Gambling Insider: Mar/Apr 2020

Mar/Apr 2020 Mar/Apr 2019

Joining forces An exclusive on the DraftKings/SBTech merger JURISDICTIONS Online gaming hub roundtable LAS VEGAS Sporting capital of the world?

GGA LONDON Full review of this year’s ceremony

EDITOR’S LETTER

COO, EDITOR IN CHIEF Julian Perry EDITOR David Cook David.Cook@gamblinginsider.com Tel: +44 (0) 207 739 9908 SENIOR STAFF WRITER Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITERS Owain Flanders Owain.Flanders@gamblinginsider.com Iqbal Johal Iqbal.Johal@gamblinginsider.com Aidan Williams Aidan.Williams@gamblinginsider.com LEAD DESIGNER Laura Fogar DESIGNERS Rebecca Lydamore, Olesya Adamska

E

Julian Perry, COO, Editor in Chief

David Cook, Editor

ven when you fit in some time away across the Christmas period, you may notice a slowdown in news; however, you do always have to be wary in this industry that something very significant could catch you. It’s been known to happen before, such as when GVC Holdings announced on 22 December 2017 its plans to acquire Ladbrokes Coral.

Fast forward to 23 December 2019, and while many of us were tucking into Quality Street tins and watching The Great Escape for the 500th time, DraftKings revealed its intention to become a public company, entering into a business combination agreement with Diamond Eagle Acquisition Corp. and SBTech, creating a combined company worth $3.3bn. This is arguably the most significant development in sports betting in the US since PASPA was overturned in 2018, with many wondering how this will affect competition on the supplier side and whether bringing technology in-house could become a more common tactic for operators moving forward.

The fact the deal is yet to be completed at the time of going to press (this is expected before the end of H1 2020) means it is a privilege for us to be able to ask all the questions that need asking of the senior management at the top of the merged business. How did this deal come about? Why does DraftKings believe bringing sportsbook technology in-house will be a more successful strategy than outsourcing? What exactly will the structure of management at SBTech look like once the deal completes? Tim Poole's feature, which includes interviews with DraftKings CEO Jason Robins, SBTech Chairman Gavin Isaacs and SBTech US President Melissa Riahei, begins on p34.

Following the cover feature, we have a roundtable comparing online gaming jurisdictions in Europe (p40), online gaming futurologist Mark McGuinness asking for better research to combat problem gambling (p46) and a feature on the development of cash-out since its inception (p52).

We, of course, also hosted the Global Gaming Awards London 2020 at the Hippodrome Casino, which was followed by ICE London at ExCel London. We review both events, starting on p18.

DC Editor

CONTRIBUTING THIS ISSUE

DESIGN ASSISTANTS Radostina Mihaylova, Louise Clark EVENTS MANAGER Mariya Savova PRODUCTION CONTROLLER Emily Jackson OPERATIONS ASSISTANT Shannon Moran WEBSITE MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 BUSINESS DEVELOPMENT DIRECTOR, MALTA Oz Mustafa Oz.Mustafa@gamblinginsider.com Tel: +356 3550 0485 EVENTS SALES MANAGER Ryan Horwood Ryan@globalgamingawards.com +44 (0) 208 638 7610 SENIOR ACCOUNT MANAGER William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Richard Carr Richard.Carr@gamblinginsider.com Tel: +44 (0) 203 435 5624 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 US ACCOUNT MANAGER Erica Clark Erica.Clark@playerspublishing.com Tel: +1 702 430 1912 CREDIT MANAGER Rachel Voit WITH THANKS TO: Sam Barrett, Sam Behar, Bet365, David Black, Pascal Camia, Martin Carlesund, Michele Ciavarella, Andrew Cochrane, James Connelley, Alex Fagelson, Neil Fairweather, Fantini Research, the Gambling Commission, Rian Haddow, Gustaf Hagman, Gavin Hamilton, Daniel Hook, Phil Horne, Gavin Isaacs, Daniela Johansson, Josh Jolliffe, Nikos Konstakis, Oliver Lovat, Andrew Lyman, Bernard Marantelli, Mark McGuinness, Harald Neumann, Susan O'Leary, Jason O'Shea, Melissa Riahei, Jason Robins, Willem van Oort, Lee Willows, Matt Wilson, Lyle Wraxall and David Wylie Gambling Insider magazine ISSN 2043-9466

MARK MCGUINNESS

Online gaming futurologist

4

GAMBLINGINSIDER.COM

DAVID WYLIE

Managing Director, LendingMetrics

Produced and published

by Players Publishing Ltd All material is strictly copyrighted and all rights reserved.

Reproduction without permission is forbidden. Every care is taken in compiling the contents of Gambling Insider but we assume no responsibility for the effects arising therefrom. The views expressed are not necessarily those of the publisher.

CONTENTS 36

ISSUES

10

8 Comment Tim Poole, Owain Flanders, Aidan Williams and Iqbal Johal discuss current industry issues

36 DraftKings-SBTech Tim Poole speaks to DraftKings CEO Jason Robins, SBTech Chairman Gavin Isaacs and SBTech US President Melissa Riahei, as Gambling Insider examines every aspect of the DraftKings-SBTech merger and what the future holds for the new company

12 Facing facts Eye-catching industry data 14 Taking stock Tracking operator and supplier stock prices across a six-month period 16 In Numbers A gaming snapshot by Fantini Research

EVENTS

18

18 GGA London 2020 review We provide a breakdown of the top three positions in all 16 categories from the third Global Gaming Awards London 32 Self-nominate for GGA Las Vegas 2020 The window for self-nominations to be submitted for the Global Gaming Awards Las Vegas 2020 is now officially open 34 ICE London 2020: A week to remember Owain Flanders looks back on the highlights of his first ICE London experience

COVER FEATURE

london

202 0

FEATURES

42

74 Event Calendar

42 Roundtable: What does your jurisdiction offer?

Representatives from Gibraltar, the Isle of Man and Alderney speak with Gambling Insider about the benefits their jurisdictions can provide gambling companies

Upcoming shows and conferences

48 A call for better research Online gaming futurologist Mark McGuinness asks for more rounded research in tackling problem gambling, arguing against conforming to labels and fads 50 Las Vegas: Sporting capital of the world Oliver Lovat on how sports and betting go hand in hand in Las Vegas, and how it may even be primed to eventually host the Olympics

EVENTS

INSIDERS 78 Daniel Hook

50

52 Consolidation in Sweden?

Betsson AB CEO Pontus Lindwall speaks to Tim Poole at ICE London about falling share prices in gaming, the prospect of consolidation in Sweden and the operator's expectations ahead of Euro 2020

Rockolo

79 Jason O'Shea Games Inc.

80 David Wylie LendingMetrics

82 Willem van Oort Gaming in Germany

56 Is millennial marketing creative?

Using examples from the UK market, we assess how gambling operators can cater their marketing efforts towards a younger demographic 60 The future of cash-out Aidan Williams reports on cash-out’s success to date and whether it is set to increase in importance 64 Regulation: Light at the end of the tunnel With new regulations enforced by the Gambling Commission, including mandatory contributions operators must now make to charitable causes, Iqbal Johal assesses the impact this could have on problem gambling customer complaints in the UK market 66 Reality TV Betting Tim Poole assesses what can be learned from reality TV betting – the "last bastion of old-school trading" 70 ICE London roundtable: Bonuses Owain Flanders reports as marketing executives discuss the future of bonusing within the gaming industry

60

FINAL WORD 90 Michele Ciavarella Newgioco Group

COMMENT

TIM POOLE

A DIFFERENT CASINO EXPERIENCE Tim Poole reviews The Diamond Casino & Resort.

If you haven’t heard of it, that’s probably because it isn’t real One lazy Sunday afternoon in January, my wife and I were glued to our sofa, eyes fixated on our television screen and scouring the digital sphere for entertainment options. Before you ask, we had just watched something on Netflix – obviously our go-to choice – so turned our attentions to our games console; the Xbox One. Having recently re-installed Grand Theft Auto (GTA) V, we decided it was high time to bring some gaming chaos to an otherwise peaceful day off. For those of you who haven’t played it, GTA is an open-world action-adventure game; its name literally has the same meaning as stealing a car – which genuinely gives you a clue as to the nature of the game.

As a gambling industry journalist though, I was delighted to hear my wife take a different approach that Sunday. Rather than “let’s rob a bank,” it was “let’s try the GTA casino.” Let’s indeed, I thought, as her avatar promptly entered The Diamond Casino & Resort; Los Santos’ finest gaming property and a mighty fine virtual resort.

Straight away, the overall glamour of a high-end US casino was apparent. What immediately struck me was how positively it was portrayed. Then I considered how much more negative this portrayal would be if GTA was set in a UK city. Sure, there are the high-flying casinos of Mayfair in London, along with the Hippodrome Casino and Aspers, but I couldn’t help imagining a run-down bookies on the high street being a game designer’s first port of call on this side of the Atlantic Ocean.

As the avatar entered this classy establishment, a lucky spin on the wheel of fortune bolstered our bankroll from $5,000 to $25,000 within a flash (in-game currency, not real money). The slot machines were realistic to the degree they even had their return-to-player rates clearly labelled.

What if real companies could market their real slot games through the GTA casino this way, I thought to myself.

Could this even be a way of marketing the benefits of casino gaming in general, encouraging responsible gambling within a regulated environment? Probably not, as the amount of crimes you have to commit just to complete GTA’s story mode, let alone when pitted against other players online, don’t exactly make it a bastion of morality. My wife also later informed me the ultimate purpose of casinos in GTA has more to do with organising heists.

But, in other news, the casino element itself didn’t miss a single trick when it came to its representation of reality. There was a VIP section, a fancy bar and clothes/gift shops galore. Kitting your avatar out in fancy dress for the virtual world outside the casino

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was a practical reward for any generated winnings. There was roulette, blackjack and three-card poker; I have to admit, my living room felt like Las Vegas for a second, illustrating the power of the wider live casino concept.

The main event for us however, was the virtual horseracing, where I explained the odds to my wife and she wisely picked the favourite at even money. I say wisely only as the result of hindsight. She won – right on the line – and the short-term thrill we both felt brought about an epiphany.

As this was virtual horseracing set within a virtual game, technically it was no less real than an actual virtual horseracing product (I know, spooky thought right?). The concept of having a virtual race within the GTA casino was, for me, an excellent touch and maybe even an effective indirect marketing technique.

After a couple of wagers, some won and some lost, we were happier for the experience and my wife’s avatar departed The Diamond Casino & Resort all the better for her experience. All of us, whether human or AI, were given a lesson in responsible gambling and entertainment value: exactly what going to a casino should be about.

OWAIN FLANDERS

COMMENT

GETTING AHEAD OF THE GAME Owain Flanders predicts which regulatory changes UK operators could face this year, and suggests ways in which they might be pre-empted For the British gambling industry, tighter regulation is looming like an ominous dark cloud. If you are reading this, it is likely you are aware it is approaching and there is very little that can be done to stop it.

Shortly after the New Year, the industry felt its first few drops of rain. The Gambling Commission (GC) announced a ban on the use of credit cards for gambling in Great Britain, effective from 14 April. This regulatory reform seems like a delayed reaction to a black-and-white issue – one that perhaps could have been foreseen.

The possibility of a credit card ban was clear to see, with reports surfacing in January last year suggesting the UK Government was considering a ban. In such a fragile environment, operators need to pick and choose their battles carefully, always ensuring they are learning from past mistakes.

With a clear appetite for further regulation evident in the press, and the Conservatives’ planned review of the Gambling Act upcoming, a ban on credit cards could be the least of the industry’s problems in 2020. As the dark cloud of regulation draws inevitably closer, what can operators do to limit its damage? The first step is to identify what issue might be next to step into the firing line.

When the Gambling Related Harm All-Party Parliamentary Group (GRH APPG) set out its work program for 2020, it highlighted restrictions on staking levels for online slots and gambling advertising as two of its main targets for regulatory reform.

Online limits have been a hot topic since late last year when the GRH APPG called for stake and deposit limits to be set at £2 ($2.60) for online slot gaming. Undoubtedly, this pressure will continue into 2020, but perhaps operators can learn from past experiences in regards to this kind of regulation.

When the £2 stake limit was applied to fixed-odds-betting terminals (FOBTs) last year, it could be argued operators missed a trick in not setting limits themselves. This could have helped them avoid regulator intervention while demonstrating a level of responsibility in the eyes of the public – perhaps even reducing the level of limit applied. Instead, the GC enforced the regulation and the retail sector of the UK gambling industry began to struggle, with GVC announcing an 18% fall in retail revenue for Q3 2019, and the expected closure of 900 of its betting shops.

Amid increased pressure from the industry’s critics, online staking limits are likely to be the next issue. With the negative consequences of the FOBT limits in mind, it could make sense for the industry to pre-empt regulatory intervention and impose its own limits, over which it would have greater autonomy; the limit wouldn’t necessarily have to be as low as £2, but any proactiveness on the issue could go some way to quietening dissenting voices.

The GRH APPG has also outlined its desire for reform in regards to gambling advertising – an aim that has no doubt been influenced by the number of breaches to the guidelines of the Advertising Standards Authority (ASA) in recent years.

In 2019, the regulatory body banned advertisements from a number of major operators, and demonstrating that this trend is far from over in 2020, the ASA was called into action shortly after the turn of the year to ban an advertisement from Betway.

For now, the punishment for breaching ASA regulations is only the banning of said advertisement, but in the future, this could lead to fines or even bans on advertisements altogether. Any breach of regulation draws negative attention towards the industry, no matter how serious the transgression, and ASA compliance is one situation in which operators could certainly spare themselves some criticism; potentially preventing enforced regulation in the future.

That being said, one area in which the UK gambling sector is truly succeeding is in increased levels of co-operation from all areas of the industry. This is personified in the Betting and Gaming Council (BGC), formed to replace the Remote Gambling Association and the Association of British Bookmakers, which now provides the industry with one single voice. If the formation of the BGC cannot stop the dark cloud of regulation from approaching, then it can certainly slow its advance, and perhaps even make things a bit brighter in the long run.

GAMBLINGINSIDER.COM

9

COMMENT

AIDAN WILLIAMS

GIVING THE INDUSTRY SOME CREDIT Aidan Williams on why the gambling industry deserved more praise for its attempts to combat match-fixing in tennis It was surprising to see such little reaction to the fact suspicious match alerts in tennis have fallen to their lowest levels since the Tennis Integrity Unit (TIU) began reporting the figures in 2015, according to its 2019 report. In total, there were 138 suspicious matches reported last year, with none at Grand Slam level, three from the men’s ATP Tour and five from the women’s WTA Tour.

This is welcome news for both tennis, but also of course, the gambling industry. Had the number of alerts risen, then you can imagine how sections of the press would have swarmed over the report to pick it apart and somehow blame regulated gambling for potential match-fixing.

The figures are staggering: the number of alerts totals more than 100 less than any other year since and including 2015, and while it does not necessarily mean less matches are being fixed – the statistics are only alerts, nothing more – it points to a positive trend. The alerts are provided through memorandums of understanding with regulated betting operators and data companies and it shows how such co-operation can be a real force for good.

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GAMBLINGINSIDER.COM

The reverse is also true: the high numbers in the previous years were not necessarily a negative. High numbers show potential issues are being highlighted and put into a position where they can be addressed. Perhaps after four years, it was inevitable there would be a drop in alerts as more work is done to prevent fixing.

This is also supported by the number of players and officials that were subject to sanctions, which was actually at its highest number (26) since the reports began, although the numbers are somewhat skewed, with players’ provisional suspensions and actual suspensions sometimes listed in different years.

Reading between the lines, it is possible that a higher number of players being sanctioned, yet lower levels of alerts, could indicate that betting companies and the bodies within the sport are becoming more efficient at determining the signs of suspicious activity. It could also be that people are being put off the idea of trying to fix a match or part of a result: past convictions of players like Nicolás Kicker, a top-100 player, and Oliver Anderson, a junior Grand Slam champion, would have sent shockwaves through the sport.

It is no secret a lot of betting companies co-operate with the sport when it comes to integrity, particularly when a strange amount of bets come rushing in on a particular match, so it could just point to people not using legal or mainstream/regulated markets to avoid risk.

But the TIU’s report is not a one-off. Promisingly, the International Betting Integrity Association’s most recent report, for 2019, shows similar findings. The report says there were 101 tennis alerts reported last year, down significantly from 178 alerts in 2018. Khalid Ali, IBIA CEO, said the decline was “primarily a result of an improved level of integrity in ITF tennis, which has been the subject of particular scrutiny in recent years.”

More convictions and fewer alerts point towards the problem diminishing, or at the very worst being driven away from legal markets. For the betting industry, this is very good news. Yes, fixing is always going to be an issue, especially in unregulated gambling markets, but that is more of a problem for tennis authorities to work out how to combat. From the gambling industry’s side, it is doing something helpful, but is of course unlikely to be given credit for this by mainstream media.

The co-operation between betting companies and the sporting bodies are producing good results and this is real evidence of this, so all involved should be satisfied. The threat of fixing is not over though, and unless prize money rises staggeringly at the lower levels, then I don’t think it ever will be, but in terms of results, this is a pretty good set.

IQBAL JOHAL

COMMENT

TIME FOR BALANCE In the wake of numerous measures being introduced in recent times, Iqbal Johal looks at how operators are now taking crucial steps in dealing with problem gambling The Gambling Commission’s decision to ban the use of credit cards to gamble in Great Britain was the latest regulation to hit the UK industry. This followed the reduction in maximum stakes on fixed-odds betting terminals, from £100 ($131.80) to £2. Wherever you stand on the debate about whether these measures are merely to appease public outrage or are genuinely helpful in the fight against problem gambling, what should be remembered is operators are playing their part in helping against the issue; as understandable as it is that mistakes are and should be highlighted by the national media.

Measures taken by the industry include the introduction of stronger rules relating to age verification, tighter moneylaundering measures, the flagging of unusual customer behaviour, advertisement restrictions, mandatory charity contributions and the announcement all online operators must now participate in GamStop’s self-exclusion scheme.

The self-exclusion scheme will make it easier for customers to self-exclude online, with one request needed rather than one to each individual operator, which will deny players access to online gambling.

From my previous experience at an operator – albeit a start-up – it is clear operators are making an effort to look out for any unusual betting patterns that might have links to money laundering or players betting beyond their means. First, a list is made of all the players signed up with GamStop to make sure they can’t place any bets, while tougher verification rules mean customers are unable to withdraw any winnings before being KYC-checked, and not being automatically verified means having to send in documents to prove identification.

At weekly meetings, a section is dedicated to customer service teams flagging up any issues they have seen with customer behaviour, whether it comes from the verification process or players depositing an unusual amount of money. Suspicious players are blocked immediately, while in my experience, players who are most likely to bet themselves into harm either have strict deposit limits or are signed up with GamStop. All these measures are designed with the customer’s welfare in mind.

Tighter advertising restrictions are now firmly in place in the UK, including the prohibition of the use of sports people under the age of 25 being used in marketing material, which has led to Betway and Football Index having adverts banned. Marketing material appearing in products popular with children are prohibited, while figures from the Advertising Standards Authority showed a fall in the amount of gambling ads viewed by children on TV across a five-year period to 2018. It is clear there is a considerable effort to avoid gambling being promoted to the wrong people; whether to children or vulnerable adults, even if some operators can improve at adhering to this.

Five of the biggest operators – GVC, William Hill, Bet365, Flutter Entertainment & Sky Bet – have committed to increase the voluntary levy on gross gambling yield to 1% from 0.1%, to raise an estimated £60m to help deal with problem gambling.

Those five, along with five more operators, have also come up with further measures to tackle the issue.

GVC, William Hill and Flutter have all pledged more than £1m to GambleAware for 2019 as part of the voluntary levy, on top of the mandatory contributions online operators now have to make to at least one of problem gambling charities GambleAware, GamCare and YGam. This measure was introduced by the Gambling Commission in January (stay tuned for an in-depth feature on levy contributions on page 64).

Despite all these regulatory and voluntary restrictions coming into force in recent times, it’s probably not enough to stop the lambasting of the industry. But whatever the public and the media think about gambling operators, it’s clear something is being done to help with problem gambling, even if it is just a start.

