Gambling Insider Jan/Feb 2021

Mar/Apr 2019

Jan/Feb 2021

Futureproof: the leaders staying ahead of the game BIG QUESTION Big trends in payments for 2021 ROUNDTABLE Land-based and online slots go head to head POSITIVE SIGNS Optimism in Ukraine as gambling moves to legalise

INSIDERS RICHARD WILLIAMS

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EDITOR’S LETTER

COO, EDITOR IN CHIEF Julian Perry EDITOR Carl Friedmann Carl.Friedmann@gamblinginsider.com Tel: +44 (0) 207 739 9908 SENIOR STAFF WRITER Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITERS Owain Flanders Owain.Flanders@gamblinginsider.com Iqbal Johal Iqbal.Johal@gamblinginsider.com Ezra Amacher Ezra.Amacher@gamingamerica.com Peter Lynch Peter.Lynch@gamblinginsider.com LEAD DESIGNER Laura Fogar

C

Julian Perry, COO, Editor in Chief

Carl Friedmann, Editor

EOs are still being tested like never before, even if the calendar has flipped over into a new year. January 1 is never a reset button in reality, even though there’s an entire industry, however flaky, based on resolutions. Ask yourself if you’ve already given up on your declarations for daily sit-ups, gardening or eating more kale. I thought so. Those we feature in this CEO Special, however, have certainly doubled down on their commitment to see a task through; we didn’t ask about their running habits though.

The tests to keep things humming along are just as challenging as ever as the pandemic continues to dictate terms. But sticking fast to diversification, agility and morale as the workforce diaspora tackle WiFi speed have been common areas to prioritise. Take Robert Chvátal, CEO of SAZKA Group, for instance, as he discusses on page 24 how business in Austria and the Czech Republic, as well as efforts in new regions, are showing great resilience against headwinds in other regions. “We’re looking in general in Europe because we’ve demonstrated in several geographies that we’re able to give a proposition that is a win for the government for state budgets, a win for consumers because of fresh and innovative products, and a win for us as a group because we are diversified.”

Then on page 30, we hear the inspired story of LeoVegas CEO Gustaf Hagman from his burger-flipping days to becoming a leading force in the gaming industry. If anything, LeoVegas is in an enviable position of growing influence. “There are a lot of companies out there: the smaller operators are trying to get acquired and the larger ones are looking at companies like us, since we have a clear position,” he explains. “With US investors moving into Europe now, we see more of them in our holdings and we can see their presence increasing all the time. I think that will also drive M&A in upcoming years. Definitely in a couple of years there will only be larger and larger operators.”

Spare a thought for all the companies that haven’t been able to ride the pandemic out, even though they might have followed a similar approach. Circumstances can be brutal.

And as enjoyable as it was to put this issue together, we hope you’re able to apply some of the strategies and tools discussed in your own businesses, whether it’s directly related or not. It has nothing to do with surrendering to what’s considered normal but being consistently brave and daring. Those are a couple things I picked up on at least. The New Year isn’t new anymore and we still have to learn by the examples set by those who continue to excel.

CF, Editor CF

CONTRIBUTING THIS ISSUE

DESIGNER Olesya Adamska DESIGN ASSISTANTS Radostina Mihaylova, Aleksandra Cakikj, Veronika Fukita, Inna Shtereva MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 EVENTS SALES MANAGER Ryan Horwood Ryan@globalgamingawards.com +44 (0) 208 638 7610 SENIOR ACCOUNT MANAGER William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@GamblingInsider.com Tel: +44 (0) 207 739 9918 Joe O'Halloran Joe.OHalloran@GamblingInsider.com Tel: +44(0) 207 613 5863 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 US ACCOUNT MANAGER Erica Clark Erica.Clark@playerspublishing.com Tel: +1 702 430 1912 CREDIT MANAGER Rachel Voit WITH THANKS TO: Gustaf Hagman, Stéphane Pallez, Matt Davey, Per Jaldung, Robert Chvátal, Mikael Lijtenstein, Rio Broadfoot, Rhi Burns, Liam Colclough, Christopher Justice, Mark Luke Borg, Andrey Astapov, Simon Hammon, Amichai Marmor, Catalin Bratosin, Joseph Addabbo, Jr, Lee Richardson, Steve Donoughue, John Griffiths, Nik Sarafi, Willem van Oort, Xavi Muñoz Bellvehí, Ranjana Adhikari, Scott Burton, Paul Sculpher, Nick Arron, Martin Lycka, Alex Czajkowski, Peter Causley, Richard Hogg, Richard Williams, Andy Synnott, Jason Ader Gambling Insider magazine ISSN 2043-9466 Produced and published

by Players Publishing Ltd

RANJANA ADHIKARI

co-head media entertainment, Nishith Desai Associates 4

GAMBLINGINSIDER.COM

LEE RICHARDSON

CEO, Gaming Economics

All material is strictly copyrighted and all rights reserved.

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

CONTENTS 14

34

50

ISSUES

CEO SPECIAL

FEATURES

8 Facing facts The latest industry data with a look at COVID-19's impact on gaming revenue figures

18 CEO Special - Per Jaldung Casino Cosmopol CEO and European Casino Association chairman Per Jaldung tells Tim Poole about a career with the police, the Swedish equivalent of the FBI and the boardroom

44 Big Question Industry experts weigh in on payments, and what the biggest trends are for 2021

10 In Numbers A gaming snapshot by Fantini Research 12 Taking stock Tracking operator and supplier stock prices across a six-month period

GGA LONDON 14 GGA London The Global Gaming Awards have moved to June and companies have self-nominated for the15 categories this year

22 CEO Special - Sazka Gambling Insider speaks with Group CEO Robert Chvátal about capitalising on technology and the knowledge at their disposal to deliver beyond expectations 28 CEO Special - LeoVegas Tim Poole sits with LeoVegas CEO Gustaf Hagman, who provides his take on consolidation, regulation and the future of the gaming industry 34 CEO Special - FDJ Stéphane Pallez, chairwoman and CEO of Française des Jeux, discusses how she evolved into the top role and making demanding decisions to meet these challenging times 40 CEO Special - Matt Davey Tekkorp Digital CEO Matt Davey, one of the pioneers of online gaming, speaks to Tim Poole about starting his career with a regulator, his time at NYX Gaming and his hopes for the online market

50 Positive signs Andrey Astapov, managing partner at Eterna Law in Kyiv, speaks about optimism in Ukraine as gambling moves to legalise 54 Roundtable A high-end panel discusses innovation for the digital sphere and differences between land-based and online slot design 60 Huddle New York Senator, Joseph Addabbo, Jr, on the possibility of mobile sports wagering in the state 62 Lifting the lid on bids Gaming Economics CEO Lee Richardson on getting to the business end of the UK National Lottery bidding competition 64 Seeing red UK gambling regulation expert Steve Donoughue compares the Gambling Commission to Soviet Russia 66 The missing ingredient John Griffiths, CCO at Spicy Mango, asks if more trust is needed for a quicker evolution of the global esports betting market

82

86

98

68 What are the chances?

Nik Sarafi, attorney at Dr. Sarafi, explains how games of chance across state lines in Germany are being examined

INSIDERS

FINAL WORD

86 Lightning box Peter Causley

98 An online awakening Gaming industry analyst and SpringOwl Asset Management CEO Jason Ader speaks to Gambling Insider on why he envisages an uptick in M&A deals in 2021

71 Online state of play Willem van Oort, founder of Gaming in Germany, explains what to look out for as Germany strives to regulate online gambling 72 A restrictive market Representatives from Spanish law firm ECIJA discuss gambling advertising restrictions recently introduced 74 A sleeping giant Nishith Desai Associates' Ranjana Adhikari discusses e-sports in India and which legislation operators need to look out for 76 A tectonic shift FansUnite Entertainment CEO Scott Burton analyses the impact of single-event sports betting as it gets the green light in Canada 78 Spin cycle GRS Recruitment's Paul Sculpher and Nick Arron from Poppleston Allen discuss the path forward for UK slot machine legislation 80 Paving the way Martin Lycka from Entain on the proposed legalising of online gaming in Ontario, Canada 82 Live video on demand Marketing executive Alex Czajkowski on the exponential growth of live video content and its implications

87 Betgames.TV Richard Hogg 88 Keystone Law Richard Williams 89 Spotlight Sports Group Harry von Behr

PRODUCT REVIEWS 90 What's new on the market Product output in the gambling industry continues to gain strength as we settle into 2021. Gambling Insider previews several of the hottest currently available

ISSUES

NUMBER CRUNCHING

Facing facts

Gambling Insider takes a close look at the impact of COVID-19 on gaming revenue figures throughout the world, with operations showing gradual signs of recovery after a worrying year for the industry

Danish quarterly gaming revenue shows the impact of the pandemic on each of the four sectors, with online casinos reporting growth at theGRAPH expense casinos during lockdown (€ million) GRAPH 2 GRAPH GRAPH 2 of land-based 3 Source: Danish Gambling Authority (Spillemyndigheden)

US commercial casino GGR was over $9 billion in Q3 2020, down 19% from the same three-month period in 2019 but up 294% from Q2 of 2020.GRAPH In the1 first nine 1 months of 2020, commercial gaming revenue GRAPH contracted by 36.5% compared to the same period last year, but the industry continues to recover strongly from historic lows in Q2 Source: American Gaming Association Commercial GGR

Betting

YoY Change

12

20%

20%

11

11

10%

10%

10

10

0%

0%

9

9

-10%

-10%

8

8

-20%

-20%

7

7

-30%

-30%

6

6

-40%

5

-50%

4

-60%

3

3

-70%

-70%

2

2

-80%

-80%

-90%

-90%

1 0

Online casino

Borgata Borgata

800

800

600

600

400

400

Caesars Caesars Golden Nugget Golden Nugget

-50%

5

1

Land-based casinos

Balla’s ACBalla’s AC

Hard Rock Hard Rock

-40%

4

0

Gaming Machines

Land-based Online casino Betting Betting Gaming Gaming MachinesMachines Land-based casinos casinos Online casino

YoY Change

GGR ($B)

12

3

-60%

Harrah’s Harrah’s Ocean Resort Ocean Resort

200

200

0

0

Resorts Casino Resorts Casino Tropicana Tropicana

-100% -100%

Q1 2020Q1 2020

Q3 2019Q3 2019 Q4 2019Q4 2019 Q1 2020Q1 2020 Q2 2020Q2 2020 Q3 2020Q3 2020

Q2 2020Q2 2020

Q3 2020Q3 2020

0

0 50

GRAPH 8 8 Comparing Atlantic GRAPH GRAPH 6 6City casino revenue for Q3 over the past twoGRAPH OPAP and Everi results for Q3 2020 (US$ million). From years, demonstrating the negative impact of the pandemic on all casinos throughout the region (US$ million) 4 4 Source: New Jersey Department of Law & Public Safety 3 GRAPH 3 GRAPH

a revenue standpoint, demand for equipment and manufacturing for land-based casino operations suffered considerably more than 4 gaming like lottery and scratch cards GRAPH GRAPH 4 GRAPH newsstand-style 600 Source: Company reports

600

2 AC Balla’s

Balla’s AC

Borgata Online 1casino 1 Caesars

Borgata

2

Land-based casinos Online casino

0

2020

2019

2019 500

524 500

524

465 400

465

400

OPAP

Ocean Resort

Resorts Casino

Resorts Casino

Tropicana

Tropicana

200

200

100

100

0

0

0

8

50

GAMBLINGINSIDER.COM

0 100

50 150

100 200

150 250

250

400

200

200

300

300

150

150

200

200

100

100

100

0

0 Q3 2020

250

400

100

1

Ocean Resort

Everi

M ar 11 1M Ma arr 211 1M Ma arr 321 1M Ma arr 13 0 1A Mp arr 210 0A Appr r 320 0A Appr r 10 30M a Apy 20 r 10 M May ay 320 0M Ma ayy 309 J Mun ay

0 0 Golden Nugget Golden Nugget ry ary aryrch ary ril rch ay priul ne ayuly uneust ulyber ustber ber ber a u a ru p a M A J M J J g J m g o m to nu bruRock an M eb A M Hard Rock Au pte AuOct pte Oc Ja Hard F Fe J Se Se Harrah’s Harrah’s

OPAP

Everi

300

300

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Everi

OPAP

200

250

50

0 GGR

GGR

EBITDA

GRAPH 6 GRAPH 6

EBITDA

50

287 S Auep g 17 7 Se Sep

2020

19 9 Ju Jul l 219 9 Ju Jul l 8 29Au Jug 18 l 8 Au Aug g 218 8A Auug g

2019

2020

3

19 9 Ju Jun n 29 19 J Juun n 29 Ju nl

3

5 GRAPH 5

0 Online sports

150

200

100

100

6

-40%

5

-50%

4

-60%

3

-70%

2

50

-80%

0

0

0

0

GGR

EBITDA

Q3 2019

Online sports

Macau gross gaming revenue for 2020 and 2019, demonstrating the negative impact of the pandemic on casino operations in the region (MOP million) Source: DICJ

Q4 2019 Poker

Q1 2020 Horse Q2 2020 racing

-90% -100%

Q3 2020

US commercial casino gaming revenue for the nine months through September 2020, demonstrating a gradual recovery after the closure of properties across the country due to the pandemic ($US billion) Source: University Libraries Center for Gaming Research

GRAPH 6

2019

ISSUES

NUMBER CRUNCHING

1

GRAP

GRAPH 6

2020

4 600

30000

3 500

457

20000

465

2 400

427 1

GRAPH 5 0

0

y ar

nu

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a nu

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100

GRAPH 3

2020

250

GRAPH 40

6

200 20%

150 10% Gaming Machines

Land-based casinos

Online casino

-30%

600

50

Online sports

-70%

Poker

Horse racing

100

Resorts Casino

-90%

1,000

Tropicana 0

-100%

200

1,500

Ocean Resort

200

-80%

300

Harrah’s

400

-60% 0

2,000

Hard Rock

-40% -50%

0

Q1 2020 of casinoQ2 2020 2020business in the US from 1 Mar to0 11 Dec.50The easing 100 of restrictions 150 200 The number properties openQ3for across the country has seen the majority of casinos reopen, albeit with increased safety measures.

Source: American Gaming Association 500

Q3 2020

ar 400

Golden Nugget

-20%

2020

2019

Caesars

800

-10% 100

M

2,500

Borgata Betting

0%

1

c

L’Autorité nationale des jeux (ANJ) Q3 2020 revenue compared with Q3 2019.

France’s online gambling 2020 2019 market reported a 17% year-on-year increase, with revenue climbing to €405m (€ million) Balla’s AC Source: L’Autorité nationale des jeux (ANJ)

De

ov

300

GRAPH 8

250

GG

0 Tribal Properties Open

Commercial Properties Open

11

10000

2020

524

Nevada

New Jersey

Pennsylvania

Mississippi

GRAP Indiana

600

300 500

524 457

200

465 400

100 300

200

100

2,000

1,500

c

No v

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26

16

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427

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9

ISSUES

FANTINI RESEARCH

AREA

NOVEMBER REVENUE (M)

ANNUAL CHANGE (%)

SEGM

Nevada

$771.163

-17.75

Blackja

Las Vegas Strip

$349.797

-32.46

Baccar

Clark County

$639.780

-20.54

Total G

$52.989

+1.74

Total S

$18.863

-2.15

NOVEMBER EARNINGS IMPACTED BY COVID-19Downtown LV North LV NOVEMBER: NEVADA, STRIP FALL Nevada's gaming revenue fell 17.75% to $771.163m in November as the Las Vegas Strip fell 32.46% to $349.797m.

Both declined compared to October.

Baccarat on the Strip declined 45% as hold was once again lower than last year.

$33.348 -18.97 Elsewhere, North Lake Tahoe's 3.97% +18.23 growth could $68.567 bode well for Full House Resorts, which operates the casino at the Grand Lodge Hyatt. $10.935 -7.85 Casinos statewide were capped at 50% until November 24,$105.282 when capacity was lowered to+0.42 25%.

