Monster Products rolls the dice on gambling technology - San Francisco Chronicle

Monster Products, the consumer electronics company best known for speaker wires, Beats headphones and the onetime naming rights to Candlestick Park, is placing a bet in a different direction: online gambling.

A division of the South San Francisco company last week bought technology created by Florida’s Universal Entertainment Group and licensed by the Iowa Tribe of Oklahoma to launch an online real-money poker site early next year.

Monster already has a connection to Universal Entertainment: Consultant Fereidoun “Fred” Khalilian, who once ran Paris Hilton’s nightclub in Orlando and has a checkered past as a telemarketer, is Monster’s interim chief operating officer.

Monster Products founder Noel Lee declined to say how much his Technology Group paid for the software, but described the deal as a “natural” for the company he started 38 years ago by selling premium audio speaker wire.

“It fits because it’s software,” Lee said in an interview. “It’s a revenue stream, no different than any other licensing product. But it’s something that fits into the Monster gaming family.”

This year, Khalilian has been helping Lee round up investors in the privately held Monster Products, which has struggled since the loss of its share of the popular Beats by Dre headphone line, before that company reaped a big payday when Apple bought it for $3.2 billion in 2014.

Last month, the Iowa Tribe of Oklahoma announced it had been granted a license for the gambling technology from the Isle of Man Gambling Supervision Commission.

The site, PokerTribe.com, could serve only gamblers overseas, because online gambling is outlawed in 47 U.S. states and needs specific licenses in the remaining three, said James Kilsby, managing director of Gambling Compliance, a gaming-industry research firm focused on regulatory issues.

But the international online poker market “is extremely difficult to break into,” Kilsby said. To generate enough profit to be successful, online poker sites need to draw a large number of players — as PokerStars, now the most popular site, has done, he said.

Also, poker sites are not growing as fast as other sites offering slots, blackjack and other casino games, he said.

So for a new entrant like PokerTribe, making a profit “is going to be the tallest of tall orders,” Kilsby said.

But Khalilian said Monster gives the tribe a known brand name to draw new gamblers.

“Nobody knows what PokerTribe is or what the Iowa Tribe is, but at least people know who Monster is,” he said.

United Entertainment previously tried to work with Oklahoma’s Cheyenne and Arapaho Tribes on an online poker venture, which is now the subject of a lawsuit filed last month in the Cheyenne and Arapaho tribal court. Khalilian blamed regulatory hurdles and tribal politics for that venture’s failure.

In 2011, the Federal Trade Commission permanently banned Khalilian from any telemarketing operations for running what the FTC called an illegal robocalling service that sold “bogus” extended automobile warranties. Last year, the FTC issued nearly 6,000 refund checks to victims totaling $4.26 million.

Khalilian said he agreed to the settlement without admitting guilt to avoid a protracted legal battle.

Benny Evangelista is a San Francisco Chronicle staff writer. Email: bevangelista@sfchronicle.com Twitter: @ChronicleBenny

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