“SUSPICIOUS PLAYERS ARE BLOCKED IMMEDIATELY, WHILE IN MY EXPERIENCE, PLAYERS WHO ARE MOST LIKELY TO BET THEMSELVES INTO HARM EITHER HAVE STRICT DEPOSIT LIMITS OR ARE SIGNED UP WITH GAMSTOP. ALL THESE MEASURES ARE DESIGNED WITH THE CUSTOMER’S WELFARE IN MIND”

GAMBLINGINSIDER.COM

11

ISSUES

GRAPH 2

NUMBER CRUNCHING

Facing facts GRAPH 3

Apr 2017Mar 2018 (M)

Apr 2018Mar 2019 (M)

One year % change

Betting (non-remote)

£3,310.84

£3,253.64

£3,253.39

0.0%

Bingo (non-remote)

£684.28

£680.11

£677.04

-0.5%

Data tracked by Gambling Insider here includes off-course betting turnover in +1.8% £429.65 £422.12 Great Britain, casino staff numbers in the US and£424.93 the global esports audience Arcades (non-remote)

Off-course betting turnover in Great Britain, from 2009/10 to 2018/19, by sector (£bn) Source: Gambling Commission

10

,000

7.5

Football

Casinos (non-remote)

£1,163.54

£1,180.58

£1,059.23

-10.3%

Remote casino, betting and bingo

£4,775.18

£5,355.33

£5,321.11

-0.6%

National Lottery (remote and non-remote)

£2,978.60

£3,007.80

£3,079.30

+2.4%

Sector Sector

Apr 2016Apr 2017 2016Mar Mar 2017 (M) (M)

Apr 2017Apr 2017Mar 2018 Mar 2018 (M) 96 (M)

Arcades (non-remote) Arcades (non-remote)

86 £424.93

£424.93

£422.12 £422.12

£429.65 £429.65

Betting (non-remote) Betting (non-remote)

£3,310.84 £3,310.84

£3,253.64 £3,253.64

£3,253.39 £3,253.39

£442.43

TOTAL

GRAPH 3 GRAPH 8 GRAPH 3 Others

Numbers

10

7.5

73 Bingo (non-remote) Bingo (non-remote)

,000

,000

5

5

2.5

2.5

0

0

32

Remote casino, betting Remote casino, betting 55 and bingo and bingo 32 National Lottery National Lottery (remote and non-remote) (remote and non-remote)

One year %

Apr 2018-

year % Apr Mar20182019 Onechange change Mar 2019 (M) (M) 95

93

+1.8% +1.8% 0.0% 0.0% 75

£677.04 £677.04

-10.3% -10.3%

£1,059.23 63£1,059.23

£5,355.33 £5,355.33

£5,321.11 £5,321.11

-0.6% -0.6%

£2,978.60 £2,978.60

£3,007.80 £3,007.80

£3,079.30 £3,079.30

+2.4% +2.4%

£508.11 £508.11

41 £541.58

£541.58

+6.6% +6.6%

£14,361.30 £14,361.30

-0.3% -0.3%

33 £14,407.69 £13,779.80 £14,407.69 £13,779.80

77

-0.5% -0.5%

£4,775.18 £4,775.18

£442.43 £442.43

TOTAL TOTAL

30

£680.11 £680.11

65 £1,163.54 £1,163.54 64 £1,180.58 £1,180.58

Large Society Lotteries Large Society Lotteries and non-remote) (remote and non-remote) 38(remote

A M pr ar 20 20 09 10 A Ap pr M M arr 20 ar 220 0 20 0110 9 11 0 Ap MAp r M arr 20 ar 2200 10 20 1111 12 Ap MA r M par 20 ar 2200 11 20 1122 1 Ap 3 M Apa r 20 r M r 2 12 ar 2001 20 133 A 14 MA pr a 2 M prr20 013 ar 201 20 144 A 15 M pr Aapr 20 M r20 14 ar 2015 2 1 A01 5 M pr 6 Aapr 2 201 M r 01 5 ar 20 6 2 1 A0 6 M p1r 7 a 2 Apr 20 016 M r 17 ar 20 A20 17 M p1r 8 a 20 Apr 20 17 M r 18 ar 20 A2 1 M p01r 9 8 ar 20 20 18 19

,000

£684.28 £684.28

Casinos (non-remote) Casinos (non-remote)

48

,000

55%

Gross gambling yield (GGY) in Great Britain by £508.11 £541.58 vertical, from 2016/17+6.6% to 2018/19 Source:£14,361.30 Gambling Commission -0.3% £13,779.80 £14,407.69

Large Society Lotteries (remote and non-remote)

A M pr ar 20 20 10 11 Ap M r ar 20 20 11 12 Ap M r ar 20 20 12 13 Ap M r ar 20 20 13 14 Ap M r ar 20 20 14 15 Ap M r ar 20 20 15 16 Ap M r ar 20 20 16 17 Ap M r ar 20 20 17 18 Ap M r ar 20 20 18 19

GRAPH 2 2 GRAPH GRAPH 7Horses Dogs

,000

43

21

0 2001

2003

2005

2009

GRAPH88 GRAPH 2018 2013 2017 2015 GRAPH 7 GRAPH 7 Number of enterprises in the gambling and betting activities sector in Great Britain, from 2013 to 2019, by turnover size band 2011

96

Q1 250,000

2013

250,000

2015

2014

2016

86

Q3

Q2

2017

Q4

86

75

73 73

75 64

200,000

64

450 150,000

55

150,000 400 100,000

48

48

350 100,000

32

30

2001

2001

2003

2003

2005

2005

2007

2007

2009

2009

2011

2011

2013

2013

2015

2015

2017

2017

65

63

63

32 41

41

33

30 38

0

65

32

38

32

50,000

250 0 200

55

33 21

21

2018

2018

150 Q1

100 50

500

450

450

400

400

350

£0 - £49,999

351.52 360.75

12

Q2

Q3

Q1

Q2

Q3

£500,000 - £999,999

£1million - £4.999 million

£5 million+

500

0 360.75

£50,000 - £99,999

GAMBLINGINSIDER.COM 350 300 250

300 250 200

£100,000 - £249,999

£250,00 - £499,999

93

95

2019

2018

500 200,000

300 50,000

95

96

300,000

300,000

.14

351.52

2007

Source: Gambling Commission

500

85

Apr 2016Mar 2017 (M)

Sector

Q4

Q4

93

10

Arcades (non-

£50,000 £99,999

Betting (non-

7.5

Bingo (non-r 5

£100,000 £249,999

Casinos (non-

ISSUES

NUMBER CRUNCHING

2.5

Remote casino and bing

National Lo (remote and no

£250,00 £499,999

0

A M pr ar 20 20 09 10 Ap M r ar 20 20 10 11 Ap M r ar 20 20 11 12 Ap M r ar 20 20 12 13 Ap M r ar 20 20 13 14 Ap M r ar 20 20 14 15 Ap M r 2 ar 0 20 15 16 Ap M r ar 20 20 16 17 Ap M r ar 20 20 17 18 Ap M r ar 20 20 18 19

Large Society (remote and no

£500,000 £999,999

CT

The sports betting legal landscape in the US at the start of 2020 Source: American Gaming Association

RI

GRAPH 7

NJ DE MD DC

£1 million £4.999 million

£5 million+

0

50

100

150

200

250

300

350

400

450

500

TOTAL

300,000

Live, legal single-game sports betting (14 states)

250,000

Authorised sports betting, not yet operational (6 states +DC)

200,000

Active 2020 sports betting legislation/ballot (9 states )

150,000

No 2020 sports betting bills (21 states )

100,000

GRAPH 4

50,000

0

Gross revenue generated by Macau casinos for 2010 to 2019 (MOP bn) Source:GRAPH Gaming Inspection & Coordination Bureau 3 Apr 2016Mar 2017 (M)

Apr 2017Mar 2018 (M)

Arcades (non-remote)

£424.93

£422.12

Betting (non-remote)

£3,310.84

Bingo (non-remote)

£684.28

Sector

2010 2011

GRAPH 2012 3 2013

One year % £1,180.58 change Mar £1,163.54 2019 (M) 230.84 £4,775.18 £5,355.33

-0.5%

400

351.52 -10.3% £1,059.23

£4,775.18

£5,355.33

GRAPH 8

£5,321.11

-0.6%

£2,978.60

£3,007.80

£3,079.30

+2.4%

£442.43

£508.11

£541.58

+6.6%

+2.4%

200

10

-0.3%

A 150

7.5

Suspicious match alerts from the Tennis Integrity Unit, £13,779.80 £14,407.69 £14,361.30 from 2015 to 2019,-0.3% by quarter 86 Source: Tennis Integrity Unit

55%

100

96

£500,000 £999,999

2.5

65

64 96 55 48

£1 million £4.999 million

75 65

64 21

0

50

100

£100,000 - £249,999

GRAPH 7

300,000

250,000

32 150

200

250

300

350

400

450

500

38

43

33

200,000

150,000 Q2

Q1

Q3

21

Q4 100,000

GRAPH 4

50,000

0 Q2

Q1

Q3

Q4

2001

2003

2005

2007

2009

2011

2013

2015

2017

GAMBLINGINSIDER.COM 2010 2011

188.34 267.87

500

£250 (re

La (re

63

41

30

C

Re

Local-government-owned casinos Privately-owned casino hotels Local-government-owned casinos without hotels Privately-owned casinos without hotels

43

41

77

33

30

£5 million+

48

63

77

75

93

32

86

38

73 32

55

95

Breakdown of quantities of casino models in the US, 0 93 from 2001 to 2018 £0 - £49,999 £50,000 - £99,999 Source: US Bureau of Labor Statistics

95

2019

2018

B

45%

50

0 73

2017

2016

2015

45%

250

+6.6%

5

GRAPH 8

443M +12.3% year-on-year

350

GRAPH 230055%

-0.6%

£5,321.11

292.46

£250,00 £499,999

32

450

GRAPH 6

360.75

£677.04

+1.8% £429.65 223.21 £3,079.30 £2,978.60 £3,007.80 £3,310.84 £3,253.64 £3,253.39 0.0% Large Society Lotteries 265.74 £442.43 £508.11 £541.58 (remote and non-remote) £684.28 £680.11 £677.04 -0.5% 302.85 TOTAL £13,779.80 £14,407.69 £14,361.30 £1,163.54 -10.3% £1,180.58 £1,059.23

TOTAL

2018

£680.11

Esports enthusiasts 198M +14.4%

500

0.0%

National Lottery (remote and non-remote)

Casinos (non-remote) £50,000 2019 £99,999 Remote casino, betting and bingo

2017

+1.8%

£422.12

£424.93

Arcades (non-remote) 2016 £0 Betting (non-remote) £49,999 2017 Bingo (non-remote) 2018

National Lottery (remote and non-remote) £100,000 Large Society Lotteries £249,999 (remote and non-remote)

2015

£429.65

Occasional viewers 245m +10.7%

A M pr ar 20 20 09 10 A M pr ar 20 20 10 11 Ap M r ar 20 20 11 12 Ap M r 2 ar 0 20 12 13 Ap M r ar 20 20 13 14 Ap M r ar 20 20 14 15 Ap M r ar 20 20 15 16 Ap M r ar 20 20 16 17 Ap M r 2 ar 0 20 17 18 A M pr ar 20 20 18 19

A M pr ar 20 20 18 19

2015

One year % change

£3,253.64304.14£3,253.39

2003

GRAPH 6

Apr 2018Mar 2019 (M)

267.87

GRAPH Apr 1 2018-

Apr 2016Apr 2017Casinos (non-remote) Mar 2017 Mar 2018 (M) (M) Remote casino, betting and bingo

2014 Sector

ar 20 20 17 18

188.34

2018 2005 2007 growth 2009 for 2011 2013 2017 2015 Year-on-year the global esports audience Source: Newzoo

2001

2018

13

ISSUES

TAKING STOCK

Gambling Insider tracks operator and supplier stock prices across a six-month period (September 2019 to February 2020). The stock price is taken from the first day of each month and last date available at the time of writing.

KINDRED GROUP

EVOLUTION GAMING Currency (SEK)

Currency (SEK)

350

80

300

70

250

60 50

200

40

150

30

100

BETTER COLLECTIVE

y ar ru

ar nu Ja

KAMBI GROUP

Fe b

y

r be ce m De

Six-month high - 70.7 (28 Oct) Six-month low - 45.7 (14 Jan)

Currency (SEK)

200

92

180

90

160

88

140

86

120

84

100

82

80

GAMBLINGINSIDER.COM

Six-month high – 92 (21 Oct) Six-month low – 72.5 (17 Dec)

ar y ru Fe b

ry Ja

nu a

r be ce m De

No ve m be

r to be Oc

be Se pt em

ua Fe br

ar nu Ja

De ce m

be No ve m

er to b Oc

be pt em

Six-month high – 195 (12 Dec) Six-month low - 119.7 (23 Dec)

r

74 ry

0 y

76

be r

20 r

78

r

40

r

80

60

Se

be

er to b

Six-month high - 318.5 (24 Jan) Six-month low – 188.2 (04 Oct)

Currency (SEK)

14

No ve m

r Se

Oc

pt em

be

ar ru Fe b

Ja

nu

ar

r be ce m De

er

be No ve m

Oc

to b

be pt em Se

y

0 y

0 r

10

r

50

r

20

ISSUES

TAKING STOCK

LEOVEGAS

FLUTTER ENTERTAINMENT Currency (US$)

Currency (SEK) 40

70

35

60

30

50

25

40

20

30

15

y

Ja

Fe b

nu

ru

ar

ar

y

r be ce m

Oc

Se

Six-month high – 37.39 (13 Sep) Six-month low - 28.08 (30 Jan)

Six-month high – 63.51 (02 Jan) Six-month low – 42.05 (03 Sep)

SCIENTIFIC GAMES CORPORATION

CROWN RESORTS Currency (A$)

Currency (US$) 30

13 12.8

25

12.4 12.2

20

12

15

11.8 11.6

10

11.4 11.2

5

11 y ar Fe br u

r

ry Ja nu a

De

ce m

be

be

er to b Oc

No ve m

Se

pt em

be

r

ar y ru Fe b

ar y nu

be ce m De

Ja

r

r be No ve m

er to b Oc

pt em

be

r

Six-month high – 31.58 (8 Nov) Six-month low – 17.57 (3 Sep)

r

10.8

0

Se

De

to b

be pt em

ar ru Fe b

er

r

y

y ar nu Ja

ce m

be

r De

Oc

No ve m

to b

be

r be pt em Se

be

0 No ve m

0 r

10

er

5

r

20

10

Six-month high – 13.18 (27 Nov) Six-month low – 11.43 (28 Jan)

GAMBLINGINSIDER.COM

15

South Dakota

$416,094

$408,574 Kansas

+1.84

$416,094

$408,574

+1.84

$220,701

$110,548 Kentucky

+99.64

$220,701

Virginia $110,548

+99.64

$2,509,156

$2,561,367 Louisiana

-2.04

$2,509,156

$145,189

$144,296Maine

+0.62

$1,757,053

$1,746,364 Maryland

+0.61

FANTINI RESEARCH Nevada $1,757,053 $1,746,364

+0.61$12,030,985

$11,916,824 Nevada

$718,535 $404,592

$273,072 Massachusetts $273,072 Same Store

+163.13 +48.16

$43,177,623 +163.13 $43,247,550 +48.16

$41,961,739 US casino total $42,332,416 US same store

(M)

ISSUES

Number of Facilities Year

$3.532

West Virginia $2,561,367 REGIONAL MARKETS CASINO TOTAL $144,296 $145,189 SAME STORE

US casino $273,072total US $273,072 same store

$718,535 $404,592

Revenue (M)Year

-0.93Virginia

$16,640 -2.04 $31,146,638 +0.62$31,216,565

$103,055

$100,155

+2.90

$1.277

$3.532

-0.93

$1.277

N/A

$16,640

$0

N/A

$31,146,638 $31,216,565

$30,044,915 $30,415,592

+3.67 +2.63

+0.96

$12,030,985

$11,916,824

+0.96

+2.90 +2.16

$43,177,623 $43,247,550

$41,961,739 $42,332,416

+2.90 +2.16

Revenue (M)

States operating

Year

Revenue (M)

States operating

$0 West Virginia

$30,044,915 +3.67 REGIONAL MARKETS CASINO TOTAL $30,415,592 +2.63 SAME STORE

Number of Facilities

Revenue (B)

Year

Year (B) Revenue

2

2012

$15.998

2013

2

$1.601

2013

2017 $1.601

$243.223

3

2017

$243.223

3

2

2013

$24.622

2014

2

$2.030

2014

2018 $2.030

$373.987

6

2018

$373.987

6

2

2014

$27.721

2015

2

$2.369

2015

2019 $2.369

$818.801

12

2019

$818.801

12

2015

$29.124

2016

3

$3.037

2016

$3.037

2016

$50.773

2017

3

$3.265

2017

$3.265

3

2017

$75.302

2018

3

$3.536

2018

$3.536

8

4

2018

$110.548 2019

4

$3.807

2019

$3.807

1

8

3 3

2019 IN REVIEW: US GAMING GROWS 2019 $237.341 US GAMING REVENUE

LEGACY CASINOS

8

Year

2013

2014

2015 Year

2016

2013

2017

2014

2018

2015

Legacy casino gaming has continued to grow at a similar US gaming revenue grew 4.6% last year to a record $48.322bn. pace to overall gaming revenue, with growth continuing It was the fourth straight record, and December’s 4.88% increase $150.708 Revenue (M) each$8.371 Revenue (M) $199.725 $8.371 $247.997 $124.604 $301.717$150.708 year since$124.604 2014. marked the 23rd straight month of year-on-year growth.

$39,000

US gaming revenue 2007 to 2019 ($m)

Legacy casino revenue from 2012 to 2019 ($m)

2019

2019

2019

2018

2018

2018

2017

2017

2017

2016

2016

2016

2015

2015

2015

2014

2014

2014

2013

2013

2013

2012

2012

2012

2011

2011

n/a

2011

n/a

2010

2010

n/a

2010

n/a

2009

2009

n/a

2009

n/a

2008

2008

n/a

2008

n/a

2007

2007

n/a

2007

n/a

$41,000

$43,000 $35,000

$45,000 $37,000

$47,000 $39,000

$41,000

$43,000

$45,000

$47,000

That growth is being boosted by additional gaming options like online gaming, the proliferation of sports betting and historical horseracing, and the continued spread of slot routes.

$35,000

$37,000

$39,000

$41,000$35,000 $43,000$37,000

New forms of gaming have emerged in recent years, with sports betting expansions throughout the US and the launch of online gaming in new states like Pennsylvania.

fantiniresearch.com

16

GAMBLINGINSIDER.COM

$39,000

2019

2016

$518.577 $199.725

$41,000

Ohio +2.38Ohio $1,941,478

$1,941,478 $1,863,904$1,941,478 $1,863,904 +4.16 $1,863,904

+4.16

+4.16

Pennsylvania Pennsylvania +5.64 $3,310,084

$3,310,084 $3,248,689$3,310,084 $3,248,689 +1.89 $3,248,689

+1.89

+1.89

Rhode -1.16 $1,863,904 -1.16 Island

Rhode Rhode Island +4.16 Island $626,298

$626,298 $629,450 $626,298

$629,450 -0.50 $629,450

-0.50

-0.50

$3,310,084 $408,574 +1.84 $408,574

South +1.84 $3,248,689 +1.84 Dakota

South South +1.89 Dakota $103,055Dakota

$103,055 $100,155 $103,055

$100,155 +2.90 $100,155

+2.90

+2.90

$626,298 $110,548 +99.64 $110,548

+99.64

$629,450 Virginia +99.64

-2.04

$100,155 West -2.04 Virginia

$1,443,097 Illinois

Illinois$1,352,408 Illinois +0.77

New Mexico Tribal $615,260 $1,352,408 $1,374,867$1,352,408 $1,374,867 -1.63 $1,374,867

$569,011 Indiana

Indiana$2,059,638 Indiana +0.99

New York $2,733,785 $2,059,638 $2,094,322$2,059,638 $2,094,322 -1.66 $2,094,322

Pennsylvania -1.66 $2,587,867 -1.66

$1,374,867 Iowa

Iowa $849,360 Iowa -1.63

Ohio $849,360 $859,310 $849,360

$1,941,478 $859,310 -1.16 $859,310

$2,094,322 Kansas

Kansas$416,094 Kansas -1.66

Pennsylvania $416,094 $408,574 $416,094

$859,310 Kentucky

Kentucky Kentucky -1.16 $220,701

Rhode Island $220,701 $110,548 $220,701

$408,574 Louisiana

Louisiana Louisiana +1.84 $2,509,156

South Dakota $103,055 $2,509,156 $2,561,367$2,509,156 $2,561,367 -2.04 $2,561,367

$110,548 Maine

Maine $145,189 Maine +99.64

$2,561,367 Maryland Massachusetts $144,296 Same Store $1,746,364

HISTORICAL HORSERACING Virginia

$145,189 $144,296 $145,189

$3.532 $144,296 +0.62 $144,296

Historical horseracing revenue has hit record

Westbeing Virginiarecorded $16,640 Maryland Maryland since$1,757,053 $1,746,364 $1,746,364 years$1,757,053 annually first in 2012.

