got game but, please, not a Farmville clone.
The Extreme Group CEO has launched a new venture called Karma Gaming International, whose objective is to make regulated lotteries more appealing to younger consumers by adding casual gaming capabilities to their product mix.
The idea first came to Leblanc several years ago when Halifax-based Extreme was AOR for the Atlantic Lottery Corporation. One of the agency’s tasks was making existing lottery products (which tend to fall into three main streams: scratch and win tickets, draws like Lotto 649 and Lotto Max, and video lottery terminals) relevant to a younger audience.
Leblanc suggested that instead of coming up with solutions to make existing products relevant, why not simply create new products. The notion didn’t gain any traction, he said, because regulations make it difficult for lottery corporations to add new programs.
While some lottery corporations have already dipped a foot into casual gaming options like online poker, Leblanc said they don’t have the necessary liquidity to compete with established operations like PartyPoker.com or PokerStars.net.
With its appeal to younger audiences and its near-ubiquity across platforms like Facebook—which claims it now has 235 million people playing games, up from 205 million a year ago—the casual gaming sector is projected to be a $7 billion industry this year, and is positioned for rapid growth, said Leblanc.
Sensing an opening in what he called a “blue ocean of opportunity,” Leblanc joined with his former business partner Jay Aird—now Karma’s chief innovation officer—to develop the company.
Leblanc said that his marketing and advertising background aligns perfectly with launching the new venture. “An agency’s purpose today is far less about crafting marketing and advertising to solve business problems and becoming solutions-oriented,” he said.
“Everything we’ve done with Extreme is 100% transferrable to Karma,” he said. “The only thing that does not correlate with what I do [with Extreme] is raising capital.”
That, too, has been an early success for Karma, with the partners raising $1.4 million from a combination of venture capitalists, angel investors and debt equity.
Early investors in Karma include Paul Gauthier, a Silicon Valley veteran who was co-founder and chief technology officer for Ludic Labs—which developed online advertising, loyalty and promotional tools for local businesses—and is currently the chief technology officer for Groupon.
The seven-person company has spent several months testing its product with approximately 12,000 people worldwide in an effort to determine key performance indicators like how long people are playing the games and their intent to play games for real money.
Karma currently has five games in prototype mode.
The company recently signed a deal with Jumbo Interactive—a supplier to the Australian lottery corporation—to implement a game-based system that helps players pick numbers for their favourite lottery draws. The Atlantic Lottery Corporation has expressed an interest in working with the company, said Leblanc, and Karma is close to signing term sheets with three other lottery corporations around the world.
While Karma’s primary goal is to create products aimed at enhancing lotteries, Leblanc didn’t rule out working with marketing partners in the future.
“If Coke came to us and said it wanted to create a gaming promotion, we’ve got staff to do that.”
Changes at Extreme
With Leblanc now responsible for the day-to-day operation of Karma as its CEO, he assumed a new role at Extreme: chief entrepreneurial officer. “My role inside the agency is much more about growth and opportunity, not just in its client base but in terms of other things that are out there.”
Extreme has also made a series of senior management changes that include the appointment of partner Shawn King as president and chief creative officer— which Leblanc said is more of a formalization of a role he has held internally for the past several months.
“It’s been in the works for the better part of a year,” said King. “As we grew and as Paul started looking into new opportunities, it happened naturally that I started taking on some of the operations roles and fell into the role almost naturally.”
The agency has also named longtime staffers Martin Delaney (VP of planning) and Mike Bevacqua (managing director, Toronto) partners and appointed a new executive team comprised of Leblanc, King and Daniel Tolensky (chief financial offer for Extreme and Karma), Delaney, Bevacqua and Clare Tidby (director of client services in Halifax).