Gaming America Jan/Feb 2023

COO, EDITOR IN CHIEF

Julian Perry

STAFF WRITERS

Robert Collins

Robert.Collins@gamingamerica.com

Ricky Gray Jr. Ricky.Gray@gamingamerica.com

LEAD DESIGNER

Brendan Morrell

DESIGNERS

Olesya Adamska, Christian Quiling

DESIGN ASSISTANTS

Radostina Mihaylova, Svetlana Stoyanova, Gabriela Baleva

MARKETING & EVENTS MANAGER

Mariya Savova

PRODUCTION ASSISTANT

Sophie Blocksidge

FINANCE AND ADMINISTRATION ASSISTANT

Julia Olivan

IT MANAGER

Tom Powling

COMMERCIAL DIRECTOR

Deepak Malkani

Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279

US BUSINESS DEVELOPMENT MANAGER

Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818

Erica Clark Erica.Clark@gamingamerica.com T: +1 702 949 5534

ADVERTISING SALES EXECUTIVE

Ariel Greenberg Ariel.Greenberg@playerspublishing.com Tel: +1.702 833 9581

SENIOR ACCOUNT MANAGER

Michael Juqula

Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498

ACCOUNT MANAGERS

William Aderele

William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062

Grover Ho Grover.Ho@gamblinginsider.com Tel: +44 (0) 203 435 5628

BUSINESS DEVELOPMENT MANAGER

Michelle Pugh Michelle.Pugh@gamblinginsider.com Tel: +44 (0)20 7739 5768

WITH THANKS TO:

Leighton Webb, Elena Kvakova, Declan Raines, Martin Cheek, Caroline Ponseti, Geo Zochodne, Derrick Morton, Brian Wyman, Stephen Crystal, Mark Guntrip, Joseph Martin, Fergal Parkinson, Adam Fiske, The Game Day, Colin Dew-Becker, Kim Noto, Kelly Burke, Paul Sculpher, Amir Mirzaee, Joe Pappano, David Ball, Adam Fiske

EDITOR’S LETTER

JULIAN PERRY, COO, Editor-in-Chief

A Happy New Year to all our readers and, as we head into 2023 and even people born in the 1990s start to feel old, it feels like an important one for US gaming. Every year can be said to be important, of course, but there are definitely some industry-defining talking points to consider for the 12 months up ahead.

The first is the mainstream discussion around responsible gambling. Following the media storm caused chiefly by the New York Times in November regarding college campus advertising of gaming, both Caroline Ponseti and Paul Sculpher write about the topic in this issue of Gaming America . Is the fact this topic has gone mainstream actually a good thing for the industry? And will the US learn from the UK's mistakes by self-regulating advertising before it's too late?

Naturally, the growth of online gaming is another talking point set to create column inches in 2023 and we consequently have several cyber security articles in this edition. We also have an exclusive interview with Howard Mittman, 888's US President, along with several other insightful interviewees from across the industry.

Our cover feature, meanwhile, is inspired by another huge trend within iGaming; the high growth of tech firms versus their almost-equivalent high losses. Operators such as FanDuel, BetMGM, Caesars Interactive and, in particular, DraftKings, have worked for years to build a huge player database, with the plan to become profitable once that market is conquered. But when will investors want their money back if, quarter after quarter, the profits still don't come? It's all about 'riding the wave,' and Stephen Crystal and Brian Wyman help us analyze this key topic in what we hope you find an insightful Q&A discussion.

Editor-in-Chief Julian Perry

FEATURED IN THIS ISSUE

CREDIT MANAGER Rachel Voit

BRYAN WYMAN Senior Vice President, Operations & Data Analytics, The Innovation Group

HOWARD MITTMAN

08 FROM THE TOP

A recent AGA report highlights the economic downfall caused by illegal gaming markets, although this is not the only detrimental effects they have, as Gaming America discusses. 10

TRIBAL INFLUENCE: THE MAJOR PLAYERS

22

THE NEED FOR RESPONSIBLE IGAMING

Poli�cal consultant Pat McFerron recently said: “I don’t know that I’ve ever seen the Tribes more active than they are today,”in regard to their involvement in state-level politics. He was referring to Oklahoman Tribes pushing a candidate in midterm elections – but this observa�on is valid for a number of US states.. 12 GA

HUDDLE: PAYNEARME

Leighton Webb, VP of iGaming & Sports Betting 14

16

Q&A: 888 HOLDINGS

Howard Mittman, US President

WHY MORE STATES SHOULD EMBRACE PLAYER POOLING

Elena Kvakova , Head of US at Internet Vikings, explores the significant interest in MSIGAs.

18 EXCELLING IN SPORTS MEDIA

Gaming America sits down with Cody Darwick, Director of Partnerships at XLMedia, who discusses the company’s expansion and embrace of ever-changing US sports trends.

IGaming has achieved legality in relatively few states, yet remains wildly popular. Declan Raines, TransUnion Senior Manager of Strategic Planning, US Gaming, outlines why responsibility could help iGaming achieve its full potential. 24

THE DANGERS OF COMPLACENCY

Martin Cheek, Managing Director of SmartSearch, discusses why the industry should never sleep when it comes to anti-money laundering. 26

28

LET'S TALK ABOUT ‘RG’

Caroline Ponseti, Senior Director at the Herald Group, argues why using the blanket term ‘responsible gaming’ doesn’t cut it anymore when addressing concerns about problem gambling.

MATTRESS MACK, MASSACHUSETTS AND MARCH MADNESS

Covers.com's Geoff Zochodne speaks to Gaming America about the state of the US sportsbook market – and where it is heading as more states open their doors to sports betting.

30 EVOLUTION OF AI AND THE METAVERSE

Flowplay’s President and Co-Founder Derrick Morton talks virtual world betting and how it could affect traditional land-based operators in the future, with AI playing an increasingly prominent role in gambling.

30 Derrick Morton

16 Elena Kvakova

Ball

32

COVER FEATURE: RIDING THE WAVE

Many US sportsbooks rely on a growth-driven strategy to embed themselves in an aggressive market. Gaming America asks if their constant net losses will eventually put off investors. 36

WHAT SECURITY RISK ARE YOU BETTING ON?

46

THE SOCIALIZATION OF SPORTS BETTING?

OddFlex CEO Colin Dew-Becker discusses how his social sportsbook is aiming to attract Millennial and Gen Z bettors.

50

GENERATION VIP

Menlo Security Senior Director Mark Guntrip sits down with Gaming America to discuss how large-scale sporting events are exploited by cybercriminals. 38

AML: A YEAR IN REVIEW

Joseph Martin , CEO of Kinectify, walks Gaming America through 2023 from an anti-money laundering in gaming perspective. 40

PLAYING BY THE RULES

Co-Founder & Director of TMT Analysis Fergal Parkinson discusses how to avoid hefty fines and protect your reputation – it’s crunch time for online gaming firms. 42

DECIPHERING THE FUTURE

Adam Fiske, CEO of Cipher Sports Technology Group, discusses how sports content sites can drive affiliate revenue through predictive analytics. 44

UNFAZED

The team at the Game Day discusses how sports betting legalization is sprinting forward, despite hitting a snag with November rejection in California.

THE DEBATE GOES PUBLIC

Today's gambler is coming to expect more and more from casino operators in return for their loyalty – but how much is this loyalty worth? Gaming America inves�gates 52

Regular contributor Paul Sculpher feels like there has been a watershed moment in debate about US Gaming – it's genuinely gone public. 54

ESPORT S BETTING: WILL THE US JOIN THE GAME?

Esports betting has a huge customer base but its legalization process in the US has been sluggish. Gaming America takes a closer look with the help of Amir Mirzaee, CCO & Managing Director of Bayes Esports.

58 VIEWPOINTS

Experts give their input into how they strategize for the Super Bowl, one of the most significant dates in the calendar for sports betting operators. 64 WHAT'S

NEW?

GamingAmerica takes a look a some of the market's newest and most exciting gaming products, available for land-based players across the country.

50 Kim Noto 58 David

THE ILLEGAL GRAY MARKET

A recent AGA report highlights the economic downfall caused by illegal gaming markets, although this is not the only detrimental effect they have, as Gaming America discusses.

The regulated US gaming industry is considered to be one of the most highly supervised sectors in the nation. However, the patchwork, staggered nature of gaming legalization across the States has exacerbated the impact of numerous illegal or ‘gray’ markets – where is no way to enforce standards in these spaces. Illegal and unregulated gambling operators often base their headquarters offshore from where they offer their services. This undermines the economic and tax contributions of the legal gaming industry, and also puts illegal operators in a position to flaunt regulations.

The demand for gambling in states where it remains illegal is huge. This is evidenced by the amount that Americans bet with illegal and unregulated operators – $511bn according to a recent report by the American Gaming Association (AGA). In total, unregulated markets have cost the legal gaming industry $44.2bn in gaming revenue and states $13.3bn in lost tax revenue, as per the AGA.

ILLEGAL SPORTS WAGERING – A RISKY BET

Sports wagering is one area where the effects of a lack of regulation are painfully evident. Americans have wagered an estimated $63.8bn on sports with illegal bookies at the opportunity cost of $3.8bn in gaming revenue and $700m in state taxes. With Americans projected to have cast $100bn in legal sports wagers by the end of 2022, these findings indicate that illegal sportsbook operators have seized almost 40% of the US sports betting market.

Legal sports betting is an industry that has accelerated immensely in the past few years, with Massachusetts, Maine and Kansas joining the list of states where it has been legalized in 2022. This means that a strong majority (30+) of US states have legalized some form of sports betting, with a lot of excitement surrounding Ohio's recent launch.

Some experts say this only makes sports betting more enticing to those

who are living in states where it is illegal – demonstrated by the $63.8bn wagered at illegal bookies. And illegal operators are becoming savvier at appearing to be legitimate.

Almost half (49%) of past-year bettors used illegal operators, and an AGA report shows that nearly half of these gamblers believed they were wagering legally. Experts have expressed concern over the potential impact of the illegal gray betting market on the integrity of sports. Illegal sports betting is often associated with match-fixing and other forms of corruption. Since these activities are not monitored or regulated by the government, it is difficult to gauge the full extent of their impact.

Furthermore, illegal betting markets can put athletes at risk of exploitation. In some cases, athletes may be coerced into participating in illicit activities in exchange for money. The Alcohol and Gaming Commission of Ontario (AGCO) recently told gaming operators to halt wagering on the UFC due

to non-compliance with its standards. The organization was informed of publicized alleged incidents, including insider betting and reports of suspicious betting patterns in multiple UFC events. Ontario’s no-nonsense approach to the matter demonstrates why North American regulated betting is so highly regarded. These illicit practices are more likely to occur in unregulated markets, where organizations like the AGCO don’t have authority.

THE LARGEST UNREGULATED MARKET – ICASINO GAMING

When the overturning of PASPA in 2018 enabled states to allow legal sports betting, most expected to see a greater rate of iGaming adoption to accompany it. However, iGaming has achieved legality in only seven states compared to the 30 states that offer sports betting.

TransUnion Senior Manager of Strategic Planning, US Gaming, Declan Raines (see more on page 22), notes that in the six states (Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia) where iGaming was legal in 2021, it generated $970m in tax revenue – compared to $560m for sports betting in 30 states. The appeal of iGaming is so overwhelming that desire for these games spills outside the confines of land-based casinos, often to nearby retail and travel locations with heavy footfall.

A single airport slot operator, Airport Slot Concession, in Las Vegas reported it had broken the $1bn all-time milestone in November 2022. It did so by operating 1,400 slot machines at Harry Reid International Airport. IGaming’s popularity in the regulated market translates to its dominion over the gray market. Americans wagered $337.9bn on illegal iCasino websites, with a potential loss of $3.9bn in state tax revenue from $13.5bn in estimated revenue.

The 5,284 participants in the AGA’s survey were asked which of 22 prominent online slots and table games providers they gambled with. The results showed that 52% gambled in legal channels

only, 30% gambled in illegal channels and the remaining 18% gambled in a mix of both legal and illegal channels. Americans bet over $337.9bn a year with illegal operators, costing the legal industry $13.5bn in revenue and state governments a $5bn loss in potential tax revenue.

GOING IN FOR THE SKILL

Unregulated gaming machines are also often known as ‘skill machines’ and they are located in commonplace locations across the US, such as convenience stores and bars. The prolific nature of these devices was shown in the AGA’s report, which estimated there were 580,651 unregulated machines in the US.

With 870,000 regulated machines statewide that would mean 40% of all gaming machines in the US are unlicensed. These illegal machines aren’t subject to the same standards as regulated ones, meaning they can take advantage of customers. AGA found that, in the past 12 months, slot machines in Nevada have an operator win rate of 7.16% compared to the 25% average win rate on unregulated machines. This demonstrates how regulation lowers the exploitation of gamblers.

Another downside of the gray market for skill machine gaming is the level of criminality that it ushers along with it. For instance, a lawsuit was filed against slot manufacturers and a store in Hazelton, Pennsylvania over the murder of a store clerk in November. The lawsuit argued that the illegal nature of the slot operation meant that it did not have proper security measures in place, making it an obvious target for armed robbers.

HOW TO TACKLE THE GRAY MARKET?

The most obvious answer to how to eradicate gray or black markets of any kind is to legalize the product they are profiting and pilfering from. However, since PASPA’s overturning, we have seen four years of a disparate legalization process in certain states – this should not be expected to accelerate with immediate effect in

states likes California or Texas, for example. A more common-sense solution for the moment is for stakeholders with an interest in the regulated gaming industry – and the tax revenue that comes with it – to band together and crack down on the gray market.

HAVE WAGERED AN ESTIMATED $63.8BN ON SPORTS WITH ILLEGAL BOOKIES AT THE COST OF $3.8BN."

One way to do this on a state level is to lower tax rates for gaming operators, which may be a bitter pill for some legislators to swallow – but should make economic sense in the long run. For instance, New York’s aggressively high tax rate of 51% on sports betting means that only nine sportsbooks are able to operate there. New Jersey, meanwhile, has 17 legal sportsbooks with a tax rate of 14.25% (which is closer to the average national sports betting tax rate).

A lower number of legal outlets creates increased demand and supply of gray market betting markets. So, although it may seem counterintuitive, states may be well-served to keep tax rates low for sportsbooks. In doing so, they are more likely to drive illegal operators from the market and increase tax revenues in the long term. AGA President and CEO Bill Miller commented: “All stakeholders – policymakers, law enforcement, regulators, legal businesses – must work together to root out the illegal and unregulated gambling market. This is a fight we’re in for the long haul to protect consumers, support communities and defend the law-abiding members of our industry.”

"AMERICANS

TRIBAL INFLUENCE: THE MAJOR PLAYERS

NORTH DAKOTA

Native American Tribes succeeded in securing favorable new state-Tribal compacts with state Governor Doug Burgum. These compacts allowed them to lower the legal gambling age from 21 to 19 at Tribally owned casinos and permitted online sports betting within the confines of their reservations. However, online gaming is still a no-go for Tribes.

MICHIGAN

The Little River Band of Ottawa Indians is pushing (again) for permission to build a casino in Muskegon County, Michigan. A representative from the Tribe claimed it had support from the US Department of the Interior for this project. However, Michigan Governor Gretchen Whitmer rejected the proposal the first time around on a state level, due to issues around land rights.

CALIFORNIA

California’s leading Tribes went to battle with commercial operators for the heart of the Golden State’s sports betting market this November. The Pechanga Band of Luiseño Indians was among a collection of Tribes who funded the Prop 26 ballot. This initiative called for legalized sports betting at American Indian gaming casinos and licensed racetracks. It was set up in opposition to Prop 27 (its commercial operator counterpart) and succeeded in at least derailing the other ballot. As San Diego political science professor Thad Kousser commented: “Maybe the tribes won by losing.”

Political consultant Pat McFerron recently said: “I don’t know that I’ve ever seen the Tribes more active than they are today,” in regard to their involvement in state-level politics. He was referring to Oklahoman Tribes pushing a candidate in midterm elections – but this observation is valid for a number of US states...

OKLAHOMA

Oklahoman Tribes became involved in a ‘feud’ to try and prevent Governor Kevin Stitt from gaining re-election in the midterms. Five of the state’s most powerful Tribes endorsed Stitt’s Democrat contender Joy Hoffmeister in an attempt to unseat him. Stitt became unpopular with Tribes when he sought to overturn a US Supreme decision on Tribal sovereignty in 2020 and failed to renegotiate compacts with them.