-2.04 $1,746,364$1,757,053 +0.61 That growthREGIONAL has continued as facilities have $31,146,638 MARKETS $718,535 CASINO TOTAL Massachusetts $718,535 $273,072 $273,072 $718,535 $273,072 +163.13 beenMassachusetts built, more machines have been added +0.62 SAME STORE $31,216,565 Same Store Same Store $404,592 $404,592 $273,072 $273,072 $404,592 $273,072 +48.16 and more states have opened up. +0.61

Nevada

$12,030,985

-1.63

$600,937 -1.63Ohio

$16,640 $0

$16,640

Virginia$3.532 Virginia -0.50 West West +2.90Virginia $16,640Virginia

US same store

+48.16

$43,247,550

2012 $15.998

2012

2013 $24.622

of 2013 ties

$15.998 2

2012 2013

Year

2014 $27.721

2014 2013 2015 $29.124 2015 2014 2016 2016 $50.773 2015 2017 $75.302 2017 2016 2018 2018 $110.548 2017 2019 2019 $237.341 2018

2014 2015 2016 2017 2018 2019

$15.998

$24.622 2

$24.622

$27.721 2

$27.721

$29.124 3

$29.124

$50.773 3

$50.773

$75.302 3

$75.302

$110.548 4 $110.548 $237.341 8 $237.341

2019

2 2

Revenue (B) 2 $1.601 3 $2.030 3 $2.369 3 $3.037 4 $3.265 8 $3.536

2

2014

2015

2015

3

2016

2016

3

2017

2017

3

2018

4

2019

2019

2019

2018

2018

2018

2017

2017 2017 Total Gaming Revenue for 2019 (M)

2016

2016

2015

2015

$1.601

2013 $1.601

2018

$2.369 $243.223 $3.037 $373.987 $3.265 $818.801 $3.536

2019

2019 $3.807

$3.807

$818.801 $818.801 12

12

12

2019

3

2017

2019

$3.037 6 $3.265 12 $3.536 $3.807

Year 2013

Year 2014 2013

2013 2015 2014

Revenue (M) (M) $8.371 $8.371 Revenue $124.604 2016

2017

Revenue (M)

$8.371

$124.604

$150.708

$199.725

$247.997

2019

2014 2016 2015

+0.77 2012

2008

2008

2008Florida Florida

$574,650 $574,650

$569,011 $569,011

+0.99

+0.99$35,000

2007

2007

2007Illinois Illinois

$1,352,408$1,352,408

$1,374,867$1,374,867

-1.63

-1.63

New Tribal Mexico Tribal New Mexico

$849,360 $849,360

$859,310 $859,310

-1.16

-1.16

$47,000 Kansas Kansas

$416,094 $416,094

$408,574 $408,574

+1.84

+1.84

KentuckyKentucky

$220,701 $220,701

$110,548 $110,548

+99.64 +99.64

LouisianaLouisiana

$2,509,156$2,509,156

$2,561,367$2,561,367

-2.04

-2.04

Maine Maine

$145,189 $145,189

$144,296 $144,296

+0.62

+0.62

Maryland Maryland

$1,757,053$1,757,053

$1,746,364$1,746,364

+0.61

+0.61

Massachusetts Massachusetts Same Store Same Store

$718,535 $718,535 $404,592 $404,592

$273,072 $273,072 $273,072 $273,072

+163.13 +163.13 +48.16 +48.16

2018

2019

$301.717

$518.577

2019

2019

2019

2018

2018

2018

2017

2017

2017

+2.38

+2.38

$2,733,785$2,733,785 $2,587,867$2,587,867 $41,000 $43,000

+5.64

+5.64

$1,941,478$1,941,478

$1,863,904$1,863,904

+4.16

+4.16

Pennsylvania Pennsylvania

$3,310,084$3,310,084

$3,248,689$3,248,689

+1.89

+1.89

Rhode Island Rhode Island

$626,298 $626,298

$629,450 $629,450

-0.50

-0.50

South Dakota South Dakota

$103,055 $103,055

$100,155 $100,155

+2.90

+2.90

Virginia Virginia

$3.532 $3.532

-0.93

-0.93

West Virginia West Virginia

$16,640 $16,640

$0

$0

New York New York $37,000 $39,000 Ohio

$615,260 $615,260

N/A

N/A

+3.67 +2.63

+3.67 +2.63

$11,916,824$11,916,824

+0.96

+0.96

$43,177,623 $41,961,739 $43,177,623 $41,961,739 $43,247,550 $42,332,416 $43,247,550 $42,332,416

+2.90 +2.16

+2.90 +2.16

$30,044,915 $31,146,638$31,146,638 $30,044,915 CASINO TOTAL REGIONAL REGIONAL MARKETS MARKETS CASINO TOTAL SAME STORE SAME STORE $30,415,592 $31,216,565$31,216,565 $30,415,592 Nevada Nevada

$12,030,985 $12,030,985

casino total US casinoUStotal same store US same US store

$1.277 $1.277

GAMBLINGINSIDER.COM

2012

2012

Number of of (M) Number RevenueRevenue (M) Facilities Facilities $15.998 $15.998

20

$150.708 $150.708 $199.725 $199 $8.371 $124.604 $124.604 $150.708 $199.725 $247.997 $3

$600,937 $600,937

Ohio

$35,000$39,000 $37,000$41,000 $39,000$43,000 $41,000$45,000 $43,000$47,000 $45,000 $45,000 $47,000 $47,000 $35,000 $37,000 $39,000 $41,000 $43,000 $37,000 $2,059,638$2,059,638 $2,094,322$2,094,322 -1.66 -1.66 Indiana Indiana

Year Year

2015 2017 2016

2016 2016 2016 Jurisdiction/Market Year-End Jurisdiction/Market Year-End 2019Year-EndYear-End 2018 Change%Change% 2019 2018 2015 2015 2015 Mississippi Mississippi $2,156,535$2,156,535 $2,111,709$2,111,709 +2.12 +2.12 2014 2014 2014 MissouriMissouri $1,729,573$1,729,573 $1,754,471$1,754,471 -1.42 -1.42 2013 2013 2013 New Jersey New Jersey $3,165,801$3,165,801 $2,821,865$2,821,865 +12.19 +12.19 2012 2012 2012 New Mexico New Mexico $244,084 $244,084 $235,445 $235,445 +3.67 +3.67 $35,000 $35,000 $37,000 $37,000 $39,000 $39,000 $41,000 $41,00 $ $35,000 $37,000 $39,000 $41,000 $43,000

+0.77

$45,000

$373.987 $373.987 6

2019 $818.801

2015

$1,443,097$1,443,097

$43,000

3 6

2014

$1,454,275$1,454,275

Iowa

3 6

2013

2016

Iowa

$243.223 3 $243.223

2018 2018 $373.987

2017 $243.223

Year

2009Detroit Detroit

$35,000

$2.369

Revenue (M)

2009

2011

States States States Year (M)Year Revenue (M) Revenue (M)operating Revenue operating operating

2017

Year

2009

2012

$1.601

2015 $2.369 2017 2016 $3.037 2018 2017 $3.265 2019 2018 $3.536

2010

2013

Year

$2.030 States 2018 Revenue (M)$2.030 operating

2014 $2.030 Year

2018 2019Year-EndYear-End 2018 Change%Change% 2019 2018 Jurisdiction/Market Year-EndYear-End Jurisdiction/Market 2015 Arkansas $370,677 $370,677 Arkansas $427,500 $427,500 +15.33 +15.33 2017 2014 2014 Same Store $400,510 $400,510 Same Store $370,677 $370,677 +8.05 +8.05 2016 2013 2013 ColoradoColorado -0.00 -0.00 $842,088 $842,088 $842,103 $842,103 2015 2012 2012 Connecticut Connecticut $982,231 $982,231 $1,059,411$1,059,411 -7.29 -7.29 2014 2011 2011 Delaware $133,806 $133,806 +5.27 +5.27 Delaware $140,860 $140,860 2010 2010 2013

2014

N/A

Online gaming revenue in New Jersey since it first began offering online gaming

Online gaming has achieved strong growth since the launch of online sports betting in states like New Jersey and Pennsylvania, giving online casino operators the chance to offer their games alongside sports betting.

2019

N/A

$0

8

$3.807

ONLINE GAMING

2013

2014

2

Revenue Revenue (B) (B)

Year Revenue Year (B)

2013

2

$0 N/A

Sports betting revenue since the year prior to PASPA being overturned in 2018

+2.16

$42,332,416

of Number of NumberRevenue of Year (M)Year Revenue (M) (M)Number Revenue FacilitiesFacilities Year Facilities

Year

$1.277

$31,146,638 $30,044,915 $31,146,638 BETTING +3.67 REGIONAL MARKETS CASINO TOTAL REGIONAL$31,146,638 MARKETS CASINO TOTAL SPORTS SLOT ROUTES $30,044,915 +3.67 $30,044,915 +3.67 REGIONAL MARKETS CASINO TOTAL -0.93 $1.277 +0.62 +0.62 SAME STORE SAME STORE $31,216,565 $30,415,592 +2.63 a+2.63 $31,216,565 $30,415,592 SAME STOREhas grown $31,216,565 +2.63 Sports betting has gone through huge Slot route revenue impressively in $30,415,592 growth phase since the US +0.96 Supreme Court $0 years, as more N/A the+0.61 last seven machines have +0.61 Nevada $12,030,985 $11,916,824 Nevada $12,030,985 $11,916,824 +0.96 Nevada $12,030,985 $11,916,824 struck down+0.96 the federal ban on sports betting. been added to routes and new states like +2.90to sports $43,177,623 +2.90 betting, $41,961,739 +163.13 $30,044,915 US +3.67 casino $43,177,623 total US casino total $43,177,623 States continue to open up Pennsylvania have opened. +2.90 $41,961,739 $41,961,739 US+163.13 casino total US+2.63 same $43,247,550 store US same store $43,247,550 $43,247,550 +2.16 $42,332,416 +48.16 $30,415,592 $42,332,416 +2.16 +48.16 with 12 states in operation last year vs. just six US same store +2.16 $42,332,416 the prior year. More are opening. $11,916,824 +0.96

Historical horseracing revenue since 2012 $43,177,623 Slot route revenue since 2013 +2.90 $41,961,739 +163.13 US casino total

$273,072 $273,072

41,000

$3.532 -0.93

ISSUES FANTINI RESEARCH -0.93 $1.277 $1.277 $3.532 -0.93

2

2

Year Year 2013

2013

(B) RevenueRevenue (B) $1.601

$1.601

17

StatesState (M)operating Year Year RevenueRevenue (M) operati 2017

2017

$243.223 $243.223

3

3

GGA LONDON 2020

Lead Partner

REVIEW: GLOBAL GAMING AWARDS LONDON 2020 The winners of the Global Gaming Awards London 2020 were announced at an afternoon tea ceremony at the Hippodrome Casino on Monday 3 February. Bet365 and Red Tiger Gaming enjoyed a particularly successful afternoon, claiming two prizes each, met with a warm reception by an approving audience of industry executives.

Bet365 defended its titles in the Online Sports Betting Operator of the Year (sponsored by Scientific Games) and Affiliate Programme of the Year categories.

Red Tiger Gaming won Casino Product of the Year with its Daily Drop Jackpots Network and its Chief Executive, Gavin

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Hamilton, won Chief Executive of the Year (sponsored by 1xBet).

A total of 16 categories were decided by a Judging Panel of more than 50 industry experts. Winning a Global Gaming Award is a remarkable achievement, as the Awards celebrate the companies that have made the biggest impact on the gaming industry in the previous 12 months. This year’s ceremony was the third edition of the Awards, which were live streamed for the first time.

The Global Gaming Awards are powered

by Gambling Insider and the voting process was officially adjudicated by KPMG Isle of Man, ensuring fairness and transparency.

BetConstruct was the Lead Partner of this year’s Awards.

Julian Perry, Gambling Insider COO, who presented the ceremony, said: “I would like to thank everyone who has helped make the Global Gaming Awards London a success once again. From the Nominations Panel, to our expert Judging Panel, all category sponsors and all attendees, all are vital in creating the most fair and thorough Awards ceremony in the gaming industry.

“Congratulations to all winners and I am really looking forward to what should be another exciting year in the industry, before we do it all again in 2021.”

GGA LONDON 2020

Lead Partner

BETTING SHOP OPERATOR

“It’s been a challenging year for retail betting shops, so this is an especially good accolade for the team”

Rian Haddow, Head of Operations — UK Retail, Paddy Power Betfair

WINNER Paddy Power

RUNNER-UP Fortuna Entertainment Group

During a successful year against the odds, Paddy Power helped parent group Flutter Entertainment towards 5% retail revenue growth in Ireland for H1 2019. This came despite difficult regulatory conditions within the UK and Irish retail markets.

THIRD Ladbrokes

ONLINE SPORTS BETTING OPERATOR

Sponsored by

“This means a lot to us and we’re proud of everything we’ve achieved” - bet365 spokesperson

WINNER bet365

RUNNER-UP Sky Betting & Gaming

Defending its title and winning its third successive Award in this category, bet365 made further progress in 2019. The operator generated revenue of £2.98bn ($3.94bn) for the 12 months ending 31 March 2019, a rise of 10% year-on-year.

THIRD 888 Holdings

RETAIL SUPPLIER

“Great thanks go to all the Scientific Games employees who made this possible and thank you to everybody who voted” - Phil Horne, CEO, SG Gaming

WINNER Scientific Games RUNNER-UP SBTech THIRD Betradar

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Despite a challenging year for the supplier, Scientific Games still delivered success on changes to fixed-odds betting terminal stakes in the UK. It also cemented partnerships with Ladbrokes Coral and numerous arcade and bingo venues.

GGA LONDON 2020

Lead Partner

ONLINE SPORTS BETTING SUPPLIER

Sponsored by

“This is testament to the many teams that work diligently to make our product a success” - Andrew Cochrane, Chief Development Officer, SBTech

WINNER SBTech

RUNNER-UP Scientific Games THIRD Kambi

CASINO

Winning its first Award in this category, SBTech signed deals with large lotteries including Veikkaus and Svenska Spel during 2019. Naturally, its deal to be acquired by DraftKings, announced in December, has transformed the supplier’s status within the gaming industry.

“We’re proud because it’s all our colleagues from the industry who voted”

- Pascal Camia, EVP of the Gaming Operations, Casino de Monte-Carlo

WINNER Casino de Monte-Carlo RUNNER-UP Hippodrome Casino

Defending its 2019 title, Casino de Monte-Carlo has been re-inventing its gaming experience to enchant all audiences since 2016. The casino creates original experiences and attracts regular players, as well as an audience of new and occasional gamers.

THIRD Casino Barcelona

ONLINE CASINO

Sponsored by

“To win Online Casino of the Year again, it warms my heart” - Gustaf Hagman, CEO and Co-founder, LeoVegas

WINNER LeoVegas

RUNNER-UP 888Casino THIRD PlayOJO

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Winning for the third year in a row, LeoVegas prides itself as “leading the way into the mobile future.” During 2019, the operator achieved a position in Sweden that was “stronger than ever” and continued its growth in Germany.

GGA LONDON 2020

CASINO SUPPLIER

Lead Partner

“This is the third year in a row where we have won this Award and this is the perfect way to celebrate our 40th birthday” - Harald Neumann, CEO, Novomatic (until March 2020)

WINNER Novomatic

RUNNER-UP Scientific Games

Another winner to defend its 2019 victory, Novomatic continued to provide slots and electronic table games to the industry en masse in 2019. For its last fiscal year, revenue rose 10% year-on-year, to €2.6bn ($2.81bn).

THIRD Aristocrat

ONLINE CASINO SUPPLIER

Sponsored by

“It means a lot to be recognised; it means a lot for our players and it’s more for them than for me” - Martin Carlesund, CEO, Evolution Gaming

WINNER Evolution Gaming RUNNER-UP Greentube THIRD NetEnt

CASINO PRODUCT

“The value of our peers voting on these things is very important to us” - Gavin Hamilton, CEO, Red Tiger Gaming

WINNER Red Tiger Gaming ‒ Daily Drop Jackpots Network RUNNER-UP Big Time Gaming ‒ Who Wants to be a Millionaire Megaways

THIRD Betsoft Gaming ‒ Gold Canyon 24

GAMBLINGINSIDER.COM

In 2019, Evolution created a unique new live game show category, which puts entertainment at its core. The supplier also developed a number of successful games including Monopoly Live and Deal or No Deal Live, as it continues to drive growth in live casino.

Winning in this category for the first time, Red Tiger’s Daily Drop Jackpots Network has proven popular with operators, being much more attainable for players than progressive jackpots. Paddy Power made the product the centrepiece of its new marketing campaign featuring football manager José Mourinho.

GGA LONDON 2020

PAYMENT SOLUTION

Lead Partner

“It is really great to be recognised by some of the top CEOs in the industry for all our hard work and innovation” - Sam Barrett, Director of Gaming, Trustly

WINNER Trustly

RUNNER-UP Paysafe Group

Trustly has shaken up the online gaming market with products such as Pay N Play and Trustly Live. Pay N Play allows players to register and play on a site just by making a deposit and without having to fill in a registration form.

THIRD Worldpay

CORPORATE SERVICES PROVIDER

“It’s a great privilege to be in that kind of company and with the selection process that goes on in these Awards, it’s just a very special moment”

- David Black, Managing Director EMEA, Continent 8 Technologies

WINNER Continent 8 Technologies RUNNER-UP BettingJobs THIRD GLI

ONLINE BINGO OPERATOR

Winning for the second year in a row, Continent 8 has delivered technology and services for 20 years. With data centres and points of presence spanning three continents, Continent 8 supplies secure, reliable networks across Europe, Asia and the Americas.

“We’ve had another fantastic year, continuing with our standout bingo product” - Alex Fagelson, Head of Brand: Bingo-led, Jackpotjoy

WINNER Jackpotjoy

RUNNER-UP Svenska Spel THIRD Tombola

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Defending its title, Jackpotjoy was responsible for generating 46% of Gamesys Group’s 2019 Q3 revenue. In September, JPJ Group acquired Gamesys Holdings for £250m ($325.5m), subsequently creating Gamesys Group.

GGA LONDON 2020

Lead Partner

ONLINE POKER OPERATOR

“We have lots of exciting stuff coming in 2020, so we look forward to seeing you at the Awards again next year”

- James Connelley, Commercial Director, Group Marketing, The Stars Group

WINNER PokerStars

RUNNER-UP 888Poker

PokerStars has operated more than 200 billion hands and more than 1.95 billion tournaments since its inception – and counting. The operator’s World Championship of Online Poker series attracts players annually.

THIRD Unibet

AFFILIATE PROGRAMME

“The team have done a fantastic job in the last year and there will be plenty to look forward to in the next 12 months” - Neil Fairweather, Head of Performance Marketing, bet365

WINNER bet365 Affiliates

RUNNER-UP Kindred Affiliates

A previous victor in this category, bet365 rounded off a successful Awards with its second win of the ceremony. Its affiliate programme offers a dedicated team to help affiliates maximise earnings across a complete range of products.

THIRD LeoVegas Affiliates

CORPORATE RESPONSIBILITY PROGRAMME

“We are very pleased to be recognised in this way”

- Daniela Johansson, Chief Responsibility Officer and Deputy CEO, Paf

WINNER Paf

RUNNER-UP Danske Spil

THIRD Kindred Group 28

GAMBLINGINSIDER.COM

In 2019, Paf implemented a maximum annual loss limit for players of €30,000 ($32,450). Taking this even further, Paf then reduced this limit to €25,000 at the start of 2020. Sacrificing around €2m in annual revenue, the pioneering policy puts responsible gambling at the heart of Paf ’s offering.

GGA LONDON 2020

CHIEF EXECUTIVE

Lead Partner

Sponsored by

“It’s a great reflection of all the hard work our team put in this year so I’m very happy” - Gavin Hamilton, CEO, Red Tiger Gaming

WINNER Gavin Hamilton Red Tiger Gaming

RUNNER-UP Peter Jackson Flutter Entertainment THIRD Martin Carlesund Evolution Gaming

THE CEREMONY

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GAMBLINGINSIDER.COM

Claiming the Award for the first time, Hamilton was a popular winner among the GGA London crowd. The Red Tiger CEO oversaw rapid growth in 2019 and spearheaded negotiations as NetEnt acquired the supplier for an initial value of £197m ($243.1m).

GGA LONDON 2020

Lead Partner

SUBMIT YOUR SELF-NOMINATIONS FOR GGA LAS VEGAS 2020

The window for self-nominations to be submitted for the Global Gaming Awards Las Vegas 2020 is now officially open.

As the most respected and trusted Awards ceremony in the gaming industry, the Global Gaming Awards recognise and reward excellence displayed by industry companies across the previous 12 months.

The seventh edition of the luncheon ceremony will take place at the Sands Expo Convention Center on Monday 5 October, as part of the G2E show.

Any person can nominate any gaming industry company for an Award. Nominations can be submitted at GlobalGamingAwards. com/Vegas, along with a supporting statement, including reasons, products or achievements related to the last 12 months.

The self-nomination window will close on Sunday 24 May. All self-nominations will then be considered by the Gambling Insider editorial team. The Nomination Panel will put forward their own recommendations before the final Shortlist is decided.

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GAMBLINGINSIDER.COM

Nominated companies will then be able to provide a supporting statement to the Judging Panel, who will cast their first- and second-choice votes in all 12 categories, before the winners are revealed at the ceremony in October.

The 12 Awards up for grabs are: Land-Based Operator of the Year; Digital Operator of the Year; Land-Based Product of the Year; Digital Product of the Year; Land-Based Industry Supplier of the Year; Digital Industry Supplier of the Year; Customer Loyalty Program of the Year; Property of the Year; Product Innovation of the Year; Slot of the Year; Responsible Business of the Year; and American Executive of the Year.

Aristocrat was the standout winner at last year's ceremony, as it was the only company to take home more than one Award, winning Land-Based Industry Supplier of the Year and Slot of the Year with its Buffalo Diamond game.

The Global Gaming Awards Las Vegas are powered by Gambling Insider in association with G2E and are independently adjudicated

by KPMG Isle of Man. BetConstruct is the Lead Partner of the Global Gaming Awards Las Vegas.

ICE LONDON

ISSUES

ICE LONDON: A WEEK TO REMEMBER

After a week filled with the Global Gaming Awards London, networking parties and celebrity appearances, Owain Flanders looks back on the highlights of his first ICE London experience I experienced a certain sense of trepidation in the weeks before ICE London — perhaps slightly worsened by the warnings of colleagues who had already attended. While they were evidently excited for the headline event in the industry’s calendar, I was also urged to prepare for a hectic week full of interviews, meetings, networking parties and little sleep.

While interviewing industry executives for our ICE preview in GI Friday two weeks prior to the event, this same sense of nervous excitement always crept into the voice at the other end of the phone, regardless of their position or company. Executives outlined plans for lavish stands, press conferences and celebrity appearances, all the while stressing the incredible importance of an event which would see more than 35,000 industry professionals gather at ExCel London.

Needless to say, as I walked through the event doors with a packed schedule in hand, I had fully prepared myself for one of the busiest and craziest weeks of my career to date – and it certainly didn’t disappoint.

The first thing that grabbed my attention (and I’m certain this was the aim) was the sheer size of some of the stands. In particular, suppliers Novomatic and SBTech dominated huge sections of the show floor, with areas five times the size of some of their competitors.

Bar staff served cocktails while surrounding LED screens and speakers beamed graphics and sound, creating an all-immersive (and slightly alcoholic) experience.

The first significant event of the week saw the Gambling Insider team host the Global Gaming Awards London 2020 at the Hippodrome Casino. This offered me the opportunity to meet some of the industry executives I had spoken to but never met face-to-face.

It also offered them the opportunity to meet the annoying journalist who had been pestering them for information on one story or another; hopefully I didn’t disappoint.

Something I found significant about the Global Gaming Awards London was the gratitude shown by the Award winners, and the importance it clearly held to be nominated by their peers. As I interviewed Red Tiger CEO Gavin Hamilton following his second

34

GAMBLINGINSIDER.COM

win of the day as Chief Executive of the Year, he was clearly taken aback to have collected multiple Awards. But from the amount of applause he received when collecting each, it was evident the industry fully recognised Red Tiger’s achievements in the last year.

Sleep became an afterthought as the week progressed, and I was lucky enough to attend a number of after-hours networking parties at exciting venues. Particular highlights included a Paysafe party at the top of The Gherkin with a 360 degree view of London’s skyline, and an 888 event at Aspers Casino – both with excellent food, drink and company. On the Wednesday evening, Skywind’s party seemed to exceed all expectations for myself and most of those in attendance.

Held in a beautiful, traditional building in central London and decorated with a bank heist theme, the extravagant party felt more like a modern art exhibition than a networking event.

The ExCel was certainly not shy of famous faces throughout the week; particularly if, like me, you’re a football fan. Players from English Premier League football club West Ham United visited the event in partnership with payment supplier MuchBetter, ex-Arsenal player Ray Parlour attended as ambassador for operator VBet and ex-Manchester United goalkeeper Peter Schmeichel showed up as the new face of operator STS. However, these appearances were slightly overshadowed by one of the show’s biggest attractions for 2020 — the world’s fastest man.