Las Vegas Locals Market

$192.712

+5.82

Baccar

Total G

WINSlots PERC 2020

RenoBlackjack

$40.795 $47.225

-35.86 -6.21

13.25 STATE

-32.46

Baccarat Sparks

$10.496 $40.846

-13.05 -45.29

$639.780

-20.54

NorthTotal LakeGames Tahoe

$153.196 $1.827

-36.23 +3.97

9.97 State t 12.3

Downtown LV

$52.989

+1.74

Total Balance of Slots County

$7.188 $196.601

+50.77 -29.21

RIVER 8.22

North LV

$18.863

-2.15

South Lake Tahoe

$17.140

+23.75

Marga

Laughlin

$33.348

-18.97

TABLE DROP Elko County

$23.688 2020 (BN)

-12.37(BN) 2019

Boulder Strip

$68.567

+18.23

Mesquite

$10.935

-7.85

Balance of County

$105.282

+0.42

Las Vegas Locals Market

$192.712

+5.82

$15.535 $0.307 $8.154 $0.409 $8.941 $1.245 billion $14.877 $2.392

$66.736

Wendover Blackjack Balance of County Baccarat Carson Valley Area Total Games Other Areas Slots

-17.25 $0.509 -1.30 $0.543 +1.83 $1.814 +8.14 $3.593

-3.21

ANNUAL CHANGE (%)

Nevada

$771.163

-17.75

Las Vegas Strip

$349.797

Clark County

Reno

STRIP COMPONENTS

$47.225 MAJOR STRIP SEGMENTS:

Sparks

ANNUAL CHANGE (%)

$10.496

SEGMENT

North Lake Tahoe

$1.827

-6.21 -13.05

NOVEMBER REVENUE (M) +3.97

SEGMENT

Washoe County

STATE ANNUAL State total CHANGE (%)

12.49 NOVEMBER

ANNUAL CHANGE (%)

Eldora

+7.87

Belle o

-8.60

Sam's T

-11.77

Riverb

Baccarat

$52.989

+1.74 Wendover

$18.863

-2.15 Balance of County

$8.154

$33.348

-18.97 Carson Valley Area

TABLE DROP $8.941

2020+1.83 (BN)

GAMBLINGINSIDER.COM +18.23 Other Areas Blackjack $14.877

+8.14 $0.307

$0.509Bossier (PENN) -39.54 $3.277 Boomtown

-17.57

$0.409

$0.543N.O. (PENN) Boomtown

-23.75

$7.188

-35.86 RIVERBOATS

$17.140

$40.846 +23.75

Total Games $23.688

$153.196 -12.37

Total Slots

$196.601 -17.25

-45.29 9.97 Margaritaville (PENN) -36.23 12.3 L'Auberge LC (PENN) -29.21 8.22 L'Auberge Baton Rouge

$105.282

+0.42

Baccarat

13.25

Golden Nugget - LC

REVENUE (M)

13.74 $13.827 13.24 $23.452 7.73 $10.981 $22.485

ANNUAL Hollywood B.R. (GLPI)CHANGE (%) $3.670 2019 (BN)

-24.60 $7.042

Horses

Amelia

Treasu

-32.46 South Lake Tahoe -20.54 Elko County

-7.85

Boomt

-20.08

$349.797

$10.935

Hollyw

WIN PERCENTAGE $204.724 2020 2019

$40.795 +50.77

10

Golden

ANNUAL CHANGE (%)

Blackjack

-1.30

L'Aube

NOVEMBER REVENUE (M)

-17.75 Balance of County

$15.535

L'Aube CHA

Boomt

$771.163

$68.567

Blackja

ANNUAL CHANGE -3.21 (%)

NOVEMBER REVENUE (M)

Washoe County

$639.780

TABLE

NOVEMBER REVENUE $66.736 (M)

AREA

EMBER NUE (M)

Laughlin Baccarat would have declined 24% with the same hold both years. Boulder Strip Outside of the Strip, Downtown Las Vegas, the Las Vegas locals and the Boulder Mesquite Strip had healthy months despite Clark County falling 20.54%. Balance of County

-14.39 -15.47

LAND

Harrah

UE (M)

CHANGE (%) Balance of County

$7.188

REVENUE +50.77 (M)

771.163

South Lake-17.75 Tahoe

Blackjack $17.140

$40.795 +23.75

349.797

Elko County-32.46

Baccarat $23.688

$40.846 -12.37

639.780

Wendover -20.54

Total Games $15.535

$153.196 -17.25

NNUAL GE (%) NNUAL $52.989 GE (%)

-17.75 $18.863 -17.75 -32.46 $33.348 -32.46 -20.54 $68.567 -20.54 +1.74 $10.935 +1.74 -2.15 105.282 -2.15 -18.97 192.712 -18.97 +18.23 $66.736 +18.23 -7.85 $47.225 -7.85 +0.42 $10.496 +0.42 +5.82 $1.827 +5.82 -3.21 $7.188 -3.21 -6.21 $17.140 -6.21 -13.05 $23.688 -13.05 +3.97 $15.535 +3.97 +50.77 $8.154 +50.77 +23.75 $8.941 +23.75 -12.37 $14.877 -12.37 -17.25 -17.25 -1.30 -1.30 +1.83 +1.83 +8.14 +8.14

SEGMENT SEGMENT SEGMENT +1.74 Balance of County SEGMENT Blackjack SEGMENT Carson Valley-2.15 Area

BlackjackBlackjack Baccarat Blackjack Other Areas-18.97 Blackjack BaccaratBaccarat Games BaccaratTotal+18.23 Baccarat Total Games Total Games Total Slots Total Games -7.85 Total Games Slots Total Slots Total Slots +0.42 Total Slots

TABLE DROP +5.82 TABLE DROP TABLE DROP TABLE DROP -3.21 Blackjack TABLE DROP

RIVERBOATS CHANGE (%)

NOVEMBER 2020 2019 REVENUE (M)

ANNUAL CHANGE (%)

SLOT

-35.86 13.25 Margaritaville (PENN)

12.49 $13.827

+7.87

Louis

-45.29 L'Auberge LC (PENN)

9.97

13.74 $23.452

-8.60

Evang

12.3

13.24

-36.23

RESEARCH L'Auberge Baton Rouge FANTINI $10.981 PERCENTAGE NOVEMBER ANNUAL WIN REVENUE (M) CHANGE (%) 2020 2019 WIN PERCENTAGE NOVEMBER ANNUAL WIN PERCENTAGE NOVEMBER ANNUAL $196.601 -29.21 7.73 8.22 Total Slots $8.154 -1.30 Golden Nugget - LC $22.485 REVENUE (M) (%) REVENUE (M)CHANGE CHANGE (%) 2020 2019 2020 2019 WIN PERCENTAGE NOVEMBER ANNUAL 12.49 13.25 WIN PERCENTAGE NOVEMBER ANNUAL REVENUE (M) $40.795CHANGE (%) $8.941 +1.83-35.86 2020 2019 REVENUE (M) $40.795CHANGE (%) -35.86 12.49 B.R. $40.795 -35.86 13.25 Hollywood 12.49 13.25 (GLPI) $3.670 2020 2019 $40.846 -45.29 13.74 9.97 12.49 $40.795 -35.86 13.25 $14.877 +8.14 ANNUAL TABLE DROP 2020 (BN) 2019 (BN) 12.49 Bossier $40.795 $40.846 -35.86 -45.29 13.25 $40.846 -45.29 13.74 9.97 Boomtown 13.74 (PENN)CHANGE$3.277 9.97 (%) $40.846$153.196 $40.846$153.196 $153.196 Blackjack $153.196$196.601 $153.196 $196.601$196.601 Baccarat $196.601 $196.601 Total Games

2020 (BN) 2020 (BN) Slots 2020 (BN) 2020 (BN) $0.307 2020 (BN) Blackjack $0.307 $0.307 Blackjack NOVEMBER: FALL -6.21 LOUISIANASTATE $0.409 Baccarat

12.3 -45.29 -36.239.97 13.74 13.24 -45.29 13.74 $0.509 9.97 Boomtown N.O. -36.23 -36.23 13.24 12.3 13.24(PENN) 12.3 $0.307 -29.21 7.73 8.22 -36.23 13.24 (CZR) 12.3 Horseshoe -36.23 13.24 -29.21 $0.409 7.73 $0.543 8.22 -29.2112.3 7.73 8.22 -29.21 7.73 8.22 Amelia Belle (BYD) -29.21 7.73 $1.245 billion8.22 $1.814

State total State total -17.25 State total RIVERBOATS State total -1.30 RIVERBOATS RIVERBOATS

REVENUE (M) (%) REVENUE (M)CHANGE CHANGE (%) NOVEMBER ANNUAL -20.08 L'Auberge LC (PENN) NOVEMBER ANNUAL REVENUE (M)$204.724 CHANGE (%) $23.452 REVENUE (M)$204.724CHANGE (%) -20.08 $204.724 -20.08 L'Auberge Baton Rouge $10.981 $204.724 -20.08 NOVEMBER ANNUAL $204.724 -20.08 REVENUE (M) CHANGE (%) NOVEMBER ANNUAL ANNUAL GoldenNOVEMBER Nugget - LC $22.485

REVENUE (M) (%) REVENUE (M)CHANGE CHANGE (%) RIVERBOATS+1.83 NOVEMBER ANNUAL $13.827CHANGE +7.87 Margaritaville (PENN) RIVERBOATS NOVEMBER ANNUAL REVENUE (M) (%) Hollywood (GLPI) REVENUE (M) B.R. (%) $3.670 $13.827 Margaritaville (PENN) (PENN) $13.827CHANGE+7.87 +7.87 Margaritaville

+8.14 -8.60 L'Auberge LC (PENN) $13.827 $23.452 Margaritaville (PENN) Boomtown Bossier (PENN) +7.87 $3.277 $13.827 +7.87 Margaritaville (PENN) $23.452 $23.452 -8.60 -8.60 L'Auberge LC (PENN) L'Auberge LC (PENN) L'Auberge Baton Rouge $23.452 $10.981 -8.60 -11.77 L'Auberge LC (PENN) Boomtown N.O. (PENN) $7.042 $23.452 $10.981 -8.60 -11.77 L'Auberge LC (PENN) Baton Rouge -11.77 L'Auberge Baton Rouge $10.981 -14.39 Golden $22.485 L'Auberge BatonNugget Rouge - LC Horseshoe $10.981(CZR) -11.77 $12.108 L'Auberge BatonNugget $10.981 $22.485 -11.77 -14.39 -14.39 Golden Nugget - Rouge LC $22.485 Golden - LC Hollywood $2.096 Belle $3.670 (BYD) -14.39 -15.47 Golden Nugget - LCB.R. (GLPI) Amelia $22.485 -14.39 Golden Nugget - LCB.R. (GLPI) $22.485 -15.47 -15.47 Hollywood B.R. (GLPI) Hollywood $3.670 $3.670 Boomtown Bossier (PENN) $3.277 Treasure Chest (BYD) $5.649 -15.47 -17.57 Hollywood B.R. (GLPI) $3.670 -15.47 -17.57 Hollywood B.R. (GLPI) Boomtown Bossier (PENN) Boomtown Bossier (PENN) $3.670 $3.277 $3.277 -17.57 Boomtown N.O. (PENN)Eldorado $7.042 Resort (CZR) $5.505 Boomtown Bossier (PENN) $3.277 -17.57 -23.75 Bossier (PENN) $3.277 -17.57 Boomtown N.O. (PENN) $7.042 $7.042 -23.75 -23.75 Boomtown N.O. (PENN) $12.108 -25.71 Horseshoe (CZR) Belle$7.042 of B.R. (CZR) $1.131 Boomtown(CZR) N.O. (PENN) -23.75 $12.108 -25.71 -25.71 Horseshoe Horseshoe (CZR) Boomtown N.O. (PENN) -23.75 $7.042 $12.108 $2.096 Amelia $12.108 -25.71 -33.00 Horseshoe (CZR)Belle (BYD) Sam's Town (BYD) $3.427 $12.108 -25.71 -33.00 Horseshoe (CZR) $2.096 $2.096 -33.00 Amelia Belle (BYD) Amelia Belle (BYD) Treasure Chest (BYD) $5.649 -33.90 $2.096Total -33.00$114.651 Amelia Belle (BYD) Riverboats $2.096 $5.649 -33.00 Amelia (BYD) TreasureBelle Chest (BYD) $5.649 -33.90 -33.90 Treasure Chest (BYD) Resort (CZR) TreasureEldorado Chest (BYD) $5.649 $5.505 -33.90 -37.30 TreasureEldorado Chest $5.649 $5.505 -33.90 -37.30 -37.30 Eldorado Resort(BYD) (CZR) $5.505 Resort (CZR) LAND-BASED NOVEMBER Belle of B.R. (CZR) $1.131 -37.30 -43.71 Eldorado Resort (CZR) $5.505 REVENUE (M) -37.30 Eldorado Resort (CZR) $5.505 -43.71 -43.71 Belle of B.R. (CZR) Belle of B.R. (CZR) $1.131 $1.131 Sam's Town (BYD) $3.427 -44.71 -43.71 $14.747 Belle of B.R. (CZR) $1.131 Harrah's N.O. (CZR) -43.71 -44.71 Belle B.R. (CZR) Sam'sof Town (BYD) $1.131 Sam's Town (BYD) $3.427 $3.427 -44.71 Riverboats Sam's Town (BYD) Total $3.427$114.651 -44.71 -23.56 Sam's Town (BYD) Total $3.427$114.651 -44.71 -23.56 Riverboats Total $114.651 -23.56 Riverboats Riverboats Total $114.651 -23.56 Riverboats Total $114.651 -23.56 LAND-BASED NOVEMBER ANNUAL

REVENUE (M) CHANGE (%) LAND-BASED NOVEMBER ANNUAL LAND-BASED NOVEMBER ANNUAL REVENUE (M) CHANGE (%) REVENUE (M) CHANGE (%) LAND-BASED NOVEMBER $14.747 ANNUAL -43.47 Harrah's N.O. (CZR)REVENUE LAND-BASED NOVEMBER ANNUAL (M) fantiniresearch.com CHANGE (%) (M) $14.747CHANGE (%) -43.47 $14.747 -43.47 Harrah'sHarrah's N.O. (CZR) N.O. (CZR)REVENUE Harrah's N.O. (CZR) Harrah's N.O. (CZR)

$14.747 $14.747

Delta

-14.39

Fair G

-15.47

Slots

-17.57

Slot R

$7.042 -39.54

-23.75

$12.108 -24.60

-25.71

$2.096 -31.35

-33.00

REGI

Baton

ANNUAL 2019 (BN) Treasure Chest(%) (BYD) $5.649 -33.90 CHANGE ANNUAL 2019 (BN) ANNUAL 2019$2.392 (BN) $3.593 -33.43 CHANGE (%) CHANGE (%) ANNUAL 2019 (BN) $0.509 -37.30 Eldorado $5.505 -39.54(CZR) ANNUAL 2019 (BN) CHANGE (%)Resort CHANGE (%) -39.54 -39.54 $0.509 $0.509 NOVEMBER -43.71 Belle ofANNUAL B.R.-24.60 (CZR) $1.131 $0.543 -39.54 $0.509 REVENUE CHANGE (%) Factoring out (M) those two casinos, properties as PENN had the only casino

Blackjack Louisiana gaming revenue fell$0.307 20.08% to -39.54 -24.60 Blackjack $0.307 $0.509 $0.409 $0.543fell$0.543 -24.60 Baccarat $0.409 Louisiana Baccarat in November, though $204.724m Legends’ 16.74% to $204.724m.