FLORIDA

"WITHDRAWALS ARE

AS IMPORTANT AS DEPOSITS. IN PARTICULAR, THE SPEED OF RECEIVING THAT WITHDRAWAL IS REALLY, REALLY IMPORTANT

PAYNEARME, PAY NEAR YOU

Leighton Webb, PayNearMe VP iGaming and sports betting, joins the GA Huddle to discuss the key gaming payments trends to look out for in 2023

It’s a pleasure to have you on. Could give us an intro into your role and talk us through the company’s key offerings?

Absolutely. I’m the Vice President of Online Sports Betting and iGaming, responsible for the real money gaming vertical here at PayNearMe. Our key offering is our gaming payments platform, which we call MoneyLine. It’s an end-to-end payments platform and it gives operators the ability to process payments both on the deposit and the withdrawal side, through every major tender type. Those tender types include debit, credit cards, PayPal, Venmo, Apple Pay and, of course, our flagship cash product, which allows players to deposit at over 30,000 retail locations across the US – 7/11, Walgreens and more.

This year, you guys conducted some consumer research. Can you talk us through the main points you found when talking to customers out there?

Firstly, the variety of tender types of payment methods is critical. That’s because players want to deposit with payment tenders that they’re used to and ones they trust. That trust is an important part of offering that tender. When a player goes into an operator’s application to see something they’re used to and familiar with, when they make that deposit and ongoing deposits, that leads to the second finding in the research, which is that the initial deposit is critical.

Operators spend a lot of money to acquire a player. They go in, they go to make that deposit, and getting through and having a

successful first deposit is critical to the lifetime value of that particular player. We saw in the research that a significant number of risk respondents would leave the operator’s application altogether if that initial deposit was unsuccessful. So really getting that right is vital. That’s kind of a combination of things: which is that experience, the design, the look, the feel, you know, minimising clicks to get them through that deposit and then also having a deposit method that the players know and trust today.

Thirdly, one of the highlights – and this is getting more and more talk in the press, and you’re seeing it at trade shows – is that withdrawals are equally as important as deposits. In particular, the speed of receiving that withdrawal is really, really important for the player. It’s in direct correlation to player engagement and ultimately lifetime value

Watch the full video online at gamingamerica.com/ga-huddle

EQUALLY

FOR THE PLAYER."

of the player. In conclusion, operators are continuing to focus on that initial experience when the player makes that deposit to ensure it is intuitive and seamless. And they also want to have that speed on the outbound side to make sure that players aren’t having to wait days, weeks to receive those funds.

When it comes to leaving the app altogether, are the findings similar for withdrawals, not just deposits? Absolutely, and this is true with any consumer-facing application not just related to gaming and sports betting, but it’s that overall experience. I always describe it as entertainment at the end of the day – and that experience has to be a positive one. It has to work. It has to be intuitive. And it has to be fast, especially if you think about the psyche of the player. They want that gratification, right? They want to be able to receive that cash either in their bank account or if they use the card with cash at an ATM product.

If you couple that with just the overall, as you know, competition in the US market, there’s not a lot of patience and tolerance for a bad experience because the player will just go to someone who does it better. So there’s this competition among the operators to make sure that cashier experience, both deposits and withdrawals, is continually optimised and continually improved upon.

Bearing in mind everything we’ve covered so far, can you talk us through the benefits of a single payments platform for operators?

The first is a single integration, which reduces development time and overall complexity around the payment stack. Many operators today are having to manage multiple integrations through multiple providers for the various tenders they offer within the cashier. As part of that single integration is also the benefit of one contractor contracting with one party, PayNearMe. There’s one settlement method that’s a particular issue. In some examples where operators are having to manage multiple settlements, there’s one partner to work with versus managing multiple contracts and partners. It becomes complex very, very quickly.

Lastly, I like to say this a lot as I talk to operators: they’re really future-proofing their payment strategy. All we think about, day in and day out is payments. It’s 100% of our focus, whereas operators are managing a lot of different things related to the business, a big part of which is compliance, regulatory approvals etc. So they’re really looking to us to be that expert in the future-proofing of their payment strategy. When we bring a new feature or a new tender type to market, it’s minimal work for them to make that available to their players.

From what you’re saying, is that particularly helpful during a big sports betting event, such as the Super Bowl or perhaps the recent FIFA World Cup final, where there’ll be plenty of settlements and payments going on at one time? Yeah, 100%. A good example of that is something as basic as redundancy. Obviously, a sporting event is time-critical. Players are going in, the event starts and you know you can’t as an operator be in a situation where something fails. That’s an example of something that we would provide, to mitigate against that.

On a similar theme, can you talk us through the benefits of acquiring player payment data?

The first is, and I will talk a lot about this, risk and fraud. That’s an ongoing concern in our category. Data is critical to be able to mitigate against that. Secondly, the payments data really gives you insight into marketing. What do I mean by that? The ability to look at behaviour, the frequency with which players are betting, the amount they’re betting, allows you to really tune that marketing message to engage the player that’s not engaging, that has dropped off for some period of time – and really get to the ultimate goal, which is one-to-one marketing. So to be able to take that message based on the behaviour of the player – the behaviour of the player really starts with that deposit, the amount of the deposit, the frequency, etc. Having that data and being able to connect that data into your marketing tech stack is really where these operators want to go: to be able to create that one-to-one message with the player.

"BEING ABLE TO CONNECT THAT DATA INTO YOUR MARKETING TECH STACK IS REALLY WHERE THESE OPERATORS WANT TO GO: TO BE ABLE TO CREATE THAT ONE-TO-ONE MESSAGE INTO THE PLAYER."

888: ILLUSTRATING SPORTS BETTING

Gaming America sits down with 888 US President Howard Mittman to discuss his company’s approach to capturing a loyal sports betting customer base.

What is 888’s strategy for growth in the US?

888 has been in the US for a long time, pre-PASPA we were an early entrant and again after it was overturned. Throughout that time, there have been a lot of highs and lows in the strategies involved. The way we see it now, sports betting in the US is at the epicenter of sports, media, technology and betting – it’s become a cultural phenomenon. Throughout my career, the things I’ve enjoyed the most sit at interesting cross-sections. This cross-section we sit at now, which allows us to develop this exclusive partnership

with Authentic Brands Group and Sports Illustrated (SI) means we have the chance to introduce a vertically aligned, content-first sportsbook that taps into the power of one of the most iconic brands in sports.

We’re now live in Colorado, Virginia and Michigan. In Q1, we’ll be launching a casino offering in Michigan and we’re excited about that because 888 is world-class when it comes to casino products. The casino launch in Michigan will be the pivot point for us – we’re looking at where we take his brand in states that have both sportsbooks and casinos; they’re the most attractive to us. There’s just a handful of criteria that we look at, but it has to start with the state having sportsbook and casino offerings.

Is there a danger of reducing your options here, as there are only sixseven states with both? Is it worth it to have the double offering?

I think the combination of the SI brand with its storied content combined with 888’s knowledge and sophistication of betting means there isn’t a risk. We see that as our ‘secret sauce formula,’ and so whatever it might do in the short term, in limiting penetration for us in the US, we still see it as a prudent and necessary part of the strategy.

of an industry of retention and long-term value (LTV) ratio. So for us, this plays nicely into retention and LTV. It’s part of how we have a more targeted roll-out strategy instead of just spreading our chips out all over the board.

What would you say your core demographic is at the moment? With the customers you engaged with the most, what were the strategies you used?

If you think about SI here in the US, the things that come to mind are history, legacy, heritage and creditability. For a generation of sports fans, the magazine was a window into the world of sports. It gave them knowledge and proximity to the games and the athletes that they love, so it shouldn’t come as any great surprise that these are the individuals that we’re targeting.

HOWARD MITTMAN 888 Holdings US President

Some operators are going out of business, consolidation will continue and I think we’re moving out of the stage where it’s acquisition at all costs. We’ll be moving into the mindset

Many brands are marketed towards ‘sharps’ and that’s great, that’s where you get your VIP customers and the 80-20 rule. However, that’s not our target demographic. We believe there’s an audience that creates a tremendous amount of opportunity for us that we call ‘the unsexy sweet spot.’ This is 40-60 plus-year-old sports fans who bet casually or who don’t bet yet, and we think we can bring them along for this journey and ultimately teach them how to embrace sports betting. There’s 90% brand awareness of SI for sports fans in general. Around 80% have said that they are highly

likely to use our service. And, 43% of the US market is 40-60 plus year-old men. Their age and user behavior suggests they are probably a little more loyal and a little less likely to chase bonus offers.

We’re gearing ourselves towards this cadre of sports fans and we’re focused on our strategy. The way we reach them is through our customer journey which has five stages: inform, inspire, educate, engage and entertain. Those are the five ways we think a vertically aligned consumer-focused sportsbook brand can make inroads in the US – without a billion-plus dollars in marketing budget that have become ubiquitous.

What is it you do to target this age group?

Fundamentally, we’ve evolved the product in a significant way. We made some significant enhancements specifically up to and then throughout this NFL season. So when it comes to informing audiences, you have to let people know there’s a game and when it is. You have to focus on game times, news, box score stats, betting lines, scores – all the things that matter to sports bettors in terms of inspiring them. Then the emotional part of the journey is getting these people to care about the soap opera of sports. That involves articles from trusted sources, iconic imagery and compelling stories. You pull them in first, then you make them care about the game.

Then the third step is education, and this is helping give them reasons to bet. We have a feature that we’re using called ‘One For You’, which is customized user recommendations from SI talent like Pat Forde or Michael Fabiano. They’ll go in and say ‘here’s a really interesting bet for you.’ We don’t come at this with the preconceived notion that everyone already knows how to bet.

The next step is engagement which involves evolved product experiences. So that demographic we’re going after –40-60-year-old men – what is it that we can do to make this as frictionless as possible. Is it bigger text, large logos or larger buttons? Is it college sports icons, or real-time game visualizations? We’re trying to make this as easy as we can. That means thinking about the app, and trying to engage and retain them and looking at time spent on our platform. We’ve seen evidence that our time spent is up 45% from the start of the NFL season to this point in the NFL. That’s a really exciting thing because it shows users are excited about these products.

So how can we create an end-to-end game betting experience? This can be done through multimedia integrations, articles, videos, images and a wider array of betting options, as well as free-to-play games. It’s what we call the brilliant basics. We have to make everything work as easy as possible – once we do that, we’re getting to the stage where we can layer in casino games. We have several unique casino games we’re launching

to the US that are SI-specific and branded. And then, over time, we’ll bring in the 3,000 plus games that our platform has access to globally, which creates a really interesting and winning combination.

What are your plans over the next 18-24 months in the market?

I think we see the introduction of casino on top of sportsbook as an opportunity to solidify our strategy and create a unique point of differentiation, not just in terms of how the brand resonates for consumers, but in how we’re able to create unique experiences and bring new offerings to the US market. From a casino standpoint, you can expect to see us in Michigan in Q1, and then a handful of other rollouts over the next 18-24 months focused on states where there is sportsbook and casino. I think what we’re looking to do is to execute on our strategy, and lean into 888’s core strengths in such a way that allows us to do something a little bit different than anything else we have seen in the US market.

We have an exclusive partnership with the most trusted brand in sports in the US and I think that puts us in an interesting position. And over the next 24 months, I think we’re going to look to create and solidify an established platform for growth, and that will be led by world-class technology, operational expertise and unrivalled trust in the SI brand. You know, if that’s the case, I think we like our odds.

WHY MORE STATES SHOULD EMBRACE PLAYER POOLING

Elena Kvakova , Head of US at Internet Vikings, explores the significant interest in MSIGAs (Multi-State Internet Gaming Agreement) – and what this could mean for operators and service providers.

Within a highly restricted market, iGaming in the US is most likely to face explosive changes and developments to keep up with the evolving needs of players – and changes – across worldwide markets. However, with state-to-state regulations being so

diverse, how will this impact each state’s operations and ability to grow?

Player pooling – to raise the stakes

When we consider what player pooling can do for the online poker industry, it has all the benefits – more players, bigger

bets, healthier games. Most smaller states do not even have online poker rooms, because operating costs do not justify their small demand. However, if several small states come together – they form a greater pool of players and the game is on.

BIGGER BETS, HEALTHIER GAMES."

The significance of player pooling

Online poker is the game most impacted by a lack of players, which means operators can struggle to provide it. The lack of players results in an unfavorable variety in stake levels and gameplay options. More traffic is becoming a central selling point for poker players. The online poker market in the US shows the full extent of the legislative flaws in the state-by-state control system. With the restriction on cross-state iGaming, some states just do not have the population to support these games, making them an unviable option.

A solution that’s being considered is to allow states to work together while complying with federal law and benefiting from state-by-state shared traffic. This, however, hasn’t proved to be a simple solution yet. Currently, only four states have been able to form an MSIGA. The iGaming industry hopes more states can form interstate partnerships and boost industry growth even more.

MSIGA: What does this mean for your players?

New Jersey, Nevada, Michigan and Delaware have come together to form a partnership and agreed upon specific terms concerning an MSIGA that works

ELENA KVAKOVA

Internet Vikings Head of the US Market

for each state. This has already seen a great increase in poker mobility, and is set to increase the popularity and overall success of the game. These results are making it an attractive option for even more states to participate in similar agreements.

What this means is that a player in Nevada can compete against a player in Michigan, and it is the same for the other states with an MSIGA. However, as we know, the US market is highly

regulated and a MSIGA is no exception to some rigid laws. For operators and platform providers to host in multiple states simultaneously, they must ensure:

1. An MSIGA agreement has been entered into by the relevant control board.

2. All licenses and approvals required by the board have been obtained by the operator, platform provider, and any other parties participating in multistate poker.

3. Multistate poker has been specifically authorized by the board.

Moving forward – supplier licensing & vendor registration

Depending on the services that are provided, new providers that make use of a multistate poker platform may need to register with the board. This includes software providers, hosting providers and marketers. It also applies to new platform providers contracted by operators who do not currently offer poker. Software platforms are required to meet five new minimum standards to protect personal data and financial credentials as well as negate all cheating activity. This information must be kept in the event of an investigation or complaint.

Across all four states, these measures strengthen the responsible gambling procedures provided by online poker operators.

The rest of the US

In addition to Pennsylvania, Connecticut and West Virginia both have legal, regulated online poker, but their entry into the compact would be challenging. Due to their small populations, all three states could only contribute a limited amount to shared liquidity through a MSIGA. Connecticut has about 3.6 million residents, while West Virginia has 1.8 million, and Pennsylvania has 12 million, with only 11.1% of people stating that they participate in iGaming activities.

All in all, the benefits of MSIGAs are clear for all to see.

"WHEN WE CONSIDER WHAT PLAYER POOLING CAN DO FOR THE ONLINE POKER INDUSTRY,

IT HAS ALL THE BENEFITS – MORE PLAYERS,

EXCELLING IN SPORTS MEDIA

During the whirlwind of World Cup fever, XLMedia Director of Partnerships Cody Darwick discusses how American football reigns supreme in US sports betting, among other topics.

How would you describe XLMedia in your own words?

We’re one of the largest publishers focused largely on sports betting at this point. In North America, we own a lot of sports media and we have a lot of sports betting-focused properties.

We partner with highly engaged publishers, whether they are focused on sports or the news side – obviously Newsweek falls into the latter. We operate with all the top regulated sportsbooks and drive high-value customers for them.

How is XLMedia preparing for the launch of Massachusetts early this year?

We have a local media partnership there that we’re quite excited about; we work with MassLive.com which is an Advance Local property. We work with

Cleveland.com in Ohio, Ohio launched on January 1 so we’re very much excited about that and MassLive is the second event-cycle property we’re working with.

Massachusetts is a rabid sports state; they have a number of storied franchises up there – the Boston Celtics, the Red Sox, the Patriots – we think the passion for sports there is almost unparalleled.

How will the partnership with Newsweek benefit XLMedia?

We were excited to announce our exclusive sports betting partnership with Newsweek. Newsweek is a storied brand in terms of magazine publication – they’re a digital property that reaches around 50 million unique visitors across the US.

that are in the market. We want it to be informative and educational for them.

With the US getting through to the Round of 16 in the World Cup have you seen a rise in soccer interest?

I think there has been a buzz, but it’s hard to know exactly what that means from a betting perspective... How to handle all the new player activations and that sort of thing, but obviously in the US getting through to the Round of 16 is a big win, and people are excited about that. The game against England on Black Friday, the day after Thanksgiving, drew a lot of people, TV audience-wise.

properties based on college football with the Saturday Football brands. There is a focus on the NCAA and the Big Ten – two of the biggest conferences – in the biggest states, like Ohio or Alabama, where they are essentially like professional teams in terms of their following and fanbase.