On Wednesday, hosted by Ganapati for the promotion of the supplier’s new slot game, Usain Bolt entertained the ICE crowd with his DJing skills, later followed by an exclusive Q & A session in which a member of the Gambling Insider team managed to ask a few questions.

Undoubtedly, the pre-ICE warnings of my colleagues were not to be taken lightly, and as I dragged myself out of IGB Affiliate London on the last day, it felt like I needed a week of sleep to recover. But having experienced my first full ICE, it is clear why those within the industry consider it the most important event on the calendar.

Next year, I’m certain my trepidation will be replaced by excitement when ICE London week looms on the horizon.

COVER FEATURE

DRAFTKINGS/SBTECH

A perfect marriage Tim Poole speaks to DraftKings CEO Jason Robins, SBTech Chairman Gavin Isaacs and SBTech US President Melissa Riahei, as Gambling Insider examines every aspect of the DraftKings-SBTech merger and what the future holds for the new company

36 GAMBLINGINSIDER.COM

DRAFTKINGS/SBTECH

COVER FEATURE

GAMBLINGINSIDER.COM 37

COVER FEATURE

DRAFTKINGS/SBTECH

The key players Jason Robins – DraftKings Co-founder and CEO since

2008. Having grown DraftKings into a daily fantasy sports (DFS) and now sports betting giant, Robins will lead the merged organisation as CEO. Gavin Isaacs – Non-executive Chairman at SBTech

and member of the board at Galaxy Gaming. Isaacs is a former Scientific Games President and CEO, with vast experience of M & A. Melissa Riahei – President of SBTech US, joining the supplier

in June 2019. Riahei has been instrumental in the legalisation of online gaming in the US, previously serving as Deputy Chief Counsel to the Off ice of the Governor in Illinois.

Richard Carter – Appointed SBTech CEO in February 2016

following seven years at Deutsche Bank. It is hoped he will remain within the management structure.

Jason Park – DraftKings CFO as of June 2019, based in the operator’s Boston office.

Shalom Meckenzie – Co-founder of SBTech in 2007

and an important part of the DraftKings deal, according to Isaacs.

Diamond Eagle Acquisition Corporation – The special purpose acquisition company helped finance the deal, enabling DraftKings to go public.

Change has been afoot in the US market for some time now. At MGM Resorts International, Jim Murren’s 12-year reign as CEO is over. At Caesars Entertainment, the Eldorado Resorts supremos are moving in after last year’s $17.3bn merger. At Flutter Entertainment, regulatory checks are being carried out as it looks to complete its acquisition of The Stars Group. It is a transforming US landscape, pioneered by technology-first corporations, and the growth of mobile gaming and sports wagering.

No insignificant addition to this ever-growing list of alterations was December’s news DraftKings and SBTech will merge to form a new

38 GAMBLINGINSIDER.COM

public company, worth an estimated $3.3bn in market capitalisation.

Having engaged Diamond Eagle Acquisition Corporation to finance the deal, the operator hopes to have found the final piece of its jigsaw in SBTech’s technological stack. But how exactly did the deal come about? Who exactly was involved? What alternative options were evaluated? Where does this merger leave the two brands moving forward? Interviewing three key executives across both parties during ICE London, Gambling Insider sets out to establish the facts.

The starting point In many ways, DraftKings CEO Jason Robins had laid the foundations for his M & A plans in an interview with our Gaming America publication at ICE London 2019. Hinting the operator was “potentially looking at doing some M & A of our own” and emphasising the need to “control our own destiny,” it is little wonder DraftKings has arrived at this point. At ICE London this year, Robins tells us the idea was initially “floated out about a year ago,” having “stopped and started a few times.”

But for SBTech, that searched started even earlier. Gavin Isaacs, SBTech Non-executive Chairman, tells Gambling Insider: “I think it’s fair to say SBTech were looking at strategic alternatives more than 12 months ago. They then came across DraftKings and there was always an interest. The question was how and when it made sense. That culminated in everything coming together in December. Once we get regulatory approvals and things like that, we can close the deal.”

Despite SBTech’s strong European presence, its entry into the US market had been profound following the overturning of PASPA in 2018. As Isaacs points out, Churchill Downs had already been a US client of the sports betting supplier, while it also won the tender to become Oregon’s sole online provider in 2019. Once the possibility of combining with DraftKings became apparent though, Isaacs was not alone in seeing the potential synergies of merging its “huge database” with a company equally “product-orientated, young and enthusiastic.”

For the Australian, the DraftKings-SBTech deal is “a perfect marriage.”

The Kambi factor Not for the first time in the history of beautiful relationships however, there was originally another party involved. Having partnered with DraftKings in June 2018 – the month after PASPA was overturned – Kambi was the operator’s original sports betting supplier. The two firms enjoyed immense success together as DraftKings and FanDuel dominated the early US sports betting revenue charts, especially in New Jersey.

An extension to this partnership was announced in August 2019, but with reports first surfacing of DraftKings acquiring SBTech in the summer, there was a growing sense DraftKings-Kambi wasn’t going to last long term. While the deal has not been terminated at the time of writing, even Kambi CEO Kristian Nylén is operating under the impression this day will come in the near future.

But why did DraftKings agree to merge with Kambi's rival when it already had an existing relationship with Kambi? This question has led some analysts to the inevitable conclusion DraftKings must have approached the Swedish supplier first, prompting Isaacs to remark: “This industry’s full of rumourmongers.” When Isaacs first joined SBTech, there were even

DRAFTKINGS/SBTECH

suggestions his links with Scientific Games could lead to a merger between the two suppliers. “I’m not that smart,” he jokes.

Equally, Nylén recently told Gaming America DraftKings purchasing Kambi was “something that never really came up.”

Although, when we put the question to Robins, he answers with neither a yes or a no: “We did look at lots of different options, including other acquisitions and partnerships. This was the best option for us. I can’t really get into any specifics, but we did look at a number of other options.”

The influential figures When it comes to those who were most influential in agreeing the merger, Isaacs continues to cut a figure of modesty. According to the executive, he “didn’t have a major role at all,” only advising “when required.” Similarly, SBTech US President Melissa Riahei says she was “generally involved” but, having joined the company in June 2019, was busier with SBTech’s other US projects. “I give full credit for the deal to Jason and Shalom [Meckenzie, one of SBTech’s Co-founders in 2007],” Isaacs adds.

While it is clear Robins was at the spearhead of negotiations, he attributes a little more credit to Isaacs than the man himself. At Gambling Insider, we too are interested in the timing of Jason Park’s arrival as DraftKings CFO – also in June. “Both were very important parts of the deal and the negotiation,” Robins says. “Gavin, from just him and his reputation and the confidence his view of SBTech’s

COVER FEATURE

business gave me in their business, to his specific knowledge about how to get these types of deals done, was very helpful. Jason came in while the talks were already underway but, certainly, his expertise around deal structure and financing options helped accelerate and get the deal completed.”

Another key individual was Richard Carter, SBTech CEO since February 2016 and one of the stars of the Gambling Insider CEO Special in 2019. Carter was another “very important piece of glue,” according to Robins, helping bring all the relevant teams together.

The DraftKings CEO explains: “He did a lot of the analysis. He helped us with a lot of the diligence, helping us understand their technology, financials and all that. He has a lot of experience breaking down businesses and looking at financial statements.”

Where next for Carter and his team?

As the deal was announced, it was confirmed Robins will be CEO of the merged company and retain DraftKings’ management team, including co-founders Paul Liberman and Matt Kalish. It was also confirmed SBTech’s management team will be integrated into the new firm, although details of exactly how are yet to be revealed. They are, in fact, still being worked out. Isaacs says: “Jason’s going to be the CEO. I think we’re still working through that but, at this stage, most of the key people who drive SBTech will still be driving this business.”

Robins hopes Carter and the rest of SBTech’s senior management remain on board, although he admits that is as much up to them

“We did look at lots of different options, including other acquisitions and partnerships. This was the best option for us.

I can’t really get into any specif ics, but we did look at a number of other options” – Jason Robins

GAMBLINGINSIDER.COM 39

COVER FEATURE

DRAFTKINGS/SBTECH

as DraftKings’ side of the organisation. “Post-close, we’re in a process now of meeting everyone and figuring things out,” he states. “Our intent is to keep the majority if not all the management team in place. Part of that is up to them, so we’ll have to talk to everybody and figure out what their plans are.”

According to Riahei, full details of the new structure will be disclosed when the merger is expected to close in April. Her hope however, is similar to that of Robins. “We anticipate we will close the deal in April, but that [SBTech’s senior management remaining in place] is consistent with my understanding,” she says. “Part of SBTech’s success is the great people we have at the company and we want to utilise that talent.”

Diamond Eagle During the conclusion of the deal, Diamond Eagle was as important as DraftKings or SBTech themselves. For the purposes of the transaction, DraftKings was purchased by Diamond Eagle, allowing it to finance the SBTech acquisition and become a public organisation. The special purpose acquisition company (SPAC) secured a private investment of $304m from institutional investors, heralding from Capital Research and Management Company, Wellington Management Company, Franklin Templeton and others.

For a deal of this size however, DraftKings would likely have had an unenviable list of alternative options. So why specifically

“We anticipate we will close the deal in April. Part of SBTech’s success is the great people we have at the company and we want to utilise that talent” – Melissa Riahei

Diamond Eagle? “I had known the Diamond Eagle team for a few years beforehand,” Robins states. “I understood from knowing them and doing research what a SPAC was. So it was not a new topic or concept for me. But it really started with SBTech and once we knew we wanted the deal, that’s when I thought of a SPAC and brought them into the discussion. It was the best way to finance it and also had the benefit of going public for us.”

40 GAMBLINGINSIDER.COM

As for the announcement itself, which came just before Christmas, both companies were eager to release the news as quickly as possible, rather than waiting for a strategic opportunity in the calendar. Isaacs explains: “Neither of us were publicly listed at the time, so a lot of people try and make their presentations to associate it with public company events such as quarterly results. There may be a lag in results and you may need to lift your earnings or share price. That wasn’t relevant for us. Once we had the deal done, we wanted to announce it, because we’re excited for the future.”

Independence or integration?

Making the merged company private is something that was indeed discussed, according to Isaacs, although both companies eventually arrived at the conclusion a public entity was the best possible outcome. An equally important aspect of the deal, continually emphasised by both parties, is SBTech’s desire to remain focused on its B2B business. While Isaacs says the merged organisation is still working out its “overall strategy,” SBTech will focus both on serving DraftKings and its existing European and US customers, forming a “great circle for all the customers in the pie.”

This message is further underlined by Riahei when we ask how different SBTech’s plans are post-deal to its initial pre-DraftKings strategy. She says: “I think the plans haven’t really changed. Having been in this industry in the past decade, everyone in the US was

DRAFTKINGS/SBTECH

“I don’t think the market can support 100 brands.

But DraftKings are so well-positioned with their background, database, marketing and product skills” – Gavin Isaacs

always anticipating the legalisation of sports betting, but never really believing it would happen. Everything since then has been opportunity and momentum. I think what has happened now SBTech has merged with DraftKings is the combination of the two companies will really enable us to accelerate, in terms of technology, but the plan is still the same.”

DraftKings vs. FanDuel Exactly how strong a position this leaves DraftKings in is the question all analysts – and competitors alike – will be asking. As already discussed, in the early days of post-PASPA US sports betting, two brands dominated the market: DraftKings and FanDuel. The competition is now increasing, with Roar Digital – MGM’s joint venture with GVC Holdings – William Hill and Fox Bet just some of the names vying for market share.

But for the month of January 2020, DraftKings and FanDuel were still way out in the lead in the state of New Jersey (while expanding successfully into other states too). FanDuel’s Meadowlands sportsbook generated $26.5m in monthly sports wagering revenue and DraftKings-partnered Resorts Digital took $15.9m. The closest competing location – Borgata – generated just $3.2m.

With SBTech now in tow, DraftKings will no doubt look to increase that gap to the rest of the market, pushing FanDuel ever closer in the markets where it is a close second. “I think there will be more consolidation," Isaacs says. "I don’t think the market can support 100 brands. But DraftKings are so well-positioned with their background, database, marketing and product skills. Putting together the two companies gives them a very strong competitive advantage.”

From Robins’ standpoint, differentiating DraftKings’ product is the key to capturing market share. “At our core, we consider ourselves a product and technology company,” he states. “That’s really where we’ve been the most differentiated in our prior history of DFS. It’s also

COVER FEATURE

what we think is most important for differentiation and capturing of market share, not just in the US but everywhere frankly. We always had the belief it didn’t make sense to outsource; we wanted more control over our entire technological stack to achieve our long-term goals around growth and this gives us that.”

International plans As this ever-changing, ever-consolidating industry continues on its current path, Robins describes DraftKings’ stance on future M & A as being “opportunistic.” If the operator never has to make another acquisition again, he says, his team would be content.

Equally, if the right opportunity presented itself within the next year, it wouldn’t be “off the table.” “One of the things we pride ourselves on as a company is we can figure it out along the way,” he comments. “The core of our thesis is: How do we reach as many customers with the highest-quality experience as possible?

I think SBTech gives us the complete toolkit to do that.”

Where Robins remains consistent with what he told Gaming America last year is DraftKings’ US focus.

Internationalisation plans are not being accelerated, although the SBTech deal does add a new dynamic to the equation.

“We’re always assessing different opportunities but, for the moment, we think the US is the biggest point of focus for us, outside of that existing B2B business SBTech has,” Robins confirms. “From a B2C standpoint, we’re focused on the US right now. But this does accelerate things by giving us substantial revenue and a meaningful presence outside the US. If we didn’t do this acquisition, I don’t think we would make as significant an investment outside the US.” Robins also highlights the fact DraftKings isn’t simply “buying market share” and that this is a “horizontal integration.” These are naturally important considerations for a company that, while growing at an incredible rate, reported a loss of $114m for January to September 2019. “If we ever did at some point want to enter into any of the international markets as a B2C provider, this gives us a launching point with SBTech, having already obtained their license and configured their software. Those are two big benefits.”

A natural evolution Once the deal is concluded, no US competitor can ignore what this merger means for the future make-up of the market. SBTech’s technological synergies will no doubt be crucial to DraftKings’ growth from here and those involved in the transaction have now earned the sense of a job well done. Riahei explains: “We’re all very excited about the merger. You have SBTech as a supplier in numerous European jurisdictions for the past decade, although we’ve done a lot during the time we’ve been in the US. The combination with DraftKings will really help the company have a foothold in the US.” Riahei’s closing statement offers the perfect summation of what Isaacs earlier dubbed the “perfect marriage.” She concludes: “For DraftKings to finally have its own technology will make a huge difference when offering a differentiated product in the marketplace. In terms of what the optimal situation would be in these rapidly emerging markets, it’s a natural evolution for both companies.”

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JURISDICTIONS ROUNDTABLE

ROUNDTABLE: WHAT DOES YOUR JURISDICTION OFFER?

By Owain Flanders

Representatives from Gibraltar, the Isle of Man and Alderney speak with Gambling Insider about the benefits their jurisdictions can provide gambling companies

THE PANEL Andrew Lyman – Executive Director of the Gambling Division, Government of Gibraltar Lyle Wraxall – CEO, Digital Isle of Man Susan O'Leary – CEO, Alderney eGambling

What are some of the main benefits your jurisdiction can offer as a base of operations for gambling operators?

AL: Gibraltar is a centre of excellence and intellectual property for gambling. We have between 3,000 and 3,500 employees here, so the skill sets needed for the industry are already here. It’s also an international finance centre, so the tax and other economic conditions are favourable for operators.

Then also there is the lifestyle here, the access to Spain and 320 days of sun every year.

LW: One main reason why businesses are choosing the Isle of Man at the moment is our reputation. We’ve got everything an operator could want on the Isle of Man, including banking solutions, crypto, blockchain, data centres and consultants with the experience required for global expansion. We have a stable government who are fully supportive of the gaming sector and a fantastic regulator that is very approachable.

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SO'L: Being a global-facing regulator, licensees are afforded the flexibility and freedom to access whichever markets work for their business, providing local laws are adhered to. The Alderney license is unique in being the only highly respected license to open up the pre-regulated space to its licensees.

Considering that 70% of the online gaming sector is still pre-regulated, the potential afforded here to businesses looking to enter these markets having received the necessary approvals from a respected and recognised licensing body is huge.

Alderney is outside the EU and EEA and it is also the only regulator to provide a licensing framework for businesses who aren’t domiciled in the jurisdiction and of course for those that are too. The option of obtaining a B2B or B2C Associate Certificate, which mirrors the standard license model in effect, means the benefits of the Alderney regime are available to any business, wherever they are based.

Another significant benefit is the favourable tax regime. There’s no VAT or gaming duty levied and zero-rated corporate tax. For those who choose to base their operations in Alderney, there are many additional benefits and the island provides a fantastic base for international businesses.

How can your jurisdiction minimise the challenges inherent in joining the gambling industry as a new business?

SO'L: There’s no doubt banking and payment processing issues are a challenge for the entire industry and we’ve seen it become more and more difficult. But the

Alderney licensees have found that holding an Alderney license demonstrates to the financial institutions that the business is operating to a high standard of regulation from a leading global regulator, which can be enough to mitigate the perceived risk.

Added to that, Alderney has received the highest levels of endorsement from Moneyval and the Financial Action Task Force on its approach to AML; not all jurisdictions can claim such a positive evaluation.

LW: All the businesses we have here on the Isle of Man pull together and support one another in the online gaming community.

Andrew Lyman

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JURISDICTIONS ROUNDTABLE

welcomed. This transparency offers licensees a significant opportunity to run their operations in line with internationally recognised best practice, all under the security of the respected Alderney licensing structure.

LW: The companies in the Isle of Man are now a lot more mature and we are seeing a lot more M & A activity than we did a few years ago. This means we had to restructure the way we operate. We are no longer just going out to attract new businesses to the Isle of Man, because it is equally if not more important to spend time with the businesses we have here and ensure they have everything they need to grow and succeed on the island.

Lyle Wraxall We do have some new entrants and we’ve been able to work with senior people from our existing operators to assist them. We also have an Online Gaming Strategic Advisory board where we talk about what the industry needs and how the government can support it further. The newer entrants are invited into this forum so they can have a seat at the table.

AL: Traditionally, Gibraltar has had a policy which is based on only accepting licenses from blue-chip brands with a gambling history in other jurisdictions. But certainly over the last two years, we have more of a risk appetite for start-ups. We’ve licensed two relatively well-invested start-ups and have an appetite for new business and emerging market business as well.

What are some of the biggest changes you’ve seen in your jurisdiction’s gaming industry in the past few years?

AL: Gibraltar’s industry has been fairly stable.

The GVC family of companies — including Ladbrokes, Coral and Bwin — have been here for a considerable time, and it’s the same with BetVictor, Betfred and William Hill.

As Gibraltar is substantially UK-facing in its approach, these companies find it is a good base.

In some respects, the biggest change we have seen is the M & A activity.

SO'L: A significant development last year was the clarity on the jurisdiction’s position on economic substance. There are now very clear and definitive guidelines on what constitutes sufficient economic substance, recognised by ECOFIN and OECD. The requirements are easily achievable and the development has been positively

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How much emphasis does your jurisdiction place on new technologies such as blockchain?

SO'L: We assess new technologies in such a way as to address how they fit into the regulated space. Alderney has a very broad and flexible regulatory regime which incorporates all types of gambling activity and we take a pragmatic, risk-based approach to regulation – this includes how we assess new supporting technologies such as crypto and blockchain and how they are used within a licensee’s operations. Anything goes with regard to new technologies, provided it works within the already flexible framework.

LW: We launched our blockchain proposition last year. It’s very different to Malta’s proposition in that we don’t regulate the technology. This works in the same way that we don’t regulate the technology for financial services or banks. Through both our gambling regulator and our financial regulator, we have a set of regulations that work for blockchain. We will have a dedicated blockchain team that support businesses coming into the island. We also make everyone go through an application process which is designed to ensure there are no red flags coming to the island. We also have a dedicated blockchain office space now which is actually fully sold out, so we are expanding that.

AL: Gibraltar has actually now established a regulatory regime for blockchain and that has been in force for some time now. They have now had a number of licenses in that particular space. We haven’t as yet licensed either a crypto-using operator or someone who is using distributed ledger technology, but we are open to applications and there has been some interest. We’re up and running as far as we’re concerned, so the issue now is the appetite of operators to bring propositions to us.

Do you expect Brexit to have any impact on your jurisdiction’s industry?

AL: There has been a lot of uncertainty and obviously that has caused angst for operators. One of the main issues here is the issue of border fluidity, but the Government of Gibraltar is focused on working with the Spanish authorities to ensure those cross-border flows sustain.

Undoubtedly, Brexit will result in change and we will see a shrinking of EU business being conducted from Gibraltar; but with change comes opportunity. There is a strong opportunity for Gibraltar to consolidate as a UK-facing hub and grow, and with our attitude to emerging market businesses, that is more likely to grow the numbers here rather than decrease them.

SO'L: Being outside of the EU and EEA, there’s no direct impact on Alderney from Brexit and, in fact, Alderney has been able to offer a safe harbor during the recent times of mass uncertainty. That being said, we’ve been speaking to many operators who are more certain of their position now that Brexit has arrived.

Many EU businesses are looking to expand their operations outside of the EU and we’re helping them to access new markets under the Alderney license through our vast network, maximising the opportunities available.

LW: We were never in Europe to start with, so any impact on the island will be the impact on the UK. Most of our operators are outward-facing, so the impact we’re looking at is what will change within the UK and our relationship with the UK. Any of our companies that do have a UK license will have a separate arrangement with them anyway, so we’re not expecting much change.

Susan O'Leary

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PROBLEM GAMBLING

A CALL FOR BETTER RESEARCH

By David Cook

Online gaming futurologist Mark McGuinness asks for more rounded research in tackling problem gambling, arguing against conforming to labels and fads

Mark McGuinness

MARK MCGUINNESS has more than 23 years’ experience in digital marketing director roles with both private and public online gaming operators.

