Game on: Continent 8 is building a data center in A.C., providing infrastructure … and potentially making city into esports hub

By Meg Fry
Atlantic City | Jul 17, 2018 at 6:30 am
From our print edition

There could not have been a more not-so-perfect reminder, Barbara DeMarco said, of how important her client’s work would soon become.

“Michael Tobin and I were attending the first State of the City at Boardwalk Hall when the audio and visual technology failed in the middle of Mayor Frank Gilliam’s speech,” DeMarco said.

That is something Continent 8 Technologies, a global network solutions provider headquartered in the United Kingdom, hopes to prevent from happening again — and then some.

The company plans to privately invest more than $5 million into the creation of an independent data center at the Atlantic City Convention Center later this year.

Not only will this investment support further technological and economic development within Atlantic City and the entire South Shore region, but it will allow the city to establish a hub for what is expected to become a $1.5 billion industry worldwide by 2020 — esports.

“You need the technology, infrastructure, security, redundancy, power, bandwidth and more to successfully host an esports industry — something Atlantic City does not have at the moment,” DeMarco, vice president of Porzio Governmental Affairs, a Trenton-based subsidiary of the law firm Porzio, Bromberg & Newman in Morristown, said. “However, once Continent 8 is in place, the sky is the limit.”

Michael Tobin, co-founder and CEO of Continent 8, said that, while the company will continue to focus on gaming in Atlantic City, it also intends to provide faster connectivity and great cybersecurity protection across industries.

“We see the building of an independent data center in Atlantic City as a critical part of infrastructure that does not yet exist, for any job or company using technology in South Jersey,” he said.

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Though Continent 8 has seamlessly integrated, managed and secured global internet hubs with offshore and regulated jurisdictions for more than two decades, the company only arrived at Revel Casino in Atlantic City in 2013 with the expansion of online gaming.

Today, with locations in Newark and the Ocean Resort Casino and Caesars Hotel and Casino in Atlantic City, the company connects New Jersey with more than 30 locations across Europe, Asia and the Americas, providing private connectivity and the ability for companies in these areas to expand globally.

Continent 8 Technologies also is the only independent information technology provider licensed by New Jersey’s Division of Gaming Enforcement to supply both data center and network services to online gambling licensees.

“How do you take something as overregulated as gambling and something as underregulated as the internet and marry those two extremes?” Tobin said. “New Jersey wants to be very heavy-handed, so that it always knows what is going on — but, especially within the world of internet gaming, you also need a trusted and knowledgeable fiduciary to be able to pull the plug on anyone causing problems.

“Now, a licensee says, ‘We accept that you will manage all our infrastructure and provide the best technological services to run our business, especially because we only exist on the internet.’

“That also means we better keep them up and running all of the time.”

The creation of an independent data center not only would assist in that endeavor, but would help to wire and attract new industry to Atlantic City, Tobin said.

A previous internet gaming law, however, required that all servers be in data rooms on casino premises.

Enter DeMarco, a Hammonton native and one of New Jersey’s premier state lobbyists on casino, pari-mutuel and internet gaming, who was hired by Continent 8 Technologies in 2014 to help change the law to allow for such an independent data center within the geographic limits of Atlantic City.

“Historically, casinos would store all of their data equipment in-house, but the internet really has become a utility now — people are not running their own servers anymore,” Tobin said. “In Las Vegas, for example, all of that has moved out of the casinos into a major data center, and that is exactly what we want to happen here.”

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DeMarco was able to help change the law within one year.

That was hardly the biggest hurdle, she said.

“Finding a location for the independent data center was no small task, as we needed to find a place with a 100-year floodplain,” DeMarco said.

She and Continent 8 Technologies first tried searching for privately-owned real estate, DeMarco added, before attempting partnerships with universities such as Atlantic Cape Community College and Stockton University, and with companies such as Verizon.