-13.05 Sam's Town-31.35 (BYD) $1.245 billion $1.814 Total Games Diamondjacks and Caesars’ Isle of Capri Penn National’s combined properties $0.543$204.724 -24.60 -20.08 Baccarat State$0.409 total $0.409 $0.543 -24.60 Baccarat $1.245 billion $1.814 -31.35 Total Games $1.245 billion $1.814 -31.35 Total Games in Lake+3.97 Charles remained closed during performed the best among multiple Riverboats -33.43 Slots the month. $1.245 billion $2.392 $1.814 $3.593 -31.35 Total Total Games $1.245 billion $2.392 $1.814 -31.35 Total $2.392 $3.593 -33.43 Slots Games $3.593 -33.43 Slots RIVERBOATS NOVEMBER ANNUAL +50.77 REVENUE (M) CHANGE (%) $2.392 $3.593 -33.43 Slots $2.392 $3.593 -33.43 Slots STATE NOVEMBER ANNUAL LAND-BASED +23.75 REVENUE (M) CHANGE (%) $13.827 +7.87 Margaritaville (PENN) STATE STATE NOVEMBER ANNUAL NOVEMBER ANNUAL

STATE -12.37 STATE State total

ISSUES -11.77

-43.47 -43.47

Lake

Shrev New

to grow year-over-year at Margaritaville. $3.427 -44.71 Casinos, video poker and slot routes are restricted to 50% capacity. $114.651 -23.56

Harrah's N.O.-8.60 (CZR) -11.77

MULT PROP

SLOTS AT TRACKS

NOVEMBER REVENUE (M) NOVEMBER ANNUAL REVENUE (M) CHANGE (%) $2.868 Louisiana Downs (CZR) $14.747 Downs (BYD) Evangeline

-43.47 $5.217

Delta Downs (BYD)

Penn CH Boyd

Caesa

$11.575

SLOTS AT TRACKS NOVEMBER ANNUAL REVENUE (M) CHANGE (%) SLOTS AT TRACKS SLOTS AT TRACKS NOVEMBER NOVEMBER ANNUAL -14.39 Fair Grounds (CHDN) ANNUAL $2.752 REVENUE (M) CHANGE (%) REVENUE (M) CHANGE (%) SLOTS AT TRACKS NOVEMBER $2.868 ANNUAL -19.43 Louisiana Downs (CZR) SLOTS AT TRACKS NOVEMBER ANNUAL REVENUE (M) CHANGE (%) -15.47 Slots at (M) Tracks Total REVENUE (%) $22.412 $2.868 $2.868CHANGE -19.43 Louisiana Downs (CZR) -19.43 Louisiana Downs (CZR)

-19.89 Evangeline Downs (BYD) $2.868 $5.217 -19.43 $52.915 Louisiana Downs Slot Routes -17.57 (CZR) -19.43 -19.89 Louisiana Downs $5.217 $5.217 -19.89 Evangeline Downs(CZR) (BYD) Evangeline Downs (BYD) $2.868 Delta Downs (BYD) $5.217 $11.575 -19.89 -21.72 Evangeline Downs (BYD) -23.75 $5.217 -19.89 Evangeline Downs (BYD) Delta Downs (BYD) $11.575 -21.72 Delta Downs (BYD) $11.575 -21.72 REGIONS NOVEMBER Fair Grounds (CHDN) $2.752 REVENUE (M) -25.71 Delta Downs (BYD) $11.575 -21.72 -27.79 Delta Downs (BYD) (CHDN) $11.575 -21.72 -27.79 -27.79 Fair Grounds (CHDN) $2.752 $2.752 Fair Grounds -21.83 Slots at Tracks Total Baton$2.752 Rouge$22.412 / Central Louisiana -33.00 -27.79 $20.999 Fair Grounds (CHDN) -27.79 Fair $2.752 $22.412 -21.83 -21.83 SlotsGrounds at Tracks Slots (CHDN) atTotal Tracks Total $22.412 Slot-33.90 Routes +2.88 Lake$22.412 Charles$52.915 / Vinton -21.83 $57.512 Slots at Tracks Total -21.83 Slots at Tracks Total Slot Routes $22.412 Slot Routes $52.915 $52.915 +2.88 +2.88 Shreveport Slot Routes-37.30 $52.915/ Bossier City +2.88 $41.012 REGIONS NOVEMBER ANNUAL Slot Routes $52.915 +2.88 REVENUE (M) CHANGE (%) REGIONS NOVEMBER ANNUAL REGIONS NOVEMBER ANNUAL New Orleans $30.190 -43.71

REVENUE (M) (%) REVENUE (M)CHANGE CHANGE (%) REGIONS NOVEMBER ANNUAL $20.999 -17.03 Baton Rouge / Central Louisiana REGIONS NOVEMBER ANNUAL REVENUE (M) CHANGE (%) -44.71 REVENUE (M) $20.999CHANGE (%) -17.03 $20.999 -17.03 Baton Rouge Baton/ Central Rouge /Louisiana Central Louisiana MULTIPLE NOVEMBER $57.512 Lake Charles / Vinton $20.999 -17.03 -22.25 Baton Rouge-23.56 / Central Louisiana PROPERTIES REVENUE (M)

$20.999 $57.512 BatonCharles Rouge Central $57.512 Lake VintonLouisiana Lake//Charles / Vinton Shreveport / Bossier City $41.012 Penn National $57.512 Lake Charles / Vinton $57.512 $41.012 Lake Charles / Vinton Shreveport / Bossier Shreveport /City Bossier City $41.012 ANNUAL New Orleans Shreveport / Bossier $41.012 $30.190 Boyd CHANGE (%) City Shreveport / Bossier City $41.012 New Orleans $30.190 $30.190 New Orleans New Orleans $30.190 Caesars -43.47 New Orleans $30.190 MULTIPLE NOVEMBER

PROPERTIES MULTIPLE MULTIPLE PROPERTIES PROPERTIES MULTIPLE Penn National MULTIPLE PROPERTIES PROPERTIES Penn National Penn National

Boyd Penn National Penn National Boyd Boyd Boyd Caesars Boyd Caesars Caesars Caesars Caesars

-17.03 -22.25 -22.25 -24.96 -22.25 $58.579 -22.25 -24.96 -24.96 -36.68 -24.96 $27.964 -24.96 -36.68 -36.68 -36.68 $36.359 -36.68 ANNUAL

REVENUE (M) CHANGE (%) NOVEMBER ANNUAL NOVEMBER ANNUAL REVENUE (M) CHANGE (%) REVENUE (M) CHANGE (%) NOVEMBER $58.579 ANNUAL -8.66 NOVEMBER ANNUAL REVENUE (M) CHANGE (%) REVENUE (M) $58.579CHANGE-8.66 (%) -8.66 $58.579 $58.579 $27.964 $58.579 $27.964 $27.964 $27.964 $36.359 $27.964 $36.359 $36.359 $36.359 $36.359

-8.66 -8.66 -28.61 -28.61 -28.61 -43.18 -43.18 -43.18

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-28.61 -28.61 -43.18 -43.18

CH

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ISSUES

TAKING STOCK

Gambling Insider tracks operator and supplier stock prices across a six-month periods. The stock price is taken from the first day of each month and last date available at press time.

Boyd Gaming

Las Vegas Sands (Currency USD)

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Six-month high – 56.53 (Dec) Six-month low – 44.00 (Aug)

Six-month high – 40.72 (Dec) Six-month low – 20.25 (Jul)

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Caesars Entertainment

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GGA LONDON 2021

Lead Partner

GLOBAL GAMING AWARDS LONDON PROCESS UNDERWAY FOLLOWING SELF-NOMINATION PERIOD Companies have successfully self-nominated for the Global Gaming Awards London 2021, which will have 15 categories this year

The self-nomination window for the Global Gaming Awards London 2021 has now passed, with numerous companies across the industry entering across this year’s categories.

Following the success of our seventh Global Gaming Awards Las Vegas ceremony, powered by Gambling Insider and Gaming America, our attention now turns towards categories that demonstrate prowess in Europe, Asia and across the globe.

You can watch how the Global Gaming Awards Las Vegas 2020 played out at globalgamingawards.

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GAMBLINGINSIDER.COM

com/vegas, with the hugely successful inaugural virtual ceremony available to view in full.

The London Awards will take place in June, with 15 categories this year, including the brand new Product Launch of the Year Award sponsored by Kalamba Games.

The event will be live-streamed on globalgamingawards.com as well as YouTube, LinkedIn and Twitter. If circumstances permit, winners will be announced at a CEO invite-only afternoon tea in the famous Hippodrome Casino, London.

Gambling Insider COO Julian Perry said: “After the success of the Las Vegas Awards, we are excited to switch our focus to the Global Gaming Awards London.

“Despite the challenges posed by the COVID-19 pandemic, there have been plenty of recent success stories within global gaming, and we intend to honour and celebrate the industry’s finest.”

As ever, the Awards will be powered

by Gambling Insider and voting will be adjudicated by KPMG.

Casino Cosmopol CEO and European Casino Association chairman Per Jaldung tells Tim Poole all about a career with the police, the Swedish equivalent of the FBI and the boardroom

Every CEO we’ve spoken to has had their own unique journey. Matt Davey tells us in this edition about starting out with a gambling regulator, while MGM Resorts International CEO Bill Hornbuckle discussed being a bus boy in last year’s US CEO Special; Kindred Group CEO Henrik Tjärnström won a small lottery jackpot as a child and DraftKings CEO Jason Robins participated in over 100 fantasy leagues growing up. Even then, however, when Per Jaldung says “that, in a nutshell, is how I went from the police to the casino boardroom,” it's a story that takes some beating on the originality front. The Casino Cosmopol CEO tells all from Sweden via Zoom, with a bustling casino as his virtual background to remind us of better times.

Starting out in Gothenburg, Jaldung first came into contact with casinos at the age of 17 during an exchange year in Chicago, though his early career saw him follow in his father’s footsteps by attending police college. With his father the head of the Gothenburg Police Department, he had initially decided he would never go down the same path. Yet, leaving school, Jaldung did just that, learning plenty on a job he enjoyed and that fulfilled his curious nature.

After his years on the beat, Jaldung progressed to more advanced investigations and intelligence work at the National Swedish Police Department, which he likens to the Swedish version of the FBI. It was actually a law program at Uppsala University that reignited feelings the 17-year-old Jaldung experienced when seeing the glamorous casino signs in Chicago. As he studied the new Swedish casino act that was to be passed in 1999, Jaldung unknowingly made his first significant step towards a career in the boardroom.

“That was probably where my interest in the casino industry really started, because there had not really been

casinos in Sweden prior to that,” Jaldung, now 53, tells Gambling Insider. “I wrote a paper on this and when I returned to the police force, the Commissioner appointed me to be the contact person to the country's casino company (Casino Cosmopol) and the gaming board.

In 2002, I left the police and was appointed head of security and surveillance at one of the casinos in 2001. I held that position for about three years, during which we started to build the casino, staffed it and opened it. I was then promoted to general manager at the Gothenburg casino and worked in operations there for about three years, as well. In 2008, I was promoted to Casino Cosmopol CEO. So for 12 years now I’ve been the CEO. Up until last year, we had four casinos; unfortunately, the pandemic forced us to close one of them permanently and we have three temporarily closed that we hope to re-open soon.”

When discussing his early influences, it’s of note that Jaldung’s father was not alone. Being married to an American, Jaldung’s late father-in-law was a huge casino fan. Together, they visited US casinos annually and, although he himself was never much of a player, Jaldung fondly remembers the exciting environment.

He found himself further inspired down the casino path a few years later, when working in law enforcement. He particularly recalls raiding illegal casinos in Sweden, once even physically carrying out a “really crappy” roulette table that substituted diamonds with improvised bolts.

“When you open a casino, it’s especially critical, because everyone wants to test you,” he remarks. “It was the same for us. We had a lot of foreign players and experienced casino people who come to test you. It’s an interesting time the first few weeks, with inexperienced staff. You’re still breaking in all the equipment so you’re vulnerable.

I remember working 24 hours a day for weeks at the beginning. Of course we had incidents. We had some cheating, some fraud. But you gain experience dealing

GAMBLINGINSIDER.COM

19

rime c d e s ns. ani o g i r t o a ince oper s s e a g m tart i e s t V y g s d n a a lo a sh d in L e n hat. e v It’s a l e t o b t v s u n ibly i re ha t abo s e i b h v u t o s , d d is n os wa o a n n i s s s ’ a s sine ny c here In ma industry, t rporate bu s ted s co ’ a t l i in thi , u y g re oda But t highly

with such threats. We also had great trainers, in our case from Holland Casino, with around 100 people who helped us with both security and gaming; we got so much knowhow from Holland Casino when we set up Casino Cosmopol in Sweden.

“They helped us keep things in order so we wouldn’t take too big of a hit as we learned the industry. There had never been casinos in Sweden so we had to train all the dealers, all the cash-desk operators, everybody. There are certainly a lot of risks running a land-based casino.

But if you look back that was 20 years ago, and what we have now you can’t even compare, with all the systems and professionalism we offer today, and of course all the security and safety we have in place.”

The incidents Jaldung describes conjure up images of the typical Hollywood scenario: thieves or conmen visiting a casino with only one goal in mind – to swindle the house. Ocean’s Eleven and Casino immediately come to mind and, when we bring these classic movies into conversation, Jaldung raises broader points about the industry. While he isn’t sure a film based on Sweden’s casino market would be a thrilling hit, he is naturally an admirer of the all-star casted Ocean’s Eleven, and the 1995 Joe Pesci, Robert De Niro and Sharon Stone blockbuster Casino.

One thing Jaldung laments, however, is how – despite their age – these movies still influence the way stakeholders see casinos today. “They think that’s how it is in casinos,” Jaldung explains. “It’s a long time since organised crime was visibly involved in Las Vegas operations. In many casinos, there’s been a shady start in this industry, there’s no doubt about that. But today, it’s corporate business and is highly regulated when it comes to responsible gambling, anti-money laundering, and all kinds of fraud. It’s a different world. But some people watch these movies and think that’s how it is, and that’s not true.”

For Jaldung, dispelling these myths is a personal mission – especially in his role as chairman of the European Casino Association (ECA), one he took on in 2015. Much of his

20

GAMBLINGINSIDER.COM

everyday work involves laying out the facts of the modern-era industry. He says: “There’s no lack of risks when it comes to starting a casino. We’ve been robbed, we’ve had fires, we’ve had floods. But ultimately everybody was safe. I think these risks go back to the fact casinos are open 24/7 and attract a lot of people. Inside the casino, we have to ensure people are safe. In fact, I would say actually being inside the casino nowadays is one of the safest places in the city.”

Already, Jaldung’s career makes quite a tale – and we haven’t even reached his time as Casino Cosmopol CEO. That came in 2008, with the four-year period that followed representing the operator’s highest levels of visitation and revenue. It was at that time, though, that online gambling began to grow in popularity, with Jaldung freely admitting Sweden’s online casinos today are bigger than their land-based counterparts. The executive says it is simply undisputable that online competition has taken a piece of Casino Cosmopol’s business. Coupled with tougher regulation, which Jaldung agrees with from a moral and social perspective, the operator has seen repeated year-on-year falls since 2012.

The coronavirus pandemic, which Jaldung discusses in-depth later in our conversation, considerably accelerated this fall throughout 2020.. But, for the CEO, the decline of land-based casinos in Sweden started pre-pandemic, in parallel with wider society, as people began to shop more online, banks removed physical offices and gambling began following similar trends. Jaldung maintains the belief there will always be room for live entertainment, with modern casinos being more than mere gambling rooms. Restaurants, bars, music, shows, exhibitions, meetings, conferences and gaming can build a good future in his eyes. But he acknowledges a need to adjust to new trends, with competition from other types of entertainment accounted for.

Even in the US, where Gambling Insider points out some executives believe the online experience will never match that of land-based, Jaldung thinks online growth is underestimated, a fire for which the current pandemic provided an extra spark. As ECA chairman, of course, he's able to speak not only for Casino Cosmopol but European land-based casinos as a whole. Having joined

the organisation in 2006, he has attended every general assembly since (with the pandemic ensuring there is real doubt this year’s assembly can go ahead in person). The association began its existence as a forum, with the modest aim of getting five to six countries together to discuss the industry’s challenges and opportunities. Now containing 30 member nations, including Switzerland, Monaco and Serbia from outside the European Union, the ECA is headquartered in Brussels.

In 2018, Jaldung was re-elected after his first three-year cycle as chairman: “It feels a little bit like the UN of casinos.

We’re very diverse but we still have so much to talk about every time we meet. When I took over, we started off laying out the strategy and what we wanted to achieve. Every once in a while, an organisation like the ECA has to stop and reflect on everything that has been, and what we are going to keep doing, change or start doing. In 2015, we started focusing more on challenges that are common for us. One of them was combating illegal gambling in Europe. There was a lot at that time and still is, both online and land-based. We really had a lot of trouble with online offers, without all the safeguards and care for the moneylaundering, and it really tilts the competition situation.”

Here, Jaldung believes the ECA has been successful in raising awareness among stakeholders and politicians.