CODY DARWICK XLMedia Director of

So we’re excited to provide the Newsweek team with our betting content. In terms of editorial focus, they have a very strong readership and we’re the first foray for them into this space. We don’t take that lightly; we’re looking forward to providing our content to their team and their audience, and introducing the top regulated sportsbook options

People were very happy with making it to the knockout round so anything apart from that is just the cherry on top. I think a lot of it is building to the next World Cup four years from now – it’s a young team, so we’ll see.

Have you seen any major changes in content output regarding changing demographics in the past few years?

It all depends on seasonality, on what time of the year it is and what sporting event is live. I think the NFL is the biggest driver of our business generally in the US; that’s no secret. We have owned and operated

We do a lot of content around football as you can imagine, and basketball as well – there's the NBA and March Madness. Then there’s baseball – we kind of do it all. The Phillies making the World Series was a big deal for Pennsylvania and we own a site there called Crossing Broad. So it depends on the time of year. Our content team has years of experience in knowing what sports fans want to read – during a game, before a game and after a game. Then we look at the various angles to tap into that audience and fandom; that’s our specialty.

What are XLMedia’s plans for the next 12 months?

I can only speak to the North American sports sector. Over here, we’re excited about the Ohio launch and Massachusetts thereafter. We’ll be continuing to grow our owned and operated properties, and work with our various media partnerships to help to be their partner in a sports betting space that’s vastly evolving and changing.

"SO WE’RE EXCITED TO PROVIDE THE NEWSWEEK TEAM WITH OUR BETTING CONTENT. IN TERMS OF EDITORIAL FOCUS, THEY HAVE A VERY STRONG READERSHIP AND WE’RE THE FIRST FORAY FOR THEM INTO THIS SPACE."

THE NEED FOR RESPONSIBLE IGAMING

IGaming has achieved legality in relatively few states, yet remains wildly popular. Declan Raines, TransUnion Senior Manager of Strategic Planning, US Gaming, outlines why responsibility could help iGaming achieve its full potential.

When a US Supreme Court decision enabled states to allow legal sports betting, most expected to see greater iGaming adoption. However, access to online casino products lags far behind online sports betting, with iGaming achieving legality in only seven states, far fewer than the 30+ states that offer some form of sports betting.

For states, among the robust barriers for iGaming are concerns about responsible gaming. Fortunately, these concerns can be overcome by new technology, data and tools to ensure regulated online casino products are safer for consumers.However, with iGaming projected to generate $6.35bn in tax revenue annually for individual states, legislators have a renewed interest

in legalizing online gaming. According to the American Gaming Association (AGA), the six states (Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia) in which iGaming was legal in 2021 generated $970m in tax revenue, compared to $560m for sports betting in 30 states.

With gambling regulations legislated at

the state level, operators must demonstrate to state officials and lawmakers in each jurisdiction that they are committed to providing players with a safe betting experience.

IGAMING IN THE SHADOW OF SPORTS BETTING

While online casino products can provide financial benefits through job creation and tax revenue, states have been slow to implement iGaming due to concerns from legislators, the public and problem gambling organizations. In contrast, online sports betting has skyrocketed in popularity since New Jersey’s lawsuit opened the door for the legalization of sports betting in 2018.

These differing opinions and legislation surrounding online casinos versus sports betting may stem from a perception of increased risk to consumers if they have access to online casino products. For example, Massachusetts recently approved online sports betting after delays stemming from concerns around responsible gaming. If state legislators understand how operators intend to mitigate risks and protect players, they are more likely to legalize online gaming.

WHY RESPONSIBLE GAMING IS THE SOLUTION

If more states are going to legalize online casinos, legislators and regulators will need to be assured that responsible gaming is taken seriously. To do this, operators must keep investing in responsible gaming technology and data to protect consumers; these enhancements create a clear difference between regulated operations and unregulated entities.

Operators should consider developing procedures to spot consumers displaying problematic behavior, educate consumers on how to control their online gambling behavior, and offer options like taking time-outs and cooling off periods. For instance, Axes recently made a large donation to the University of Nevada, Las Vegas to develop AI technology that deals with responsible gaming.

Once legislators see online sportsbooks deploying technology and investing in responsible gaming consistently, the doors to online casino products in their respective states may start to open.

HOW TO TACKLE OFFSHORE ACTIVITIES

If players can’t access online casino gaming in their states legally, the risk is that players will seek out unregulated, offshore platforms that take potential tax revenue away from the states where the players live. Offshore and unregulated gaming participation is a unique factor in the US market. Ultimately, states

would do well to consider the benefits of regulated offerings to drive valuable state tax revenue, economic benefits and job creation.

Additionally, unregulated online gambling is risky because it leaves consumers vulnerable. Offshore operators do not have robust payment technology, responsible gaming or know your customer procedures compared to regulated entities. A safer playing experience should be a key differentiator for consumers when engaging with regulated operators. In Europe, operators deploy technologies to identify signals of financial distress, resilience or consumer stability to comply with regulation and protect consumers. These technologies and best practices could be common in the US soon. Examples include affordability checks, cooling-off periods, self-exclusion and educating consumers on problematic behavior.

With inflation rising in the US, consumers are facing financial difficulties. If operators are perceived to be profiting from vulnerable individuals, they face the potential of losing the trust they’ve built over the past few years. DraftKings CEO Jason Robins spoke recently with a group of state legislators, encouraging them to pass online casino laws citing better protection for consumers.

Declan Raines

TransUnion

Senior Manager of Strategic Planning, US Gaming

While there is an audience and financial incentive to adopt iGaming for states, it will take continued investment in responsible gaming to allay the significant concerns that exist. Enhancing consumer protections in online sports betting is the fastest path for operators to underscore their commitment in this area.

"IF OPERATORS ARE PERCEIVED TO BE PROFITING FROM VULNERABLE INDIVIDUALS, THEY FACE THE POTENTIAL OF LOSING TRUST THEY’VE BUILT OVER THE PAST FEW YEARS."

THE DANGERS OF COMPLACENCY

Martin Cheek , Managing Director of SmartSearch, discusses why the industry should never sleep when it comes to anti-money laundering.

safeguards, it’s far too easy for operators to unknowingly become enablers for sanction evasion. That’s especially true as the volume of sanctions increases and more Politically Exposed Persons (PEPs), Special Interest Persons (SIPs) and Relatives & Close Associates (RCAs) come under the microscope. All things considered, complacency can be so dangerous in the world of anti-money laundering (AML).

Higher on the agenda

Martin Cheek, Managing Director, SmartSearch

While legalized gambling may be one of the most highly regulated industries in the US, there are still opportunities for complacency when it comes to money laundering. After all, gambling is still heavily reliant on cash with large numbers of high-value transactions taking place, often in short succession. As a result, the industry remains a clear target for resourceful criminals to filter illicit funds. Worst of all, their methods grow more and more sophisticated.

The landscape has changed so rapidly too, with the continued shift online. The pandemic only accelerated this movement with all commercial and Tribal casinos mandated to close. In fact, the online

gambling market in the US was worth $2.65bn in 2021 alone. With one-off customers and high attrition already presenting challenges in identifying potential threats, the switch online made that task much harder.

To add insult to injury, the war in Ukraine has only increased the compliance pressures, with thousands of Russian nationals and entities now subject to sanctions. Since Russia’s invasion, the US has issued around 1,500 new and 750 amended sanctions. Its efforts and those of its allies have immobilized around $300bn worth of Russian Central Bank assets.

But without adequate checks and

Lawmakers are all too aware of the risks posed by money laundering and the heavy burden facing the ‘gatekeepers’ of the financial sector. Efforts are ongoing to increase standards and expand FinCEN’s regulatory powers and enforcement capabilities. The most recent attempt has been the Enablers Act, which aims to broaden the Bank Secrecy Act’s definition of a ‘financial institution.’

If passed, the likes of law firms, investment advisers, accountancy firms and payment processors will all be subject to bank-style AML obligations. It’s set to be a comprehensive list that will expand as necessary to broaden national defense and protect firms from financial crime.

While many casinos are classed as non-bank financial institutions (NBFIs) and already subject to strict regulation, the broad reach of the Enablers Act could mean ancillary gambling and gaming firms may, in the future, face greater regulatory demands. And while it may not have passed the senate just yet, the bipartisan support for the act surely

points to a case of when rather than if.

Nevertheless, it serves as an important reminder of the standards expected of all firms and the increasing spotlight on AML compliance.

Know your customer

To comply with the Enablers Act, firms must conduct risk assessments and staff training, update AML policies and appoint dedicated officers. Firms must also report any suspicious activity they find. But the key to all other aspects of the regulation is robust know-your -customer (KYC) procedures. By law, firms will need to carry out proper KYC checks and customer due diligence to accurately confirm identity and determine any potential risk.

This has long been a requirement for casinos and operators across the gambling sector, as well as other financial

institutions. However, it’s no reason for companies to rest on their laurels. The challenging global climate and the threat of serious organized crime highlight the need for firms to not only increase but modernize processes. In the current climate with the heavy burden of compliance, this requires a move to perpetual know your customer (PKYC).

It’s a much more dynamic approach that’s better suited to the challenges of today. Reactive checks are replaced with proactive real-time monitoring, utilizing hundreds of data sources including credit reference agencies and sanction lists, to continually update client information and highlight any potential red flags.

Across the Atlantic

With the UK’s Gambling Commission taking action on non-compliance with hefty fines – including a record £17m

($20.5m) settlement with Entain in August 2022 – many UK-regulated firms and operators have already moved in this direction and adopted a perpetual model.

With real accuracy, electronic verification can help firms weed out bad actors and verify a customer’s identity. With ongoing monitoring, users are alerted to any potential red flags or discrepancies presented by new and existing customers, with enhanced due diligence triggered automatically.

It’s an important step forward to not only optimize processes and create a clear audit trail, but to remain one step ahead in the ongoing fight against financial crime. Plus, the advancements in digital onboarding create a frictionless experience for customers, helping to reduce dropout and deliver a clear competitive advantage.

LET’S TALK ABOUT “RG”

The gambling industry has an ambiguity problem it can ill-afford in the legal sports betting era. I’m talking about the single most crucial message casino operators and gambling equipment providers must clearly communicate: how seriously they take gambling addiction. The end of 2022 saw a wave of negative publicity around legal sports betting. It wasn’t just The New York Times’ series. Unfavorable stories about US sports betting filled the pages of top-tier outlets including The Wall Street Journal, Bloomberg and The Athletic.

This isn’t new. Negative stories about the realized implications of legal sports betting have steadily increased in the four years since the Supreme Court paved the way for legal sports betting outside Nevada. But why are so many outlets focusing on this topic?

It’s low-hanging fruit. Sports betting is now legal in 31 states and Washington DC. That translates into hundreds of outlets that can latch onto the latest instance of an uptick in calls to problem gambling hotlines or minors being marketed sports betting accounts.

The recent news stories are putting a bad taste in legislators’ mouths, and we can already see the repercussions. Following November’s media blitz: Sen. Richard Blumenthal of Connecticut called for an end to sports betting partnerships with colleges; New York legislators announced a bill to impose regulations on sports betting bonuses; and Massachusetts gambling regulators delayed awarding a sports betting license due to concerns about a company’s reputation and whether it took responsible gaming seriously.

The industry pushed back against this recent chorus of criticism in a time-tested fashion: touting gambling companies’ commitment to ‘responsible gaming,’ or as many call it, ‘RG.’ Yet this is another ambiguity issue. RG is a buzzword used within the industry as a catch-all for societal concerns around gambling. But does it effectively resonate with outsiders

CAROLINE PONSETI

The Herald Group

Communications Strategist

concerned about gambling harm?

While responsible gaming discussion has its place, the more significant problem is that it feels like the industry is only talking about responsible gaming – not what happens when those measures are not enough. The American public has grown to view gambling as a mainstream form of entertainment through decades of community investment by the industry. This positive perception helped propel sports betting’s rapid legalization in two-thirds of the country. These new sports betting markets are now mature and face mishaps like scandals, advertising violations and increases in compulsive gambling. We can’t stick to the same approach from when nationwide legal sports betting was just a dream. Our message must evolve as the market does.

But it seems like the gambling industry fears that talking about the potential for gambling harm will outweigh the reality that the vast majority of Americans keep gambling safe and fun. Problem gambling solutions are complex. Advocates say the effort requires funding more research, earmarking more revenue for problem gambling resources, and

training more mental health professionals on problem gambling disorders.

Downplaying the proportionate realities of gambling issues not only makes it taboo to discuss but also inadvertently stigmatizes people fighting their own battles with the disorder. If you look at the big picture, society has been actively working to destigmatize mental health issues by letting people know that it’s okay to struggle with depression or anxiety, and that it’s good to get help.

All gambling stakeholders can start making incremental progress today by changing how we communicate these key issues to make sure there is zero doubt about the industry’s commitment to preventing gambling harm. First, expand the dialogue beyond ‘responsible gaming’ to meet the new challenges of sports betting’s ubiquity. Broaden the everyday conversation around responsibility to include problem gambling, underage gambling, gambling addiction, and compulsive gambling on a regular basis. Normalizing these terms also plays a role in destigmatizing them.

Media, legislators and regulators have forced the industry to shift to defense. That protective stance, however, presents a major opportunity to meet those with questions on their turf while modernizing our messaging for the inevitable next wave of pushback. But if the industry continues to avoid acknowledging the problem, it’s not hard to see a future that holds increased regulation and a halt to future expansion. In any regulated industry, building trust and confidence starts with owning the issue.

We must realize that, for most people, gambling is a form of entertainment. But for others, it can lead to addiction and mental health issues. We can’t keep touting the industry’s commitment to ‘RG’ every time there’s a scandal. If the gambling industry wants to demonstrate its commitment to preventing gambling addiction, let’s stop talking just about ‘RG’ – and start talking about the root problems.

MATTRESS MACK, MARCH MADNESS AND MASSACHUSETTS

Covers.com's Geoff Zochodne speaks to Gaming America about the state of the US sportsbook market – and where it is heading as more states open their doors to sports betting.

Could you give us your general take on the state of the US sportsbook market at this moment?

The general overview would be that we’ve reached a point where a majority of US states have legalized some form of sports betting. It’s reached a tipping point from that perspective in that you now have more than 30 states having legalized some form of sports betting. There are a few notable holdouts, like Texas. California, for example, just had two ballot measures that were defeated in the midterms. There’s a bit of a legal kerfuffle going on in Florida right now, which is holding back sports betting there. Other than that, you have seen again the majority of the states do it. We also have some notable states that have come online – including Maryland. On January 1st, Ohio went live, right when the clock strikes midnight. And then later in January, you’ll have Massachusetts with retail sports betting. They’re targeting the Super Bowl.

Then there’s the launch of mobile sports betting in early March, which has definitely just become much more normalized, I would say. Some states are always going to be a tough sell, in the South and more socially conservative states, for example. But you’ve seen a lot of momentum pick up in certain spots,

like Massachusetts. It took them a while to really figure out what they were going to do. But they were coming under such pressure from nearby states such as New York and other New England states having it; that really put lawmakers on the spot. Eventually, they managed to hammer out a compromise. But the general overview is that it’s really gained a lot of traction. So, it’s definitely good – but there is equally room for improvement.

The dates you just gave for Massachusetts, are they nailed-on dates?

Yes. The Massachusetts Gaming Commission had a very lengthy meeting and they ultimately set a broad-strokes timeline for that. But they’re shooting for late January with casinos and early March for online sports betting. So they will miss the Super Bowl with the online launch, but they’re going to still try to capture March Madness, which they wanted.

The Massachusetts regulators, having watched a lot of their meetings, they’re very thorough and careful in how they go about their business, including how they interpret the law that was passed. They’re not going to let themselves be rushed too much. I think it took them all a while just to settle on that timeline. Now that that is there, I think they don’t want to revisit it. They actually got asked

GEOFF ZOCHODNE Covers.com

by DraftKings, which is based out of Boston, to look at potentially revisiting it and they shot that down because the state didn’t want to. They took so long just to settle on it the first time, they didn’t really want to go back over it.

What about opportunities in new states? Obviously, we were talking about Massachusetts, which looks like it will be a huge new market when that opens up. Yeah, population wise, it’s significant, but it’s not the biggest market. Ohio is bigger in terms of population, but you’re

exactly right, they have legendary teams like the Boston Celtics, the Patriots and this really robust culture of loving sports. As I noted earlier, you have one of the biggest online sports betting operators in the entire country that’s based in Boston. So, it’s kind of funny that they’ve expanded into all these other states, but not in their own backyard. That has actually been a point that they’ve brought up during some of the debates around legalizing sports betting in Massachusetts – DraftKings argued that if they had it, it would create more jobs and maybe give the economy a shot in the arm.