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The year is 2020, and this could be the opening sequence of a sci-fi movie in a galaxy far, far away. The future isn’t happening tomorrow; it’s happening now. The planet and its inhabitants are looking into the eternal abyss and potential mass extinction, due to the fragility and failing of Earth's ecosystems, yet the powers at be continue to procrastinate, pontificate and gamble in the forlorn hope things shall reset and get better.

The new decade of continued turmoil in our hyper-connected digital world goes unabated. We are continually exposed to fake news and a tsunami of negativity in all quarters, almost on a minute-by-minute basis. It also appears in this oxymoron environment where ludicrous labels and social fads rise and fall, driven by the so-called 'snowflake' generation. It’s also apparent that technology and today’s digital platforms allow everyone to push their own agenda on how you should live your life. The minority or singular voice can impose their social compass on you and unravel a brand or indeed individual in minutes.

Of course, it is important to be open-minded and respectful of people’s opinions, even when you disagree, but now it is apparent that disagreement or debating based on empirical or hard facts is met with disdain and anti-sentiment.

To quote Richard King: "Everyone has an opinion and the guy screaming for censorship may be the next guy to have his ideas cut off."

MOVING FORWARD What does the future hold for the online gaming industry in Great Britain, after the ban on gambling with credit cards comes into force on Tuesday 14 April.

First, the large majority within the online gaming industry are fully supportive of measures to reduce gambling harm across vulnerable societal groups. However, the measures or consensus and the journey to achieve those goals and statements perhaps needs closer scrutiny from independent scientists that are uninhibited and deal with empirical data, as well as qualitative and quantitative research methodologies.

Gambling is, as we all know, one of the oldest human activities since the dawn of civilisation, and continues to exist across many cultures.

Humans — in the main — are risk-takers and we ‘gamble’ every day in our life’s journey of continuous choices and decision processing. We like to believe we rationalise and calculate, but in reality, the majority of our decision-making is emotional, irrational and highly complex. The average adult processes 35,000 conscious decisions every day, while 226.7 decisions each day take place on the topic of food alone. We are all unique individuals, and we seek and are encouraged to be individual, yet we are exposed to a version of ourselves promoted by the media, social platforms and society to conform to certain values. We are also influenced by what we see, what we hear, what we smell, and those close to us.

About 24 million adults gamble in Great Britain, with 10.5 million of those gambling online, according to the Gambling Commission. Millions of adults gamble responsibly, or 36% of the current UK population of 66 million.

If we delve a little deeper, the same source information (Gambling Commission and UK Finance) states 800,000 consumers gamble using credit cards. Therefore, reflected as a percentage of the total adult population of 24 million gamblers,

PROBLEM GAMBLING

the portion of them using credit cards to gamble is 3.33%. The total represents 7.62% of online gamblers.

Looking further, the source information claims 22% of online gamblers using credit cards to gamble are classed as problem gamblers, with more at some risk of harm.

This is based on research conducted online

by Populus, which covered a representative sample of c.2,000 adults, of whom c.150 had reported using a credit card to gamble online.

Looking at these numbers, it could be suggested the data sets perhaps aren’t statistically robust, given the small data samples. Of course, in an industry such as ours, which is fundamentally governed by mathematics, statistical models and outliers, it appears the numbers still support that the majority of adults gamble responsibly.

The questions that therefore arise are: Are the data sources presented in a statistically robust way given the small sample size? Are they truly representative of the wider 24 million adults who gamble responsibly, as the 2,000 sample size only represents 0.008% of the population?

Should there be a wider scaled-up research program about credit card usage linked to harmful behavioural traits?

The threshold question, and perhaps the elephant in the room that does need to be addressed, is that once credit card usage is banned in April, what reduction in gambling harm can be forecast? In plain terms, shall it reduce the incidence of harm, or shall it merely masquerade and transfer the problem to another payment method or indeed behaviour?

MORE DATA PLEASE... AND FEWER OPINIONS It's clear the industry and regulators need to unite to reduce gambling harm, and we

are working towards that direction to agree a tolerance level that is acceptable to all stakeholders. However, the banning of credit cards is perhaps not the correct route. Credit card usage has declined in popularity, as evidenced by the investment of both major credit card companies in the fin-tech space, and general consumer trends towards a cashless and contactless society.

It could also be argued there has been an erosion of consumer freedom of choice by what could be perceived as the nanny state. Unless I’m mistaken, consumers can still purchase alcohol and tobacco using their credit cards; both of which are in the same temperance movement basket that gambling now finds itself in and could result in harmful outcomes.

Now is not the time or place to vilify and introduce a modern day temperance-like movement with one-sided information and reduction or restriction of a consumers’ choice of payment methods. The time is to work together and address the deeper societal challenges that are at the heart of the mental health epidemic and are linked to behavioural traits that can induce harm, be it via gambling, alcohol, drugs or online shopping.

We need to drive research in the growing field of behavioural economics, which looks at the study and the effects of social, cognitive and emotional factors on the economic decisions of individuals; gaming and gambling are affected and influenced by those processes.

We owe it to ourselves and to society to help one another and provide medium- to long-term solutions and behavioural changes for the good of all.

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“ARE THE DATA SOURCES PRESENTED IN A STATISTICALLY ROBUST WAY GIVEN THE SMALL SAMPLE SIZE? ARE THEY TRULY REPRESENTATIVE OF THE WIDER 24 MILLION ADULTS WHO GAMBLE RESPONSIBLY, AS THE 2,000 SAMPLE SIZE ONLY REPRESENTS 0.008% OF THE POPULATION?”

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HIGH-STAKES POKER

LAS VEGAS: SPORTING CAPITAL OF THE WORLD?

By Oliver Lovat

Oliver Lovat on how sports and betting go hand in hand in Las Vegas, and how it may even be primed to eventually host the Olympics

When I lived in London, on my short walk from home to the tube station, and again from the station to the office, I passed a dozen bookmakers. Ray Winstone barked live in-play odds at every ad break during the football. Even on the highbrow Radio 4 Today program, the tips for that day’s horseracing were suggested and discussed.

However, when I moved to the US in 2015, I discovered this sports-obsessed nation had a very complex relationship with betting. This was to change dramatically in four short years.

SPORTS BETTING IN LAS VEGAS Although gambling was made legal in Nevada in 1931, sports betting was kept off the main casino floor for nearly 40 years, partly due to the large 10% federal tax on sports wagering.

Some bookmakers in town were happy to work with this tax burden, such as Jimmy “The Greek” Snyder and Downtown legend

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Jackie Gaughan, who operated books outside the main casinos until the tax was reduced to 2%. In 1974, Gaughan opened a sportsbook inside his Plaza casino on Fremont Street in 1975, which was to be the first place to watch and play sports inside a casino.

Las Vegas was still the only legal jurisdiction for sports betting in the US, and would remain the only state with fully-regulated sports betting until 2018.

Legendary illegal sports bettor, and subject of the movie Casino, Frank “Lefty” Rosenthal, opened the first Strip sportsbook in the Mob-controlled Stardust in 1976, with hundreds of seats and six giant screens for patrons to watch live sports, setting the template for the sportsbooks we see in Las Vegas casinos today. In 1983, the tax on sports betting was reduced again, to 0.25%.

Gambling was an anathema for the North American major leagues. Gaming companies were not permitted to advertise during sporting events; even the name of the Super Bowl was not permissible to be used

by Las Vegas casinos in advertising their events around it, with each resort hosting “big-game” parties to denote the event that was being viewed inside.

Everything changed however, with the overturning of PASPA in 2018.

Taking 2018 as a sample year, of the $5.8bn of gaming revenue generated on the Strip, $18m was generated for the casinos in race bets and $73m in sports bets; about 1.6% of total gaming revenue. Many casinos actually outsourced their sports betting operations, such was the cost in setting up and running the business. This left William Hill and Cantor Gaming to set odds in multiple casinos, including The Venetian and Cosmopolitan resorts, with more than 11,000 rooms between them alone.

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ALL CHANGE Las Vegas loves events. The city invented the residency model in the 1950s, with The Rat Pack and Elvis Presley the landmark headliners. The model was reinvented by Celine Dion, Elton John and Rod Stewart, and made relevant for the new generation

by Britney Spears, Lady Gaga and the dozens of DJs that make Las Vegas their second homes.

In the US, no event is bigger than the Super Bowl, and unsurprisingly, it is one of Las Vegas’ busiest weekends. Likewise, March Madness - the college basketball tournament - is a boon for visitation.

Boxing is synonymous with Las Vegas, as is the Ultimate Fighting Championship, which is headquartered in the city. When fights are held, visitation and gaming revenue both spike.

When I arrived in Las Vegas in 2015, local professional sports were almost absent.

However, in 2017, the Vegas Golden Knights became the first professional ice hockey team to play in the valley, with regular sell-outs and hundreds of thousands of away fans coming to town to experience a different type of “knight-time” experience. Las Vegas Lights FC, playing in the United Soccer League Championship, brought the sport to Downtown, perhaps as a precursor to an MLS team. Howard Hughes Corporation built the Las Vegas Ballpark in Summerlin, for the renamed Las Vegas Aviators baseball team. MGM Resorts hosts the WNBA team – Las Vegas Aces. As I write, the city awaits the launch of the Las Vegas Raiders, due to be housed in a multi-billion dollar stadium that will undoubtedly be one of the finest in the world. Las Vegas is poised to be one of the leading sporting destinations in the US. With the proliferation of states legalising sports betting, what was once a minor part of the casino revenue picture became an opportunity for gaming operators. By year end 2019, Oregon, New Mexico, Iowa, Arkansas, Mississippi, Indiana, West Virginia, Pennsylvania, New York, New Jersey, Rhode Island and New Hampshire had joined Nevada in offering fully-regulated sports betting.

Total US sports revenue generated last year was $790m. This is just the beginning and the major casino operators, such as Caesars Entertainment and MGM, which cater for tourists, and Station Casinos and Boyd Gaming, that focus on locals, are making significant investment. William Hill is also making major moves and the FanDuel/DraftKings fantasy platforms have been revived.

Like poker, which for a brief moment, brought occasional players into gaming in a wider context, sports betting introduces sports fans to betting with potential increased visitation to Las Vegas.

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The major operators have signed partnerships; NFL has partnerships with Caesars, DraftKings and Sportradar, the NHL and NBA have partnered with MGM and William Hill, and MLS is partnered with MGM. Bleacher Report now has a fully-functioning studio at Caesars Palace. Many individual teams have also followed suit; notably the Raiders with their MGM partnership.

THE LAS VEGAS OLYMPICS? Economist Stefan Szymanski of the University of Michigan made the case for Las Vegas to potentially be a future host of the Summer Olympic Games in the Economic Club of Las Vegas’ look at the 2020s.

With the eye-watering costs to hold the Olympics, huge infrastructure investment and dubious legacy value, there are very few cities that are willing or able to host the Olympics. Las Vegas is ready, with 150,000 hotel rooms (potentially rising to 160,000 by close of the decade) for an Olympic village, tourists and media. It hosts more than four million sq. ft. of convention/events space, plus the T-Mobile Arena, Grand Garden Arena, Sam Boyd Stadium, the Thomas and Mack Center, the MSG Sphere, Cashman Field, Allegiant Stadium, Lake Mead for sailing and Lake Las Vegas for triathlon; all could be utilised.

Szymanski's one caveat was the history of Las Vegas may preclude the International Olympic Committee from considering the city as a suitable venue, but as we see with the US sporting bodies, this view is surely outdated.

Las Vegas is not just the entertainment capital of the world, but could very soon be the sporting capital. With billions of dollars active in development and investment, Las Vegas is primed for an exciting new phase.

OLIVER LOVAT FRICS leads the Denstone Group, which offers strategic advice and consultancy on customer-facing, asset-backed investment and development, with a focus on casino resorts.

He is a Fellow of the Royal Institution of Chartered Surveyors and visiting faculty at Cass Business School, City, University of London.

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BETSSON

CONSOLIDATION IN SWEDEN?

By Tim Poole

Betsson AB CEO Pontus Lindwall speaks to Tim Poole at ICE London about falling share prices in gaming, the prospect of consolidation in Sweden and the operator’s expectations ahead of Euro 2020

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BETSSON

Overall, how do you reflect on 2019 for Betsson, from an investment and finance point of view?

It’s been a challenging year, because we’ve had impact from regulation in one way or another on a few of our main markets. Sweden took a big hit with the tax and increased competition.

The Netherlands obviously imposed a lot of changes we had to adapt to, which of course is aiming at keeping our operations down. This, I think, is not fair from the authorities and had a big impact. Increased tax and a marketing ban in Italy also affected us.

These are the kind of issues going on with some of our main markets.

On the positive side, I would like to mention Betsson has made a lot of achievements, in terms of planning for the future, looking at new markets; we recently made our first business agreement for our sportsbook, commercialising it as a B2B company.

We have been exploring a lot of new opportunities. None of them will be massive on the revenue side for 2020 but, for the future, it’s really, really interesting.

How do you see markets like Sweden faring in 2020? Do you expect an improvement or are conditions currently more or less the same?

I think we will see an improvement from our side; I expect that. But then I expected an improvement in H2 last year, which didn’t happen. I think in the first half of 2019, we were still in a state of shock when trying to understand what was going on. Now, we have taken measures, scaled down marketing and returned to the drawing board. We are up to pace with our sports betting offering and doing really, really well in Sweden, sponsoring the major ice hockey leagues. Ice hockey is huge in the Nordics; it’s almost like football for us.

Apart from that, I expected more to happen on the M & A side already in Sweden, but it didn’t. Some companies are working in red figures and I don’t think they intend to stay there forever.

I think consolidation really makes sense.

There is no reason to have 80 to 90 different suppliers of the same product, more or less, in a small market like Sweden, so I think we’ll see more consolidation in 2020.

Betsson acquired Suaposta, a horseracing operator in Brazil, towards the end of 2019. Off the back of that deal, how much of a focus will Latin America be for Betsson long term?

I think Latin America is a very interesting market. We have seen

“I THINK CONSOLIDATION REALLY MAKES SENSE. THERE IS NO REASON TO HAVE 80 TO 90 DIFFERENT SUPPLIERS OF THE SAME PRODUCT, MORE OR LESS, IN A SMALL MARKET LIKE SWEDEN”

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regulatory initiatives happening there.

Obviously, this acquisition with the horseracing site and that organisation means we are prepared for a bigger part of that market when it is about to regulate. We have the ambition that Latin America will be an even bigger part of our operations in the future.

The issues you previously highlighted obviously had an impact on the Betsson share price in 2019. With a busy summer ahead involving both the Uefa European Football Championships and the Summer Olympics, do you see Betsson’s stock value improving in 2020?

What we saw with the share price, it’s not really company-specific. We’ve been doing pretty well and we’re a really healthy company, in terms of profitability. We’ve always been operating with a decent profit margin, which means we give contributions to our shareholders. In that way, we are financially very healthy. I think we have seen a little bit of a downgrade of the whole industry, in terms of valuations.

When Denmark announced they were going to raise the tax, the whole stock market and gaming prices went down. I got a question from some people asking why we took such a

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BETSSON

hit in the stock market, because we are very small in Denmark. But the thing is, it wasn’t the damage to revenue, as such, investors were interested in – it’s the fact regulators can change the tax by 40% just like that. That’s something we cannot predict or consume. It was rather a shift in the whole valuation; not on Denmark as such.

In a way, that’s an analysis I understand; it’s sad but it’s easy to understand. If you sit as an investor, you think ‘this company, Betsson, is not in control of its own business.’ The control is mainly with authorities, who you cannot trust really – which has been shown time after time. We have seen in the Nordics a bit of pressure on the share price; some institutions have left the industry.

But, at the end of the day, we are becoming more and more regulated, and we are quite a big company in a growing industry. We should be a part of the bigger investment portfolios anyway. I think that will have to shift back soon – hopefully already during 2020.

In terms of what you can control, how big are your revenue expectations during the busy sporting summer ahead?

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“ON THE POSITIVE SIDE, I WOULD LIKE TO MENTION BETSSON HAS MADE A LOT OF ACHIEVEMENTS, IN TERMS OF PLANNING FOR THE FUTURE, LOOKING AT NEW MARKETS; WE RECENTLY MADE OUR FIRST BUSINESS AGREEMENT FOR OUR SPORTSBOOK, COMMERCIALISING IT AS A B2B COMPANY” We have done no predictions or estimates which are official. But we have been through several of these big tournaments and we know when there is a big tournament like that, there’s a lot of interest and a lot of people focus on sports that don’t normally focus on sports. It brings activity to the site, not only to the sports betting but it also generates offerings through cross-sell.

When the tournament happens, we get more questions from press on

possible outcomes and things like that.

We will get more focus when that happens and it will drive activity for sure.

Then again, it’s always hard to say how it’s going to turn out financially.

That’s the beauty of sports betting: you never know. Normally, we start off with some big hits, because favourites are easy to predict in the beginning of the tournament. Then, when it builds up, things happen and it becomes more and more interesting at the end of the tournament.

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MILLENNIAL MARKETING

IS MILLENNIAL MARKETING CREATIVE?

By Owain Flanders

Using examples from the UK market, we assess how gambling operators can cater their marketing efforts towards a younger demographic

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MILLENNIAL MARKETING

“Creativity and branding is almost null and void in our vertical; when everyone is predominantly selling the same thing, it’s very difficult to have a creative stance that cuts through.”

Speaking at a marketing panel hosted by supplier Genius Sports Media last year, Sam Behar, Head of Global Marketing at operator Marathonbet, gave his opinion on betting companies thinking too far outside the box when it comes to marketing.

The technological environment in which consumers live has changed significantly in the past decade, and while this clearly affects the products being offered, it also influences the way those products are marketed.

As a result of this changing environment, marketing teams now face the challenge of developing a strategy catered towards a generation of consumers raised withinthis technological space – otherwise known as millennials.

This poses its difficulties for the gambling industry’s marketing executives.

Should they continue with business as usual, simply paying for space online to demonstrate their latest prices, or does a change in technological environment and audience require a different tactic to anything prior?

Behar makes a point that has been repeated at a number of industry events – albeit only in regards to UK sports betting. The offering provided by UK bookmakers is often seen as too similar to warrant creative marketing, which is something that can be reflected in the advertising itself.

Marathonbet’s simple marketing strategy focuses on its ability to offer the best price on football, while Sky Bet associates itself with Jeff Stelling, and Bet365 employs Ray Winstone to provide its odds with a cockney twang. But, while these tactics all have their merits, is this an effective strategy for the new generation of gambler, or is this an over-simplistic tactic of a bygone era?

While there will always be those consumers who focus solely on price, there are also those who want a real connection with their bookmaker. For Matt Wilson, CEO of sports media agency Ball Street Network, creative marketing is more important than ever in the gambling industry for this very reason — especially in regards to a younger demographic.

Even before I sit down with him at the offices of his self-started marketing business, it is clear from his company’s work with operator Paddy Power that he takes a very different stance to Behar on this topic.

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Josh Jolliffe When marketing to millennials, Wilson explains how advertisements that interrupt a viewer’s desire for content are often disregarded, while companies that interact with a person’s interests stand a better chance of building loyalty. As an example of this, he clicks through videos on his YouTube history, where a video about the Ultimate Fighting Championship is suddenly interrupted by an irrelevant advertisement. Wilson explains how, in disrupting the viewer’s desire for a certain type of content, the advertisement is at odds with the potential consumer’s interests, which will lead to them disregarding the product being advertised.

He argues that instead of employing this archaic marketing technique, operators should invest in what he refers to as ‘communities,’ to create a connection with the consumer. Wilson says: “Millennials follow their interests.

They spend voluntary time, and lots of it, around that subject matter and the curators of those interests. There is no one way to reach these people now.

Consumption is diverse. The world is a collection of communities. What people want in those communities is authenticity and things that are in line with what they expect.”

A number of UK bookmakers are starting to see the importance of creativity when it comes to the new generation of players. No doubt this is also influenced by an increased limit to the way operators are able to advertise, with restrictions around TV advertising and increased pressure for limits on gambling sponsorship in sport.

One operator which consistently demonstrates its ability to think outside the box, rightly or wrongly, is Paddy Power. Whether it’s through making comical videos with football stars for television or simply creating humorous Twitter content, the operator stands out from other UK bookmakers in its creativity.

Wilson believes Paddy Power’s ‘Save our Shirt’ campaign — a campaign it should be added Ball Street worked on — was an example of how it should be done. It would be hard to disagree with him considering the buzz the operator generated around what is a relatively small community of fans.

English Championship football club Huddersfield Town currently has close to 204,000 Twitter followers, which pales in comparison to English Premier League teams such as Manchester United, which has 21 million, or Chelsea, with close to 14 million. However, when Paddy Power chose to ‘un-sponsor’ the shirt of Huddersfield in July last year, it generated conversation and dominated headlines.

Similarly to Paddy Power, 888 has also been investing in content to appeal to certain communities of sports fans. The operator’s YouTube channel includes a number of video series, including a series in which football fans from opposing teams discuss a controversial topic, and a series in which jockeys explain the importance of the Cheltenham Festival.

While the content is clearly created by 888, the brand is unobtrusive and allows viewers to organically enjoy

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MILLENNIAL MARKETING

the content – perhaps building some loyalty to the brand in the process.

While these might be examples of operators deploying their creativity effectively for a millennial audience, Josh Jolliffe, Genius Sports Media’s Sales Director for Europe and Africa, believes no matter how bold or unconventional a marketing campaign might be, it still needs to be backed up by an appealing product at a good price.

Jolliffe gives Sun Bets as an example of a brand that collapsed as a result of a sub-optimum product. Backed by Tabcorp, Sun Bets adopted the branding of one of the biggest newspaper and digital news brands in the UK. It might come as a surprise therefore that in July 2018, Tabcorp reported a loss of £51m ($66.4m) from the venture, forcing the operator to pull out of its 10-year deal with News UK for ownership of the brand. Sun Bets has been inactive ever since.

Although this is one example of an operator failing to progress in a competitive UK market, Jolliffe believes it is possible for others to succeed by running a more targeted branding strategy, while investing in product

Matt Wilson

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and top-quality pricing. He argues that creating live sporting narratives could be one way to do this.

“We’ve seen huge uplifts in campaigns among 18- to 35-year-olds when they are designed to tap into the live sporting narrative, in terms of timing and content.

This means providing live odds and match stats for games you know the target audience cares about – at the right time and in an authentic, non-pushy way.”