Yet, as he notes, in 2020 it was a task made insurmountably tougher by a global pandemic. “The COVID-19 pandemic came over us very quickly,” Jaldung reflects. “We were surprised by the speed it affected us. Some countries held out longer than others but almost every casino in Europe had closed by the end of March. Before we closed, we introduced a lot of measures to try to keep customers safe. We implemented distancing, we had screens, obviously all the hygiene things and hand gel and so on, but even with all these measures, some governments have felt casinos and societies need to close down. They’ve come to lockdowns of different degrees in different countries to keep the pressure off emergency rooms.”

On average, Jaldung tells us casinos in Europe were closed for 123 days during 2020, hugely impacting employment and revenue. Casinos are staff-intensive with multiple fixed costs, inevitably forcing a number of them to shut permanently during the pandemic. Most European casinos should stay closed for the month of February, according to Jaldung, while some are opening at a limited capacity, with restaurants restricted too. As many owners will have learned from experience, though,

a reopening can almost immediately be followed up by another swift closure.

There’s no doubt in Jaldung’s mind that the pandemic has provided the biggest challenge of his career: “My personal guess would be some casinos will be able to open during Q2 this year. It seems like the spread of the virus is bigger during cold periods. If that’s because people meet more inside and spread it easier or if it doesn’t like warm weather, I don’t know.

But we certainly saw a big dip in the virus during the summer: let’s hope we can open up before then.

“We will have to adapt our casinos and floor layouts, to make it easier to keep people safe. Maybe after the summer, we will come back more with the vaccine having an effect on the pandemic, and we can look forward to a fall where we can start getting back to normal. We hope; nobody knows but we hope. Nobody thought we would be closed now if you asked them last February.”

Although it’s virtually impossible to look beyond COVID-19 right now, Jaldung shares the view of other CEOs that Gambling Insider has interviewed when it comes to gaming’s long-term future. A much-discussed topic within gambling for some years now, Jaldung feels land-based casinos will diversify further into an entertainment centre and meeting spot, rather than being seen as a place to gamble. Food and beverage will be important but so too will be new types of games, with Jaldung keen to reference the Netflix hit series The Queen’s Gambit as the kind of trigger that can reignite a pastime with a rich history (in this case, chess).

“We once had an exhibition where we had gambling equipment that was a couple of thousand years old,” Jaldung says. “Humans have always had a natural need to entertain themselves together with other people. We can meet that demand in different ways. But we always have to make sure we stay on top of trends and sometimes lead trends, invite people to try things that were popular a long time ago in new forms. New types of card games, new dice games, maybe some new equipment. In this field, I think there’s a lot to explore.”

For Jaldung, if these adaptations are made, land-based casinos will survive both the pandemic and digitalisation.

He concludes: “People are people and we will be there to serve them, entertain them, and provide a great place to play and have fun. There will be always room for this, of that I have no doubt.”

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As SAZKA Group strengthens its position as a leader in the lottery and gaming sector, with geographies ďŹ rmly established in southern and northern Europe, and a current bid in the works for the UK National Lottery, Gambling Insider speaks with Group CEO Robert ChvĂĄtal about capitalising on technology and the knowledge at their disposal to deliver beyond expectations

Robert Chvátal, who joined SAZKA Group in 2013, has helped to create one of the fastest growing lottery companies in Europe, and there are no signs of slowing down now. He is clearly excited about the UK lottery bid but there are many other initiatives underway at SAZKA Group. Executing several initiatives at once and leading by example have been characteristic of Chvátal’s approach throughout his career, which started at Procter & Gamble, followed by 15 years in mobile telecommunications.

He believes one of SAZKA Group’s strengths is its geographical diversification: its two northern markets in Austria and the Czech Republic, and its two southern markets in Italy and Greece. The northern markets enjoy high levels of lottery penetration and are the Group’s trailblazers in terms of online sales, which Chvátal sees as key to its continued growth, and the Mediterranean markets benefit from a culture where gaming is a popular social activity.

The Group concentrates primarily on lotteries, with a smaller focus on digital gaming, sports betting and, as the name of SAZKA Group’s subsidiary Casinos Austria would imply, land-based casinos. It is made up of SAZKA a.s. in the Czech Republic, OPAP and Stoiximan in Greece, LOTTOITALIA in Italy and Casinos Austria and its subsidiary, Austrian Lotteries, in Austria.

With a presence in these varied regions and across such popular modes of gaming entertainment, SAZKA Group has managed to remain resilient and grow in a year of unpredictable shifts due to the spread of coronavirus. Business in the Czech Republic has remained strong, as have the lotteries and online business in Austria, although the casinos have been

shut. In these regions, retail sales have remained steady since newsstands and retailers of essential goods, which are the main channels for lottery products, have remained open and lockdowns have helped to accelerate the share of online sales. Italy and Greece, however, were impacted in the first lockdown. In Italy, the regulator suspended lottery draws early on, and retail outlets selling OPAP products were deemed non- essential and were, therefore, closed. However, the Italian lottery remains up and running in the most recent lockdown with points of sale largely open, although Greece has once again been impacted.

Helped by its diversified footprint and products, SAZKA Group’s performance compares well to a leisure sector that has been dealt a hard blow. The Group appears to have had a robust 2020 with the last reported quarter, Q3, showing a swift recovery in GGR to slightly above 2019 levels. The last quarter of the year will be impacted by restrictions in Greece but the lotteries in other regions were largely unaffected, meaning 2020 overall should prove to be a robust year for the Group.

“It was a challenging year for all,” says Chvátal, “but I’m really proud of our teams who have acted swiftly to keep staff and customers safe, and also adapted the business to lockdown and other restrictions.

Over 80% of our EBIT is generated through lottery types of games and the demand for our products has been resilient. Our strategic focus on online channels has also paid off and I think the growth of digital sales is very supportive for our future growth.”

Online is certainly a priority for the Group with its northern markets already advanced on this front. The Czech business, for example, generated a significant 30% of its GGR online in 2020. Austria is also doing well online and will now be boosted by SAZKA Group’s

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T is I B E our f ery o t t % o 0 l 8 gh u o Over and r m h e t d he ted t a r ent. d i e n l i n a s e s ge me nr e a e g b f s o ha line s n t o c types n u rod us o p c r o f u off d i a p for o strategic lso a r s u a O sh l e n n cha percentage is of people experience and capabilities, with the Group owning a majority share of the Austrian business since mid-2020.

Online in the southern markets isn’t as prevalent yet but in Greece, OPAP launched a digital entertainment hub in March. Since then, OPAP is seeing good take-up of online lottery sales and encouraging growth in the online casino and sports betting businesses, despite starting from a low base.

Alongside the online strategy, Chvátal and his team are actively seizing other opportunities to grow the business. One focus is on event-based jackpots with specific themes. “For us, Friday the 13th has become a tradition. There are some magic dates when it’s worth trying your luck,” he says. Chvátal also cites Black Friday as a date that resonates in some of its markets.

While many lotteries are not run in an innovative way, SAZKA Group is trying to instil agility and creativity into the lottery part of its business. “We are typically able to collect much higher wagers on these special dates because we’re able to market them better,” Chvátal adds.

Another area of interest for SAZKA Group is customer loyalty. That’s not unusual for many businesses, but lotteries face a different challenge compared to those online in that the retail customer base is traditionally totally anonymous; people go to a newsagent and buy a lottery slip and no one knows who they are, nor is there a way to capture their spending habits.

In comparison, the online space requires that people register and be verified. This makes consumer behaviour more transparent and, importantly, consumers are safer from a responsible gaming point of view. However, SAZKA Group is finding some overlap between online and offline consumers that it can effectively utilise.“ We’re ableto relate to the big data: what the

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who buy lottery and scratch cards, or play online casino, and vice versa,” he says. “This is a big benefit of online. But retail loyalty is also very important so we offer virtual loyalty cards, where players register online with a mobile number, which then allows us to identify them as a unique player. We also have a proposition in retail loyalty called Wheel of Fortune where participants benefit by being offered a second chance within 24 hours of their retail purchase, for example. People are definitely embracing it.” Despite these initiatives, Chvátal thinks there will always be a segment of the customer base that will want to remain anonymous and be reluctant to go online.

He is clearly very focused on growing the businesses organically but M&A also remains an integral part of SAZKA Group’s history and future. The Group recently received a €500 million investment from Apollo, one of the most respected investors in the gaming space, to help finance future expansion. SAZKA Group’s track record on M&A is impressive as well as its record of making bolt-on investments, such as that of Stoiximan in Greece recently. Chvátal explains: “As part of our M&A strategy, our Greek business OPAP acquired a sports betting and online casino market leader called Stoiximan, which means ‘the bettor’ in Greek. We’ll be building on Stoiximan’s own proprietary sports betting platform not only in Greece but also in other European markets.”

And that’s not all in terms of growth initiatives. Closer to home, Chvátal is deep in preparation of the bid for the UK National Lottery. Air Miles and Nectar Card founder Sir Keith Mills, former J Sainsbury plc CEO Justin King, and co-founder of lastminute.com Brent Hoberman are also involved to secure this national treasure of a brand after 26 years of operation

by Camelot.

“In my view it’s a good opportunity and it should be in the interest of the British people, government and regulator to seriously consider whether the stewardship of the national lottery under Camelot after over a

quarter century looks a little dated and should be changed,” Chvátal says. “I think so, of course, because we’re the ones suggesting that change is necessary.

We’ve demonstrated in several geographies that our proposition is a win for the government as we increase income for state budgets, and a win for consumers because we offer fresh and innovative products. To have a financially stable, responsible and innovative operator running the national lottery makes sense in any country, and with that in mind, we’re going to the UK where the lottery deserves the best operator. Sometimes after so many years of the same story, you can’t teach an old dog new tricks.”

Along with the expansion, Chvátal is keen to stress SAZKA Group’s commitment to responsible gaming.

It can be a balancing act between operators and regulators to find the best compromise to mitigate risks yet ensure the most enjoyment and opportunities for the vast majority of consumers still exist.

“Responsible gaming is of course very important to every regulator in every country and it is always a crucial part of our strategy,” says Chvátal. All of SAZKA Group’s member companies are part of European Lotteries, so there’s a strict and supervised responsible gaming certification mechanism. “We’re fortunate in the sense that we’re in the business of big wins with small probability, which is the essence of lottery, draw-based games or even scratch cards," he continues. “The wins are infrequent, compared to games with higher probability and higher frequency, so the risk of excessive or problem gaming with lotteries is small. You don’t buy 100 lottery tickets for next Sunday’s draw. Given the payout ratio is smaller than for online casino, I find it unfortunate that there’s been this debate about scratch cards in the UK, which I believe can be solved by offering scratch cards that don’t show diamonds, gold nuggets or a safe full of cash, but something less glitzy and more common to everyday life, and

maybe more fun. Above all, they’re consumer products and not dangerous. They should be enjoyable and playful propositions that people buy once, not products where you sit in front of the computer for hours or click 50 times in a row.”

Irrespective of gaming, people are indeed sitting in front of computers for more hours now due to the coronavirus dictating that people work from home.

But SAZKA Group has been able to successfully transition to a more remote-based organisation.

“We have knowledgeable workers who are qualified, competent and able to work at home,” Chvátal adds.

“But it’s not ideal. On the one hand, we are able to work very efficiently through remote working. But never underestimate the importance of the office kitchen or a corridor chit-chat.” This deficit is where Chvátal believes companies will suffer if we’re in lockdown for another year and the culture slowly erodes into robotics.

“I’m a big advocate of a combination of online and office so people can work flexibly,” he adds.

“People deliver inspiration, creativity and motivation in unexpected ways and at unexpected times, so any way to maintain personal interaction, while remaining safe, is encouraged.” But the steady move to online is inevitable, from both the human capital and cost standpoints.

“We are fortunate that our business is able to move online, so you don’t see a major disruption like you see in many sectors like retail, hotels, travel and events,” he adds. “So we can continue to provide employment for our people and generate funds for good causes.”

ble, a t s lly a i c n tive na i a f v o a n ve d in n nal a o i To ha e t l a b en y, nsi h r o t t p n s g u e n r co nni y u n r a r n i to g to e a n s i r e n o e p g o re ’ es s e k w a es , v m d r n y i e r s m e y de t in lott r a e h t t t lo ith e w h d t n e a tor r a e r h e w p K st o e b the U e th

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Tim Poole sits down with LeoVegas CEO Gustaf Hagman, who provides his take on consolidation, regulation and the future of the gaming industry One job aside, LeoVegas CEO Gustaf Hagman has never been hired in his entire career. That job? Hagman worked at McDonald’s during weekends in the ninth grade. Apart from this “fun and humbling” experience, the serial entrepreneur has been starting, growing, selling and liquidating companies all his life. It’s a path that has enabled him to truly shape gaming companies and achieve real influence within our industry. There is no better example than LeoVegas, the mobile-first operator Hagman co-founded in 2011, and he’s never looked back since. Sitting down for an hour-long Zoom call with Gambling Insider from Stockholm, Hagman tells us the LeoVegas story and discusses a sector that is changing, he hopes, for the better.

“Most of all, I am a pure entrepreneur,” Hagman summarises, recalling his early gaming career. An economics graduate from Stockholm Business School, the executive’s first venture came in 1999, creating VSMarket.com. Today, you can still find a 2001 Forbes article named “Betting the House” about this creative business model, which read in part: “Leave it to four guys from Europe’s most left-leaning country to make a Vegas-like grab for a pot of gold.” Hagman tells us: “It was a game where you could bet on stocks, primarily on the Nasdaq, hence the name versus the market. We were putting up odds on shares and stocks increasing or decreasing in value, where you could bet on one-day, three-day or week-long periods of time.

The lowest bet you could place was $1 at that time.”

Existing before the Federal Wire Act, which effectively outlawed online betting in the US, Hagman recalls having a sizeable audience. August 2001 saw VSMarket.com’s largest-ever turnover, although another event would soon shut the business down – and it had nothing to do with the Wire Act. Indeed, the terrorist attacks of 11 September, 2001, served a big hit to a gambling business based on the stock market. VSMarket.com never recovered and was liquidated in 2003. What Hagman and his business partners were able to do, though, was sell the pool engine the company had built, to the likes of Kindred Group (at that time Unibet) and others. The engine still forms part of the buyers’ software today.

“That was my first involvement in gaming and that was over 21 years ago,” Hagman reflects. Despite liquidation, VSMarket.com provided the base he would use to branch

further out into gaming. His next steps were to learn the industry and make early contact with several of the sector’s other entrepreneurs. This involved companies such as Traction Poker Network, OnGame and Boss Media, which have all since been acquired and now exist in different forms. In 2004, Hagman and a friend attained a license in the Nordics for Eurobet. The operator was owned by Coral at the time, before Coral was acquired

by UK bingo operator Gala in 2005. The newly formed Gala Coral, though, wanted control of all Eurobet’s markets, and so bought the 15-year license Hagman co-owned, ending this particular chapter in his career.

After Eurobet, Hagman founded Net Gaming. He explains: “We were primarily doing consolidation within the poker market at that time. So we consolidated on the OnGame network and on the Traction network, consolidating smaller skins, taking their databases and throwing it into our database. That way we grew a few brands within Net Gaming and then I listed it on a small stock exchange in Sweden in 2009. Around 2011, I saw all the trend movements go towards mobile and started to discuss this with Robin Ramm-Ericson, an old friend who was also with me on the VSMarket venture.”

The rest was history, with Ramm-Ericson and Hagman going on to co-found LeoVegas, the three-time Global Gaming Award-winning online casino operator. Hagman left his role as Net Gaming CEO in the summer of 2011, and recalls having Ramm-Ericson (who became chairman of the board) and his family over for a barbeque. There, they discussed Hagman’s first iPhone 3GS and the idea of creating “an operator that is mobile from day one”.

“Quite quickly, we found other operators were trying to squeeze their desktop offering onto the mobile UX,” he says. “But we figured if we built everything day one from

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mobile, that’s going to make sense. So we did. In May-June 2011, we founded the company, got the first funding and everything was done before mid-summer. We started to build directly after in July. We set a goal to go live either right before Christmas or right after, and went out looking for the best system architects and programmers we could find, and then we started to build LeoVegas.”

Despite it being “extremely hectic” to get suppliers, payments providers and all the other necessary components on board,

supplier of this software, Hagman acknowledges this is a realistic future prospect but that’s a topic for a future discussion.