Maryland’s an interesting one, too. We’ll see how that plays out. The usual suspects are all involved but the state’s law really has a lot of room for others to join in because it was written in a way to try and ensure the participation of women and minorities in the sport. That’s actually why it took them a while to get to the launch, because in Maryland they had a referendum in November 2020, which is how the state decided to proceed with sports betting. It has taken them more than two years to launch online sports betting, in part, because they had to look into the state of the industry and ensure there would be diversity.

That is why it’ll be interesting to see how it matures. It looks like up front it’ll be the likes of DraftKings, FanDuel and BetMGM. But down the road, you might see some interesting partnerships, because there is room for it under the law. You do wonder about the future of smaller sportsbooks and how they’re going to survive against the might of

brands like DraftKings, FanDuel and Caesars. Just recently, we saw MaximBet pull out of the market – they were only live in Colorado and Indiana, and they eventually just shut it down. They decided the economic conditions and difficulty of the industry right now wasn’t worth it. Frankly, DraftKings is still a year away at least from profitability. There’s a lot of pressure on the small operators...

How do smaller sportsbooks compete against that and keep customers, when obviously the odds are so stacked against them?

It’s really tough. We had New York launch online sports betting in January and a lot of the operators went all out, pulled out all the stops to grab as much market share as they could, right off the top. There were some really lucrative sign-up offers that operators were throwing towards people, to the point where I think they all had to pump the brakes. After that, they might have decided they have overdone this one. It’s tough to match some of these bigger books on their financial resources.

FanDuel has the backing of Flutter behind it and they’ve put a lot of money into FanDuel, which has responded by grabbing a tonne of market share. One thing that’s interesting is that there are some companies hoping to launch sports betting who’re not traditional gambling companies. The one I’m of thinking off the top of my head is Fanatics. They are a big sports merchandise company, known for selling products like shirts and hats to people for their favourite teams,

who are dead set on entering the sports betting business. They’ve been getting licences all over the place. But having that merchandise side to it, they're sort of making a joke where instead of signing up and you get $50 in free bets, the customer gets a free hat. So, something like that’s really interesting.

What about customers that hit the sportsbooks for a lot of money, like Mattress Mack?

That was a hell of a thing to be thrown up for if you’re a small sportsbook! The good thing is he spread his bets around, and some of the bets were smaller for the US – I think Unibet got in on it, they took a $1m hit. But the biggest was the one he placed with Caesars for $3m. It’s funny because Caesars is a publicly traded company and they have their quarterly calls; so, depending on how it went with Mattress Mack, the online gaming division could either be profitable next quarter or it could be unprofitable because it was going to swing to a loss. Also, it’s worth saying that Mattress Mack has been doing this for a long time and he doesn’t always win. He lost a bunch on the Super Bowl. I think he lost the Kentucky Derby. He’s not clairvoyant or anything like that. He’s returning business for them.

The last thing I really want to ask you about is in relation to the recent FIFA World Cup, how big is the sport in the US now?

This is the first one where you’ve had widespread legal sports betting across the US, and I think the American Gaming Association just came out saying they were expecting a huge sum. But they have a few things that went against them, including the timing of the games. It was on Qatar time, so it was a bit tricky that way.

But soccer has really gained a lot of attraction itself in the US. The MLS league continues to do pretty brisk business, and there’s now this availability that hasn’t been seen before in the US for any previous World Cups.

"YOU HAVE ONE OF THE BIGGEST ONLINE SPORTS BETTING OPERATORS IN THE ENTIRE COUNTRY ... IT’S FUNNY THAT THEY’VE EXPANDED INTO ALL THESE OTHER STATES, BUT NOT IN THEIR OWN BACKYARD."

THE EVOLUTION OF AI AND THE METAVERSE

Gaming America sits down with FlowPlay President and Co-Founder Derrick Morton , to discuss how virtual-world betting will affect land-based and online operators.

AI art generators to enhance, not replace, game artists

AI art has been progressing at a speedy rate in recent years, with AI art generators such as DALL-E and NightCafe becoming familiar names to those curious about the technology. However, anyone who has used these sites can tell you that the results produced by AI generators are somewhat… mixed.

As Derrick Morton, FlowPlay President & CEO, comments: “If you’ve ever played with these tools you know you can do some really interesting and cool stuff but it mostly comes out weird. To come up with something that is precise is something that AI is not able to do, and I don’t think it will be able to for a while.”

That being said, AI generators are able to do some things well, particularly in relation to backgrounds, patterns and auto-generating things that artists are then able to use as their ‘toolbox.’

Morton notes that AI generators are good at all these things, as well as graphics, but knows they are far from the finished article. He states: “There are people – gaming artists especially – who are worried that AI will replace them, but I don’t think that’s going to be the case.” Instead, he thinks it is more likely AI generators will complement the work of gaming artists, rather than take their positions altogether.

AI art generators provide a great starting

platform, one that is far superior to artists working from scratch or from photographs. But they alone can not create gaming art that is independently coherent.

Is Google Stadia the rule or the exception?

Google Stadia was a cloud-based video game streaming service that was launched in 2019. It is likely you have never heard of it and that is precisely why it is shutting down – it does not attract enough users to the platform to be viable.

Morton attempts to explain the failure of Google Stadia: “I think it was a solution

with no problem to solve. There was nobody screaming – particularly looking at consumers – 'Hey I just wish I didn’t have to have an app on my phone. I wish I didn’t have to go to a website.' There are so many options and the friction is not that great that streaming solves a real need that consumers were looking for.”

Low demand is not the only problem with cloud-based video game streaming services being applied to betting platforms. Many companies that are trying to be innovative sink money into expensive technology for streaming that is not easy to provide from a service-side point of view. It’s also not easy from a hosting perspective, a delivery perspective and requires inordinate amounts of bandwidth.

Morton gives his insight into these issues: “If you’re playing a streaming game on your phone, every pixel of that game has to come over the network, versus if you’re playing a game that is client-based. With streaming, almost all the game is on your phone – all that’s really going back and forth is scoring information.”

DERRICK MORTON FlowPlay President and Co-Founder

The FlowPlay CEO sees synchronization between players in multi-player games as key and says it is far easier to achieve with client-based games than streaming games. Despite this, he acknowledges that streaming-based games have potential if taken on by a company with the resources to back up the complexities and logistics that come with them. He says: “Microsoft is looking at it as it

helps them get into the mobile platform. For them, it is great, because they can offer a streaming avenue to get into Android devices and other devices.”

The metaverse is not a new concept for gamers

Morton points to the peak-pandemic years as being an exceptional time for online gaming and one that will have a lasting impact. He says there were huge amounts of consumer interest online as, “it was one of the only options, so I think next year there will be regrouping. The audiences won’t be as great as they were during Covid-19.”

So what exactly will this ‘regrouping’ look like? Morton also describes it as a rebuild, in which companies will have to consider what their marketing plans are going to be and what their plans are for opening up in new territories. He believes sports betting is where the action remains for iGaming companies for the most part, saying: “I haven’t heard about much new upcoming online content outside of sports. Obviously, sports betting is opening up really fast in the US.

“In terms of pure online gambling and slots, blackjack and other table games, I haven’t heard of a lot else opening up in the five to six states that are active (with iGaming betting).”

Will land-based operators embrace online social casinos?

With online sports betting and social casinos on the rise, a hard question is posed to land-based operators on

whether they should pivot to accept this change in the industry – or stick to what they know.

Morton believes the established brick-and-mortar will move with the times. He says: “I think that land-based casinos are realizing this and have for a long time. The casinos are going to see gamblers playing a popular mobile-based or PC game and, in many cases, they know they don’t have a solution in-house. The customers are going to be playing a Slotomania-type game or some third-party product to satiate their desire for a gambling-style experience.”

Land-based casinos will want to maintain

an operator-customer relationship once the player is outside the casino floor. Morton says FlowPlay is working with Hard Rock International now, which has developed an exclusive product,where customers can earn Hard Rock points when they’re playing the game online or on their phone.

Morton believes online social casinos do have an upper hand in customer relationship management (CRM), though. He points to the mobile slot game company MyVegas as an example of a company that has been “doing CRM for a very long time and very successfully. They’ve had a couple of limited partnerships but I see room for expansion as it doesn’t make sense for them to have a third party managing their relationship, to take on the management of their customer relationships.”

Although land-based operators are learning from the successes of the metaverse, Morton evidently thinks they still have catch-up work to do to get to the CRM capabilities of social casinos. Time will tell.

"IT’S ALSO NOT EASY FROM A HOSTING PERSPECTIVE, A DELIVERY PERSPECTIVE AND REQUIRES INORDINATE AMOUNTS OF BANDWIDTH."

RIDING THE WAVE

Many US sportsbooks rely on a growth-driven strategy to embed themselves in an aggressive market. Gaming America asks if their constant net losses will eventually put off investors.

The sports betting industry in the US is an increasingly competitive space, and operators are looking for ways to rise above the fray. One way that brands find success is by focusing on growth rather than profit. This is evident when looking at the biggest sportsbooks, such as FanDuel and DraftKings.

There is no confusion about their approach to the growth versus profit dilemma – they will build the largest audience as quickly as possible and turn their attention to profitability later.

Growth-focused operators are taking a long-term approach to their business

rather than looking for short-term gains. By focusing on growth, operators can increase their customer base, expand their offerings and improve customer loyalty. This leads to increased revenue and – they believe – profits in the future. This is demonstrated by FanDuel recording a profitable quarter

RIDING THE WAVE | GAMING AMERICA

in Q2 of 2022, with the company having been founded way back in 2009. FanDuel controlled 51% of the share of US market share in this historic quarter, more than double that of its nearest competitor, DraftKings. This is perhaps emblematic of how huge a sportsbook has to be before it finally begins turning a profit.

There are many benefits of focusing on growth. One is that operators can put more resources into marketing, research and development, which can help them create better products and services that attract more customers. Operators can also look for new opportunities to expand their offerings, such as introducing new betting options or offering more live betting options.

While some companies have the infrastructure and resources to play ‘the long game,’ many smaller operators do not. This is when the growth versus profit question becomes more difficult, as companies look to raise their brand recognition and drive their stock up – but in a way that is sustainable and won’t come back to bite them. For instance, MaximBet ceased operations in November 2022 for precisely this reason; it could not keep up operational costs to get the player acquisitions and retention required to compete in the cutthroat US market.

The stock price of an operator should reflect the present value of future cash flows – a dollar today is worth more than the promise of a dollar tomorrow. The discount of a dollar tomorrow versus a dollar today is based largely on prevailing interest rates among other factors. When you look at established companies like Caesars or MGM Resorts, they have relatively predictable performances, so their stock prices are largely determined by their recent performance – how are revenues and margins trending, and what acquisitions and divestitures do they have slated? Then there is the investor outlook on the macro environment for gaming, which could include the client’s overall outlook on the economy.

In contrast to Caesars and MGM, DraftKings sells itself as a high-growth tech company, so investors treat it differently. Its price is still a reflection of the present value of future cash flows, but future cash flows

are more uncertain than those of mature and stable businesses, and the prices reflect that – it’s a higher-risk, higher-reward type of investment. The thesis with DraftKings is that it'll lose money for some time to acquire a loyal customer base, and then it'll be able to pull marketing back to a level that allows it to be massively profitable with that customer base. Amazon took the same approach, and it also expanded its product offering in much the same way that DraftKings Marketplace added NFTs, in an attempt to provide more reasons for consumers to return to its app.

DraftKings sustained yet another round of exorbitant losses despite high growth in the third quarter of 2022. Even with a resounding 136% increase in revenue growth, the company posted a net loss of $450m – a remarkable amount for a brand that most in the industry would consider ‘successful.’

So will investors stick with the flashy brand that seems ‘too big to fail’ or jump ship if they grow weary of never-ending losses (think Bitcoin and the state of flux many of its crypto-investors are in over its unpredictability)?

Gaming America sat down with two industry experts – The Innovation Group

(TIG) SVP of Operations and Data Analytics Brian Wyman and SCCG Management Founder Stephen Crystal, to get their expert opinion on the subject.

STEPHEN CRYSTAL SCCG Management Founder

– STEPHEN CRYSTAL

Would most investors have reacted negatively to DraftKings’ Q3 report given high growth but high losses once again?

SC: The construct for gauging public iGaming companies has changed. It used to be that the focus was on revenue growth, and not EBITDA and profit and losses. Around a year ago that calculus changed for investors. Now the focus is on cash burn, cash flow and breaking even. DraftKings, for example, is expected to be EBITDA negative $800m for 2022 and EBITDA negative $500m for 2023 – and cash flow neutral by the end of 2024. So the question for investors is when does cash flow positive occur – not just for DraftKings but for all iGaming companies? Private firms obviously have a longer-term outlook than public ones.

Is the fact that DraftKings has narrowed losses for consecutive quarters a plus point or is it too little too late?

SC: It’s not too little too late. The only question for investors now is when cash flow neutrality occurs. The pace at which this occurs matters to investors. The hope

"THE BIG DIFFERENCE WITH THESE BEHEMOTHS IS THAT THEY CAN PROMOTE THEIR INTERACTIVE BUSINESSES TO EXISTING BRICK-AND -MORTAR CASINOS."

now for DraftKings is that this occurs by the end of 2024. If this does occur at the current pace, then its stock will suffer in the public markets. The reason the stock went down in the first place was that investors were not happy with the pace at which cash flow neutrality would occur. Overall, DraftKings is trending in the right direction.

Is a fair comparison a direct one to Caesars Interactive?

SC: Yes and no! Caesars has the ability to use its giant real estate platform to market its interactive customers and DraftKings does not. Because Caesars can utilize non-cash promotions to drive brand awareness – it’s not exactly an apples-to -apples comparison. Also, Caesars Interactive is consolidated into the brick-and-mortar portfolio from a public company perspective. So for those two main reasons, there is no direct comparison.

What about land-based businesses – behemoths like MGM Resorts & Caesars? How do they compare as an attractive alternative proposition?

SC: The big difference with these behemoths is that they can promote their interactive businesses to existing

brick-and-mortar customers. With iGaming – there is a great correlation, less so with sports. But in the end, products, tools and the intuitiveness of the app will be extremely important and can make a real difference. So it’s not all about the brand – it’s also about the customer experience with the app.

In general, how long does an investor give before needing a return, if it’s a high-growth, fast-paced tech company?

SC: In the public markets, returns are determined by the price at which you bought and the price at which you sell. So timing and circumstance are everything. For private companies, the time horizon is longer and returns are determined based on the starting value versus the value when the company is sold or goes public.

How important are quarterly reports generally; can one bad quarter change the path of an investor or are they generally more long-term focused?

SC: For public companies primarily, we live in a quarter-to-quarter market. Public investors look at quarterly results, and other data like state monthly gaming revenues, and make shorter-term decisions than is the case with private companies where the outlook is much more long-term.

Finally, how much do the above questions vary depending on the profile of the investor?

SC: As mentioned previously, private company investors have a longer horizon and don’t usually review their investments quarterly, whereas public investors will evaluate their stock positions very often. For the iGaming industry, the key metric now is when EBITDA or cash flow neutrality occurs. So the pace still matters!

and margin when evaluating DraftKings. With FanDuel showing profitability, there’s going to be pressure from Wall Street for DraftKings to trend toward profitability. But it’s a highly competitive space, and for the DraftKings thesis to work, they need to consolidate a loyal base of consumers; so continued revenue growth and expansion of the user base are incredibly important as well.

Is the fact that DraftKings has narrowed losses for consecutive quarters a plus point or is it too little too late?

BW: It’s a plus. I think investors want to see margin expansion, and they want to see continued revenue growth. Whether the losses are narrowing fast enough to continue to attract investment is going to be highly dependent on investors’ risk profiles – and their view of DraftKings’ leadership ability to ultimately generate profitable revenue.

Is a fair comparison a direct one to Caesars Interactive?

BW : I think it’s a fair comparison, at least directionally. Their product offerings are slightly different, and their approaches are a little different. Across the space, there is a huge trade-off – some companies are shooting for huge market share by unprofitably growing a consumer base for much longer, while others want short-term profitability at the expense of rapid growth. Caesars Interactive is probably somewhere in the middle of this spectrum.

What about land-based businesses – behemoths like MGM Resorts & Caesars? How do they compare as an attractive alternative proposition?

BRIAN WYMAN

The Innovation Group Senior Vice President, Operations & Data Analytics

Would most investors have reacted negatively to DraftKings’ Q3 report given high growth but high losses once again?

BW: Investors are looking at both growth

BW: They are completely different risk profiles, so I don’t think they are very comparable. In general, how long does an investor give before needing a return, if it’s a high-growth, fast-paced tech company? I don’t think there are hard rules for this.