Regardless of an operator’s strategy, it is evident the new generation of

player might require something more from marketing campaigns than what they have been getting up to this point.

In an age when there are many diverse advertising options, and in a market as competitive as the gambling industry, Behar’s argument for the inefficacy of a creative stance suggests only a lack of imagination. Whether it be through creating YouTube content, providing live odds and match stats, or getting creative when it comes to football sponsorship, it’s high-time for marketing teams to start thinking outside the box.

“CONSUMPTION IS DIVERSE. THE WORLD IS A COLLECTION OF COMMUNITIES. WHAT PEOPLE WANT IN THOSE COMMUNITIES IS AUTHENTICITY AND THINGS THAT ARE IN LINE WITH WHAT THEY EXPECT” - Matt Wilson

FEATURES

CASH-OUT

THE FUTURE OF CASH-OUT

By Aidan Williams

Gambling Insider reports on cash-out’s success to date – and whether it is set to increase in importance

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It cost one anonymous Warwickshire-based player £178,000 ($230,438), but secured him £72,000. Leicester City’s English Premier League title victory in 2016 stunned the sporting world, but by accepting a cash-out offer almost two months before the end of the season, he both won and lost out on a huge sum of money from an improbable £50 bet.

That story was perhaps one of the best things that ever happened to cash-out (at least in the UK), as the stories about those who had been bold enough to bet on Leicester to win the title were being reported across B2C media. Any number of unlikely situations have thrown up similar stories. The premise of cashing out bets early before an event has actually happened, for lesser reward, has become an industry standard. It is a staple of many a match for bettors, who switch their eagle-eyed gaze between their phone and their TV, searching for the prime moment to cement their stake.

In-play betting began back in the late 1990s, initially via phone calls with bookmakers, and the latter development of online gambling paved the way for cash-out to be introduced.

Bernard Marantelli, CEO of operator/supplier Colossus Bets, takes credit for inventing cash-out. He tells Gambling Insider: “It was created because I was playing some big jackpot pools myself, and I thought: ‘I’m one leg from winning 200,000 and I’m going to win 200,000 or nothing. I wish I could hedge. I wish I could remove some of my risk, lock in some of my profit.’

“As a semi-sophisticated player, I could go on to Betfair.com for an exchange and do that sort of hedging, but it was not available for retail.

"It was not available to the person who had bet $2 and was now about to win $200,000, so I said it really needs to be available for them and that is when I worked on that.”

FEATURES

CASH-OUT

The introduction of the feature changed sports betting immensely, with players now potentially able to protect a bet, or minimise a loss, by astute reading of the game and predicting where it will go as it happens.

The constant connectivity between the person making the bet and the company while watching a game can make an immersive gambling experience, so it should be no surprise it is now ubiquitous across the gaming landscape.

Marantelli says: “It reduces volatility for the operator and the player, so it really is one of those features that everyone thinks is a good deal for them.

“I think that is a unique element, because a lot of people said they would like to win the lottery, but were put off because they had a 'bazillion' to one chance of winning.

"I think with a feature like cash-out, everyone thinks they are getting the best side of the coin.”

In Bet365’s latest set of annual results, up to 31 March of last year, it reported amounts wagered on sports increased 23%, with live betting revenue representing 79% of sports revenue in that time.

Widespread data, or results that are broken down further, is difficult to find, but Marantelli explains operators have told him that, if it functioned as a vertical, it would be their fourth biggest, adding Colossus Bets typically gets 30% churn on cash out.

The feature is not without its issues however, as Nikos Konstakis, VP Sportsbook Product at supplier SG Digital, explains to Gambling Insider.

Konstakis mentions how the biggest challenge during the initial years was getting the accuracy of the algorithms right, which led to an initially restricted range of odds as the option began. He also references the technology involved, because cash-out is both back-end and front-end, providing a real-time value of the bet while supporting thousands of bets and being able to complete the wager quickly as soon as the person decides to use it.

Konstakis also nods towards the security the feature can give the bettor, being able to reduce their losses should a match seemingly not be going their way.

Konstakis says: “I think giving them a chance to, at any point in time, take the money, gives them the security that there is nothing wrong behind the scenes. Back in the early years of online betting, where we started to expand content, everybody was a little bit sceptical about what is

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happening behind the scenes, with the integrity of the whole industry and the business.”

Things are only likely to improve for cash-out and in-play betting as well, with the gradual introduction of 5G, which started last year, set to improve connectivity at sports venues.

A report from Paysafe, which surveyed more than 7,000 consumers from the UK, US, and Germany, found 5G would address the most pressing concerns for bettors who have not taken up live betting.

The report found the concerns shared by the most bettors related to speed of service; not being able to place bets in time (22%) and the poor connection of a mobile device to the internet (19%).

The report said it was particularly important to players in the UK; here, more than one quarter (27%) are concerned about not being able to place a bet in time.

In an earlier interview with Gambling Insider, Paysafe Chief Business Development Officer Daniel Kornitzer explained the need and desire for 5G. He also pointed towards the speed of being able to bet affecting betting in the crucial moments of a match.

Konstakis believes it has been a positive introduction for sports betting, although he admits it is hard to put a figure on just how many people are cashing out during an average match, pointing towards how the very different contexts that can arise can affect participation.

He says: “It is a highly-engaging feature, so the customer places a bet and stays with you to constantly monitor what is the value of their bet.

“Either you constantly generate more stakes just because the recycling of the turnover happens faster, or at the same time, you have an improved margin due to the fact that when people are cashing out the end result, the operator is usually having a better margin compared to keeping the stake as it was.”

Marantelli believes, in terms of improvement, diversifying it into other areas of gambling may well be the step forward for the feature. He says: “I think the core principles of cash-out are there and probably won't change.

"I think it is more about seeing it move into lottery and other areas and then we should see the use of it in existing sports betting dramatically changes.”

The future of the feature is such a safe bet that somewhat ironically, you likely wouldn’t cash-out on it.

“IT REDUCES VOLATILITY FOR THE OPERATOR, IT REDUCES VOLATILITY FOR THE PLAYER; SO IT REALLY IS ONE OF THOSE FEATURES THAT EVERYONE THINKS IS A GOOD DEAL FOR THEM” – Bernard Marantelli

FEATURES

REGULATION

LIGHT AT THE END OF THE TUNNEL

By Iqbal Johal

With new regulations enforced by the Gambling Commission, including mandatory contributions operators must now make to charitable causes, Gambling Insider assesses the impact this could have on problem gambling

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Problem gambling has been discussed and debated profusely in recent years. Whether among the general public, mainstream media, the industry itself and of course here at Gambling Insider, you can barely mention gambling without thinking about or discussing problem gambling.

According to statistics from the Gambling Commission’s 2018/19 annual report, 24 million adults gambled in Great Britain during the period. Of those, 340,000 adults are identified as problem gamblers, with a further 550,000 classed as at moderate risk and another 1.2 million at low risk.

To be clear, the Gambling Commission refers to problem gamblers as those who gamble with negative consequences and a possible loss of control. Adding up those three figures, that’s more than two million adult gamblers who are at some kind of risk of problem gambling, which doesn’t factor in those unable to speak up about their issues.

But if you think this will be another article knocking the industry’s approach to problem gambling, you’re mistaken.

Instead, whether you consider it to be overdue or not, the industry and its regulator can be seen to be making strides to address the issue. As a prime example, from 1 January 2020, the Gambling Commission made it mandatory for operators to make an annual financial contribution for gambling research, prevention and treatment. This contribution will go to one or more of the organisations or charities listed by the Gambling Commission.

This is required under Licence Conditions and Codes of Practice (LCCP) SR code 3.1.1, although there’s no specified amount that needs to be donated. The research, education and treatment (RET) contributions were initially reserved for GambleAware, GamCare and The Young Gamers and Gamblers Education Trust (YGam); but since the initial allocation, five further organisations have been added

to the list, taking the current total to eight charities operators can help fund.

Charities willing to be on the list must provide information to help the Commission assess their suitability.

They have to provide information of appropriate governance through independent regulation; evidence they are signed up to deliver one or more functions of research; prevention or treatment to reduce gambling harms; and a commitment to delivering aspects of the Commission’s National Strategy against a set timetable.

Before mandatory contributions for operators came into place, the current arrangements for preventing problem gambling relied on a voluntary funding model. The new requirements came into force following a review by the Gambling Commission in February 2018 into the previous RET voluntary arrangements, which found they were falling short of objectives.

A Gambling Commission spokesperson tells Gambling Insider: “The Commission was concerned RET contributions were disparate and uncoordinated and that some recipients of RET contributions had no clear link to the research, prevention or treatment of gambling harms.

“The aim of this change is to ensure contributions are focused on actions to reduce gambling harms and co-ordinated to enable the most effective delivery of the National Strategy. The approved list is to help guide operators on how to be compliant with the LCCP requirement to make financial contributions.”

On top of this, last June, several of the UK's biggest operators pledged to increase a voluntary levy to donate funds in the fight against problem gambling.

GVC, William Hill, Bet365, Flutter Entertainment and Sky Betting & Gaming announced their intention to increase their 0.1% voluntary levy to 1% by 2023. The funding is a percentage of gambling profit.

REGULATION

It is projected this would raise £100m for gambling charities, as opposed to the £9.6m GambleAware received in 2018/19.

The RET contribution obligation is part of a wider effort the Gambling Commission has made towards dealing with problem gambling, after its review into online gambling in 2018. Since then, the Commission has worked with the Competitions and Markets Authority to strengthen rules around unfair terms and conditions; as well as strengthening online age and identity verification requirements and making sure operators interact with customers most at risk of experiencing harm.

The most significant new regulation was the announcement of a ban on consumers being able to use credit cards to gamble in the UK. This will come into effect on 14 April, with stats showing 22% of the 800,000 people who use credit cards to gamble are classed as problem gamblers. Added to that is the ruling all online operators must sign up with GamStop’s self-exclusion scheme, which allows players to self-exclude from all online operators once signed up, making it a one-stop scheme.

Although more than 90% of operators are already participating in the scheme, the rest must participate by 31 March.

Considering GamStop has more than 120,000 registered users, this is another important step towards dealing with problem gambling. But according to the Gambling Commission, it shouldn’t all be down to the industry to solve the problem, with the regulator also calling upon the National Health Service (NHS), local authorities and the UK Government.

A spokesperson explains to Gambling Insider: “The industry does have a clear and key role in implementing their own prevention and support tools for consumers, and for funding research, prevention and treatment. A number of operators recognise this role and on the issue of funding they have renewed their commitments for increased funding over a five-year period. However, there is clearly a role for the NHS, national and local public health bodies and government. But we are encouraged by the increasing engagement of these organisations.”

One of the beneficiaries of the mandatory RET contributions is charity YGam, which has the remit to inform, educate and safeguard young and vulnerable people to help them understand the consequences of gambling. The charity was set up in 2014 by founders Lee Willows and Anne and Keith Evans. All three spoke candidly about the impact gambling has had on their lives.

Anne and Keith Evans' son committed suicide, and had suffered with gambling problems. Willows tried to take his own life and also had gambling problems.

YGam has never been funded by GambleAware. Instead, it chooses to work directly through corporate social responsibility collaborations, while receiving funding through operators, which started four years ago. The charity secured almost £1m in funding and pro-bono support in 2019, up from £749,238 in 2018. There is hope the contributions operators now have to make can increase revenue to £1.5m for this year.

YGam CEO Willows tells Gambling Insider: “I think the Gambling Commission taking responsibility for the National Strategy, opening up the opportunity for a wider number of stakeholders to engage with its delivery and then having a framework where organisations such as ourselves can apply to the Commission to be on that framework, is really helpful. It gives confidence to the operators that they can donate as it’s counted towards their RET contribution. Working with us or GamCare directly means operators can see where their money’s going.”

Willows praised the five operators.

The YGam CEO did however, suggest the mandatory ruling for operator contributions could have come earlier and emphasised the need for charities to work together.

Willows adds: “Could more have been done earlier? Yes, because the rest is voluntary. I think the fact operators have decided to push the envelope of their voluntary levy to 1% is good.

But what the Gambling Commission has done with the RET list is open up

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the market and allow more people to contribute to that national plan.

“The only risk with that though, is co-ordination. When everything went through GambleAware, there was a good level of control; while it’s a positive the market has opened up, it just needs to be co-ordinated so all the work we and other charities are doing is counting towards the national plan. But it can only be seen as a good thing.”

While Willows knows there is a long road ahead, he feels the recent regulations the Gambling Commission has put in place can only improve things. “Having been involved now for six years, I’ve seen more and more of these initiatives and that’s really good because YGam was founded based on lived experience and it’s really pleasing for us,” he adds.

“I think the number of operators doing more to try and help problem gambling is only going to improve.”

Clearly, more can be done to tackle problem gambling. According to Willows, only 3% of problem gamblers receive treatment in the UK, so more funding should go some way to increasing that figure; along with education programs to raise awareness among young and vulnerable people.

Strides are being made to tackle the issue. It’s a waiting game to see the exact impact recent regulations will have, but the initial signs point towards positive progress – and light at the end of the tunnel.

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REALITY TV BETTING

THE THINKING BEHIND REALITY TV BETTING

By Tim Poole

Gambling Insider assesses what can be learned from reality TV betting

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When you think of bookmaking today, what comes to mind? If it’s huge stands at ICE London, complex trading algorithms, swathes of technical staff and software specialists, you’d be along the right lines. Pick any page in this magazine at random and, regardless of whether retail or online gaming is being assessed, you’d be odds-on to read about something computerised.

The above is, frankly, obvious. Bookmaking and the compilation of odds have improved to no end and will continue to do so – perhaps

eternally as there is no real ceiling to be reached.

But, as I’ve argued before, the human touch will equally always be needed amid a sea of artificial intelligence. With all the tools available to a modern-day trader, gut instinct is still a precious commodity.

While this notion applies across our industry in an overarching sense, there are few examples more prevalent than novelty betting. For US players, this concept is becoming more and more familiar. Odds are beginning to be offered on markets like the Oscars, adding to traditional

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REALITY TV BETTING

Fred Nathan prop bets such as how long the national anthem will last and on which side the coin toss will fall during the Super Bowl. Players in the UK however, are even better-versed, with reality TV betting forming a rather large market for the casual bettor on this side of the Atlantic.

As opposed to sports wagering, where statistics and modeling are paramount, and even slots and casino, where mathematical probabilities are fundamental, betting on the outcome of a TV show is a little different.

Strictly Come Dancing, where celebrities partner with professional ballroom dancers, and I’m a Celebrity Get Me Out of Here, where celebrities compete to be voted King or Queen of the Australian jungle, require far less mathematical trading precision.

Then there’s something like Love Island, where logic and sanity can feel like an altogether alien concept. Any readers from outside the UK who have never seen this show, please Google and enjoy – or recoil in horror.

“With reality betting, it’s almost the last bastion of old-school trading,” Fred Nathan, Media Relations Specialist at Press Box PR, tells Gambling Insider. “If you think about sports, everything can be modeled; there are formulas, form, stats. But in the old days of trading before this technology, there was a lot of gut feel.

Obviously, there are precedents, but they’re not going to be as black and white. With lots of celebrity shows and even with most reality shows, the people taking part haven’t done anything like this before. So there’s not really any indication whether they’re good at skating, dancing, singing or whatever.”

Having consulted the trading team at operator SportNation, Nathan talks us through what a trader would look for when pricing up a reality TV market. “They would assess the competition and say there have been five female winners between the age of 25 and 30,” he explains, "you would look into the line-up and see if there is a youngish female soap star.

Athletes often do very well; age is a factor. They

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consider the common, simple factors that would determine a winner; it’s old-school trading.”

According to SportNation’s odds compilers, the aforementioned Love Island isn’t actually that popular for betting, being outperformed considerably by Strictly and I’m a Celebrity. In the past, you could also wager on pre-recorded shows such as The Apprentice and The Great British Bake Off, although this is no longer permitted, due to the outcome having already been decided before any stakes are placed.

While an English Premier League football weekend would eclipse even the biggest reality TV show final, Nathan still anticipates betting on Strictly for one weekend round would generate millions of pounds’ worth of wagers.

As Gambling Insider has previously explored meanwhile, the UK public is equally willing to stake considerably on something like the General Election.

The intricacies of how to approach such markets, in the absence of technological or algorithm-based assistance, pose the dilemma of pricing accurately while also trying to welcome the more creative bettor. On the one hand, you could say there is a reduced cost in offering reality odds: only one trader is required, rather than a sophisticated network of software and technology. On the flip side though, reduced certainty increases trading risk.

“Traders are traders for a reason. They’re mathematical minds,” Nathan says. “They know what the value is, how to set, how to protect their company, but also entice players in. I think that balance is still able to be struck with reality TV. Realistically in the UK and US, there’s only going to be three or four reality TV shows on at one time. I feel a lot of bookmakers are prepared to take that risk. The traders can then hold their hands up and say ‘look, if the 7-2 shot beat the odds-on favourite, then fair enough we got it wrong.’ They might even try to price it deliberately; because it’s less scientific, they can probably be a little bit more creative in the way they offer odds.”

Naturally, that creativity can lead to a sales maximisation exercise rather than a profit maximisation approach. For instance, offering the eventual winner at a longer price might lead to a short-term loss on the market, but a greater number of sign-ups, potentially creating long-term value and welcoming a new legion of players. Odds for reality TV can serve a wider purpose too, with regards to media coverage. For news reporters and journalists, odds are a sign of what the public think and feel, opening the door for operators to use these news sources as a means of external marketing. Want to know who will win this year’s Strictly Come Dancing?

Find out the latest favourite with *insert operator name here.* It’s a tried-and-tested advertising strategy.

Considering the various elements of the US broadcasting spectrum, and the existence of state-by-state media, there is plenty of scope for this kind of marketing across the Atlantic. While the concept of reality betting has become commonplace in the UK, it is slowly taking off in the US as well. As Nathan explains: "US markets are just coming to terms with sports betting state-by-state and disseminating what odds reveal about different audiences. It’s a newer concept in the US, though both bettors and betting companies are gaining a broader understanding.”

For stateside lovers of the old-fashioned, reality TV betting truly is the jackpot.

Mathematical probability and artificial intelligence are highly unlikely to indicate how a crowd will react to a given celebrity in the distant future, let alone the present or indeed the past. Any US firms looking into this novel area of wagering will have free rein to benefit from the instinctive and creative approach the vertical requires. In other words, there is plenty of room for manoeuvre.

Reality betting is unlikely to generate the revenue a sporting contest would, nor will it attract the most dedicated of casino players.

But it is a unique form of engagement and a method of attracting a slightly different audience. It offers greater variation than sporting odds and the chance to experiment with your marketing and advertising. In fact, you could even say for the old-school traders of Las Vegas, reality TV might just be the future of the past.

“WITH REALITY BETTING, IT'S ALMOST THE LAST BASTION OF OLD-SCHOOL TRADING. IF YOU THINK ABOUT SPORTS, EVERYTHING CAN BE MODELED; THERE ARE FORMULAS, FORM, STATS. BUT IN THE OLD DAYS OF TRADING, THERE WAS A LOT OF GUT FEEL”

- Fred Nathan

FEATURES

BONUSES

BONUSES: THE BEGINNING OF THE END?

By Owain Flanders

Panellists at this year’s ICE London discuss the future of bonuses and whether a change is needed from traditional cash and free bet offerings

MODERATOR Henry McLean – Commercial and Marketing Director, 4theplayer SPEAKERS Neal Smith – Head of Customer Bonus and Reward Strategy, Kindred Group Gabriele Sarti – Head of Brand Marketing, Paddy Power Betfair Adam Beighton – Director, SportPesa

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NS: We need to start looking at different ways of rewarding customers. It’s not just the traditional bonus. We are constantly looking at other ways, such as offering exclusive content, making the site faster, making withdrawals faster.

These are things customers are seeing as drivers of loyalty now and actually the sense of reward in the old sense is becoming a distant thing.

AB: I would agree with that. We all have a good idea in terms of where bonuses are going. In terms of our brand at SportPesa, for us it is very much about

building that brand credibility. We are looking to be one of the first sportsbooks to operate across Africa and being able to build a very strong brand is vital for that success. There is definitely a need and a place for bonuses, but it’s about actually knowing your customer, knowing what motivates them and generating that loyalty.

HM: I totally agree. It is about aligning the correct player with the correct content. At 4theplayer we spend a lot of time looking at that to make sure our games are really clear, engaging

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BONUSES

and that the player can understand what they’re doing.

NS: We found out some interesting things a few months ago when conducting research on a couple of our markets. We went to customers all across different segments and we asked them about a whole list of rewards, from lifestyle rewards to monetary rewards and tech. We also included our traditional rewards such as free cash and free bets. Out of the customers who answered that survey, 80-90% still want those traditional rewards.

I think there is a place for slowly transitioning to a more hybrid model, but at the end of the day customers come here to gamble. They want rewards that are more relevant to that activity. As an industry, I think we should be moving to diversify our rewards format but our customers are telling us there is still a place for those traditional rewards. It is still effective as a way of acquiring and retaining customers, so until we actually see the evidence this has changed, it will still have a place.

GS: I totally agree to all. It’s also what the customer expects and what meets their needs. If we don’t see the change in the customer’s behaviour, why would we drop bonuses entirely?

HM: How do you see the customer understanding some of the large wagering on some of these bonuses? Do you see that as unfair or just a requirement?

AB: My view on that is absolutely clearcut. If you’re going to offer somebody something for coming to your site, it’s up to marketing and retention teams to make sure the customer is getting a big enough reward for the money they are spending to achieve bonuses.

NS: Customers aren’t stupid. Perception is reality. What customer completes 90 times wagering? No one. You could give £1m ($1.28m) to a customer but if that needs wagering one million times then it means nothing. The perception of the reward is what the actual value is after the wagering is completed.

The two most important drivers we see in research into why a customer churns when they stake bonuses is around relevance and the perception of it being rewarding. I would love to see how many customers come in the front door and exit the back door when an operator is doing 90 times wagering.

That is down to customer retention

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teams and understanding what is right for that customer at that time. It might be rewards or it might be something else.

Understanding motivations is key here.