A sign of any company’s interest in online gaming these days is a move to Malta and, for LeoVegas, that migration came in 2012.

lly a u t c is a s l this a o f g o y pt i o n imar e he r c t p r y k e n p m i f I th . n the re t r One o n o u e m t m s i d n ion rtai y an n e i r t p t n o e o t ic o ally l t e b n r i u s ’ p y tr the that g m ses n o indus i u r h f o t h e n so m pt i o heir e t s i c g r g n e i p mblin e are los a g t For Hagman tha opl e p t a personally, it came in 2013, when he h bad, t and his family moved there, where they lived for two

LeoVegas went live at 12pm on 12 January 2012. (“12-12-12!”

Hagman laughs.) The brand name itself was devised quickly: “Leo means lion in Latin and Vegas is the city of dreams.” Teaming up with a major news corporation in the Nordics, the company conducted one of the largest mobile campaigns in history at the time.

The operator started with just six or seven games as reliable, purely mobile suppliers were at a premium, unlike today’s market where such providers are in their thousands. Hagman recalls: “Back then, we had the ones from NetEnt: Gonzo’s Quest, Jack Hammer, Blackjack, Starburst and a few others but that was it. After around a month, we had 20 to 25 games. We went live in Sweden and quite quickly other countries followed. We got a license in the UK in 2014, Denmark 2016 and so on.”

It was, however, the decision for LeoVegas to build its own platform that Hagman singles out as one of the organisation’s most important milestones. The firm realised very soon after going live its own platform would become a necessity. Hagman recalls using the NYX platform, which later integrated into Scientific Games, and acknowledges LeoVegas was not one of the “prioritised operators on the platform, so to speak”. He adds: “We were small and mobile, and no one really knew mobile was going to fly, which is amazing as it was only eight years ago.”

Work began on the LeoVegas system in the spring of 2013, before it went live in June 2015, giving the operator the ability to “steer our own destiny”. When Gambling Insider asks whether LeoVegas has ever considered becoming a B2B

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and a half years, helping build LeoVegas out of Malta.

Now, he says, LeoVegas has around 900 employees, up to 450 of which are in Malta; the operator has a headcount of over 250 in Sweden and around 100 in the UK, with the rest of its employees spread between Milan, Copenhagen, Berlin and other key locations.

In fact, given recent industry history, LeoVegas has now reached a size that could make it a prime target for M&A. The company recently finalised a bond issuance of SEK 500m ($58.6m), leaving it with a strong balance sheet. With that in mind, Hagman confirms a greater interest for European companies from across the pond. “There are a lot of companies out there: the smaller operators are trying to get acquired and the larger ones are looking at mid-sized companies with a unique position,” he remarks. “With US investors moving into Europe now, we see more of them in our holdings and we can see their presence increasing all the time. I think that will also drive M&A in upcoming years. Definitely in a couple of years there will only be larger and larger operators.”

In 2020 as predominantly an online casino operator, LeoVegas has not been affected by the COVID-19 pandemic anywhere near as much as any land-based casino or pure sports betting operator. So much so that if there was one interview Gambling Insider could skip discussing the pandemic, it would’ve been this one. That said, LeoVegas was still impacted by the global nature of the coronavirus spread, with all Maltese and UK employees following Government restrictions and transitioning to remote work.

From the business side, Hagman says revenue streams are growing faster in some countries than other. Yet restrictions

the market will be

even easier for und o f e unlicensed operators.” g w ly, yin r k t c i Hagman concedes Swedish e u r q e e w t i politicians have now begun s p u Q or to t k a s r to discuss mitigating the e e d . r op i X e r U h e effect of the black market, t e h il e ot b z e o e m although “there’s a lot of u to sq onto the we built talk and not really anyone doing anything.” The two ing r e m ed if f r o f r u o f g greatest obstacles the i e f n e o w y LeoVegas CEO singles t a to Bu gd g n i n i h out here are politicians t o failing to understand every e, that’s g we did l i the market, as well as o b .S mo e s n a negative public mood e s e k towards gambling.

It’s extremely easy for a m a minister to kick the industry, Hagman says, due to the in certain markets have “put a little bit of a stop to the overall growth of our database.” One market in particular is a topic very high on LeoVegas’ agenda: Sweden.

During the COVID-19 pandemic, the Swedish Government implemented new limits to combat a potential rise in homebound problem gambling. These restrictions included a maximum weekly deposit limit of SEK 5,000 for online casino players and a SEK 100 limit for bonus offers. The restrictions were originally designed to last until the end of the year but the Swedish Minister for Social Security extended the measures until at least 30 June, 2021. Speaking to Gambling Insider, Kindred called this move a step in the wrong direction, while LeoVegas CMO Dersim Sylwan also told us channelisation will only suffer as a result.

All this intrigue adds to a market that was only re-regulated on 1 January, 2019, and had already caused much debate among its stakeholders. Consistent fines from the Swedish Gambling Authority have been met by operator claims that the rules are not at all clear, while there appears to be friction rather than an open dialogue between policymakers and companies. For Hagman, there are no two ways about it: “The regulation has failed. I think that’s a quite strong statement but it’s the truth.

“The purpose of the regulation was customer care and to bring tax revenue to Sweden,” he continues. “If you look at the first point, with customer care and the protection of vulnerable Swedish players, clearly it’s been the opposite. And the channelisation is down to between 55% and 65%. There’s a huge black market and today it’s so easy for unlicensed or black-market operators to get hold of players in Sweden that want to have a new bonus or play outside the system. All in all, that means less tax for the Swedish authorities so clearly there is a failure in the system. All these attempts to prohibit and add new restrictions clamp down on licensed operators, meaning

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heavy media coverage of individual cases where gamblers have become addicted and, for example, lost their homes.

He believes those stories simply feed populist ministers rather than present a balanced view of gambling as a whole.

“We need a dialogue,” he says, “because otherwise we can’t educate the Government.”

This is an issue Hagman feels particularly passionately about. When we ask him what his future aims as an executive are, for instance, he sets out one of his primary goals as transforming the perception of the gaming industry. More and more, Hagman says, gaming is becoming a form of entertainment, and he believes he has the figures to prove it. “I think the perception from public opinion is more that gambling is something that’s really bad, that people are losing their houses,” he explains. “We need to turn that perception into: nope, gambling is actually something that’s been around for thousands of years.

And it’s entertainment more than anything else. Now we can start showing that with the numbers, that €65 [or $79.84] is the average monthly spend. Just a few years ago, that number was a lot higher.”

It’s an emphasis not just used by Hagman, but industrywide. GVC Holdings rebranded to Entain in December, while Paddy Power Betfair became Flutter Entertainment in May 2019, with both names having obvious connotations to casual, light-hearted pastimes. “It becomes a more sustainable database during these times,” Hagman continues. “There are a lot of new players who play for less. The industry is quickly turning into an entertainment industry, which I personally think is just awesome. Our monthly player spend is not more than a restaurant visit or a couple of beers, or going to the movies once or twice a month. I think that tells us something. It’s more average spenders that would like to enjoy a moment of casino, be able to win a large jackpot, play some blackjack, a little bit of roulette or a couple of slots. It’s more about entertainment than anything else, and I think that’s extremely healthy.”

Long before StÊphane Pallez became chairwoman and CEO of La Française des Jeux, the long-established and sole lottery operator in France, she established herself as a leader based on integrity and always being on the front foot. Here, she discusses how she evolved into the top role and how to maintain it based on making demanding decisions to meet these challenging times

In terms of gross gaming revenue, FDJ ranks second in Europe and fourth worldwide and is also France’s tour de force in off and online sports betting. Following FDJ’s completed IPO in 2019, the Group aspires to consolidate its position as the leading gaming operator in France and strengthen as a leading player in the international gaming and services sector. Pallez has her eyes fixed firmly on the future, but looking back on a storied career, it’s her work ethic that has been the impetus to persevere despite the obstacles, and there’s been no shortage of those, especially in the past year. Due to circumstances surrounding the pandemic, stakes cumulatively reached €11.3 billion at the end of September, down 10% compared to the first nine months of financial year 2019.

Stakes and revenue were also down by 18% and 15% respectively at the end of June.

But if the worst is behind us with no further point-of-sale closures, cancellations or postponements of major sporting events, the FdJ Group predicts a slight stake uptick in Q4, supported mostly by a strong lottery schedule with the relaunch of Keno, Mots Croisés and Amigo, and the launch of a second phygital game, “Qui veut gagner des Millions” (Who wants to be a millionnaire?). But from week to week, vigilance is paramount and being able to create or utilise contingencies at a moment’s notice. It’s these kind of qualities and skills that Pallez brings to FDJ even as global circumstances intensify. “I try to pay close attention to the world around me,” she says. “It’s a big part of who I am and how I work.” Pallez has worked in many public and private sectors, including the French Ministry of Finance, the CCR reinsurance group and telecommunications group Orange, always keeping an eye on and anticipating trends in other professions both domestically and abroad. So when she arrived at FDJ in late 2014, she wanted the company, she

says, to project itself into the future to imagine consumer patterns and envision the future of the business. “For example, we’ve digitised the company, setting ourselves the target of reaching 20% digital stakes by 2020. That target has now been reached. So we offer our customers new ways of using our products and services, in particular our distribution network, which is the largest in France with around 30,000 points of sale. And we’ve diversified into adjacent activities, such as B2B solutions we offer on the international market and entertainment.”

She is also a firm believer that companies don’t just exist to play an economic role in society. They also have a major social impact. “I was very keen on joining the FDJ Group because it’s France’s historic lottery operator with a unique history. Since it was founded 85 years ago to raise funds for wounded veterans of the First World War, FdJ’s business model has been based on performance, responsibility and solidarity towards the most vulnerable people. The Group’s social commitments are a core part of our identity, something all our employees are very proud of.”

These are still unpredictable times, however, and sticking fast to the trends and habits of consumers is vital to business survival. Screen time has especially increased in 2020 as a result of the pandemic, on top of how consumer habits have evolved over the last few years.

So digital is becoming more of a necessary investment, which is something FDJ is all too aware of. “The Covid-19 crisis has definitely highlighted the need to accelerate and scale up some of our transformation initiatives,” says Pallez. “The decision made five years ago to steadily invest in digital, for instance, has proved highly relevant. Our customers are increasingly connected, and digital stakes have grown in step with this trend. This was confirmed during the worldwide health crisis and the two lockdowns we experienced in France. The public health context has considerably sped up consumer adoption of new technology, a shift we’ve also seen among our customers.”

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sing u f o ays w our w r e a n l s rticu a tomer p s u n i c gest , s r r e a u c l i o fer serv s the i d ale. n h s a c i We of f h s o t oduc ork, w 00 points r ies, w p t t i e r v i n 0 t , ou ution nt ac nd 30 b e u i c r o a t r j s the di ad th a n i o o t w n r i e nc offe ified s e ent r w e m in Fra s v n i i n d a o t ter e’ve luti n o w e s d d B n n 2 A et a as B k h r c a u m s build a very strong onal i t a n r connection with our players and e int Across France, and in both physical and online networks, digital stakes, digitisation and the overwhelming adoption of electronic payment methods are now firmly established in consumer behaviour, and FDJ has stayed in lockstep as the technology has improved. “We already offered digital play slips, which users can set up in an app and validate at a point of sale, and electronic payments, Pallez adds. “Online stakes have also grown significantly, as has the number of new players on our website. Online stakes grew by more than 40% in the third quarter of 2020.” And with the launch of new phygital scratch games purchased at points of sale but continued online, they’re getting more creative in ways to enhance the customer experience. And in order to do that, there need to be a better understanding of customers to give them a more seamless experience. Being proactive about these key changes in consumer behaviour is one of Pallez’ main priorities.

Understanding how to differentiate strategies between digital and mobile is obviously paramount, and Pallez is focused on developing an omnichannel strategy, which involves investing in a range of different distribution channels that complement each other, including physical networks, websites and apps. Since most of their games are available both online and at point of sale, customers like to have options, so someone who plays at a point of sale may also like to play online at certain times. “These aren’t mutually exclusive,” she says. “In our physical networks, we’re continuing to invest in digital to streamline our customer experience. For example, our ParionsSport sports betting app allows users to prepare their bets in advance and validate them at a point of sale.”

Speaking on land-based operations specifically, Pallez is confident FdJ’s games, distributed through a network of 30,000 local businesses across the country, will remain an essential part of the Group’s development. “It helps us

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people everywhere, in the heart of cities and villages across France,” she says. “The retail network generates around 94% of the stakes collected by the Group.

Continuing to develop this network is a top priority.

That includes continuing to digitise it and add new services. That’s what we’ve been doing, and what we will continue to do. For instance, in 2019 we won a contract with the French Finance Ministry. Our gaming terminals now let users in France pay their taxes, fines and bills for public services, such as childcare and hospital fees, at tobacconists, enabling us to provide an innovative local payment solution. This contract demonstrates the Group’s ability to capitalise on its point-of-sale network, fully equipped with FDJ terminals, and on its technology and payment expertise.”

Sports betting is also a growing asset at FdJ, despite the suspension of sport throughout the spring. It makes up more than 20% of the company’s overall stakes, and it’s where they’ve been seeing the strongest growth.

According to their Q3 2020 report, annual stakes could amount to around €16 billion, a decline of only 6% over the year, taking into consideration the effect the pandemic had on its activities. On this basis, with the assumption of an annual player payout (PPO) close to that recorded at the end of September, and given the cost reduction plan for more than €80 million when compared to the Group's initial 2020 budget forecasts, the Group says it would generate revenue of around €1.9 billion, down about 7%.

It would also create an EBITDA margin of around 21%, and a free cash flow conversion rate (or cash flow generated by operations after operating investments) maintained at more than 80%. The increase in PPO for Q3 led to a PPO of 68.1% at the end of September, almost stable compared with the first nine months of 2019 (68.2%), and slightly increased compared with the first half of 2020 (67.3%).

Overall, though, sports betting is a relatively young market in France, but with a lot of growth potential. “In 2019, sports betting increased by 16%, generating more than €3.5 billion in stakes,” says Pallez. “This year, sports

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betting was of course affected by the cancellation of virtually all global sporting events starting in mid-March.

Competitions, especially football, gradually resumed in June and then picked up significantly during the summer, and our sports bets grew 27% in the third quarter, both online and at points of sale, coming to nearly €1 billion. Our aim is to continue to gain market shares online while maintaining a growth dynamic at points of sale. To that end, we will continue to develop our offering. For example, we’ve just renewed our partnership with the NBA, which will be a powerful growth driver for our sports betting platform ParionsSport in the coming years.”

This is indicative of the front-foot mindset that Pallez brings to FDJ as they’re always on the lookout for potential developments. This is nothing unique for any large-scale organisation, but FDJ is especially proactive.

For example, in 2019, they expanded their international B2B offering by acquiring Sporting Group, a global leader in technology and trading for sports betting. They’ve also accelerated the Group’s international development over recent years, in particular with the launch of their B2B gaming services subsidiary, FdJ Gaming Solutions. They also offer their expertise to international lottery and sports betting operators.

Plus, they’ve been working to digitise the company for several years, which has made the company more agile in its working procedures, organisation, and relations with stakeholders and retailers in their distribution network. So with the emergence of Covid-19, FDJ very rapidly activated its business continuity plan.

“The aim was to ensure optimal health and safety and working

conditions for employees,” says Pallez. “A huge majority was able to work remotely thanks to the tools and technological infrastructure that we’d already put in place.”

But there’s no time for self congratulation as they’re always looking to be more streamlined, strengthen their B2C business in sports betting, and ramp up diversification in payments and services. None of this is easy in the best of times, much less during a pandemic that is proving increasingly difficult to quash, despite billions of vaccines being manufactured and rolled out.

But sensing the difficulties early, FDJ was able to pull together at the start of the public health crisis and rapidly implement an €80 million cost-saving plan, so its impact on the Group was limited. As a result, stakes were back at their 2019 level at the start of June, but damage limitation could only go so far.

“While the crisis will weigh on our 2020 results,” she says, “we’ve proven that our business model is solid and it confirmed our strategic direction based on four basic pillars: resilience of the lottery, technological excellence, rigorous balance sheet management, and growth in digital.” So FDJ, with Pallez at the helm, was and is still able to weather the storm better than most.