“The allowance of sports wagering, however, was the last straw that made all of us think, ‘Oh, we better do this more quickly,’” DeMarco said.

Not only would Continent 8 Technologies now need to expand its presence into the Ocean Resort Casino to give gaming companies the ability to take immediate advantage of growth opportunities presented by online sports wagering, but the company would need to return to the drawing board regarding a location for its future independent data center.

However, in considering its goal — the eventual establishment of an esports industry in Atlantic City — the company decided to meet with the Atlantic County Economic Alliance and the Casino Reinvestment Development Authority.

“Esports does not operate in isolation,” Tobin said. “It combines communications with internet gaming regulations.”

It was at this most recent meeting, DeMarco said, that Howard Kyle, secretary at the CRDA, asked about the possibility of using the Atlantic City Convention Center.

“The facility is currently underutilized, especially since many of the casinos have built out their own convention space,” DeMarco said.

It was a perfect match.

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Barbara DeMarco
The deputy executive director at the CRDA, Marshall Spevak, left, shows Michael Tobin, CEO of Continent 8, the largest solar installation of its kind, on the roof of A.C. Convention Center. ­

Approval was given in June by the CRDA’s board of directors to enter a lease with Continent 8 for space at the Atlantic City Convention Center.

“I suspect we will have pen to paper within the next couple of weeks,” Marshall Spevak, deputy executive director at the CRDA, said.

Tobin estimated that the data center will be operational — and powered by solar panels already present on the roof — by early next year.

“We are excited to have an internationally known leader in the tech space building a real presence in Atlantic City,” Spevak said. “Having a company like Continental 8 operating in Atlantic City allows us to continue to attract new businesses and conventions to the city who will know we have an internationally recognized company with the technological infrastructure in place to host them.”

For example, Spevak added, the CRDA — as well as Tobin and DeMarco — currently is taking a hard look at the growing global industry of esports.

“There are possibilities to create tax incentives and incubators for gaming companies to locate in Atlantic City, as well as opportunities to work with the government to host large-scale events,” DeMarco said. “It all comes down to building an ecosystem that could include esports.”

It also presents Atlantic City with new marketing opportunities, Tobin said.

“For example, if we were to theoretically work with Singapore Airlines to fly 300 esport participants into Atlantic City Airport for an ‘East Meets West’ tournament, that would be fantastic for Atlantic City,” he said.

DeMarco said she, too, believes that if they build it, they will come.

“Why is Las Vegas considered the esports capital of the U.S. right now?” DeMarco said. “Because the developers, the test labs, the players and the stadiums are there, and it is a place where you can bet on it.

“With Continent 8, there is no reason we also could not do that now on the East Coast.”

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Lauren Moore, the executive director of the Atlantic City Economic Alliance, sees the possibilities.

“The (ACEA) recognizes the positive economic impact the esports industry can have on our region, which is why we were excited to work with Continent 8 Technologies to help it find a location in Atlantic City for its independent data center,” he said. “Atlantic City is undergoing a revitalization with a new beachfront college campus and 24/7 activities including casinos, concerts, sports betting and more, that, along with esports, should help attract more millennials.

Tobin said additional investment would follow increased industry, especially if he were to need to develop live gaming studios within space at the Atlantic City Convention Center.

But, right now, he said he is proud of what Continent 8 will soon provide to the city.

“We are taking an underutilized piece of public property, creating income for the state, creating core technological infrastructure for economic development and doing it all within a green location,” he said.

Not only will Continent 8 be able to serve nearby entertainment centers, banks, hospitals, casinos, universities, airports and more from its data center in Atlantic City, Tobin added, but new companies will see it as just one more reason to relocate.

“Atlantic City is rejuvenating and reinventing itself,” he added. “There are companies that I am quite sure will want to come and run their digital marketing operations here because of the quality of life, the less expensive taxes, and the proximity to both Philadelphia and New York City.

“The push to become a wired city will open up economic development opportunities for the entire South Shore region.”