Each business is going to develop a plan to get to profitability and that plan will

WAVE

evolve over time. Investor patience and confidence are highly dependent on how companies keep on track with their plan, and what other options they have for deploying capital at that time.

How important are quarterly reports generally; can one bad quarter change the path of an investor or are they generally more long-term focused?

BW: Quarterly reports are hugely important. For public companies, we only get to see this information a few times a year, so it’s incredibly important to not only see performance metrics but also hear management provide updated guidance on forecasts and timing, etc.

Finally, how much do the above questions vary depending on the profile of the investor?

BW: Investors will make decisions based on their own risk profiles and what their options are for deploying capital. Everything is highly dependent on individual investors.

CONCLUSION

Crystal and Wyman provide different perspectives but do agree on a

number of key points. Both believe that DraftKings is correct to employ a long-term approach, as it is a privately owned ‘high-growth tech’ company and investors knew the nature of their strategy when they bought into the company. They both agree that DraftKings has a different risk profile to land-based businesses such as MGM Resorts and Caesars so investor confidence and patience will be higher for the sportsbook.

However, Wyman does note that FanDuel being the first US sportsbook to turn a quarterly profit may put a bit more pressure on DraftKings and other operators who heavily focus on customer acquisition. He hints that the lack of progress in cash flow neutrality goals last quarter would have antagonized some investors.

This has not stopped companies such as Fanatics from emerging with maniacal energy and ambitions for the US sportsbook market. Its CEO Michael Rubin has made no qualms about his grand goal to become a market leader of the future, and for Fanatics’ name to be said in the same breath as FanDuel, DraftKings and BetMGM. To complete

this gargantuan feat, Fanatics has made many moves and made them fast. It’s recruited a high-profile executive team led by former FanDuel CEO Matt King and former Sky Betting & Gaming executive Andy Wright. The company is reportedly in talks to acquire the German sports betting company Tipico. In 2020, it teamed up with rapper Jay Z and Penn Entertainment’s Barstool Sportsbook to apply for a New York online and mobile sports betting license (which was rejected). Rubin says Fanatics is on a trajectory to be live in 15-20 states by the beginning of the 2023 NFL season.

The old saying goes ‘you have to spend money to make money,’ and the US’ biggest sports operators seemed to have embraced this motto with open arms. However, there are signs that investors are beginning to look at information on quarterly reports other than consistently high revenue streams. Even the gung-ho Rubin insists that his company’s bullish attitude toward the market extends to profitability as well, predicting to make $8bn in the next decade – not in revenue but in profits. But when will DraftKings, Caesars Interactive, BetMGM & co get there?

"FOR

WHAT SECURITY RISK ARE YOU BETTING ON?

Menlo Security Senior Director Mark Guntrip sits down with Gaming America to discuss how large-scale sporting events are exploited by cybercriminals.

As the World Cup captivated audiences across the globe, an estimated $35bn was wagered on the games, according to Barclays. It seemed like operators were poised to make a fortune as many users around the world were signing up for multiple online gambling sites, but many consumers failed to account for the cybersecurity risks that can come with using these platforms. When placing bets on each match, you could potentially be gambling away your personal data to bad actors. The biggest fear that many security experts had about this betting en masse was hackers using phishing emails or smishing text scams to lure participants into visiting fake or fraudulent websites, and disclosing passwords and personal details, including payment details. Other concerns were account cloning and identity theft. Even experienced gamblers were at risk during the World Cup as increased traffic to popular betting sites made them more enticing to cybercriminals. This article will take a deep dive into some of the scams we witnessed over the course of the 2022 World Cup – and the best ways consumers can equip themselves to thwart these types of attacks.

A DEEP DIVE INTO THE DRAFTKINGS ATTACK

While soccer is not as popular in the US as in most other countries across the globe, that did not stop US-based gamblers from using the popular sports betting website, DraftKings, to wager on each game. Unfortunately, the site

MARK GUNTRIP Menlo Security Senior Director Cybersecurity Strategy

was popular among hackers too. The threat made against DraftKings users was a credential stuffing attack, used to harvest the credentials of users and then take over accounts. The attack resulted in users being locked out of their accounts, having their money drained, and cybercriminals making around $300,000. The common thread between all accounts that had been hacked was the $5 initial fee players paid before starting to bet on the games.

This attack was a classic case of a lack of awareness among consumers and poor cybersecurity hygiene, as many users failed to implement two-factor authentication (2FA) even though it was offered through the site. Hackers often rely on consumer

apathy to basic security measures, and count on the everyday person to fail to set up systems like 2FA or reuse passwords across multiple platforms. Many consumers are unaware of exactly how they are exposing themselves to potential cyberattacks and what measures they should be taking to prevent hackers from getting ahold of their personal information.

"SPORTING EVENTS LIKE THE WORLD CUP ARE A HUNTING GROUND FOR CYBERCRIMINALS."

THWARTING THREATS AND TAKING PREVENTATIVE MEASURES

While cybersecurity professionals cannot save everyone who might be a victim of a malicious gambling site scam or compromised account, there are several ways for consumers to better their cybersecurity hygiene before participating in online activities. In a recent survey conducted by Menlo Security, most consumers fail to implement basic best

practices when it comes to protecting their devices, despite nearly a third (31%) reporting receiving spam emails multiple times per day. This statistic is alarming to cybersecurity experts, especially when looking through the lens of sports betting during events like the World Cup, as spam emails or texts are most certainly guaranteed to rise. Seasoned gamblers should be taking the following steps to ensure they are protected in the future:

Enable 2FA on all accounts. As we saw from the DraftKings compromise, users who did not enable 2FA (two-factor authentication) saw their accounts hacked

and balances drained.

Use strong and unique passwords across your accounts, especially if you are using multiple sites to bet on games. This gives you a better chance to avoid a breach if bad actors are attempting to use the same or similar passwords with your other login credentials across accounts.

Don’t respond to, click on links or open/ download attachments from any number or email you don’t know. Many scammers will use an opportunity like the World Cup to send fraudulent links to those who have used gambling sites in the past, to try and get them to sign up and enter personal

banking information. Make sure every link you are sent is legitimate.

Sporting events like the World Cup are a hunting ground for cybercriminals. With millions of people tuning in and many trying their hand at online gambling for the first time, it creates the perfect opportunity for bad actors to scam innocent people looking to make some extra money on a match. As hackers get more intelligent and creative with their methods of attack, those who choose to participate in online gambling must be extra vigilant when it comes to protecting their personal data. Help bettors by educating them.

"THE BIGGEST FEAR THAT MANY SECURITY EXPERTS HAD ABOUT THIS BETTING EN MASSE WAS HACKERS USING PHISHING EMAILS OR SMISHING TEXT SCAMS."

AML: A YEAR IN REVIEW

Joseph Martin, CEO of Kinectify, walks Gaming America through 2023 from an anti-money laundering in gaming perspective.

2022 posed many challenges to businesses as post-pandemic supply chains continued to struggle, and pundits predicted high inflation and economic turbulence. Despite this, the gaming industry shattered revenues records again in 2022. The industry has been on fire since 2021 in terms of growth, innovation, and attracting large new customer segments. With this growth, risk management has taken center stage; as governments and gaming companies grapple with the epidemic of money laundering, and an uptick in payments fraud and other concerns – as new online products and services continue to scale at an amazing speed. Here’s a recap of pressing compliance events of 2022:

JOSEPH MARTIN Kinectify CEO

Court proceedings against several companies, including SkyCity, Star Entertainment Group, Crown Melbourne and Crown Perth. These companies were cited and received multi-million dollar fines for failing to conduct risk assessments, and for not having risked-based controls, a board or senior management oversight; they also lacked a Transaction Monitoring Program and an EDD program to carry out additional checks on higher-risk customers.

US NATIONAL AML RISK ASSESSMENT IDENTIFIES FRAUD AS TOP CONCERN

In the States, the US Treasury issued its National Money Laundering Risk Assessment (NMLRA) and found that fraud dwarfs all other proceed-generating crimes that are laundered in or through the US.

GLOBAL GAMING ENFORCEMENT ACTIONS INCREASE

Regulators from around the world cracked down on AML in the gaming space, particularly in Australia and Europe.

AUSTRAC (Australian Transaction Reports and Analysis Centre) commenced Federal

The EU will soon launch a new AML authority called the Anti-Money Laundering Authority (AMLA) to act similarly to FinCEN in the US. In the UK, a total of 13 enforcements were issued related to AML that resulted in nearly £40m ($47.5m) in fines and three license suspensions for big names like Entain, 888, BetFred, LeoVegas and Genesis Global. In addition, the war in Ukraine has caused increased scrutiny as Russian oligarchs seek safe places to move their funds.

"THE ENABLERS ACT WOULD FOR THE FIRST TIME REQUIRE TRUSTED COMPANIES, LAWYERS, ART DEALERS AND OTHERS TO INVESTIGATE CLIENTS."

Concurrently, gaming organizations are seeing major upticks in payments fraud, especially as interactive and online gaming continues to boom.

US EVALUATES FURTHER AML REFORMS – ENABLERS ACT

In addition, a bipartisan group of lawmakers proposed the Enablers Act, the most significant update in AML laws in over 20 years to be included in the National Defense Authorization Act, but were ultimately unsuccessful. They hope, however, to pass it by other means in 2023.

The Enablers Act would for the first time require trusted companies, lawyers, art dealers and others to investigate clients and

MONEY LAUNDERING | GAMING AMERICA

their source of money that is moved into the American financial system. In the past, unlike banks and other financial institutions, such middlemen have not been required to closely scrutinize the source of their clients' wealth.The failure of the Enablers Act to make it into the Defense Authorization Act comes despite increasingly high-profile support; but the debate appears far from over in the US Congress and will likely end up on the legislative docket again in 2023.

KINECTIFY AML SOFTWARE GOES LIVE IN US AND CANADA

In early 2022, Kinectify launched AML software in the US and Canadian markets that is designed specifically for gaming and

casino operators. The company’s modern AML platform seamlessly integrates all of an organization’s data into a single view and workflow, thereby empowering gaming companies to efficiently manage risk across their enterprise.

In short, 2022 was a wild ride for the AML industry. All organizations should review their 2022 risk management programs and make the necessary changes needed for next year.

Responsible gaming, AML and fraud risk management will be at the forefront of gaming compliance focus areas in 2023. And organizations that don’t modernize their tools and methodologies will fall behind.

PLAYING BY THE RULES

Calling all gaming companies, Fergal Parkinson, Co-Founder & Director, TMT Analysis, discusses how to avoid hefty fines and protect your reputation.

It’s crunch time for online gaming firms. Global regulators have stepped up their crackdown, with fines totalling over $127m worldwide handed out during 2022. Already, this is almost three times the $48.6m levied on betting companies in 2021.

One of the major drivers behind the increase in fines issued to gaming firms has been the ever-growing issue of identity verification. The world is increasingly moving online, and the gaming industry is no different. In fact, industry figures suggest that nearly 90% of all wagers are now placed online. It’s become easier than ever for people to place bets pretending to be somebody they’re not. And this issue has become prevalent in the USA. In 2022, the New Jersey Division of Gaming Enforcement ordered DraftKings to pay $150,000 for allowing a Florida-based customer to wager

on its sports betting app via a proxy in New Jersey.

There are many similar cases in America and the impact on firms is damaging not just financially, but also reputationally. If a brand isn’t seen to adhere to the correct rules and regulations, especially when it comes to something as morally sensitive as gaming, then operators risk alienating themselves from the wider community and potential customers.

THE AGE OF IDENTITY VERIFICATION

In today’s digitally dominated world, online impersonation in the gaming industry is commonplace. Because US states are free to legislate different forms of gambling on an individual basis, requirements can differ, even in states that neighbor each other or have otherwise

FERGAL PARKINSON TMT Analysis Co-Founder & Director

similar laws. For online firms, there’s a huge challenge in ensuring that bets are being placed legitimately and that customers are eligible to bet. As such, overhauling processes around identity verification – from correctly checking age and location to identifying customers with betting problem histories – must be a priority for online betting companies.

THE CURRENT PROCESS

When people sign up to use an online gaming service, they provide personal information to confirm their age. They sign up using their first and last name, date of birth, social security number and ID to confirm whether that individual is who they say they are; and to ensure they aren’t creating a duplicate account. Often, this process is lengthy, intrusive and easier to fake.

Added to this, many also use photo or video facial identification technology, which utilises machine learning to analyse an individual’s looks and determine whether they are above the legal age to gamble. This, however, isn’t always accurate, meaning some users slip through the net. Put simply, some people just look older than they are! It can also be expensive and, from a user’s

perspective, can feel clunky and intrusive as they try and get the perfect angled shot. This friction in the authentication process risks customers either abandoning their effort signing up or contacting support, both of which cost money for businesses.

THE SOLUTION

The fact is that in most countries gamblers who use mobile devices account for about 88% of all punters in the industry. So, wouldn’t it be easier all round if identity verification was linked to the mobile usage of online punters?

There’s technology available that online casinos can use which is more effective at verifying an individual’s identity, including their age, and it’s all done via their mobile phone number. Utilising data gathered from over 80 countries every day – including trusted sources such as telecoms companies and mobile network operators, regulators and third parties – this technology can strengthen the onboarding process for businesses, reducing impersonations and accurately verifying a user’s identity, just from their mobile phone. This real-time data is fast, accurate, reliable and minimizes the chances of online impersonation. It’s also a cost-effective alternative to other

technologies on the market. And from a user experience perspective, the direct involvement between customers and online casinos means the delicate balance of increasing security while maintaining a low friction is achieved.

MOVING AHEAD

This type of mobile number intelligence technology is also evolving. In 2023, we should expect to see the introduction of new approaches that reduce the barriers for identity verification while offering improved security. One way – silent authentication – removes the need for a one-time-password (OTP), as providers can do identity checks in the background without requiring users to wait or leave their app. Specifically, it uses direct carrier connections to verify possession of a phone number without requiring user input – a huge step forward in terms of user experience. Ultimately, mobile-based online gaming isn’t the future; it’s happening in the here and now. The quicker betting firms understand this and adopt the appropriate technology, the sooner they protect themselves from receiving hefty fines, and damaging both their finances and reputation in the age of identity verification.

DECIPHERING THE FUTURE

When the Supreme Court struck down the federal ban on sports betting in 2018, there was a huge rush by affiliate marketers to cash in on the huge revenue gains that were up for grabs. Perhaps predictably, a handful of large sports content sites emerged with majority control over the market in affiliate sales. Even some five years later, the view still persists that these “super affiliates” have dominated the US sports betting market and have created an insurmountable barrier to entry for smaller affiliate sites.

Fortunately, that’s not the case. By employing the power of predictive

analytics, affiliate sites of any size can carve out their share of the market. In fact, predictive analytics may be the single most valuable resource in an affiliate’s arsenal; an indispensable tool to drive customer acquisition that will only become more critical as more US states continue to roll out legal sports betting.

WHAT IS PREDICTIVE ANALYTICS?

Predictive analysis refers to the use of statistics and computer modeling to make predictions about future outcomes. These predictions occur when analytics

programs look at historical data patterns to determine the likelihood of such patterns reemerging again. In a sports betting context, predictive analysis can make predictions on the outcomes of upcoming sporting events, the only limiting factor being how much data you can feed into the system. The more data you have, the more accurate your predictions will be.

Data scientists can use predictive analysis to generate accurate projections on the outcomes of more than 20,000 sporting events per year. Such capability is available to anyone that’s willing to put

Adam Fiske, CEO of Cipher Sports Technology Group, discusses how sports content sites can drive affiliate revenue through predictive analytics.

the time and resources into building and staffing their own data infrastructure system.

Alternatively, you can look to third-party vendors who can offer these services, something that companies from just about every business sector have done over the last few years. In fact, the interest in predictive analysis has reached such a fever pitch that the global predictive analytics market is predicted, if you'll pardon the pun, to reach $28.1bn by 2026. For small affiliate betting sites, there’s no reason to think you can’t also reap the benefits of this market boom.

HOW DO PREDICTIVE ANALYTICS DRIVE ENGAGEMENT?

As stated, predictive analysis allows for a high degree of accuracy in predicting the outcomes of sporting events. But how does that actually drive affiliate revenue? To answer this, it helps to first understand how affiliate marketing works.

Sports content sites, whatever their size, typically have affiliate partnerships with a wide range of different sportsbooks. Any time a visitor to the content site clicks on an ad or backlink to a sportsbook and places a bet, the content site collects a commission. Just about anyone can sign up to become an affiliate on a betting site as there are typically next to no entry requirements. All that’s left for the content site to do is to drive engagement with its site, grow its monthly audience numbers, and let the affiliate revenue roll in.