“We’ll see how 2021 unfolds with the pandemic and the circulation of the virus,” she adds. “I sincerely hope the situation will improve. But come what may, we will continue to invest to drive growth in our business lines.”

ro u p G J d he F t g n i tery n i t o o j l oric was t en on s e t i i k h e y ver nce’s . Sinc s y a r r a F o w fo r t s I ’ s i s t i h d n e e s ise fu uniqu ar, a becau a r W h o d t t l i r t Wo tor w years ago s a r r i e on F p d e o e h 5 s t 8 a ded ns of een b b a rity r s fo u n a e d a t i h e l v o odel ded nd s n m a u s y o s le. t i e w p l i n o i b i e s s p u b s po n able e r r FDJ’s e , n e re a l c a u n s v a t t m r m os itmen e all m h p e r fo g m t n o i s c h d t l ome ocia s towar s , y s ’ t i p d of nt ou e u r d o i G r r e p Th very of ou e t r r a a p ees y o co r e l p m our e

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Tekkorp Digital CEO Matt Davey, one of the pioneers of online gaming, speaks to Tim Poole about starting his career with a regulator, his time at NYX Gaming and his hopes for the online market As an electrical engineering undergraduate in Darwin, Australia, Matt Davey’s younger self would have been surprised to hear he’d end up in the gaming industry. One thing he always knew, however, was that he wanted to be in the boardroom, making the decisions. Davey always wanted to build businesses and help craft a company, though gaming itself wasn’t on his radar until he took a job with the Australian Government back in the 1990s.

As Davey reflects on his career so far with Gambling Insider, there are two points of note that may surprise readers. One is the initial fact the Tekkorp Digital CEO, who has to a large extent helped shape the online gaming

industry today, only really found his way into the sector by chance. The second is that, when he joined the Government in Darwin, his first job was actually with a regulator. With the Government being the area’s largest employer, Davey joined the racing and gaming authority, allowing him to gain a unique perspective before later entering the industry on the supply side. Davey worked on a small team he believes put forward the very first regulations for a first-world government regulating online casinos. It was some way to cut his teeth.

“It definitely gave me a deeper appreciation for the value of regulation,” Davey explains. “Online gaming and sports betting, you almost have a licence to print money; the business product and model is structured in a way that’s incredibly profitable, no matter how you run it typically.

So if you don’t have the integrity of both the system and operators, you can really destroy trust with the consumers.

There’s quite an opportunity and scope for bad actors without a regulated environment. I’m not saying regulations are a panacea for everything, but they do really help give trust and credibility back into the industry, so I had a much deeper appreciation for that.”

That experience also taught Davey how to really run a business, as he learned what an ICOP was (Internal Controls and Operating Procedures) and looked at how regulations can help strengthen a company. It was an interesting intellectual journey, he remarks, as he examined how regulation needed to stretch to handle a digital world with no natural borders. Taking his learnings to Sydney, he joined a small content studio named NextGen Gaming,

an experience Davey enjoyed and prompted him to set up his own vehicle at the age of 28, Tekkorp Consulting Group.

In 2005, he took over NextGen Gaming as CEO, the moment he earmarks as when his journey to today really began. The venture capital-backed company ran out of cash and Davey had to restructure the business, taking it from 40-strong to just five employees. Revenues doubled three years in a row to 2008, the year Davey says the Australian Government changed regulations to put a “moratorium on online gaming”.

Relocating to London, Davey spent the next four years building out the business and duly acquired a small Swedish company, also venture capital-backed that had run out of cash. The emphasis here can be ironically applied to the word “small” because the firm in question was NYX Interactive, prompting Davey to rebrand to NYX Gaming Group in 2011, one of the most influential firms in online gaming’s modern history. “That effectively gave us a platform for content, which allowed us to really start to control the distribution of content in the gaming space,” he says. “At that time, there really weren’t very many paths to market for content. You had to go through one of the top three suppliers, and that was a somewhat time-consuming and tedious project; we really changed that. That kicked off the innovation around our content aggregation product called OGS, which is in my mind still the largest in the market. But that didn’t exist before.”

Davey’s next strategic decision was to target the US. Advising his board that the “big guys” like Playtech and Microgaming could not be beaten head on in Europe, the CEO sought to “skate where the puck is” in more regulated markets. Relocating NYX’s focus, Davey acquired a company in Las Vegas – where he still resides today – from Ernie Moody, a fellow industry name Davey describes as “an

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entrepreneurial guy”. As Davey’s ventures into the world of M&A continued, mid-2014 saw an event he believes transformed the investment nature of online gaming, when David Baazov and Amaya acquired PokerStars. Sensing an opportunity, Davey sought a meeting with Amaya CEO Baazov.

“I met up with David at the time and said, ‘You guys are shifting to become a B2C business, we’re interested in acquiring your B2B assets.’” he recalls. “We were quite small at the time but we took the company public in Canada at the end of 2014, with the first right of refusal on his B2B assets and we ended up acquiring those. We did six additional acquisitions, including OpenBet in 2016. And right in the middle of that, the UK in its wisdom decided to vote to exit the European Union, the pound collapsed and our stock came under pressure. We were happy with the company, it was performing well and the OpenBet asset was performing incredibly well. But our stock price was under pressure.”

unemployment lines are filled with indispensable people.” Not forgetting that timeless, Davey urges would-be-leaders to “look for where you can add value well beyond what you’ve been asked to do.”

At NYX, Davey believes his team was effective in understanding the need to scale within the gaming industry. He is not afraid to admit where NYX overreached, however, such as when it acquired poker platform Ongame. “We just didn’t operate fast enough with that asset,” Davey reflects, “It was effectively a melting iceberg.” In hindsight, he says he would have made decisions quicker to scale that business.

The rest was history, with Scientific Games offering to acquire NYX and Davey negotiating “a good result” – approximately a 115% premium on its trading price at the time. Talks began in 2017 and the deal itself closed in the first week of 2018, with Scientific Games acquiring the company for around $630m. At the same time, the US Supreme Court chose to hear the case for the overturning of PASPA, which was voted through in May 2018. During this favourable climate, Davey completed integrating the company, as NYX’s 1,500 employees joined up with Scientific Games’ 8,500. It formed the fourth division of the organisation, SG Digital, and won Davey Chief Executive of the Year at the 2018 Global Gaming Awards London.

Once SG Digital’s management team was structured correctly, Davey left, setting up his current ventures, Tekkorp Capital and Tekkorp Digital, in 2019 and 2020 respectively. As he reflects on his time with NYX, he has the following advice for aspiring executives who share his ambitions to become decision-makers from an early age: “Always be open-minded, curious and check your ego at the door. One of my early mentors gave me very good advice. I was a young, up-and-coming star in the company and I complained about two other guys making more money than me. He said “Matt, the world’s

No track record can be perfect, though, and Davey’s journey to date has undoubtedly made him one of the pioneers of online gaming as we see it today.

Yet as CEO of Tekkorp Capital, which invests in both private and public companies, and Tekkorp Digital, a $250m Special Purpose Acquisition Company (SPAC), Davey still has plenty of influence on how this industry is being shaped. SPACs, in fact, are becoming increasingly popular within gaming. “SPACs have been around as a product for about two decades or so, so they’re not brand new. But they’ve become really popular recently, really in the last two years or so,” Davey explains. “A gentleman called Chamath Palihapitiya floated Virgin Galactic and that really kind of set the US market on fire. Obviously, it was DraftKings merging into Diamond Eagle Acquisition Corp that got our industry focused.”

Davey discusses SPACs with Gambling Insider from two perspectives: one as an acquirer looking to buy a business and the other as a business owner looking to sell. “I’ve been in the acquiring business for the better part of the last two decades; we’ve acquired over 10 companies. You have two challenges here. One is you have to negotiate a great deal with the company you’re looking to buy and then you have to negotiate access to all the capital. Either you’re a public company and you can raise money in a public environment, or you’re a private company and you have to go to private equity

you , g n i bett s t y. The r e o n p o s int m and r ured g p t n i o c m t u a r e eg nc is st l e Onlin ave a lice d e, no o l b m a d t h i st p ro f ct an u y l d almo b o i lly r d a e p c i r s p c s y e it t t’s in n a busin h u t r ay ou in a w ter how y mat

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shops and debt providers. Those are two quite cumbersome processes, and a SPAC effectively allows you to raise the capital first, then acquire the business; so it’s a cleaner, more efficient process from an acquiring perspective.”

On the flip side, if you’re looking to sell your company or take it public, SPACs particularly appeal to fast-growing businesses whose value is in their future growth, Davey says, not their historical position (DraftKings certainly comes to mind here). IPOs, by contrast, restrict what you can discuss in your public documents regarding future forecasts.

Time-wise, the process of merging with a private company into a SPAC is also far more efficient, in Davey’s eyes, than going through a 9-12-month IPO. If you’re facing competitive pressures and need access to capital for quick growth, SPACs can instead take 3-6 months.

From this perspective, Tekkorp Digital will specifically look at companies that are scaled, worth roughly $1-2bn, and are looking to go public. The only key, Davey says, is that they must have some kind of nexus with the US market, ensuring they are meaningful for US investors to get behind. With his broader Tekkorp Capital hat on, Davey is targeting investments in sustainable gaming segments.

“Examples are companies like BetMakers, which has built out a great position in the horse racing industry, and Scout Gaming, which has approached the daily fantasy sports market in a way we think scales,” he says. “We’re looking at those markets, currently considering investments in the esports industry, along with data, AI and analytics.”

There is much to reflect on generally during such a fascinating time in the investment and M&A spaces. For Davey, scale really is the key differentiator within the online sports and casino industry, a sector he feels was born in the early 2000s despite its early remnants forming in the mid-to-late ‘90s. “You can see the enormous benefits Google, Amazon and companies like that get from scale; it’s very difficult to beat those kind of ecommerce-orientated businesses when scaled,” he remarks.

“Online gaming is the same and benefits from a similar approach. All things being the same, having a bigger marketing budget allows you to out-compete everybody else. The industry is very much in early-growth mode and one of the largest high-growth markets happens to be the US. We’ve seen companies raise hundreds of millions, billions of dollars to invest in scaling up in probably the fastestgrowing, largest market in the world. That said, at some point, you can’t keep doing that. At some point, the easier way to grow is through acquisition.”

While the sector is seeing acquisitions driven by technology, products and services, Davey thinks gaming is still trying to figure out the right vertically integrated structure. By this he means whether it is best to own your brand and management team, outsourcing everything else, or owning data sources or the underlying platform and technology. Here, he doesn’t believe the market has spoken and that there are “a number of innings left to play out over the next decade or two”.

As we chat with Davey over Zoom, an inevitability brought on by the COVID-19 pandemic, Davey notes that the pandemic may be acting as an extra driver for M&A. The pandemic has not fundamentally changed consumer behaviour, according to him, but it has accelerated the adoption of digital entertainment – an adoption he believes is permanent. So much so, in fact, that Davey sees the current 80-20 gaming revenue split, in favour of land-based versus online, changing significantly. Bearing in mind gaming hubs such as Macau, Atlantic City and Las Vegas account for large portions of land-based revenue, digital adoption is already way ahead in many other markets worldwide. In June 2020, Evolution CEO Martin Carlesund told Gambling Insider the “online evolution has just started,” and that 50-70% of future casino revenue will be digital.

In Davey’s opinion, this figure might swing even harder the same way, leaving him – it has to be said – perfectly placed to capitalise as Tekkorp Digital CEO. “I wouldn’t be surprised to see the industry go from the current 80-20 split to greater than 50-50; it might end up 20-80 the other way,” Davey projects. “I think we have $400bn wagered a year on lotteries, poker, sports and casino, and I think at the moment we’re only on $60bn or so coming from the digital format. I wouldn’t be surprised to see that being north of $200bn over time. I think one of the areas slowing that down is the adoption of regulation and gaming regulators being comfortable with that. But in my mind, the digital product is the preferred channel and the physical product will be secondaryin the future.”

tors n e m early d advice. y m f One o e very goo nd-coming a m gave young, up- ny and I pa a m s o a ther c w o e I o h w t t in n star ined about oney tha ’s em la comp aking mor the world d m att, fille M e ' guys r d i a sa es ' me. He oyment lin le people pl ab unem indispens with GAMBLINGINSIDER.COM

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FEATURES

BIG QUESTION

Payments - What are the biggest trends for 2021?

Mikael Lijtenstein, Astropay CEO INSTANTANEITY AND UX ARE THE TRENDS FOR 2021 At first glance, we may say that security is the trend for 2021, but since its awareness has seen a huge rise among companies and users alike in the past years, attention is shifting to other areas, mainly to instantaneity and overall user experience. We are convinced that these are the three pillars that will govern 2021 in payment trends.

Mikael Lijtenstein

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PAYMENT CHAINS ARE EVOLVING The payments ecosystem is a complex landscape integrated by processors, switches, acquirers, wallets, fraud and risk providers, a plethora of fintechs that provide multiple services, as well as traditional financial institutions such as banks. As innovation in wallets and fintechs has widely expanded online payments, 2020 was characterized by great transformations in the traditionally conservative players, which will probably be accelerated in 2021.

Banks are joining forces worldwide to provide new, faster and tech-friendly ways of using money and paying for services, which is a huge game changer for all the services that harness the banking backbone, including online gaming sites. To our knowledge, the most remarkable milestone in this matter is the recent release of PIX in Brazil, which enables real time, instant payments from customer’s bank accounts, 24/7 in a country with millions of people, within a vibrant region that is already following along with

this trend. Enabling payment channels and processors that properly leverage these advantages in the financial world's backbone to build great end-user experiences, will be critical to being on the right side of the trend.

USERS DEMAND INSTANTANEITY Long checkouts that require a lot of user brainpower to figure out, filling in forms and providing a lot information are a no go.

Moreover, the response from online services cannot be just a better support service, even though they have improved notoriously through tools like live chatting and mature bots, which have shown a huge relief in customer satisfaction statistics. But this is not enough, the underlying issue requires a well thought out solution.

Understanding that paying is not a customer problem, but a service issue, is paramount for payments providers. There is a need to move forward in order to provide one-shot checkouts, single click experiences and automatic payment fulfillment as a concrete manifestation. The key is to understand that paying is a really complex money-moving activity that takes many forms. There is not a silver bullet solution. It requires a deep understanding of customer profiles, payment methods, underlying technology and operational hazards, to name a few, as well as building a correct risk-based approach to ask for the right information, in the proper way, tailoring the user experience to make it as natural as possible.

BIG QUESTION

PAYING IS AN IDENTITY MATTER By 2021 we can expect a great deal of optimization on how security is applied to the user journey, tearing down the dichotomy between security and usability. Companies are starting to realize that they can have both and that they are not a contradiction, provided the user identity is handled as a continuous relationship between user and service, that enables the implementation of a truly end to end one-shot experience.

Payment services, apps and wallets are the best players to foster that relationship,

since they are well positioned for best knowing the customer and tailoring the experience to their security and usability needs. We may even begin to see more parts of the KYC process being solved by payment providers.

Traditional security strategies such as second factor authentication will continue to be used, but as for the user perspective it is yet another step they need to perform every time they pay. It is perceived as a discomfort and should be carefully woven into the overall experience.

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Overall, 2021 promises to be an exciting year for the payments industry, where focusing on faster and painless checkouts, providing better experiences and instant funds fulfillment will play a leading role.

Mikael Lijtenstein , Astropay CEO, started out as a software developer in 2015. His previous experience as head of operations in companies such as dLocal gave him a broad experience in the payment industry, as well as a wide understanding on how to approach and enter new markets successfully.

Rio Broadfoot, gaming vertical director, Trust Payments

Rio Broadfoot We have three key predictions for payments in 2021. There will be an increased focus first on security, second on instant payouts and finally on payments-based customer loyalty.

Let’s start with the context. 2020, ‘The Year We Stayed At Home’, became a catalyst for change in consumer behaviour.

Pre-Covid we were already on track to become a digital, cashless society. The speed at which we have adopted digital and alternative payment methods, such as digital wallets, is truly unprecedented. And this is not only for ‘western’ markets or markets that were already highly digitised: emerging markets like India, Russia and Brazil have also seen mass-digitalisation of payments at dizzying speed.

It is logical that, due to all the new digital payments methods now widely used around the world, operators will need to have an even more vigilant focus on anti-fraud,

anti-money laundering and compliance to avoid chargebacks and operational costs.