GS: Recently, I received the weekly report from the customer service team and the top reasons why customers contacted us were rewards and promotions not making sense, resulting in people asking to cancel or withdraw funds.

We really need to think about that.

HM: Neil, would you say there is a direct link between bonuses and churn?

NS: Yeah the evidence is clear. Monday morning is my customer experience summary, which talks about the main drivers for churn and the latest NPS scores. Everything in that backs up that customers want transparency, as it is our number one reason for churn. I don’t think we will ever get to the point where it is eradicated because everyone would like to be paid more and paid more often with bonuses; but we need to meet customer’s expectations. One thing we are trying to do at Kindred is understand customers’ needs and player behaviour as early as possible to tailor rewards towards them.

GS: At Betfair we look specifically at customers who engage with us at least once per week. That is someone we would consider in our marketing strategy.

I totally agree with my colleagues that bonuses are not the only reason to stick around with a company. They are not the only way a customer can have a nice experience with a betting brand. There are many different ways to get the interest of prospective customers. We know what customers do on a day-to-day basis because we have sophisticated technology to keep track of this.

NS: It’s all down to using the data. We are trying to build more segmentation around bonus behaviour. We are looking at their early life activity and within this we will find customers who are only active when they are enticed with a reward. We constantly run tests to see if customers will take a reward but also if they will play beyond the reward organically. You need a strategy that will take into account long-term retention and long-term profitability. This will differentiate between when a customer is actually onboarded and retained or when they are only active because you’re incentivising them.

“I DON'T THNK WE'LL EVER GET TO THE POINT WHERE IT IS ERADICATED BECAUSE EVERYONE WOULD LIKE TO BE PAID MORE AND MORE OFTEN WITH BONUSES; BUT WE NEED TO MEET THE CUSTOMER'S EXPECTATIONS” - Neal Smith

EVENTS

CALENDAR

UPCOMING EVENTS Mar 24-27

Mar 24-26

Mar 25-27

NIGA - INDIAN GAMING TRADESHOW & CONVENTION San Diego Convention Center, California, USA indiangamingtradeshow.com

CASINOBEATS MALTA 2020 Intercontinental, Malta sbcevents.com/casinobeats-malta

SPICE INDIA Goa Marriott Resort & Spa, India sportsbettingevents.com/spice-india

GI verdict: Describing itself as the longestrunning gaming tradeshow, the show remains one of the highlights on the tribal gaming calendar. The biggest suppliers in US gaming will be in attendance.

Networking: Several events will be held throughout the course of the show, including golf tournaments, a charity slot tournament and the Native Strong Comedy Slam.

GI verdict: Following a successful inaugural year, CasinoBeats Malta returns with a two-day event with premier online casino conferences and exhibitions. The events will bring together 1,500 senior-level attendees from across the sector.

Networking: There will be two official networking parties where attendees can make new contacts, including a closing party on the last night with complimentary food and drink.

GI verdict: Spice India is the biggest gathering of stakeholders from the gaming industry in the Indian subcontinent. This year’s offering will focus on how companies can maximise growth potential, explore innovations and take stock of the changing regulatory landscape.

Networking: The event will boast 12 networking sessions in which operators, suppliers and affiliates can connect and collaborate with industry peers in a relaxed and professional environment.

Apr 7-9

apr 21-23

Apr 21-22

BET 2020 LONDON IGAMING EXPO Old Billingsgate, London betexpo.uk

ENADA PRIMAVERA Rimini Exhibition Centre, Italy en.enada.it

SPORTS BETTING EAST AFRICA+ Speke Resort Munyonyo, Kampala, Uganda sportsbettingevents.com/sbea

GI verdict: A relaxed gambling conference taking place in the heart of London, boasting more than over 2,500 experts and a range of exhibitors. The show will see a particular focus on the Latin America market, emphasising the potential of the area and predicting it to be a hot trend for the year.

Networking: The show will host numerous parties and with it being three days long, it is safe to say there will be time to meet a lot of the attendees, as well as use their networking zone.

GI verdict: Enada Primavera is celebrating its reputation as the most important exhibition in Southern Europe dedicated to gaming. The expo features a showcase of everything new in the sector, from products to technology and services.

Networking: The show offers the opportunity to network with established individuals at the very heart of the industry within key European markets.

GI verdict: The sixth edition of this event provides an opportunity for those from across the East African gaming industry to gather, share knowledge and discuss future industry trends.

Networking: There will be a ‘pre-arranged speed networking service,' and breaks to meet others roughly every three hours during both days of the show.

apr 21-24

Apr 28-30

May 12-13

GAT EXPO GAMING & TECHNOLOGY Cartagena de Indias, Colombia https://www.gatexpo.net/en/

BETTING ON SPORTS AMERICA Meadowlands Exposition Centre, USA sbcevents.com/betting-on-sports-america/

AFFILIATECON SOFIA Sofia Convention Centre, Bulgaria affiliatecon.com

GI verdict: 3A Producciones, the organiser of FADJA for 21 years, refreshes its brand portfolio, incorporating technology in addition to gaming. Here, there is a focus on everything from platforms, software, cybersecurity, betting and virtual games, to esports, affiliates, slots and cabinets.

Networking: A Carribean Welcome Party headlines the networking events on day three, with a Cocktail Lounge Zone rounding off the event on day four.

GI verdict: Betting on Sports America returns for its second year, boasting 200 leading industry speakers across 50 sessions.

Speakers include Joe Asher, CEO of William Hill US, and Tim Wilmott, former President and CEO of Penn National Gaming.

Networking: Each evening, there will be networking events at some of the most exclusive venues in New York and New Jersey.

GI verdict: An affiliate convention destined to become the industry standard for how the online gaming sector meets new and existing affiliates. This is the event’s third year and is sure to be one attendees won’t forget.

Networking: With networking breaks throughout the day in addition to an evening networking party, there will be plenty of opportunities for affiliates to catch up with old friends and form new relationships.

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INSIDERS

ALEX CZAJKOWSKI

Each issue, Gambling Insider commissions guest columns from people right at the heart of the gaming industry, to discover more about the challenges its leaders, pioneers and innovators are facing today. These insightful columnists are The Insiders.

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DANIEL HOOK Rockolo

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JASON O’SHEA Games Inc.

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DAVID WYLIE LendingMetrics

WILLEM VAN OORT Gaming in Germany

INSIDERS DANIEL HOOK

No cloud is an island Daniel Hook, Managing Director of data centre supplier Rockolo, looks at the areas in which online gaming operators and suppliers can assess cloud platform providers

"A better description would be Infrastructureas-a-Service (IaaS); cloud implies the data sits somewhere but nobody can be quite sure where. In fact, nothing could be further from the truth" The online gaming landscape is forever changing, both from a technical and licensing perspective, equally providing challenges and opportunities for companies like us. Online gaming is an industry with no borders, only constrained by local legislation.

Service providers need to match the agility and vision of operators and games providers while at the same time providing an infrastructure that is easy to deploy, fast, stable and secure. The best compliment is when the infrastructure isn’t even noticed. This means it is just doing its job.

The range of cloud services (private, public and hybrid clouds) available offer some very attractive options compared to the traditional hosting model. However, there are still some misconceptions about cloud services, especially when it comes to legislation and the licensing authorities. A better description would be Infrastructure-as-a-Service (IaaS); cloud implies the data sits somewhere but nobody can be quite sure where. In fact, nothing could be further from the truth.

The big advantage of a cloud platform is you only pay for what you use, with the added benefit of being able to use additional computing power as you need it. This is ideal for operators around major sporting events such as the Fifa World

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Cup and the Grand National, or for development projects.

TO HOST OR NOT TO HOST? Operators are the most demanding of clients and their needs can be serviced through a traditional data-centre-hosting business, for example. We have seen a number of operators fully deploy into the cloud and make it their technology-hosting platform. In some cases, operators have moved completely out of existing physical deployments and moved across to the cloud, such is their confidence and desire for an agile and flexible platform.

With games providers, we are seeing two types of companies. The first group are a number of larger, long-established providers who serve operators in many jurisdictions and have been deployed in traditional co-location hosting for many years. This group is slowly coming around to the concept of not continuing to own and have full physical control over its deployed technology. M & A activity increasingly brings these businesses into contact with the cloud deployments they inherited through acquisitions, creating change and understanding from the inside.

The second group are the challengers and innovators. They are typically younger, more energetic companies that have never

had deployments in their own physical infrastructures. They fully embrace the concept of ‘pay-as-you-use’ technology platforms from the outset and as such are free from heavy cap-ex requirements that can anchor them in one place for long periods. They are agile, and cloud (from many vendors across the world) enables them to deploy with speed, then scale their costs and infrastructure on-demand when they win new integration deals, wherever this may be.

NO CLOUD IS AN ISLAND With the ease of deployment and low set-up costs, cloud products or IaaS makes perfect business sense for many; but choosing the right combination — private, public or hybrid — needs to be taken into consideration. Companies also need to make sure the provider’s infrastructure is connected by a private network, so your distributed cloud platforms are integrated and “speak” to each other rather than being isolated.

One trend we at Rockolo have seen, and we don’t see this changing in the near future, is the use of Global Hyperscale cloud providers such as Amazon Web Services, Microsoft Azure, Google Cloud and many more; especially for development work or business elements that fall outside the regulator’s requirements. Again, you need to make sure if you have infrastructure in one of the Hyperscale cloud providers, this can be integrated by private protected connections to your other cloud hubs.

Moving your infrastructure to a cloud platform is a big step and might not be the right choice for all companies. But it is now a proven technology that needs to be considered as a feasible alternative to traditional hosting.

Daniel Hook is Managing Director of Rockolo, part of the Gibtelecom group. Hook has over 20 years’ experience within the IT sector, both as an IT engineer and more recently, over the past decade, leading operational teams and managing the data centre business for Gibtelecom.

JASON O'SHEA INSIDERS

Bespoke games: things to consider Jason O’Shea, Commercial Director at developer Games Inc., lists the key things operators need to think about before launching custom-made games DATA MUST DRIVE DECISIONS The first thing operators need to do is gather and analyse the reams of data generated by their players each day for the slot or table games they play. This will help operators understand what type of games their players wager on the most and will allow them to determine key aspects of their bespoke game.

Different types of players look for different things in a slot game, such as the volatility and the many various features they like to see included in the game. This is why it is so important for operators to identify the exact player type they are creating the game for and then use the data they have to fill out the spec sheet.

Bespoke games are one of the most effective ways for operators to stand out from their rivals and offer players something unique.

Where once welcome packages, bonuses and loyalty schemes were used to differentiate, bespoke content is now a key way to attract and retain players over time.

Why? Because bespoke games are just that. They are unique and allow operators to provide players slots and table games that have been built around their precise wants and needs.

Such is the power of bespoke games, some of the largest operators are now investing heavily in their own studios to add unique and exclusive titles to their portfolios. This includes the likes of 888 with its Section8 studio, which saw more than 1.5 million players wager more than $3bn across its titles in 2019 alone.

But bespoke games can be difficult to get right, and the process of developing them is not as simple as approaching a studio with a basic brief sheet and letting them take care of the rest. Creating bespoke games that work requires a deep understanding of the target player, creativity and flexibility and also a budget sufficient to turn vision into reality.

THINK CAREFULLY ABOUT THEME AND DESIGN The theme and design of a bespoke game is definitely a head over heart decision; while creativity is required, it is important to support this with fact and data.

It is often the case that the greatest influence on the theme and design of the game is the market where the title will be launched.

Players in the UK, for example, prefer different themes and designs to players in Sweden.

Would leprechauns have the same resonance in Scandinavia as they would in the UK? This, of course, is the beauty of bespoke games. They can be tailored to suit the different player preferences in the different markets where the operator is active.

THE PRICE IS RIGHT Budget is the biggest consideration for operators approaching bespoke games for the first time; they need to set a cost they are comfortable with and manage expectations as to what it can achieve.

Naturally, a larger budget buys more scope for stunning design and innovative features, but great bespoke games can be created for a sensible price.

When it comes to budgeting, operators should also remember bespoke games often come with more favourable commercial

"Budget is the biggest consideration for operators approaching bespoke games for the first time; they need to set a cost they are comfortable with" agreements than standard games. Ultimately, the operator owns the game and pays lower royalty fees over the time having paid much of the cost upfront to build the game in the first place.

WHAT CAN GO WRONG WITH BESPOKE GAMES? There are many upsides to bespoke games, but they can cause headaches for operators and this is usually due to a breakdown in understanding between them and their chosen developer.

If both parties are not aligned on vision, budget and expectations then things can quickly become strained. This results in delays, budget shortfalls and ultimately, a game that fails to deliver.

This does not need to be the case, and by working with the right developer partner, operators can launch hugely successful bespoke titles that hit the mark. Those that do can leverage the tremendous upsides they offer, from adding value, enjoying better commercials and ultimately attracting and retaining customers over time.

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INSIDERS

DAVID WYLIE

Learning from others' mistakes Gambling operators are at risk of going the same way as payday lenders, argues David Wylie, Managing Director of credit reference agency LendingMetrics

When I talk to gambling operators today, I am reminded of conversations I had with payday lenders in the early 2000s.

They had a very successful business model that looked set for ever-greater profits and continual growth, but did not see a giant iceberg that floated onto the horizon and was, day by day, edging ever closer. No matter how many warning signs there were of this getting nearer, they just didn’t seem to have the time or inclination to put in place systems to minimise its impact, or steer them to safety.

The iceberg was tough, no-nonsense regulation of poor affordability and suitability checks, punitive fines for non-compliance and the exponential growth of claims chasing.

We all know what the result of hitting that iceberg was for the payday industry: it has been devastated by stringent regulatory action and a growing wave of consumer misselling claims encouraged by claims chasers.

The common denominator that links payday lenders and gambling operators is inadequate affordability and suitability checks, and this is helping fuel the deteriorating public narrative surrounding online gambling operators. The payday

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loan industry failed to invest in this area when it could have and paid the price. Gambling operators are now in a position where they have a window to tighten up consumer checking before they make contact with the metaphorical iceberg.

My hope is that, given the very familiar payday story outlined above, operators will recognise they may be on a similar trajectory and act now, to prepare their businesses for what will undoubtedly be tough times ahead. The Gambling Commission announced in January that from 14 April, using credit cards to gamble in Great Britain will be banned.

What they need to do straight away – and I mean this month or this week, ideally – is ensure they have watertight consumer checks in place. Such checks need to be in real time and include all key income and spending data, so a prospective gambler who cannot afford to gamble does not. An operator should be able to point the regulator to a convincing electronic audit trail to justify its actions, rather than a collection of tick-box pages and a photocopy of an old bank statement.

The good news is gambling organisations can do this and have such checks in place now, up and running in a matter of days, thanks to Open Banking. Open Banking effectively forces banks to share line-by-line detailed customer statement data with third parties, known in the industry as Account Information Service Providers (AISPs), appointed and regulated by the Financial Conduct Authority.

Anyone with proper permission can access this 100% accurate real-time data on consumers via an AISP that provides automated underwriting tools.

By using such a tool, lenders and operators can access months of client transactions in milliseconds. Read-only data comes directly from the bank that holds a current account and onwards to the lender or operator; the chances of problem gambling are drastically cut. Because it is all computerised and automated, this process doesn’t need to delay or inconvenience the consumer.

Someone applies to gamble, agrees to limited timeframe and read-only access to their accounts, and thousands of lines of transactions can be analysed. In an instant, this can pull out salary details and all financial commitments, to then be tested by an algorithm to determine whether this individual should be allowed to gamble.

Inadequate finances and other gambling accounts will be flagged.

The technology can pick up on things otherwise overlooked: spending patterns that could lead to budgeting problems, such as spending that indicates gambling with multiple companies. It also picks up simultaneous or near-simultaneous gambling. In an age of online gambling, it has to be unwise for anyone not to have such an arrangement in place.

So the tools are already there to minimise exposure to what is coming down the track. I can’t over-exaggerate the potential exposure to operators. The PPI window has closed for claims chasers and they are looking for new targets. It should be remembered such companies spent the past 10 years perfecting the art of securing compensation, often on flimsy grounds. It is an industry capable of sending out 2.7 billion texts and emails every year.

It must come as no surprise the payday lenders that have managed to survive and thrive in the massively-changed market are those who use Open Banking-based technology. They were the ones who changed course and avoided the iceberg just in time. Will you?

INSIDERS

WILLEM VAN OORT

German online gambling: The state of play Willem van Oort, Founder of the Gaming in Germany conference, explains all we need to know about the impending regulation of online gambling in Germany Currently, there are only two states in Germany with more than one land-based casino license holder: Hesse (3) and Rhineland-Palatinate (2).

2. Virtual slot machines Virtual slot machine licenses will be made available through an open licensing model.

The restrictions on virtual slot machines will be similar to those in their landbased counterparts:

The 16 German federal states have agreed in principle to the State Treaty on Gambling Regulation, which will allow country-wide online gambling in the future. But what exactly can the industry expect?

TIMELINE The new treaty is expected to be approved during the next conference of the prime ministers of the German federal states, which is scheduled for 5 March.

Subsequently, the updated treaty will have to be ratified by at least 13 of the 16 state parliaments. The updated State Treaty on Gambling Regulation is scheduled to come into force on 1 July 2021.

PRODUCT RESTRICTIONS The new treaty distinguishes between four broad online product categories: 1. Online casino table games This category includes virtual bankholder games, such as virtual roulette, blackjack etc., as well as the live broadcasting of land-based bankholder games (i.e. live casino).

The states will either have the option to offer online casino products themselves by way of an extended state monopoly or to opt for a licensing model, which may only make as many licenses available as there are land-based casino license holders in the respective state.

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• Maximum stake of €1 per spin • Minimum spin duration of five seconds • No autoplay • No jackpots 3. Online poker Having no central bankholder, poker is distinguished from other casino table games; and will be subject to an open licensing model.

4. Sports betting Sports betting will continue to be licensed, but with new restrictions on in-play betting. Only bets on the final result, or next goal or score, or similar element of a final result, will be allowed.

Further bet types may only be offered if they have previously been authorised by the new national regulator.

RESTRICTIONS ON MULTI-PRODUCT OPERATIONS Sports betting, virtual slot machine games and online casino table games can only be offered via the same internet domain if an independent and visually separate area is set up for each of these games.

It will not be permitted to show ads for gambling products in one area that must be played in another. Sub-accounts should be created for each area to separately record the current player account balance for each product category. Funds that are transferred between sub-accounts will only be available after a waiting period of one hour.

The new national regulator will also maintain a central database that registers in real time whether an individual player

is logged in with a licensed operator. Players will not be allowed to be logged in with more than one licensed operator simultaneously.

PLAYER REGISTRATION AND DEPOSIT LIMITS Upon registration, players will be asked to set an individual monthly deposit limit across all operators. Setting a limit is mandatory. The monthly deposit limit may not exceed €1,000 ($1,088.). The new national regulatory authority may decide to increase this monthly deposit limit at a later stage, effective 1 January 2023 at the earliest.

Newly-registered players may bet up to €100 until their personal details are verified. Withdrawals are not permitted during this period.

ADVERTISING AND MARKETING Broadcast advertising for licensed gambling products is permitted between 9pm and 6am. Adverts promoting bets on a particular sporting event are not allowed immediately before or during the live broadcast of said event.

Telephone marketing and affiliate marketing based on a revenue-share model is also not permitted.

CURRENT AND NEW LICENSES Sports betting licenses issued under the current Interstate Treaty will remain valid until 31 December 2022, but new licenses will have to be obtained by 1 January 2023.

Licenses for the operation of sports betting, online poker, or virtual slot machines will be issued by the responsible authorities for a period of five years when first issued, and for seven years in all other cases.

More information on the new State Treaty on Gambling Regulation will be shared at the upcoming Gaming in Germany Conference on 24 and 25 March at Frankfurt International Airport.

CONNECTIONS

FOR SALES TEL: +44 (0) 207 729 6279

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ActiveWins

BBIN

www.activewins.com / T: +44 1613593593 / E: hi@activewins.com ActiveWins affiliate program unifies top online gaming and sportsbook brands. ActiveWins facilitates the highest level of affiliate marketing via a dedicated team of affiliate managers, marketing specialists and campaign analysts, ensuring that every campaign achieves optimal impact.

www.bb-in.com / E: bbin_cs@mail.ur163.com BBIN is the leading online gaming software supplier in Asia.

With 20 years’ experience of supporting over 500 clients and more than 1000 professionals all over the world, BBIN is one of the most suitable partners in the East. For connecting with industry dynamics, BBIN not only keeps enriching four product categories - Live Casino, Casino Games, BB Luck and Sports, but also upgrading two main services - Game API and White Label Solution.

Agilysys

www.agilysys.com / T: +1 8773696208 / E: sales@agilysys.com Agilysys delivers next-generation solutions that enable property managers to better connect, interact and transact with their guests by streamlining their operations, improving workflow efficiency, increasing guest recruitment and wallet share, and enhancing the overall guest experience.

AGS

www.playAGS.com / T: +1 8667206105 / E: marketing@PlayAGS.com AGS is a full-service designer and manufacturer of gaming products for the casino floor. The company’s roots are in the Class II, tribal gaming market, and it has expanded its product lines to include top performing slot games for the Class III commercial marketplace, as well as live felt table games and mobile gaming.

Ainsworth Game Technology

www.agtslots.com / T: +1 7029543000 / E: Sales@agtslots.com For more than half a century the Ainsworth name has been synonymous with the gaming industry. With global vision and exceptional leadership, Ainsworth provides the global gaming market with its outstanding range of gaming technology and game combination software.

bet365

www.bet365.com / T: +44 8000288365 / E: support-eng@customerservices365.com bet365 is one of the world’s largest online gambling groups with over forty-five million customers worldwide. bet365 offers a Sports-Betting, In-Play, Casino, Live Casino, Poker, Bingo and Games experience that is unrivalled. bet365 products and the bet365 affiliate programme continues to be enhanced and have consistently won multiple top industry publication awards during the last 10 years.

BetConstruct

www.betconstruct.com / T: +44 2037099010 / E: sales@betconstruct.com / marketing@betconstruct.com BetConstruct is a developer and provider of online and land-based gaming solutions with development, sales and service centres in 15 countries. BetConstruct’s offerings include an extensive range of products and services, including sportsbook, sports data solutions, retail solutions, RNG and live dealer casino, VR casino, poker, skill games, fantasy sports, social platform, Spring BME and more.