ADAM FISKE

Cipher Sports Technology Group CEO

Unfortunately, that’s easier said than done. As mentioned earlier, a small group of super-affiliate sites tend to attract the lion’s share of engagement from sports aficionados and regular bettors. How can you possibly break into such a crowded and competitive market? The answer is to develop a reputation as a trustworthy provider of independent content, and the way to do that is with highly accurate – and free – forecasting through predictive analysis.

The key word here is “free.” Your site has to offer predictions at no cost to users. Your revenue will come through other means such as advertising and, of course, affiliate commissions. This

free model will set you apart from other affiliate sites that charge a subscription for access to their predictive models.

But making your predictions freely available is only the first step. You next have to present the best odds that the various sportsbooks are offering alongside the events whose outcomes you’re predicting. For example, let’s say you’ve predicted that the Warriors will beat the Celtics by five points. Right next to that prediction, users will see the betting odds and point spread being offered by different sportsbooks, allowing them to compare and decide on which sportsbook to place a bet with.

Whatever choice they make, you’ll collect a commission. In addition, many sportsbooks allow their affiliates to offer new user promotions for users who register via the links on the site, providing even more of an incentive for users to place a bet. Another benefit of predictive analysis is that it can also boost your website traffic. By collecting data on your visitors, such as where they’re from, what their interests are, and where they spend most of their time on your site, you can design predictive models that will tell you what you should focus on to increase engagement.

For instance, perhaps you can boost your blog output if you see that your coverage brings in more visitors and, by extension, increased affiliate sale opportunities. Growing your site will also likely lead to new partnerships with media companies, who may wind up posting your content on their websites, thus helping your affiliate revenues grow even larger.

FINAL THOUGHTS

In a betting affiliate landscape dominated by a few huge players, predictive analytics is somewhat of an equalizer. Not only does it lay the foundation for a betting site to establish itself as a trustworthy source, predictive analytics also allows a relatively small staff to grow their reach and revenue gains – in what can be a highly competitive space.

"HOW CAN YOU POSSIBLY BREAK INTO SUCH A CROWDED AND COMPETITIVE MARKET?

THE ANSWER IS TO DEVELOP A REPUTATION AS A TRUSTWORTHY, INDEPENDENT CONTENT PROVIDER."

UNFAZED

The team at the Game Day discusses how sports betting legalization is sprinting forward, despite hitting a snag with November rejection in California.

Hampered by an aggressive lobbying campaign, two sports betting bills were overwhelmingly voted down in the Golden State legislature on Election Day 2022. Prop 26, which would’ve enabled Californians and tourists to wager at the state’s casinos and racetracks, was shot down 70-30.

Prop 27, which would’ve enabled both retail and online wagering within the state’s borders, was defeated even more resoundingly: Only 17% of voters said “yes” to the bill that was backed by FanDuel, DraftKings and many of the biggest names in online wagering. Still, despite the most heavily populated state refusing to join the 30+ that offer online and/or retail outlets, legalization stands to grow across several more locations into 2023.

STATES CONTROL SPORTS BETTING

Votes to legalize mobile and retail gambling have been left to the states since the US Supreme Court shot down the Professional and Amateur Sports Protection Act (PASPA) in 2018. An opportunity to attract new revenue without forcing tax hikes on income, property or goods and services is seen as a marquee draw toward legalisation, and several states who have enacted legal online sports betting have seen huge financial gains.

“Dozens of states and countless local governments are benefitting from the significant tax revenue that online sports betting provides,” Nathan Click, a proponent of California’s Prop 27, told CalMatters.org in a statement released on election night.

“As California faces tax revenue declines and uncertain economic headwinds, online sports betting can provide substantial solutions to fill future budget gaps.

“Californians are currently placing billions in bets each year on illicit offshore sport betting websites — unsafe and unregulated enterprises that offer no protections for minors or consumers and generate no support for state priorities. Californians deserve the benefits of a safe, responsible, regulated and taxed online sports betting market, and we are resolved to bringing it to fruition here.”

However, the California failures exemplify the slow legalization progress west of the Rocky Mountains: Only two of the nine states west of Colorado (Arizona and Nevada) offer online sports betting, which has stunted the national growth of iGaming. Western states have mostly failed at coalescing with natives, who control land and gaming houses. That was part of California’s problem as a reported 50-plus tribes were against Prop 27 — backing Prop 26, which would attract bettors to native casinos for sports betting instead — and spent heavily on anti-measure advertising across the state.

“Our coalition knew that passing Prop 27 would be an uphill climb,” Click said.

Though the sports betting community awaits California and fellow population powerhouses Florida and Texas to buy in, the campaign can check off several success stories that either recently have turned a corner or will soon join the party:

• Louisiana and New York started in early 2022

• Kansas and Maryland were more recent additions to this exclusive club

• Ohio and Massachusetts will reportedly launch early in 2023

• Maine and Nebraska are also in line to begin accepting bets by January 1, 2024

• The Old Line State, in particular, has pleasantly surprised the iGaming community with a recent eye-popping windfall.

CRAB CAKES & BETTING: THAT’S WHAT MARYLAND DOES

Maryland legalized brick-and-mortar sports betting in 2021 but more notably saw immense income after its November 23 online launch, reporting more than $186m in mobile betting over just nine days in late November. Between mobile and retail gaming, sports betting marked a $220m industry in Maryland, which added more than $700,000 in tax revenue for the state in November.

The Free State’s betting production has been an overwhelming success — despite the fact it is surrounded by active locations in Pennsylvania, Virginia, West Virginia and Washington DC. Its neighbours’ access only enhanced Marylanders’ appetites for gambling, though officials were still quick to tamp down expectations.

“There was tremendous pent-up demand, and a lot of people are utilising promotional offers from multiple operators simultaneously,” Maryland Lottery and Gaming Director John Martin said in a December 12 press release. “But as many

operators have acknowledged, this level of promotional play is not sustainable, and based on our regulations, it will be curtailed over time.”

Maryland’s handle exceeded expectations, particularly with only two in-state teams playing regular-season games: the Baltimore Ravens and Landover’s Washington Commanders.DC-based squads may have played into the betting handle. The NHL’s Washington Capitals and the NBA’s Washington Wizards each are deep into their seasons. Marylanders may also wager on in-state college teams, unlike in Connecticut, New York and New Jersey. Maryland’s numbers only stand to inspire new states, or states in which sports betting is on the cusp of rolling out.

O-H-I-OK, LET’S BET

Ohio, which like Maryland borders multiple legal sports betting states (Pennsylvania, West Virginia, Indiana and Michigan), officially began taking sports bets online starting January 1, 2023, and has roughly twice the population of the Old Line State.

Ohio boasts the added bonus of an in-state NBA and NHL team, the Cleveland Cavaliers and Columbus Blue Jackets respectively, which Maryland does not have. Plus, Ohio does not have restrictions on betting on in-state college teams, which means it could have an enormous betting handle if Ohio State can qualify for the College Football Playoff’s National Championship game on January 9 (the tie is yet to be played at press time).

But even if the Buckeyes don’t defeat

the defending champions University of Georgia in the Peach Bowl, Ohioans will likely have an in-state football team to wager on — or against, if you live in the northern part of the state. Joe Burrow and the reigning AFC champion Cincinnati Bengals appears poised to get back to the NFL postseason, which could buoy the betting activity in The Buckeye State even further.

WHAT LIES AHEAD IN 2023 AND BEYOND?

After Maryland and Ohio, plus Maine and Massachusetts – which each legalized sports betting in summer 2022 and expect to roll out at some point in 2023 – 11 northeast states will provide the practice of legal mobile sports wagering.

Despite having a population more comparable to Maryland, Massachusetts may be an even more intriguing betting state than Ohio. The Bay State will collect a 20% tax rate on mobile wagers — two times Ohio’s 10% rate and 2.3x that of Maryland’s 8.75% — plus 15% on all retail bets. Additionally, Massachusetts houses the New England regional hub in Boston, and more than 100 colleges and universities that pull in temporary residents from around the world.

Massachusetts has been losing valuable revenue to Connecticut, New Hampshire and New York by not having a legal sports betting infrastructure. Because Boston sports fans rank among the most rabid in the nation and reside in a tourism hub, the state is projecting $60m in additional income after

sports betting arrives, a WGBH report said.

Connecticut had been in the red financially in the early 2010s yet has a $1bn budget surplus. This is tied partly to the roughly $940,000 per month it has picked up in revenue in 2022, according to data released by the state’s department of consumer protection.

States are also weaponising some of that income to try and one-up their neighbours. Kansas legalized sports betting in 2022 ahead of neighbouring Missouri, where the practice is still outlawed. The state reportedly plans to dedicate a portion of gambling revenue to building an NFL stadium that would attract the Kansas City Chiefs to move to the Jayhawk State side of the city.

This competition could spark more proposals to hit legislative floors in the next few years, as more examples of income spikes help endear sports betting to new states. Leaders spearheading California’s iGaming movement don’t appear to be cashing out, despite hundreds of millions of dollars already pushed into the movement on both sides. The allure of locking in the mammoth state remains worth their chase.

“We remain committed to California,” Click said after the voting defeat. “This campaign has underscored our resolve to see California follow more than half the country in legalizing safe and responsible online sports betting.”

Research and analysis from Rachel Fitter, The Game Day's Director of Affiliate Partnerships, is included in this report.

THE SOCIALIZATION OF SPORTS BETTING?

on the leaderboards, maybe you’re really good at betting on basketball or you’re on a hot streak on football – whatever it might be. Maybe somebody in the marketplace will give you a dollar to buy all your picks for the next week or day.

What is OddFlex and what does being a ‘social sportsbook’ mean?

It’s a free-to-play sport (F2P) betting application that’s actually expanded beyond sports. The general idea is that we’re replicating the real-money experience without having to risk money to get all the thrills from sports betting. We give you free credits on a daily basis; we give you more and more. But as you’re wagering and if you run out and don’t want to wait until the next day to get more, you can purchase them. So that’s the standard social

casino model and it works in the sports betting world too.

Although it’s not in our current offering, we’ve been teasing it on our app. Our app is going to focus on betting performance. We have built a bunch of custom metrics, looking beyond win percentage. We’re looking at metrics that measure your ‘true betting count;’ so we have leaderboards that show everything, which means the long-term plan is that we’ll open up a marketplace where you can buy and sell betting information with other users for real money. If you’re really highly ranked

I know in Europe these services have been around for a long time but my general experience with them has been negative. They’ve been scams or hard to verify exactly what’s going on, so we’re trying to lean into the transparency part where you can see every single bet the user that you’re buying from has ever placed. You have all these metrics that rank them against everybody else and can be filtered by sport and bet type and everything else. So in theory we’re trying to improve on experience and make it more legitimate. The test is going to be whether other people who are decent at sports betting will be on here and other people will want to buy their betting pick. Will people react to someone being ‘hot’ or on a streak? Are they willing to pay a dollar or five dollars?

We wanted to ask about the breadth of sports on oddFlex. Are you trying to get sports bettors into other sports, say NFL fans into soccer?

Yes and there are regulatory benefits to this, as in the US there may be more restrictions on betting markets than there might be in Europe or Asia. This means with more sports we can offer a much broader spectrum of offerings. As ‘the House’ we don’t have the same sort of downside risk that

OddFlex CEO Colin Dew-Becker discusses how his social sportsbook is aiming to attract Millennial and Gen Z bettors.

Colin Dew-Becker, CEO, OddFlex

real-money operators do. This means we can have markets for thousands of soccer leagues and esports leagues, and we’ve just added election markets. We also have pop-culture award show-type markets.

One of the things we’re starting to do is look for partnerships with sports leagues, social groups, sports bars and entertainment venues, where we can create any betting market on anything. It’s very trivial for us to make a new market and, especially in a F2P environment, we look at it as a social engagement thing – around things that people would talk about in passing – actually having betting markets on those things.

So that’s one area we’re concentrating on, seeing what people are looking at as being possible to bet on. But we’re certainly pushing people to bet on leagues they would not usually bet on, or sports they would not bet on. It helps to have the metrics to show how you’re doing and they show the areas of betting you’re good at that you didn’t previously realize. The low-risk scenario helps lessen the pressure a little bit, so you may bet on things you wouldn’t have before.

What’s the profitability model? How much free currency can a player spend before they have to start spending real money? So in theory, you can play forever and not make a purchase. That’s how the

normal ‘freemium’ model works, we give you free credits every day. What we try and do is create an environment where you want to bet through your credits; you’re incentivized through them. Prior to working on this, I worked at Scientific Games and we built a social casino – and that was very similar, we would give you all these free credits. And on a daily basis, 98-99% of people aren’t going to spend any money and it’s just that 1% who want to boost their standing on the leaderboards. They want to have a bigger bankroll; they want to have more opportunities to increase their metrics and so on.

So we give you credits every day and create incentives to bet as much as possible. We have two bankrolls; we have a standard bank and then a live bank which you can only use to bet on in-play, in-progress events. The trick with these apps is you want people to stay on them as long as possible, as this increases the chance that they’re going to bet and also the chance of them making a purchase.

We have tiers like casinos do, which we call ‘bettor tier’, that show your status. You might be a bronze, silver, or whatever – this changes how many credits we give you on a daily basis. It changes the number of credits you get when you make a purchase. Some people may never make a purchase, but as long as a small percentage

does, that can drive a lot of revenue through. And that separate marketplace may be more highly engaged than the non-spenders. There are a lot of things we can leverage here, but in the short term it’s how many credits can you get, and how much you get for making purchases. And status within the app – if a player can show off they are platinum tier. It’s something that makes people happy, saying that they’re an ‘elite.’

What are the company’s plans for the next 12 months?

We launched in August ahead of the football season and the first area we expanded in was non-traditional sports that aren’t even really ‘sports’. These type of areas include elections and other events in culture-related fields. What we’re doing now is looking for partnerships to create markets for leagues or bars that wouldn’t be able to do that otherwise. Making those kinds of partnerships and trying to change how people engage with betting. This market will be our start-of-2023 focus and we’re going to see how people engage with that. There isn’t much precedent for things like this; there are no formalized tab services in the US and seeing how people engage with that on a F2P platform - it’s a different form of management.

Then there’s adding functionality into the app, adding that social, almost-DFS experience to the product but not picking player stats, picking points spreads. I think there are some real-money equivalents to what we’re doing but they’re not too far down the road, so I’m curious to see how they do.

Our long-term changes will be peer -to-peer betting, so it will start as a F2P experience but if that works out and our user base is large enough, we would probably pivot to a real-money dynamic there. There are multiple apps that are trying to do betting exchanges like that in the US but it’s always about liquidity and having enough users to make it work, so we’re going to see how that goes.

GENERATION VIP

Today’s gambler is coming to expect more and more from casino operators in return for their loyalty – but how much is this loyalty worth? Gaming America investigates.

Loyalty programs have been a staple of the US gaming industry since its inception, relying on a simple concept: for operators, investing money into customers through ‘freebies’ is worth it as it results in customer retention in the long term. They have proven to be a powerful marketing tool to incentivize gamblers to keep on coming back and spending more – eventually out of their own pocket rather than with free bonuses.

Following the subprime mortgage crisis of 2007, revenues at retail casinos dipped markedly, with a 9% decline in 2009 alone. This motivated casino operators to unleash a slew of loyalty programs with two primary purposes – to identify the ‘right’ kind of customer and to retain their loyalty in the long haul, thus ensuring an unwavering customer base; unsusceptible to any force majeures. Given the effects of the Covid-19 pandemic on land-based US gaming, the benefits of retaining a strong customer database can now be seen in hindsight –with key customers returning en masse when restrictions allowed (we’ll soon lose count of how many consecutive billiondollar months Nevada will post).

NEVER LET ME GO

Nowadays, loyalty programs have evolved and we have ‘VIP programs’ – basically the same protagonist but in a fancier outfit. They still rely partly on free bonuses, promotions, casino-specific ‘currencies’ and other forms of customer-tailored incentives for a gambler to remain with a single casino operator.

VIP programs, as the name implies, put yet more emphasis on the personalization aspect of the loyalty

program experience. For instance, Caesars offers its VIP customers private tours of luxury Ancient Roman-themed villas in Las Vegas. Meanwhile, Mohegan offers travel experiences from the likes of MSC Cruises, the New York Yankees, Mystic Seaport, Samuel Adams Boston Brewery and its own Momentum Travel agency.

This new wave of more personalized loyalty programs comes in the wake of the overturning of PASPA in 2018, and the subsequent feeding frenzy of operators entering the US market. With all the opportunities available to the average bettor – at a simple touch of their smartphone – what could casinos do to ensure customer retention?