Chargebacks are of course an important and useful fraud protection mechanism.

Unfortunately, operators do not have the same protections. Consumer chargebacks often end up being used as a tool to commit fraud, rather than recover from it. This fast move to digital requires stronger security, advanced authentication, and better transaction decisioning across the entire industry.

Fortunately, there are ways to manage this. It is important to keep in mind that how you manage risk and fraud in your online gaming and digital entertainment business can affect your customer conversion rates by up to 50%. We believe there are two strong new frictionless emerging technologies which will help: anti-fraud software such as Tru Fraud Check, our AI-based software which detects fraud and cyber threats through continuous behavioural authentication; and 3-D Secure v2.1.

Let's start with Tru FraudCheck. There is a gap in the market to fill the hole made by outdated and costly risk systems with binary fraud rules which are holding back the growth of online gaming businesses. Despite the wealth of data they generate, rules-based fraud and compliance systems do not turn this into real-time actionable insights. Tru FraudCheck uses machine learning, AI and authentication technology to stop fraud without compromising conversion rates or profitability.

3-D Secure 2.1 is another tool which will help address Gaming payments security and compliance – yet its benefits extend beyond just compliance. The older version of 3DS (3-D Secure 1.0) is known to be disruptive to the player experience, leading to more abandoned payments. Version 2 aims to address this, with

a more seamless experience for the player.

Initial research is promising and shows that 3DS2 can reduce checkout times by 85% and cart abandonment by 70% for eCommerce.

The approval rates have now surpassed the approval rates of 3DS 1 authenticated transactions. We are sure to see a similar pattern in gaming.

Another prediction, instant payouts, is not a new concept to the industry. There are several operators who already understood that getting payouts faster can make or break a players’ experience with a casino. There are many already offering ‘speedy’ payouts within a couple of days or within a few hours, especially on eWallets. However, there are still players who wait weeks or months to receive winnings. With 58% of online gamers using multiple gaming sites, and 69% saying they believe their online gaming experience is unsatisfactory, we believe that 2021 will see even more operators move to real-time payouts even on card payments, keeping their players by taking advantage of gaming-friendly services such as Visa Direct.

Last but not least, payments-based customer loyalty, is potentially a game changer. We believe if merchants can combine their customer loyalty and reward programs with their payment experience, they will be able to understand their players on a completely new level. We are launching a payment linked loyalty platform in 2021 that enables the smaller and medium sized operators who don’t have enterprise sized budgets or extensive systems to access a targeted player engagement platform.

Rio Broadfoot is director of gaming vertical for Trust Payments. She has over eight years’ experience in the payments and fintech industry and dedicated gambling sector expertise.

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FEATURES

BIG QUESTION

Rhi Burns, CCO, Zimpler

Rhi Burns

I never thought I could be excited by trends in fintech and finance but once you really get to know this world, it’s fascinating and 2021 is a year I am especially excited about.

I worked in payments way back in 2011, but in 2014 I left for a while for the more glamorous world of affiliation. When I got back into payments in 2019 I could not believe how much had changed, even in the specific niche of bank payments. It was a whole new world. I remember spending hours locating player deposits because they had to copy and paste the bank info from the casino cashier, login to their bank, and manually make a payment, not forgetting their specific reference which, without a doubt, the majority of players did.

Now it’s all done in one flow, on mobile you are automatically redirected to your verification app and back again, on desktop you never leave the cashier. Payments take a matter of seconds rather than the time it takes to make a cup of tea. Payouts are lightning fast and must have increased in volume at least ten times over as players can now move their money in and out without delay.

When we switched focus to online bank payments around two years ago, we came in with a good product, but a great price, with a real focus on cost saving for the merchants.

This set us up very well and meant we got some good traction fast and we spent the first year analysing player behaviour and data

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in order to improve the product and bring conversion up in line with our competitors.

Now we convert as well as the best products on the market, often better, so operators don’t have to compromise on conversion or cost when it comes to payments and I believe that will continue into 2021. As regulation becomes tougher, each click increases in importance. Taxes rise, bonuses become more limited, churn increases, yet marketing costs stay high, so conversion on every transaction will be a big focus.

But a focus on conversion is not that new. Something that is new though, is the reliance on payment providers for more than just payments that I expect to see in 2021.

With more markets regulating, and existing regulation being tightened, we already see that areas like KYC, AML and EDD are all ways that payment providers can collaborate with merchants beyond deposits and payouts.

We expect payment providers to become much more intertwined in the daily workings of operators, pooling together to ensure that both parties are not only satisfying, but going above and beyond when it comes to verification and safety. New tools and features based around extended due diligence and anti-money laundering will start to pop up, eventually becoming the norm. It’ll be about

what extra value PSPs can provide and these tools will be vital in being the supplier that can bring that added value.

Then, as we’ve seen with the recent LeoVegas news, there will likely be a demand for whitelabel payment solutions. We have been leaning that way for a while now, with a very clean, quite ‘unbranded’ flow and flexibility in how we are presented (i.e casinos own bank logo, the logos from the bank), so the next natural step is offering more customization options within the UX. Adding operator colours and logos and overall branding will likely become quite a big trend and it’ll be interesting to see if this is something players want.

So an increased focus on conversion, a new focus on added value in terms of compliance and regulatory products and more customization and white label solutions in terms of instant bank payments are trends I expect to see in 2021, but the industry could well surprise us all.

Rhi Burns, CCO, Zimpler, has been in the iGaming industry for 15 years, mostly focused on the supplier side from platforms, to affiliate marketing and payments.

Currently in payments heading up sales, account management, BizDev and marketing across multiple segments.

BIG QUESTION

FEATURES

Liam Colclough, business marketing manager - gaming at Trustly

MORE PLAYERS WILL DEMAND APM I just have one big prediction: More players will demand alternative payment methods (APMs). Here’s why:

Liam Colclough

REGULATION MAKES APMS MORE ACCESSIBLE ACROSS EUROPE In Europe, Open Banking regulation is opening a floodgate of possibilities for bank customers in the EU – and for the fintech businesses that are ready to serve them.

PSD2 provides a legal framework for Open Banking payments (also referred to as online banking payments). This standardisation will make Open Banking payments available to all EU bank customers.

In parallel, the British Open Banking Implementation Entity (OBIE) has standardised bank APIs across the UK, giving consumers easier access to consistent Open Banking payment options.

While Open Banking payments are already popular in Sweden and the Nordics, for instance, adoption is still relatively low in large markets like Germany, where invoices are preferred, and in the UK, where cards rule online payments.

Once players have the chance to try out more payment options, with a consistently easy and intuitive experience, they may not go back to their old ways of paying. That shift in consumer demand will force more operators to add a wider range of APMs to the cashier.

Operators who want to realise the full benefits of Open Banking need a fullservice partner like Trustly, one that also provides a payout solution, reconciliation services and the infrastructure to rapidly process payments.

Our research shows that improving player experience not only improves conversion, it also supports player loyalty. On the other hand, operators with clunky cashiers and limited AMP options risk alientinating both new and existing customers.

LAND-BASED PLAYERS WILL GO CASHLESS The cashless trend saw massive acceleration in 2020, and when the lockdowns end, there will be less cash in players’ wallets. Our Scan N Play gives land-based operators the opportunity to meet the demand for cashless playing.

Just like what our Pay N Play APM has done for online platforms, Scan N Play combines KYC and the deposit into one seamless flow. We soft-launched Scan N Play in 2020, and now we’re taking the solution to a wider market in 2021.

Beyond the hygiene factor and meeting customer preference, AML compliance is simplified with Scan N Play, as is the administration and cost associated with cash handling and card payments.

To ensure that even the most enthusiastic players stay responsible, both operators and players can set limits on how much they can deposit with Scan N Play. This type of added-value on top of deposits and withdrawals is just one more factor that will drive customer preference to APMs.

APMS SIMPLY DELIVER MORE VALUE Our services are about much more than just moving money from one point to the next. As I mentioned above, we also support KYC, AML, responsible play and fraud risk mitigation.

Pay N Play has completely changed the SCA MAKES APMS MORE DESIRABLE way players register, get verified and play The requirement for vendors to meet in multiple European markets, and we’re Strong Customer Authentication (SCA) is rapidly expanding into new markets around an important part of PSD2. I think these the world. requirements will also push more players For both players and operators, the to APMs. added value of APMs will only increase as When depositing with a card, players must technology and market competition advances. provide a secondary form of authentication A culmination of forces means 2021 will be such as a digital fingerprint/face ID via their the year when more players understand that bank app, or a code delivered via SMS. That value and move to APMs en masse. means they need their card and their phone at hand before they can play.

Liam Colclough, gaming business marketing Digital-first players who want a manager at Trustly, has worked in marketing for modern payment experience are being over 10 years, with a focus on iGaming and fintech. driven to APMs where the identification, Working in his homeland of Malta, Liam is able to authentication and the deposit all happen keep his finger on the pulse of the international in one seamless flow, nearly instantly. gaming market.

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BIG QUESTION

Christopher Justice, president, Global Payments Gaming Solutions

method once the pandemic subsides. This change underscores the necessity of cashless gaming solutions for operators to remain viable moving forward.

Operators looking to remain viable should seek to employ cashless, contactless solutions that are system agnostic and able to be interoperable with the infrastructure that is already in place on the casino floor, allowing current systems to operate as they do.

Christopher Justice THREE KEY CONSIDERATIONS FOR GAMING IN 2021 For years, industry leaders have speculated the emergence of cashless and contactless gaming as the preferred way for patrons to game. This transition to the new way of gaming was expected to take some time.

After all, it can be hard to break old habits.

That is until the COVID-19 pandemic emerged earlier this year. The pandemic not only expedited the industry’s move toward digital, but also changed the way consumers go about their daily lives.

As we enter 2021, we can expect this accelerated acceptance of digital cashless and contactless solutions to continue.

The increased preference for digital will also continue to fuel growth in the online gaming space. Lest we forget, COVID-19 has also shaped the minds of regulators and state legislators looking into gaming expansions. It will be interesting to see how these three key areas shape our new normal, both in 2021 and beyond.

THE ACCELERATED ADOPTION OF CASHLESS GAMING According to a study by Mercator Advisory Group, 30% of consumers started using contactless payment methods at the beginning of the COVID-19 pandemic.

Furthermore, 70% of those who are new to contactless solutions have indicated their plans to continue using this payment

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AN INCREASED APPETITE FOR ONLINE GAMING The online gaming industry saw explosive growth in 2020. Industry confidence remains high in the likelihood online gaming will continue to grow in the coming year. As with cashless, contactless gaming on the casino floor, the pandemic accelerated online gaming growth, making it a viable area for operators to explore in states where it’s legal.

Operators can leverage this to their advantage by selecting and implementing online gaming solutions that enable a multi-channel approach to online gaming, where the same account and funds can be used in both online and brick-and-mortar experiences. The blending of digital and physical gaming can drive higher guest satisfaction and put more dollars in play with lower risk.

A MORE WELCOMING REGULATORY ENVIRONMENT In 2020, voters in Maryland, Louisiana, and South Dakota passed measures to

legalise sports betting, clearing a path for more conversations, and possibly sports betting going live in these states in 2021. Also, Iowa, Indiana and Maryland are expected to expand their online slots.

State legislatures around the country are reviewing their gaming policies and beginning to show signs of embracing 21st century gaming practices.

Operators in these states will need to ensure their gaming and compliance requirements are in place. It will be vital for solutions to seamlessly fit into the gaming environment while meeting all regulators’ expectations. Compliance must reside at the centre of any innovation or it is not worth the potential operator exposure.

The future of the gaming industry looks bright. Today, 2021 looks to bring about fundamental changes to strengthen the gaming industry. Cashless and contactless adoption is here to stay. This digital emergence is expected to continue fueling online gaming growth, and regulators are looking into how these technologies will lead the industry forward. As we were reminded in 2020, one can never predict the future, but it’s a safe bet to expect the industry to continue with this momentum.

Global Payments Gaming Solutions president Christopher Justice is a veteran leader in the world’s payment and commerce industry. Spearheading Global Payments’ gaming solutions division, his extensive career spans executive leadership roles at organisations such as CenPOS, Century Payments, Ingenico, Merchant Link and First Data.

BIG QUESTION

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Mark Luke Borg, chief technical officer, VallettaPay

Mark Luke Borg

Fintech has seen massive advancements in recent years, especially in terms of payment trends. From biometric authentication on mobile apps, to blockchain, AI and machine learning to temporary code generation for transaction signing through QR Code scanners, as well as digital wallets - the way we pay has progressed dramatically.

It’s being driven by an ever-demanding community of people who want things to be instant, easy and convenient. We’re not even just talking about Gen-Z. We're talking about you and me – millennials up to baby boomers. One taste of what speed and simplicity have to offer, and we instantly expect the same from all our virtual providers – whether we’re purchasing as individuals or as companies.

As archaic paper transactions and even plastic payments are pushed back into the past, it’s not been easy for the

payment providers to find ways to keep up, but surprisingly they have and often at lightning speed. However, the onset of Covid-19 has taken these expectations and sky-rocketed them even further into the future.

Gaining in popularity in only a short span of time, Covid-19 pushed customers to seek digital first banking solutions so that tedious paperwork, queuing and travelling to branches could be avoided.

Banks that had already stepped up their ‘digital first’ approach succeeded. Others merged with fintechs to speed up their digital transformation. Others still have been sadly left behind. Payments are the lifeblood for these institutions, so finding new ways for customers to be able to enjoy contactless transactions is of paramount importance.

Here’s our take on the future of payment systems in the year ahead.

1. Consumers have been pushed into e-commerce channels and, even with new vaccines on the horizon, the trend of people making more and more purchases online is not likely to see any substantial slow down.

2. Credit cards are becoming increasingly at risk of the Buy Now Pay Later (BNPL) at Point of Sale (POS) services. Fintechs like Afterplay and Klarna in the US enable consumers to select an installment plan or credit card at the specific time of purchase or immediately afterwards, with a flat fee. Accenture has claimed that the BNPL approach has already reached 15% market penetration in the US. 3. With a more cautious temperament in the market due to Covid-19, credit lines might have decreased but debit cards have also felt the pinch as P2P or peer-to-peer transactions gain in popularity. Revolut is one such app that has revolutionized the way people pay each other, share bills, budget and make payments in the physical and digital arena.

For example, Paypal saw a 50% increase in downloads during April and May 2020 than the previous year, which shows substantial and steep growth.

4. New and innovative ways to pay hit the news on a regular basis. One of the most recent concepts is intelligent cars that you can instruct to not only make orders, but also to make payments.

5. Big tech companies like Amazon and Google are itching to get their foothold into growing markets, such as Facebook’s recent launch of ‘WhatsApp Pay’ in India.

6. The Financial Times has reported that digital currency ecosystems, such as Facebook’s ‘Libra coin’ and its supporting digital wallet ‘Novi’ will hit the ground running when they launch early in the new year.

7. Stablecoins, which are digital cryptocurrencies tied to a stable asset like the dollar, are increasing in popularity. In this case, it’s the first providers who will have advantage over any new entrants into the playing field.

8. Advances in retail payments are pushing forward the same changes in the B2B payment field, especially in streamlining operations. Businesses need electronic invoicing providers, automated payment processes and strong authentication processes with fast single-click payment methods, which not only increase trust between each party but completely transform some of the more time-consuming operational tasks businesses must overcome.

The need for modernising legacy payment systems has never been more important, both for incumbents who might have scale and trust on their side and for B2B companies who need to find ways to keep up. As financial institutions drive investment based on legislative requirements, it’s the nimbler fintech providers who might come out on top; they can cater payments around specific consumer needs, providing better ROI in the long run.

Partnering with an entity that specializes in payments can greatly speed up the process for firms that aren’t looking to be a payments leader, but just simply want to offer improved and additional payments features to their clients.

VallettaPay keeps its fingers on the pulse of the payment trends, delivering a next generation bank account to companies who need a multi-currency IBAN for better, faster and more secure cross border payments. International growth no longer has the headache it used to.

VallettaPay chief technical officer Mark Luke Borg has over 15 years of experience in the payments industry. His expertise lies in the information technology and accounting industry.