What are esports?

Esports — or organized competition between video gamers, either one-on-one or with small teams — is expected to become a $1.5 billion industry worldwide by 2020.

Competitors often compete for prize money in tournaments playing games such as “Counter-Strike: Global Offensive,” “Call of Duty,” “League of Legends,” “Overwatch” and more.

There also are tournaments or team affiliations with major league sports teams, including those in Major League Soccer, the National Hockey League, the National Football League, Major League Baseball and the National Basketball Association.

These events often are live broadcast so that hundreds of millions of people can watch their favorite gamers play via online streaming media platforms.

The New Jersey state constitution says an online bet must occur at the server.

But could another state’s server be located in New Jersey?

That is a question Michael Tobin, co-founder and CEO of Continent 8 Technologies, said he is asking as he works to create an independent data center in Atlantic City by the end of this year.

“The New Jersey Division of Gaming Enforcement has positioned itself as the de facto national regulator for online gaming, simply because they are recognized as being the best,” Tobin said. “In speaking with other state governments on behalf of our clients, we have heard that if they want to have online gaming in Mississippi or West Virginia, why would they need to waste their money and management duplicating the infrastructure there? Could New Jersey instead act as the data hub, with the NJDGE acting as a regulator?”

“I think there will be many states who want to get in on sports wagering quickly, providing New Jersey and our company with the opportunity to coordinate and educate on how this industry might, too, be run and regulated in other states.”

Betting on esports

The U.S. Supreme Court voted in May to overturn the 1992 Professional and Amateur Sports Protection Act, called PASPA, giving states the ability to create laws to legalize and license sports betting.

But were esports also considered competitive events in which bets could be placed?

New Jersey law currently states that a “prohibited sports event includes all high school sports events, electronic sports, and competitive video games, but does not include international sports events in which persons under age 18 make up a minority of the participants.”

While some read that statement as a ban of esports altogether, the New Jersey Division of Gaming Enforcement read — and clarified — it as an enforcement of age restrictions on gambling.

An emergency regulation promulgated by the NJDGE now reads: “A ‘prohibited sports event’ includes all high school sports events, including high school electronic sports events and high school competitive video game events, and any electronic sports event in which any participant is 17 years old or younger.”

New Jersey Esports Gaming Association

Barbara DeMarco said she was not sure what to think when she approached her firm with the following statement:

“I’m thinking of creating an association to build an industry that does not yet exist,” she said.

DeMarco, vice president of Porzio Governmental Affairs, said she was given the green light in March to create the New Jersey Esports Gaming Association, a trade association she expects will launch later this year.

“My client, Michael Tobin, co-founder and CEO of Continent 8 Technologies, used to employ Hai Ng, a gentleman who lived in New Jersey for more than 25 years and currently owns esports teams in Singapore,” DeMarco said. “When Hai Ng got Michael invested in esports in Singapore, and Michael decided to build an independent data center here, I also connected with Mac Seelig, the original slot machine manufacturer in (Atlantic City).

“Michael gave me the vision; Hai gave me industry input; and Mac, who reminds me of Mr. Monopoly, told me everything I already did not know about Atlantic City. The three of them together have been advising me about what they would need from such an association.”

For example, DeMarco, also a board member of the New Jersey Esports Gaming Alliance, said she would like to work with nearby universities and colleges, as well as with gaming and technology companies, to create career pathways for local and regional residents within the esports industry via training, mentorship and internship programs.

She also would like to find and work with potential team owners and esports community organizers while also enticing game manufacturers and technology companies to locate in Atlantic City.

Lastly, DeMarco said she will pursue legislation to create an esports Enterprise Zone program in Atlantic City to foster an economic climate that stimulates growth in neighborhoods that house esports leagues, training centers and competitions.

Conversation Starter

Reach Continent 8 Technologies at: info@continent8.com or +44 1624 678888.

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Meg Fry | mfry@roi-nj.com | megfry3