TO THE VICTOR GO THE SPOILS

An emphasis on casino-specific reward points has been the answer for many operators, as players are earning a currency that only has value within their premises. The modern bettor takes free bets almost as a given now – they can use it and then move on to the next operator; but they can’t do this with ‘in-house currency.’ It’s a closed-loop system – think Starbucks.

Each operator has its own version of in-house currency. At Mohegan, the ‘Momentum’ program offers ‘Momentum Dollars,’ which can only be spent at its hotels, restaurants, lounges and shops. Caesars has physical Gold, Platinum, Diamond, Diamond Plus, Diamond Elite and Seven Stars cards: earned through garnering a certain number of ‘tier credits.’ Likewise, Ocean Casino Resort’s loyalty program features four tiers – Signature, Preferred, Prime and Reserve. These tiers can be thought of in terms of a sporting league, where if you spend a certain amount of reward points you get ‘promoted,’ and if you fail to raise the volume of your betting you may be ‘demoted.’ This system punishes the bettor for not ‘training’ regularly. Ironically, promotion and relegation aren’t concepts that are too familiar within US sport...

KIM NOTO Mohegan Sun Chief Marketing Officer

But if you do take part in the game, you will receive rewards aplenty – not trophies or medals – but special incentives, such as larger ‘reload bonuses.’ For instance, a normal reload bonus may be 100 times the amount first deposited, while a VIP reload bonus could potentially be 500 of that amount. These loyalty programs are costly for operators. Ask yourself why FanDuel and DraftKings, the two largest sportsbooks in

the US, had been unprofitable since their respective launches? FanDuel turned in its first profitable quarter in Q2 of 2022 – having been launched in 2009.

But the cost of free bonuses and the like are ultimately worth it to casino operators. For any casino, losing a client, especially a betting fanatic with deep pockets, is the worst conceivable outcome. These ‘gold mine’ clients are the prize and to the victor go the spoils.

ADAPTATION

As the number of online operators has expanded, VIP programs have adapted to ensure the loyalty of their customers. Mohegan CMO Kim Noto says the company’s goal is to “sustain great relationships with the customers we already had.” She acknowledges that loyalty programs are now “universal across brick-and-mortar properties and online platforms,” and therefore Mohegan needs to differentiate itself.

Tailored experiences are key to this, with Noto telling Gaming America: “We give our guests the ability to personalize their visits across our resort and casino, as well as letting them enjoy their benefits at our sister properties and off-site partners play a major role in that. As competition continues to grow, we want our guests to value the uniqueness of their experience at Mohegan Sun.”

Many casinos now conduct separate programs for loyal clients’ birthdays, offering free spins, free credits, free entry into tournaments and more. Once again, the idea is to establish the feeling of a personal relationship between casino and

customer. Much like Mohegan’s travel experience offerings, Caesars Tier Reward system offers holidays to its ‘VIPs’ when you get to the upper echelon of tiers. At Seven Stars level, customers can get discounts on select Norwegian Cruise Line vacations and at the Atlantis Paradise Island resort in The Bahamas.

Ocean Casino Resort SVP and CMO Kelly Burke tells Gaming America : “We believe one of our key competitive advantages is the property itself. Encompassing more than 20 beachfront acres towering high above the boardwalk with uninterrupted ocean views, it is the tallest building in Atlantic City, serving as a beacon of luxury lifestyle and a one-stop destination for state-of-the-art gaming, electrifying nightlife entertainment and endless culinary adventures.”

In the past two years, Ocean has invested $100m in development, including two new guest lounges for Ocean Reward card members. Much like the ‘birthday treats’ that most VIP programs offer, the purpose of these holiday/beach-life experiences are to make the guest feel like they are receiving a gift from a friend.

VIP SAFETY

Burke says Ocean prides itself on high levels of transparency and communication with the NJDGE, while Noto commented: “Casino VIP programs and promotions are submitted to and reviewed by the Mohegan Tribal Gaming Commission and are subject to periodic audits to ensure the program guidelines are being adhered to. Generally, how much a casino decides to reinvest in its players to reward them for play and visitation

is considered a business decision, subject to the discretion of casino management. Gaming commissions also monitor VIP programs and other marketing initiatives to make sure they are not susceptible to fraud and abuse.”

Gaming America understands from industry insiders that regulations are perceived to be far stricter in the US compared to other markets – even that of the Gambling Commission in the UK. So meeting the requirements might be the hard part, but the certification those requirements provide make the legwork worth the while.

THE BENEFITS OF OFFERING A VIP PROGRAM

Operators should ask themselves about their profitability models before offering VIP programs. There is a reason the higher echelon of casino operators, such as Caesars, offer the most highly rated ones: they can afford up-front losses. There are great benefits for operators knowing their customers' betting behaviours in intimate detail. Higher-end casinos can use more advanced technology to do this.

Digital operators should arguably be better at rewards tracking and using points-based systems that are simple for players to understand: the more they play certain games, the more they are rewarded. These operators have a significant advantage in regard to tracking, as they can use complex algorithms. Meanwhile, retail venues might be more susceptible to human error, allowing for third-party casino management systems to offer their services.

THE DEBATE GOES PUBLIC

Following up his previous piece about sustainability in the US market for Gambling Insider, regular contributor Paul Sculpher feels like there has been a watershed moment in the debate about US gaming – it’s gone genuinely public.

The widely publicized (and criticized) New York Times series of articles about US online gambling and some troublesome activities associated with it have blown the conversation wide open. Some of the reaction has been entirely predictable from the pro gambling lobby, calling into question the veracity and relevance of the articles (and, to be fair, bleating about lobbying by the operators is laughable in the context of every other imaginable industry doing the same thing).

On the other hand, some of the language used by those looking to rein in the industry has been equally risible – a state senator,

speaking about the entirely reasonable concept of limiting promotional credit, complained that: “ The mobile sports betting industry is utilizing targeted advertising that is personally tailored to lure in new customers from right within their homes.” Just wait until he finds out about Amazon, he’s going to lose his mind.

Whether the detail of the articles is all 100% true, and whether there are some elements that have been sensationalized, there are undoubtedly some concerning elements. The concept that online sportsbooks have partnered with college institutions to the extent of

dominating campuses with advertising is deeply unsettling to me, for example. And at the very least, this demonstrates that some operators are able to make enough money, at high enough speed, to disregard the optics of what they’re doing. Nobody could have thought that would be a good look.

However, having said previously that the US industry is many years behind the evolution of the European equivalent, maybe they’re catching up. While there is the potential of massive problem gambling being seeded right now, in a world without consistent (or in some states adequate)

There’s still a way to go, mind – Brad Allen of online gambling consultancy firm Eilers and Krejcik, who I spoke to when writing this piece, pointed out an absolute gem online. One bookie or other in the USA planted the feel-good story of “a 20-something teacher from NY” and their $90,000 bet on Morocco to reach the soccer World Cup quarter finals winning $1m. He claimed he’d built up his bankroll using parlays and knew nothing about Morocco, it was just “a hunch.” If you ever need to see that the development gap in the US industry vs Europe still exists, imagine seeing that story these days in the UK press. You’d have the AML/source of funds investigation crashing through your door in rapid style demanding proof of where this guy, who definitely is neither a criminal nor a front for someone else, got hold of double his annual salary for a hunch bet….

want to protect US players. A large part of this is via education – players generally either can afford to gamble without impact on their lives, or they can’t – and it’s important for us to help them figure out which category they are in.”

Her view is that prevention, via education and other tools, is more effective than attempting to cure issues once they occur, and while this is of course preferable, it’s not easy. She told me “it’s critical that every partner in the process helps with the education piece, from my company on the affiliate side, to payment providers, the platform, and of course operators.”

regulated fold. New blood is the subject of the gold rush.

regulation, the emergence of the problem into public discussion has to be a positive.

I mean this both in terms of a spur for continued sector progress towards a better framework of protection (for players and, yes, I guess the operators’ futures), but also in terms of assisting players to recognize their responsibilities to themselves.

I spoke with Catie Di Stefano, who in fact by her very employment, represents an interesting step forward. Catie is Director of Community Marketing at OnlineGamblers.com, and the fact an affiliate site has anyone in this type of role – player protection and education – might not have been something you’d have seen even five years ago in Europe. Catie has been involved in the European betting/gaming industry for 11 years, and now has shifted focus to the US, so she is well aware of both the harm gambling can inflict, and also the impact of over-regulation (with Spain, her current location, as a prime example).

She said: “We’ve seen how things have developed in each European country, and

I don’t think anyone would disagree with that view, but my concern is that there’s so much money floating around the system, that short-term incentives are in danger of dominating a longer -term view. The industry in the US has also adopted a familiar refrain from Europe – regulated gambling is better than unregulated gambling (Catie – “people in the US used to be able to get a bet on through their cousin’s cousin – but that was a problem once money was owed”) and once again this stands up to scrutiny; although there’s a reason why so much marketing money is being spent – and it’s not just to bring illegal bettors into the

Also relevant is the phenomenal tax revenue being generated, but the debate is nuanced. How much tax revenue is enough to offset one gambling-related teen suicide? Tabloid headlines would tell you that there’s no amount of tax that could make up for one tragedy of that nature, but that’s a sophomoric take – if it’s one tragedy vs $1bn, clearly the $1bn could be deployed to save a vastly higher number of lives. More than one person dies from alcohol-related issues every year, but there’s not much danger of booze being banned (again). Always, always shades of grey.

I checked in with Bill Pascrell III (BP3) once more after our first conversation, and he reinforced Catie’s points, particularly about prevention being the better option than cure. He also pointed out that there are bound, in a developing industry, to be operators that go “off the rails” in the early days (FTX, anyone?), but that a collaborative approach between operators and indeed legislators will be the best way to move forward – together. There does need to be an impetus behind efforts to work together, however, and I do wonder if the sort of negative press we’re starting to see might be part of that impetus. Governments and regulators have multiple stakeholders to satisfy, and while it’s not simply the case of “whoever shouts loudest,” it’s not ludicrous to suggest that a bit of negative press might help to forge bonds between regulators and operators to the benefit of all.

PAUL SCULPHER GRS Recruitment Director

There’s a limit to how much of that can be beneficial to the industry, but whatever one might consider as the developmental gap between online gambling in the USA vs Europe – somewhere between 5 and 15 years, you’d think – it’s closing fast, and screaming newspaper headlines underline that. While concerns are of course legitimate, both respectable and overwrought headlines feel like almost a rite of passage in every jurisdiction that has legalized gambling (of any sort), and hopefully can have a galvanizing effect on all concerned in the US market.

ESPORTS BETTING: WILL THE US JOIN THE GAME?

Esports betting has a huge and eager customer base but its legalization process in the US has been sluggish.

Gaming America takes a closer look.

The popularity of esports has seen major growth inside of the US. Statisticians project that esports viewership in the US will reach approximately 46 million by 2023, and as viewership numbers grow, so too does esports betting activity. However, US states are still struggling to legalize traditional sports betting, which has been more firmly established nationwide. While traditional sports betting is legal in 30+ states, esports betting is legal in only four: Nevada, New Jersey, Tennessee and West Virginia.

VISUALIZING A ROADMAP TO ESPORTS LEGALIZATION IN THE US

There is a widespread perception that legalizing esports will be a more complicated business than the legalization of traditional sports betting. Many legislators in the US have yet to grasp the global reach that esports has. But popularity has not yet translated into acceptance for US legislators.

Why is this? There is perhaps some truth to esports betting being more complex than traditional sports betting; the value chain of a bet offer can be very long, extending from the affiliate offering match data, to the oddsmaker, to the operator turning those odds into an offering. Everyone in this chain must receive a license and gaining these licenses is a difficult affair.

Bayes Esports has recently obtained a New Jersey license, and its Colorado one is in the pipeline. It is working with

AMIR MIRZAEE Bayes Esports CCO & Managing Director

two separate law firms, one in the US and one in Germany, to find out what requirements are necessary to get more licenses. However, Bayes Esports Managing Director Amir Mirzaee observes that many state legislatures don’t seem to understand what they are asking for from esports operators.

As the US pivots away from its static focus on pre-match betting and becomes more accustomed to in-game betting, the potential for esports to take off grows. The fun of esports wagering primarily lies in the frenzy of interactive live betting as matches are being played, with odds ever -changing. However, many legislators cling

on to concepts they understand and have been demonstrated to work; this makes for a fragmented legalization process.

A RELUCTANT EMBRACE

It would be fair to say that the US as a whole has yet to accept esports betting with open arms. However, Mirzaee still sees hope. He cites Nevada as an example of a US state that wants to understand esports and reap financial benefits from it. He says: “The Nevada Gaming Control Board did a good job inviting a lot of industry players to present how this whole industry works, how the ecosystem works and what the players do in their day-to-day and how it’s connected. How integrity is handled and how betting integrity, in particular, is being addressed; they’re taking a moment to understand what to do right now.”

Esports data sources represent a ropy issue when it comes to esports, one that is struggling to get a grasp on the esports betting process. They’re unsure of how a data point is turned into an probability and are therefore reluctant to enforce something they do not understand. From their perspective, brick-and-mortar venues embody simplicity: you go to a match and fill in a betting slip.

SCANDALS SETBACK

Equally unhelpfully, there have been numerous scams in esports, but the most notorious one among fans is

the 2016 CS:GO skin scandal. Two popular esports YouTubers promoted a CS:GO skin gambling site that they secretly owned and encouraged their followers to bet on it. While there were no deposits made on the actual site (CSGO Lotto), there was a large gray market that involved micro-transactions and the exchange of real money.

One might ask if these scandals, combined with the complexity of the scams, could also be a cause for concern among US legislators. Mirzaee comments: “With the skin scandal, at the end of the day it is good for the industry as a whole. These things have to happen for everybody to understand, particularly game publishers, that their participation in the ecosystem is mandatory.

“I think the biggest mistake game publishers can make is to turn a blind eye and say ‘betting is not happening in my sport,’ which is just untrue; betting is happening whether they want it or not... It’s a double-edged sword. The bigger the ecosystem, the bigger the fan base and the more betting that’s going on.”

This is a valid point. Almost every form of gambling that has not been officially legalized has either gray or black markets where these forms of scandals and scams are more likely to occur. There may be

some underlying concern among game publishers about having their brand names attached to esports companies due to past scandals. However, Mirzaee believes the occurrence of more scandals will be a “great” thing for the esports industry as a whole, as it will uncover more unofficial data sources and game publishers “who are not forward-thinking enough to be in the betting game yet.”

WILL US STATE LEGISLATURES CHANGE THEIR ATTITUDES?

Nevada, with its long history and heavy reliance on gambling tax revenue, has been one of the few states to show a progressive attitude toward esports betting. This is unsurprising, given its history. The Nevada Gaming Control Board has a Ubisoft executive among its members, which indicates its inclination to look forward and consider the interests of Gen Z and Millennial gamblers. The Silver State produced a task group to collect information, create a forum and start to shape esports legislation.

Mirzaee is optimistic about the US as a marketplace when compared to Europe. He believes there is more of a “disconnect” in most European countries where legislators do not understand,

or don’t want to understand, how big esports is.

EUROPEAN ESPORTS IN AMERICA

The perception that Europe is more ‘backward’ in its approach to esports than the US is widespread among esports companies, which has caused a subsequent migration as European publishers are pushing hard to get into America. Bayes Esports, only being licensed for betting in New Jersey, is going for the lowest-level licenses state -by-state, as it attempts to gain ‘vendor’ status, which means it can provide raw match data.

Bet365, Pinnacle and Riot are other big names in esports rolling into the market in the US, but they face major obstacles. Mirzaee remarks: “You have a very interesting dynamic now in the US that goes: customer acquisition costs are crazy high and there’s a lot of money being spent on customers that you won’t be able to retain. European operators come in with a lot more experience. I think these guys are just going to wait it out until the market is taught, and it has adapted, and then they are going to swing in and steal customers away with heavy user acquisition. So it’s going to be a very tight space for the next few years.”

ROUNDTABLE: SUPER BOWL LVII

Executives from Kambi, PayNearMe and Sightline Payments discuss the industry's preparations for the upcoming Super Bowl.

DAVID BALL

Senior US Sports Trader Kambi

Ball joined Kambi as the Senior US Sports Trader in 2018, a position he has held for four years. He transferred his love of soccer to his love of American football, becoming Head of Pre-match NFL and US Trading Team Leader. Working in Philadelphia, he has his finger on the pulse of US sports betting, with the city being home to some of the biggest sports teams stateside. In his role, Ball uses his knowledge of sports in a similar way that stock traders use their financial knowledge to navigate Wall Street. He tries to find assets that are underpriced relative to their real value and recommends their acquisition to Kambi.