BetGames.TV Aristocrat

www.aristocrat-us.com / T: +1 7022701000 / E: contact@aristocrat-inc.com Aristocrat Technologies Inc. is a subsidiary of Aristocrat Leisure Limited, a global provider of land-based and online gaming solutions, offering electronic gaming machines to casino management systems. The company is licensed by more than 200 regulators, and its products and services are available in more than 90 countries around the world.

www.betgames.tv / T: +370 655 50 015 / E: sales@betgames.tv BetGames.TV is a unique, innovative and pioneering live dealer betting games supplier. The company offers fixed odds betting products combined with popular lotteries and table games to industry’s leading operators and platforms.

Betgenius Aruze Gaming

www.aruzegaming.com / T: +1 7023613166 / E: sales@aruze-gaming.com Aruze Gaming is a global entertainment company that designs, develops, and manufactures slot machines and gaming devices for the casino market. It aims to create fun and entertaining experiences, to build trust and maintain global relationships and to be socially responsible by supporting and encouraging responsible gaming initiatives.

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www.betgenius.com / T: +44 (0)20 7851 4060 / E: sales@betologic.com Founded in 2000, Betgenius is the leading provider of sophisticated data-driven software to the regulated sports betting sector. Betgenius delivers robust, cutting-edge technology that helps international bookmakers and lottery operators maximise performance across sportsbook platform, trading and marketing.

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Betradar

www.betradar.com / T: +41 715177200 / E: sales@betradar.com Betradar is a brand of Sportradar, the world’s leading supplier of sports and betting-related data. More than 300 bookmaker clients, including over 30 state lotteries in more than 60 countries across five continents, rely on Betradar’s quality services and solutions. The product range of betting solutions consists of event creation, odds suggestions, trading tools, resulting, live scouting and live odds services.

CONNECTIONS

Comtrade Gaming

www.comtradegaming.com / T: +386 81605200 / F: +386 81605050 / E: gaming@comtrade.com Comtrade Gaming is an independent software supplier to the gaming industry that delivers open gaming platforms, casino management systems and professional services to both online and land-based sectors.

Comtrade Gaming enables the industry to innovate it's business model at vendor, operator and regulator levels.

Betsoft Gaming

Connective Games www.betsoft.com / T: +356 2122 4481 / E: sales@betsoft.com www.connectivegames.com / T: +7 3822330775 / Betsoft Gaming develops innovative casino games for desktop and E: info@connectivegames.com mobile. Its portfolio of more than 190 RNG titles reaches players through partnerships with many of the online gaming industry’s leading operators. Connective Games develop state-of-the-art, fully-customised and white label software solutions to operators via their flexible, sophisticated gaming platform. Connective Games' portfolio of online and mobile gaming products include an online casino, online poker, and a host of popular games.

BMM Testlabs

www.bmm.com / T: +1 7024072420 / E: wendy.anderson@bmm.com BMM Testlabs is the longest established and most experienced private independent gaming certification lab in the world, providing professional technical and regulatory compliance services.

D DataSpade Inc.

BtoBet

www.btobet.com / T: +356 27135974 / E: sales@btobet.com BtoBet is a pioneer in new technologies for the betting industry.

BtoBet’s platform is unique, customisable, advanced, secure, reliable, flexible and delivers unprecedented capabilities to drive sportsbook and online gaming business.

C Casino Technology

www.casino-technology.com / T: +359 28129305 / E: sales@casino-technology.com Casino Technology is a recognized gaming manufacturer, present in many global markets. With 20 years of history, the company offers successful product series, covering land-based and online gaming industries. The company has offices and distributors in more than 15 countries and installations in more than 50 jurisdictions.

www.dataspade.com / T: +1 2313846177 / E: info@dataspade.com DataSpade is an industry-specific software and analytics company positioned to help gaming properties yield profitable results from their player’s club database. DataSpade has created a company that begins itsmission at the core of all gaming – the data.

Degree 53

www.degree53.com / T: +44 1613594000 / E: info@degree53.com Degree 53 is an award-winning digital agency, providing bespoke, innovative solutions to the gambling industry. Degree 53 holds the Remote Gambling Software licence from the UKGC and has worked on projects, including sportsbook development, gambling apps, data feed management and system integrations.

Digitain LLC

www.digitain.com / T: +44 1613594000 / E: suren.khachatryan@digitain.com Digitain is a sports betting and casino platform provider for land-based and online operators. Our API integration delivers turnkey or white-label solutions for sportsbook, casino, live dealer, and virtual sports.

Colossus Bets

www.corporate.colossusbets.com / T: +44 (0)20 3405 8420 / E: b2b@colossusbets.com Colossus Bets is a B2C and B2B provider of the world’s biggest sports jackpots with lottery-size, multi-million pound prize guarantees. The company pioneered cash-out and holds a series of patents on the technology across the globe. The product portfolio includes FreePlay, a seamless free-to-play marketing extension to its jackpots, as well as award-winning Syndicates, a unique ‘crowdbetting’ platform.

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CONNECTIONS

FOR SALES TEL: +44 (0) 207 729 6279

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Gaming Laboratories International (GLI®)

EGT

www.egt-bg.com/en/home / T: +359 28902400 / E: sales@egt-bg.com Euro Games Technology is a worldwide gaming manufacturer with headquarters in Bulgaria and 20 representative offices in Europe,Africa, Asia and America. EGT’s portfolio includes video slot games, gaming machines, multiplayer solutions, interactive games and casino management systems.

www.gaminglabs.com / T: +1 7329423999 / F: +1 7329420043 Gaming Laboratories International LLC delivers quality land-based, lottery and online gaming testing and assessment services. GLI’s laboratory locations are found on six continents, and the company holds US and international accreditations for compliance with ISO/ IEC 17025, 17020, and 17065 standards for technical competence in the gaming, wagering and lottery industries.

Gaming Partners International

EnergyCasino

www.energycasino.com / T: +356 77200290 / E: mailto:media@energycasino.com EnergyCasino offers almost 400 slots from GreenTube, NetEnt, Wazdan, Quickfire and Oryx, plus poker and live dealer casino games. EnergyCasino will soon offer content from its new sportsbook EnergyBet, covering all major global sporting events.

Everi Holdings Inc.

www.everi.com / T: +1 7028553000 / E: info@everi.com Everi Holdings Inc. is the casino industry’s only single source provider of robust payments solutions, vital intelligence offerings and engaging gaming machines that power the casino floor. Everi’s mission is to be a transformative force to casino operations by delivering reliable protection and security.

www.gpigaming.com / T: +1 7023842425 / E: mmaciel@gpigaming.com GPI manufactures and supplies table game equipment to licensed casinos worldwide. GPI provides chips, plaques and jetons, gaming furniture, layouts, playing cards, dice, and table accessories. GPI also offers RFID currency, readers and antennas and RFID solutions.

Ganapati PLC

www.ganapati.com / E: info@ganapati.com Ganapati produces high-quality, entertainment-focused casino content for the online gaming industry. Ganapati supplies the online gaming market with titles that combine the best Japanese game logic and design with a unique entertainment element.

With offices in Tokyo, London, Malta, Estonia and Taiwan, Ganapati games utilise the provider’s contacts across the entertainment industry and feature licensed IP from internationally recognised studios along with its own in-house studios.

Greentube Internet Entertainment Solutions GmbH EveryMatrix

www.everymatrix.com / T: +40 371042222 / E: info@everymatrix.com EveryMatrix delivers a modular and API driven product suite including a market leading one-stop shop casino content aggregator and integration platform, a cross-product bonusing engine, a fully managed sportsbook and sport data services, a stand-alone payment processing product, and a multi-brand affiliate/agent management system.

G GameArt

www.gameart.net / T: +356 99313566 / E: sales@gameart.net GameArt is an independent online casino software provider and developer, providing innovative games and cutting-edge solutions dedicated to online and land-based gaming operators. GameArt’s core business is the development of high quality slot games and gaming contents, not only for online operators but also for VLT and the land-based casino industry in the regulated markets.

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www.greentube.com / E: sales@greentube.com Greentube Internet Entertainment Solutions, the global interactive unit of NOVOMATIC is a leading developer and supplier of iGaming solutions. Greentube is a wholly-owned subsidiary of the NOVOMATIC Group, one of the biggest producers and operators of gaming technologies and one of the largest integrated gaming companies in the world. Greentube’s industry leading Omni-channel technology allows the convergence of online, mobile and land-based games.

H Habanero

www.habanerosystems.com / E: sales@habanerosystems.com Habanero is a supplier of quality slots and table games to the online casino industry with an experienced management team and a host of skilled designers, developers, and mathematicians. Hosted on the company's own platform and made available at a competitive rate, their games are proven revenue generators tailored to the widest possible variety of devices, allowing operators in multiple territories to maximise their incomes.

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Helio Gaming

CONNECTIONS

INTRALOT

www.LottoHero.com / T: +356 20925800 / E: info@lottohero.com Helio Gaming provides a lottery engine and custom-made games, including Lotto Hero. They integrate existing gaming platforms, CRM, campaign management, affiliate management, and other marketing automation tools. Their offering covers operator-branded RNG lottery games and those based on international lotteries. This delivers a new player-boosting vertical and multi-vertical cross-sell opportunities.

www.intralot.com / T: +30 2106156000 / E: info@intralot.com INTRALOT, a public listed company established in 1992, is a leading gaming solutions supplier and operator active in 52 regulated jurisdictions around the globe. With €1.10 billion turnover and a global workforce of approximately 5.100 employees in 2017, INTRALOT is an innovation – driven corporation focusing its product development on the customer experience. The company is uniquely positioned to offer to lottery and gaming organizations across geographies market-tested solutions and retail operational expertise.

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IGT

JCM Global

www.igt.com / T: + 1 7026697777 / E: info@igt.com IGT enables players to experience their favorite games across all channels and regulated segments, from gaming machines and lotteries to interactive and social gaming.

Leveraging a wealth of content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, IGT's gaming solutions anticipate the demands of consumers wherever they decide to play.

www.jcmglobal.com / T: +1 7026510000 / E: Jason.Cribbs@jcmglobal.com JCM Global is the gaming industry’s leading transaction technologies supplier. Its extensive line of products set global standards, with ground-breaking peripheral transaction components and innovate digital media hardware.

K Kambi

Interblock

www.interblockgaming.com / E: info@interblockgaming.com Interblock® is a developer and supplier of fully and semi-automated luxury electronic table gaming products.

Its multi-player gaming devices set industry standards and provide the ultimate in luxury interactive entertainment experiences. The Interblock brand is globally recognised for gaming solutions and technical support in more than 166 jurisdictions.

www.kambi.com / T: +356 21315514 / E: sales@kambi.com Kambi provide fully-hosted sports betting solutions through their innovative software platform. The Kambi sportsbook is available in a range of currencies and languages, and covers 65 sports and over 70,000 sporting events annually. Kambi's services encompass a broad offering, from front end user interface, through to odds compiling, customer intelligence and risk management, built on an in-house developed software platform.

Konami Gaming, Inc.

www.konamigaming.com / E: sales@konamigaming.com Konami is a complete gaming manufacturer that develops, designs, manufactures, distributes, sells, and services slot machines and its award-winning casino management system SYNKROS™.

Intertops

www.Intertops.eu / E: Affiliate@intertops.eu Intertops accepted the world’s first ever online sports bet and is still one of the globe’s largest sites for sports betting, casino, poker and games. The website offers over 4,000 daily wagers for fans of every type of sport and boasts satisfied customers in over 180 countries.

L LeoVegas Affiliates

leovegasaffiliates.com / T: +356 27780258 / E: affiliate@leovegas.com LeoVegas Affiliates is the affiliate program for LeoVegas, one of the highest converting online casinos worldwide. LeoVegas partners can earn commission up to 35%, and are offered uniquely tailored commission plans. LeoVegas also provide a full range of marketing creative and round-the-clock support from account managers.

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CONNECTIONS

FOR SALES TEL: +44 (0) 207 729 6279

Lightning Box

www.lightningboxgames.com / E: info@lightningboxgames.com Lightning Box Games exists to make the most exciting gaming entertainment for players via video slots. It has become a major global supplier of video slot content to the online RMG, land-based and social casino verticals.

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NOVOMATIC

www.novomatic.com / T: +43 2252 606 0 / E: communications@novomatic.com The NOVOMATIC Group is one of the biggest international producers and operators of gaming technologies and employs around 29,500 staff worldwide. The product range includes land- based gaming products and services, management systems and cash management, online/ mobile and social gaming solutions as well as sports betting solutions.

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Merkur Gaming

www.merkur-gaming.com / T: +49 574127369301 / E: sales@merkur-gaming.com Merkur Gaming, part of Germany’s Gauselmann Group, is the gaming innovator that delivers. Merkur Gaming delivers on game development, on high quality manufacturing, on cutting edge technology and with an overwhelming commitment to top line sales and service.

Microgaming

Ortiz Gaming

www.ortizgaming.com / T: +1 5612415368 Ortiz Gaming provides multi-platform games through land-based, social, online and mobile platforms, always bringing innovation and new experiences for players.

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www.microgaming.co.uk / T: +44 1624647777 / E: sales@microgaming.co.uk Microgaming is the world's largest provider of online gaming software with innovative, reliable gaming solutions to over 160 paysafecard market-leading sites worldwide. They offer unrivalled solutions www.paysafecard.com/business / T: +43 17208380 / for casino, poker, bingo, live, progressives and network gaming E: success@paysafecard.com across online, land-based and mobile platforms.

Paysafecard, part of Paysafe Group PLC, is the global leader in prepaid online payment solutions. Available in 42 countries at over 500,000 sales outlets, it can be used in thousands of online shops worldwide.

By using a paysafecard PIN, customers can pay quickly, simply and safely online as if paying in cash.

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NetEnt AB

www.netent.com / E: sales@netent.com NetEnt AB is a digital entertainment company, providing premium gaming solutions to the world’s most successful online casino operators.

Since its inception in 1996, NetEnt has been a true pioneer in driving the market with thrilling games powered by a cutting-edge platform.

Newgioco Group

www.newgiocogroup.com / T: +39 391 3064134 / E: ceo@newgiocogroup.com Newgioco Group is a leisure betting technology company providing regulated online and offline gaming and wagering through licensed subsidiaries throughout Italy. Newgioco Group, Inc., together with its wholly owned subsidiaries, is a fully licensed and integrated online and land-based gaming operator.

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Play'n GO

www.playngo.com / T: +46 470788851 / E: info@playngo.com Play'n GO are developers of bespoke, comprehensive solutions for the online gaming industry. Utilising the latest cutting-edge technology, Play'n GO have developed products including their innovative independent platform, a range of quality casino games and mobile and tablet gaming solutions.

Playtech

www.playtech.com / T: +44 2075349650 / E: sales@playtech.com Playtech offers cutting-edge, value-added solutions to the industry's leading operators. Playtech develops unified software platforms and content for the online, mobile and land-based gaming industry. It provides licensees with the cutting-edge tools to maximise cross-selling, player loyalty and yield through powerful management interface the IMS.

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Prestige Seating Technology

www.pstseating.com / T: +44 1914566209 / E: sales@pstseating.com Prestige Seating Technology are providers of casino furniture in Europe, designing maximum-comfort, fully customised chairs and tables for a number of high-profile casinos and entertainment establishments worldwide.

R Rymax Marketing Services

www.rymaxinc.com / T: +1 8667962911 / E: info@rymaxinc.com Rymax provide unique comprehensive marketing services, specialising in tailored rewards and incentive programmes for companies in the gaming industry and other markets. Rymax has a wealth of market knowledge and industry expertise, over 300 brands and 10,000+ reward products, putting them at the forefront of loyalty marketing.

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CONNECTIONS

T Tal Ron, Drihem & Co.

www.rd-law.co.il / T: +972 522437484 / E: TAL@RD-LAW.CO.IL The award-winning gaming and financial entertainment law firm, recommended by all leading FX, Binary and online gaming platforms, Tal Ron, Drihem and Co., founded by lawyer Tal Itzhak Ron, offers innovative solutions for company formation, regulation, banking and compliance, along with full legal services for operators, platforms, brokers and affiliates.

TCSJOHNHUXLEY

www.tcsjohnhuxley.com / T: +44 1782260220 / E: info@tcsjohnhuxley.com TCSJOHNHUXLEY is a manufacturer and supplier of end-to-end live gaming solutions and services. With an emphasis on leading edge technology, their extensive portfolio of products are utilised by land-based casino operators the world over, trusted for their quality and excellent after-sales service and support.

Trustly Group AB SBTech

www.sbtech.com / E: sales@sbtech.com SBTech is a provider of interactive sports betting solutions and services.

The complete offering includes an innovative, dynamic and customisable suite of turnkey and fully managed solutions, specifically designed for top gaming operators, existing bookmakers and land-based networks.

Scientific Games

www.scientificgames.com / T: +1 (702) 897 7150 / Scientific Games offers dynamic games, systems and services for Casino,lottery, online gaming and sports betting. Scientific Games offers the gaming industry's broadest and most integrated portfolio of game content, advanced systems, cutting-edge platforms and professional services. Committed to responsible gaming, Scientific Games delivers what customer and players value most: trusted security, engaging entertainment content, operating efficiencies and innovative technology.

Sirplay

T: +356 2713 9252 / +356 35505702 / Whatsapp: +356 79088806 / E: info@sirplay.com / Skype: sirplay.com Sirplay is an international software house with over ten years of experience in the developement of online gambling solutions. The company supplies bookmakers, lotteries and betting organisations in regulated markets for online and land-based gaming operators.

www.trustly.com / T: +46 850521120 / E: sales@trustly.com Trustly is one of the best-known brands in the online gambling industry, with a payment service developed by players, for players.

Its core product supports instant pay-ins and pay-outs directly from players' bank accounts with the highest available bank-level security.

U UltraPlay

www.ultraplay.co / E: sales@ultraplay.net UltraPlay is a modern technological company, with the core ambition to offer an innovative approach to the online gaming industry, by providing advanced betting solutions, focused on eSports, sports betting, casino, live betting and bitcoin solutions. UltraPlay is a trusted partner for delivering superior sports softwareand odds products to its customers.

Y Yggrdasil Gaming

www.yggdrasilgaming.com / E: sales@yggdrasilgaming.com Yggdrasil Gaming is a provider of superior online and mobile casino games. It has emerged as one of the industry’s most respected and acclaimed suppliers, and provides games for some of the world’s biggest operators. The company is headquartered in Malta, with a development office in Krakow, Poland as well as a regional office in Gibraltar.

Synergy Blue

www.synergyblue.us / T: x / E: bdolan@synergyblue.us Synergy Blue is a leading provider of entertainment gaming solutions who develops, licenses, produces, and manufactures arcade-style, skill-based games and platforms.

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FINAL Thinking like an WORD American bettor Michele Ciavarella, Newgioco Group CEO, speaks with Gambling Insider about the operator’s progress in 2019 and its plans for South America

“YOU CAN’T PROVIDE A EUROPEAN SPORTS BETTING PLATFORM TO AN AMERICAN BETTOR BECAUSE THEY LOOK AT THINGS DIFFERENTLY. IF YOU DON’T TRAIN YOUR BETTING PLATFORM TO THINK LIKE AN AMERICAN BETTOR, THEN YOUR PLATFORM WILL NOT BE ABLE TO REACT PROPERLY”

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Newgioco gross gaming revenue rose 3% year-on-year for the nine months to September 2019, to $28.3m, with betting handle up 27%, to $352.2m.

What are your views on this progress?

It can sometimes be difficult to take a snapshot of balance sheets and get an overall picture of the direction a corporation is heading in, especially in the early days when there are a lot of extra expenses and non-recurring fees. For instance, since even before PASPA was overturned in 2018, we launched on the Nasdaq listing. The cost of doing such a thing is exceptional, not only in man-power, but in actual resources — it takes a lot out of you.

Throughout 2019, we were funding all of these directives through revenue generated from operations.

We’re hoping folks are able to dissect these numbers better in understanding the results being positive or negative should not be a reflection of where the company is going.

Look at our history in the past five years since we started reporting and you will see we drive up our development, and then we stabilise. We get into a profit and then once we’re profitable, we move to the next stage.

Last year was one of those years for us. The growth of handle doesn’t reflect on our income statement, but it shows the growth of the company. It is a reflection of our market share.

Are you expecting a similar trajectory for 2020?

Now that we’ve stabilised the European operations, we are opening up in other countries, such as South America. The build out of the company, which started in late 2013, early 2014, was to prepare for the US market. Newgioco is not ignorant to the US market. We have a specific and very disciplined approach to how we are going to approach it. The market is huge, and there is plenty of room for good operators.

Of course, some of our competitors took an aggressive tactic of getting involved in the US market as fast as they could, but

this is not necessarily the right formula at all times. All I can say is we’re going to stick to our game-plan, which is making sure we know exactly what the product is supposed to look like. You can’t provide a European sports betting platform to an American bettor because they look at things differently. If you don’t train your betting platform to think like an American bettor, then your platform will not be able to react properly.

We expect for 2020, we will be generating revenue of some sort in the US, hopefully sooner rather than later — this is a matter of licensing. When PASPA was overturned in 2018, it wasn’t a huge moment for us. We are still a business and we have to prepare our product for the market. We still have some expenditures in that respect, but once we have completed our product for the US, then we will roll out.

In December, Newgioco announced a distribution deal into Central and South America through subsidiary Virtual Generation (VG). Can you explain a bit about this deal with HBG Group and what this means for Newgioco?

HBG Group has a terrific business. Their core strengths are in slot distribution and they have a nice business in the Italian market with a strong brand and retail presence. We are very proud to partner with a firm like that.

We on-boarded VG in 2019 and we still haven’t seen the strength and power of what it can do for us. It’s an ancillary product to the sportsbook. The SA market is a very large market and crosses several borders, so this deal opens up a much broader spectrum for VG products. VG already has a footprint in those markets, but adding HBG to the picture multiplies that several times over.

Our core strength is in our betting engine.

The HBG deal allows us to enter the market, providing a backdrop to showcase our sportsbook through. The announcement is the front-end of what I believe is going to be some very positive growth for our betting software throughout the South American space.