LEIGHTON WEBB

VP of iGaming and Sports Betting PayNearMe

Webb is a seasoned veteran of the industry, with 20 years of experience in launching products and services across all major platforms. His impressive resume includes employers such as Ubisoft, AOL, 20th Century Fox and bwin.partypoker. In 2017, Webb acted as Managing Director at Jackpocket, helping to offer users a secure way to buy state lottery tickets online. Prior to joining PayNearMe in 2021. He specializes in business development, general management, product development and executive leadership in complex markets.

JOE PAPPANO Co-Chief Executive Officer

Sightline Payments

Pappano is the Co-CEO of Sightline Payments, leading the company’s business and regulatory efforts as it transforms the gaming industry. Having spent over 30 years in payments and payment technology, he is one of the original pioneers in the modernization of payments for the sports betting, lottery, horse racing, and online as well as brick-and-mortar casino industries, bridging the divide between gaming, payments, and regulators. Before joining Sightline, he was a senior vice president of Worldpay Gaming and has extensive experience in various sectors of the payments industry from card-issuing to third-party processing to mobile and alternative payments.

LINDSAY SLADER Managing Director GeoComply

Slader has been a key member of GeoComply’s management team since its inception in 2011. Her knowledge and expertise have made her a much-requested speaker at iGaming, sports betting and regulatory conferences, as well as serving as an expert witness for state and federal government hearings. Before this, she had acquired experience in the gaming industry with Gaming Laboratories International, where she worked in Business Development for over a year.

David Ball: The Super Bowl is a one-of-a-kind betting event that is the culmination of everything Kambi has focused on from a product perspective over the course of the NFL season, and we will once again aim to deliver one of the market’s strongest pre-game and in-game offerings. From a trading perspective, in the two weeks prior to the Super Bowl we will do a deep dive into different player props and creative ideas you wouldn’t normally see during the regular season, when it is harder to create that kind of offering for 16 games every week. We also have timed development prior to and throughout the playoffs so that we have our strongest overall offering for those key games at the end of the season.

VIEWPOINTS

Joe Pappano: Since it’s in Arizona this year, Super Bowl LVII will be the first to play in a state offering sports betting at the time of the game. Although it’s sort of a historic occasion, we plan to approach this upcoming Super Bowl like we would any other day. Patrons who fund with us are afforded with fast access to their winnings. Typically, it’s a VIP audience who attends the Super Bowl. Through experience, we know fast access to their winnings is what’s most important to them.

Leighton Webb: Our top priorities ahead of the Super Bowl – and any other high-volume betting events – are speed and reliability. We always want to be known as the payments partner who ensures that critical uptime during surge events. Our product development team is constantly looking for ways to promote scalability, and allow massive amounts of data to quickly and seamlessly pass through our platform to meet the demands of our operators during major events like the Super Bowl and March Madness. We want to give our customers reassurance that their payment processes won’t fail during the biggest days of the year, and I know we’re confidently able to do that.

Lindsay Slader: The Super Bowl is the single most popular sporting event of the year. It goes without saying that it is one of the busiest weekends for our sportsbook customers and the GeoComply team. Like the athletes on the field, our team prepares a game plan that considers all possibilities, and our systems are conditioned for success. Unlike every NFL team, we know we will be a player on Super Bowl Sunday. Throughout the year, we dedicate considerable resources to ensure our solutions can support the expected demands of our customers and anticipate any unforeseen challenges. GeoComply’s age and identity services (ID Comply) will be optimized to verify thousands of new customers who are excited to wager on the Big Game. Not surprisingly, Super Bowl betting is also a time when fraudsters seek an advantage. Our anti-fraud tools will be on high alert to stop would-be scammers who seek to harm bettors or our customers.

How do you plan to approach this upcoming Super Bowl

David Ball: Last year’s Super Bowl went extremely well, and we delivered a strong offering that included more than 300 player prop markets and a leading Bet Builder product. We will aim to replicate that success for Super Bowl LVII while going even further with the introduction of interesting new bet offers. In terms of our overall strategy, one thing we will do is go back and look at the performance of certain Super Bowl offers in recent years, to see which ones generated the most interest. This might affect our strategy for the next season, as far as developing markets for those more popular bet offers and adding them to our regular-season offerings going forward.

Lindsay Slader: We never take a cut-and-paste approach. What worked last year isn’t always the best approach the next. So we are continually improving our services and engaging with our customers to understand their needs and do even better. With the recent launch of Ohio this year, more than 44% of the country will have access to legal online sports betting on Super Bowl Sunday. Since more Americans will have the opportunity to bet with licensed and regulated operators, as a compliance-driven company, we are privileged to be in a position to enable legal and responsible betting. We approach the Super Bowl by supporting our customers and upholding our regulatory obligations.

Leighton Webb: PayNearMe’s goal of providing frictionless deposits and payouts remains consistent, but we know that for the Super Bowl, the reliability piece is key. We want to be the most trusted payment partner for platform providers and operators. Consistency is the strategy. Because of that, individual events don’t affect our overall strategy, but we do make sure we put all measures in place to handle the level of processing volume that comes with a significant betting event. The Super Bowl is the biggest priority for many of our clients, making it our biggest priority as well.

Joe Pappano: With large events like the Super Bowl, we use it as an opportunity to test different incentives with a large audience. The nationwide data we gather over multiple gaming operators allows us to drive greater customer satisfaction, increase loyalty and deliver results to our gaming partners.

How do events such as the Super Bowl affect your overall strategy, is it consistent every Super Bowl

David Ball: One of the major long-term trends in sports betting has been for players to demand increasingly more control over their experience through bet builder products. At least year’s Super Bowl we found that 50% of bettors placed a bet builder bet, while31% of Super Bowl pre-game bets were bet builders. Kambi’s Bet Builder is in many areas, including paybacks and level of combinability, and the next phase of the roadmap is to expand it to include both cash-out and live. In terms of differentiating, our operator specials are always an area to be creative and create special offers that separate us from other sportsbooks. We aim to give our partners some interesting offers and give them a different offering than competitors, as well as some differentiation among the Kambi network of operators. This allows Kambi’s partners to customize their offers toward their specific customer base.

Lindsay Slader: There is no question that online fraudsters will seek to exploit individuals and sportsbooks on Super Bowl Sunday. Our value to clients isn’t just that we geolocate their players, it's how we leverage this data to protect everyone from fraud and abuse. We differentiate ourselves because we truly provide our sportsbook customers with wrap-around protection and compliance assurance. Over the years, we have collected and analyzed billions of data points. This data has helped our fraud teams and automated detection systems spot payments fraud, identity theft, bonus abuse and even proxy betting. It’s our job to identify and stop these attempts in real-time. This type of anti-fraud experience is unparalleled in the industry.

Leighton Webb: While we aren’t a sportsbook, we still support them and need to provide solid infrastructure for them to handle major events. The Super Bowl is the type of high-profile event that attracts a lot of new bettors. We have a fantastic payment experience, and that’s what will help with getting new bettors to make their first deposit on game day. We have all of the payment options that bettors are familiar with using, like PayPal and Venmo, which makes it especially easy for them. We also ensure they get paid quickly when they go to cash out, which builds trust. A big differentiator is our Cardless Cash at ATM withdrawal feature, which gives bettors same-day payouts at a local participating ATM. If someone is new to sports betting, we want the Super Bowl to be a great first experience that will make them a returning customer for our operators.

Joe Pappano: At Sightline Payments, we are partners with nearly every legal sportsbook provider. Our Play+ solution allows operators to extend their brand when they offer a co-branded Play+ account to their patrons. We do this by enhancing a patron’s gaming experience, by offering them incentives on the steps they take before and after gaming. This can include incentives on funding, quick access to their winnings, incentives on spending those winnings, and even the ability to spend it everywhere their Play+ card is accepted.

How do you differentiate your offerings from other providers ahead of the Super Bowl

Joe Pappano: When looking at the volume across all our partners during the World Cup, we doubt World Cup betting will ever get to the level of the Super Bowl or March Madness in the United States. However, we do feel that betting volume for the World Cup will grow significantly when it is co-hosted by the United States in 2026.

VIEWPOINTS

David Ball: The Super Bowl and March Madness will always have an advantage among US sports bettors due to the popularity of football and basketball, and these events also benefit from happening every year. It’s safe to say that the World Cup won’t surpass the popularity of those sports in the US market, however, the 2018 World Cup only took place a month after the overturning of PASPA, so this year’s tournament is the first one we’ve seen in a regulated US market and the interest has been strong. During the World Cup, the tournament was the third-most popular event on Kambi’s US network by handle after football and basketball there being fewer World Cup matches than those other sports. The interest in it should only grow in 2026, when the tournament takes place on North American soil and a young USMNT will be much more experienced on the national stage.

Lindsay Slader: GeoComply monitored traffic very closely during the last World Cup. We were surprised that the World Cup final had more traffic than any major US sports finals (MLB, NBA, NHL) in 2022, except for the Super Bowl. So it’s already important. We also saw volume spikes in our IDComply services before big matchups throughout the tournament, so we know that soccer is attracting a new American fan. All of the interest we saw in 2022 will be multiplied by several factors when the World Cup lands on North American soil in 2026. Like we do for the Super Bowl, March Madness or the start of the NFL season, our team will give the next World Cup special attention.

Leighton Webb: While soccer doesn’t have the same level of popularity as NFL football in the US, the World Cup is the biggest global sporting event, and it’s difficult to ignore something that huge even if you aren’t a diehard soccer fan. You scroll your social media feed and there are clips of the World Cup, memes, news clippings. You feel involved and invested, even if you didn’t watch a full game. That level of exposure, coupled with US sports betting becoming more mainstream, is definitely going to spike the popularity of betting on the World Cup in the future. An estimated 8% of US adults bet on the World Cup in 2022 according to a survey by the American Gaming Association (compared with 12% who bet on the Super Bowl), so we could see that number surpass the Super Bowl as more US states legalize online betting, maybe even by the 2026 World Cup when the United States co-hosts.

And then lastly, could you see the World Cup ever becoming as important as the Super Bowl or March Madness for US operators

WHAT'S NEW?

Gaming America takes a look at some of the market's newest and most exciting gaming products, available for land-based players across the country.

SB22 – K22

Sports wagering kiosks are revolutionizing the way people place bets on sports events. The latest offering from SB22 – the K22 – provides bettors with a convenient way to quickly and securely place bets without having to wait in lines or worry about the security of online betting sites.

The K22 is fully integrated with the GLI-33-certified sportsbook platform Fi22, which offers new levels of AI-powered

innovative wagering. It features automated risk management, custom in-house promos and advanced reporting software.

This next-gen kiosk accepts numerous methods of payment, whether it be cash, vouchers, prepaid account cards or TiTo (ticket in – ticket out). This enables casinos to operate their sportsbook kiosks like conventional slot machines with bonusing, coupons and drawings which helps streamline casino accounting procedures.

The premium kiosk will also support cashless functionality in jurisdictions that allow it. The K22 offers convenience and speed, allowing bettors to place their bets in a fraction of the time it would take to do so in person. This means that bettors can make their picks and get their bets in quickly, allowing them to take advantage of last-minute opportunities.

It uses top-of-the-line components for deposit and payout on the same machine, making the payment process all that bit easier. What’s more, the K22 utilizes the platform’s omnichannel platform to link the digital and retail sports betting experience.

Speaking on the new product, SB22 COO Vladimir Jovanovic said: “K22 is the first true self-service retail technology that allows operators to offer a profitable sportsbook without significant operational overhead and capital investment."

This kiosk also provides an element of security not seen with most kiosks available on the market. It provides secure and anonymous user betting via the use of presence detection, which is carried out by an embedded camera and AI system.

The K22 is fully remotely managed and serviceable, operating on a secure failsafe operating system.

PRODUCT REVIEWS | GAMING AMERICA

VELVIX – FORGOTTEN TREASURES

Velvix’s latest title is also one of its most unconventional. At face value, Forgotten Treasures has the look of a traditional piratethemed slot game. With 40 lines, the game sees players chase the title's single most exciting feature. When triggered, players enter the “Free Games” feature, but with a twist! The feature is activated by collecting five or more scatters, each containing a multiplier value listed on them. The player then gets to select the order the multipliers are awarded during the feature. This means the player can weigh all of the larger multipliers at the start of the free spins or decide to set the bigger action toward the end of the free game. For the first time, players are put in charge of their own destiny!

But that’s not all. Unlike traditional “Free Game” features whereby players

may experience spins with no credit win, Forgotten Treasures ensures every spin is a win. If no line win is reached, the player continues the free spin until they receive a win – including the guaranteed multiplier!

Sticking to its pirate theme, the title’s “Free Game” feature follows a treasure map. The map includes multiple stops for the player, each representing a free spin and marked by the multiplier value chosen by the player. For those in a hurry, it is also possible to simply have the multipliers laid out at random on the treasure map. Players can earn further free winning spins while in the feature, expanding the treasure map as they set off on further adventures to chase guaranteed wins!

and marked by the multiplier value chosen the feature, expanding the treasure map as

Forgotten Treasures will be available in in

game will be on display for trial during the

Forgotten Treasures will be available in April 2023 in select markets in the US. The game will be on display for trial during the upcoming IGA show in San Diego this March, 2023.

ARISTOCRAT’S DRAGON LINK $1M SLOT

Aristocrat’s Dragon Link jackpot brand has long been a favorite among slot machine fanatics but its latest iteration has proven particularly popular since its world premiere at the Hard Rock Tampa. The progressive slot allows for high and mid-denomination bets and a larger linked or standalone jackpot of $1m.

Unlike wide-area progressives, the $1m jackpots are paid immediately for the entire value and reset to $1m once this amount is hit by a lucky bettor. The $1m Dragon Link has a $25 minimum bet and $2,500 maximum bet – not bad considering the potential payout!

The Golden Century version incorporates Dragon Link’s famous Hold & Spin feature, with a chance to win up to 250x the player’s bet.

Since its launch in Florida, there has been

a high demand for these high-denomination slot machines. Peppermill Resort Spa Casino, Nevada, is the latest venue to embrace the frenzy around this game, installing two of these slot machines on its premises.

The 25-line machine features symbols that will be iconic to slot fanatics – oriental -themed characters and cultural artifacts mixed with more traditional money icons and Kings, Queens and Jacks.

The Seminole Tribe of Florida has embraced the $1m Dragon Link slot,

which has been installed at the Seminole Hard Rock Hotel & Casino Hollywood, Seminole Hard Rock Hotel & Casino Tampa and Seminole Coconut Creek Casino Seminole. The Hard Rock Tampa alone has paid out over $1.6bn in jackpots to more than 56,000 individuals in 2021. There have been over 581,000 jackpots awarded, which equates to over a jackpot paid per minute.

Dragon Link is one of the most popular slot games in the world.

PRODUCT REVIEWS | GAMING AMERICA

KONAMI DIMENSION 49 SLOT MACHINE

Konami’s DIMENSION series of machines have long proven to be a reliable slot cabinet, showcasing wonderful and popular game brands such as Ocean Spin, Fortune Mint, Lucky Envelope, Lightning Dragon, Mystical Pearl and more.

The 49" 4K UHD ‘J’ curve screen has been designed to debut a glamorous host of new game themes, where rich colors, intricate art and exotic inspirations amplify every celebration. Its streamlined frame and custom merchandising options deliver entertainment over a wide variety of potential locations on the casino floor.

The DIMENSION 49 will be showcased at ICE London. SYNKROS technology is employed by Konami which offers advanced features such as player tracking, marketing, rewards /offers, machine management, cage management, cashless technology and mobile tools.

The product has an attractive design aesthetic too, inspired by architecture from the financial and military industries. With SYNKROS as a partner, the DIMENSION 49 is covered by around-the-clock customer support.

The cabinet’s custom-engineered button interface is contained within a lighted deck with dual classic spin buttons and a plethora of surface space for players to place their drinks, phones and other personal effects. Additional player conveniences include a wireless smartphone charging pad, a USB port and a built-in handbag hook.

This is not to mention Lucky Envelope, the cabinet’s linked progressive series which features a now-iconic golden tree covered in striking red envelopes. It is a 243 Ways game with four progressive jackpot levels that scale by denomination and features wild red envelope symbols.

Konami VP of International Gaming Operations commented: “Games like Ocean

Spin, Fortune Mint and Lucky Envelope have proven consistent performance in the field over many months, and we’re excited to share these leading releases with our customers at ICE 2023. Konami and its exclusive international distributors are working together with customers to expand these solid entertainment options to operators and their guests.”