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REGIONAL FOCUS: UKRAINE

POSITIVE SIGNS Andrey Astapov, managing partner at Eterna Law in Kyiv and member of the Expert Advisory Council of the Gambling and Lottery Regulation Commission of Ukraine, speaks here about optimism gaining momentum in the country as the gambling market moves towards legalisation The New Year in Ukraine starts with great news for the gambling industry. On 21 December, 2020, the Ukrainian government has officially approved the licensing conditions that dictate specific rules and requirements for each gambling product.

Their approval takes the Ukrainian gambling market to the final move within the whole legalisation process. And this means that the Gambling Commission is ready to start accepting license applications.

Expectations for the market have always been high. Having previously estimated the market potential, many established international operators already announced their intent to apply for licenses as soon as the possibility arises. So, the first gambling operators will start filling the market in the coming months.

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So why is the Ukrainian market promised to be so advantageous to foreign investors?

Let us briefly explain the reasons and the current legal status of Ukrainian gambling in this overview. The focus is going to be exactly on the benefits that accompany the legalisation and, of course, on some important legal requirements to be kept in mind while considering the expansion of the gambling business to Ukraine.

BIG OPPORTUNITIES OF THE UKRAINIAN RE-EMERGED MARKET The global gambling market demonstrates gradual but significant growth each year, especially its online sector. The pandemic has only accelerated such trends. Internet gambling experienced a real boom due to Covid-19, and many well-known operators

search for new markets to expand their business activity.

Such rapid development of online gambling is currently prompting huge market interest exactly to this sphere of Ukraine’s legalised gambling. At the same time, land-based gambling should be of no less interest for a potential investor. In recent years, Ukraine’s tourist attractiveness has noticeably increased.

The beneficial position of being at the centre of Eastern Europe, moderate prices for accommodation and leisure activities, as well as the authentic culture are among those factors that define Ukraine’s favorable image for tourists.

Apparently, the new Ukrainian gambling market unfolds incredible possibilities for investment and development. And

REGIONAL FOCUS: UKRAINE

this applies to both online and offline gambling. As Covid-19 will start to slow down, experts expect the real revival of the tourism sector in Ukraine. So any investments in land-based casinos, betting, and slot halls are about to bring considerable revenues in the years to come.

WHAT GAMBLING PRODUCTS HAVE BEEN LEGALISED IN UKRAINE The Ukrainian gambling law legalises all well-known gambling products, though dictates strict rules for the organisation of each. Casinos, betting, and slot halls are included in the list of legalised land-based gambling products. All of the mentioned might be carried out only in special gambling zones. The definition of a special gambling zone is specified in detail below and usually means the territory of hotels meeting the requirements of the gambling law.

Following the example of other jurisdictions, the full range of online gambling is now also allowed in Ukraine.

This includes online casinos, online betting and online poker. With online gambling booming in recent years, it provides a perfect alternative for gambling at physical premises. Notably, the gambling law prescribes one license for both types of betting, meaning that a betting operator might carry out land-based and online betting on the basis of the same license.

Andrey Astapov

Separately, it’s worth singling out the B2B license that allows Ukrainian legal entities to supply gambling software to national operators and also abroad. In the meantime, when it comes to the lottery, unlike in some other jurisdictions, it does not belong to gambling activities in Ukraine. It’s left outside the scope of the gambling law and is regulated by another legal act.

HOW TO ENTER THE UKRAINIAN MARKET: REQUIREMENTS FOR THE OPERATOR The Ukrainian gambling market will be equally accessible for all foreign and national operators. One of the main goals of legalisation was to stimulate the flow of foreign investment to the country. As a result, identical transparent conditions are prescribed for all operators. So what things should the potential investor consider while planning to organise gambling in Ukraine?

First of all, any gambling activity might be carried out by a legal entity registered in Ukraine. Second, the operator shall reasonably estimate its financial capacity.

The amount of the authorised capital, the bank guarantee for the payment of winning to players, and the fee for a license are the figures to keep in mind while applying for a license. To be more specific, the minimum amount of the authorised capital is approximately €860 931. The bank guarantee is plus approximately €1,239 741.

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“As Covid-19 will start to slow down, experts expect the real revival of the tourism sector in Ukraine. So any investments in land-based casinos, betting, and slot halls are about to bring considerable revenues in the years to come”

A huge advantage here is that money from the paid-up capital might be used for any other purposes and at the full discretion of the operator.

Third, there is also a range of requirements that might be grouped as organisational and reputational. For example, any relationship with Russian legal entities or citizens is strictly prohibited.

The same prohibition also applies to countries classified by the FATF group as those violating the anti-money laundering legislation. Besides that, there are, of course, many other requirements. For example, all major officials of the legal entity must have an ideal business reputation.

IMPORTANT SPECIFIC REQUIREMENTS FOR CERTAIN TYPES OF GAMBLING Once the operator complies with all general requirements, it shall also satisfy all specific requirements defined by the gambling law for each gambling product. For example, all operators must have an online system that ensures the collection of data on accepted bets, payment of winnings, and all other data related to the gambling operation. But, usually, most specific requirements will depend on the type of gambling product.

For example, operators planning to engage with online gambling should have a website with a ua. domain. As for the land-based typed of gambling, such

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REGIONAL FOCUS: UKRAINE

operators will be obliged to have premises that comply with the minimum requirements established by the gambling law.

Requirements for casinos’ premises are tight to guarantee the safety of players and visitors. Any casino might be opened only in a 5-star hotel with at least 150 rooms in Kyiv and a 4 to 5-star hotel with 100 rooms in other cities, a 5-star suburban leisure center with 10,000 square meters, or in special gambling zones created by the Cabinet of Ministers of Ukraine. There is also an option to agree an investment project with the government of Ukraine following an individual procedure. In this case, the requirements for the premises will not apply.

Regulation for the location of a betting shop and a slot hall is similar. It must be a 3, 4 or 5-star hotel with at least 50 rooms in Kyiv and 25 rooms in other cities. But for betting, the gambling law also prescribes the possibility to organise sports betting at racetracks.

GENERAL OVERVIEW OF THE LICENSING PROCEDURE The licensing process is rather fast. If an operator satisfies all the requirements of the gambling law, it prepares and submits the full package of documents to prove such compliance. All applications are submitted

to the Gambling Commission and have 15 days for consideration.

Then the Gambling Commission can either grant or refuse to issue the license.

Luckily, there is no restriction to resubmit the application by the same legal entity as many times as deemed necessary. As for the list of documents, it’s determined by the gambling law and might be, additionally, specified by the licensing conditions.

Documents will differ depending on the type and form of a gambling product.

FEES AND DURATION OF THE GAMBLING LICENSES The gambling law sets out different fees for each license. As all licenses are issued for five years, the general fee should be divided into five equal parts that are to be paid annually.

For example, the annual installment for the land-based casino license in Kyiv is €2,066,234, and, in other cities, €1,033,117.

Notably, one license will allow establishing only one land-based casino. An operator will also have to pay extra for gambling equipment: €15,496 for each gaming table, €30,132 for a roulette wheel, and €1033 for a slot machine. These are the subsidiary licenses issued for one year.

For the betting license, an operator must pay €1,033,117 annually. As already noted, such a license will cover both online and

“With online gambling booming in recent years, it provides a perfect alternative for gambling at physical premises. Notably, the gambling law prescribes one license for both types of betting, meaning that a betting operator might carry out land-based and online betting on the basis of the same license”

land-based betting but an operator will have to pay, additionally, €5,165 for each betting shop.

For the slot machine hall, an operator must pay €258,279 annually, and besides that, €1033 for each slot machine per year.

The license fee for online casino is €223,842 annually, and for online poker is €172,186 annually. And, finally, the B2B license costs €51,655 for five years.

It should be emphasised that some annual fees, for betting, online casino and each gaming machine for instance, are tripled until the introduction of the state online monitoring system that will ensure the state control over the private online systems of each operator. As expected, it shall be introduced within two nearest years.

In the near future, we will get the chance to observe the real formation of the legal gambling market in Ukraine.

The Ukrainian government succeeded to meet the expectations of the stakeholders and make the legalisation process fast and efficient. Only within half a year after the adoption of the gambling law, it managed to adopt everything necessary for the launch of the market regulatory acts. Bottom line: Ukraine is ready to welcome foreign investors and national operators.

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ROUNDTABLE

LAND-BASED VERSUS ONLINE SLOTS Industry experts from Pragmatic Play, Pariplay and Relax Gaming discuss the differences between land-based and online slot design, and give their insight into innovation for the digital sphere THE PANEL

Amichai Marmor – director of games for Pariplay

Simon Hammon – chief product officer of Relax Gaming

Catalin Bratosin – head of games for Pragmatic Play

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ROUNDTABLE

What do you think are the main differences between the creative process for land-based slots and online slots?

Amichai Marmor: The main difference is on the device side. When you can play slots on a mobile device, everything is faster and smaller. You have to take that into account when you create the games.

We have to work with small screens and small buttons. When players are on land-based machines, they’ll sit for a while and move between machines.

When they play on mobile, they’re expecting much faster response times. The feeling of the game has to be faster because they are playing when they have less time.

Do you believe online slots generally appeal to a different demographic than land-based?

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Simon Hammon: There are several factors at play here, beginning with the players themselves. While land-based players may be perceived to be more traditional and prefer that style of game, it’s actually the overall physical experience and social environment that die-hard brick-and-mortar guests seek out. The aesthetics of a machine, the tactility of button presses and quality of audio makes for a highly sensory attraction. Conversely, replicating this on a mobile device is more challenging, the game mechanics and content have to possess a high entertainment value to hold the same level of attention. The benefit here of course is that more focus can be given to the gameplay rather than the cabinet that presents it.

Catalin Bratosin: Online slots allow for more design freedom, but the process is more demanding. The nature of online means there are, in theory, fewer barriers to creativity than with land-based games, particularly given that the advent of increasing technology levels allow us to design video slots with a higher level of detail than ever before.

Simon Hammon: Generally speaking, research and statistics support this theory, but there is an argument that a fun and engaging slot can transcend both demographics. There has always been discussion of whether one would cannibalise the other, but many studies have shown that in essence it can do the opposite. There are, of course, those that have feet in both camps but if a truly engaging mechanic or maths model adds to the overall experience, it can do so regardless, leaving the key difference in the physical packaging of the product. In these cases, there’s definitely room to take the best of both genres and make it available across the board.

Amichai Marmor: In today’s world with everything going on, playing online slots is easier for a lot of people. I think younger audiences are finding it easier and more approachable to play slots online than going to a casino. But that said, there is something missing, at least from my perspective. The feeling of being in a huge room with all the machines around you is something you don’t have when you play online.

More or less, I would say the same demographic is playing both with more of a tendency towards younger audiences.

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How do you ensure that online slots and land-based ones are accessible to both young and older generations?

Amichai Marmor: It requires research. I am a very strong believer in data-driven design and understanding which slots, designs and maths are working in different markets.

From that, we can also review different generations. Older generations will go for a simple slot design with fewer celebrations and animations. They're looking for a classic-feel.

The younger generation is looking for more gamified elements. They find it much more interesting when they’re having an impact on the game. I think the feeling of being able to win big is also an important element, which appeals to both generations. This is about playing a game, seeing the different features happen and getting the sense that you can win big.

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Simon Hammon: Answering this from a content perspective, the strategy is usually one of tailoring content to certain player profiles while being mindful of restrictions in local markets. The key is understanding shifts in behaviour by accessing, listening and implementing feedback from customers and players.

It’s something we put a lot of emphasis on due to the ultimate impact on the success of any given title. We can serve different profiles via our aggregated content as well as our own, but the goal when you have access to a good supply of great content is to ensure we find or create the blockbuster titles that offer wide appeal as well.

Catalin Bratosin: The most important thing for any online slot is that it’s engaging. You can’t please everyone with every title but having a diverse mix of themes and mechanics within your portfolio helps capture a broader audience, regardless of their tastes. Older generations will more likely have a connection with the land-based experience and may gravitate towards content that transports them to enjoyable moments of their past. Younger generations tend to prefer slots that bring in elements from video gaming. Developing content that transcends these trends is important as we move to an ever mobile-first world, regardless of preferred slot gameplay, whether it’s land-based or online.

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Simon Hammon: There is a misconception, in online terms at least, that bigger productions with heavy intro movies and super high-end graphics always enhance player enjoyment. While these design elements can help with gaining attention initially, like other forms of interactive entertainment, it’s engaging mechanics and gameplay that create a loyal following. Add to this the right win potential and you’re likely to retain players.

Slot developers face the challenge of increasing competition and lack of visibility, so creating a fast-hitting, engaging experience has never been more important for game designers.

How do you keep slots as engaging as possible to maintain a customer’s attention?

Catalin Bratosin: Engaging maths models, immersive themes or exciting games series are all key to retain customers and gain fans, but increasingly we’re seeing the importance of player engagement solutions. Toolkits such as our own Enhance solution are proven to drive engagement and retain players, which is vital in any company’s quest to stand out in an increasingly saturated marketplace.

What is the latest in the slot space?

Is there any new technology that you think could be the future for slots?

Amichai Marmor: I think the more players are moving towards mobile, they’re looking for more features. As I mentioned, they’re looking to be able to affect the game more in certain elements. They’re looking for slots that will give them a sense of strategy. Those are the winning machines with younger markets.

We have the classics, which will always be successful, but the more we learn how to use data in order to design proper gaming elements within slot games, the more success we see with those games.

Simon Hammon: Slot innovation, from the outside, can appear to stall for some time, then leap forward creating a rush of copycat games or mechanics but all true innovations should be commended. Perhaps more importantly, so should the studios that still want to invest in taking a risk to deliver something new and unique. Smaller suppliers with great ideas are now able to challenge those longer established on a product-for-product basis, which is causing some positive shifts in demand. Technology is always changing and therefore suppliers must continually adapt and optimise to the best available platforms and devices, depending of course on whether the trajectory of that tech is promising for mass adoption.

Catalin Bratosin: The slot space is one of the fastest moving industries and there are always new innovations and products being brought to the market. Technology such as virtual and augmented reality (VR/AR) have the capabilities to change the landscape of online slots, with the rate of technological expansion adding near limitless possibilities to the industry.

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ROUNDTABLE

What is your own company currently offering that sets it apart from the rest of the market?

Amichai Marmor: First of all we are data-driven, so we tailor the games towards specific markets. We are focusing on many markets, both popular and new ones. We understand from the data based on previous games what works in each market. That way we can cater our games to players in each region while also innovating. We have Power Strike coming up which has a reelin-reel feature. We have released Dragons of the North Deluxe, which was born out of the thinking as I just explained, and we see the great success in the way players enjoy the games. We released King of the Trident Deluxe also with the same design thinking, which proves the success of this approach. We’re looking at interesting features and progression mechanics in the games. We see that working very well with players. They are interested and want to progress within the story of the game.

We’re also looking at previous games and fitting them to certain markets. For example, we have an upcoming slot, Power of the Gods, which will be Dragons of the North but Egyptian-themed.

That will be focussed on the German market.

Finally, what advice would you have for any start-up company hoping to make it in the online slot sphere?

Amichai Marmor: Build very good data analytics tools for your needs. Make sure you’re measuring everything you do and you’re basing your strategy on data. We know in the social market you have the big companies and they are all data driven. No decision is taken on those games without looking at the data first. Then start to iterate on your games. Create a game with a certain feature or element and iterate on it.

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Simon Hammon: There’s much to choose from – speed, agility, tech, experience on a business level, down to keynote product launches like Money Train 2, which has been one of the biggest releases in the industry for years. In terms of compliance and adaptability, we’ve been among the fastest to adapt to new regulations, ensuring our content is safe for operators to use, and our partners have all the support they need. In this competitive landscape you need more than just one thing that sets you apart - it must be a combination of factors that customers can draw value from.

Relax Gaming is tirelessly driving differentiation to stand out, concentrating on quality, speed, reliability and innovation.

Catalin Bratosin: Our offering isn’t just limited to slot games, which allows us to expand boundaries across our entire portfolio.

Gamification tools, like Enhance, and our Drops and Wins network promotions allow us to engage with players more than ever, while our single API integration means it’s easier than ever for our operator partners to take our content.

We innovate by simplifying processes for our partners, ensuring they can focus on their players while continually making every step as smooth as possible for them.

Simon Hammon: To be mindful that the landscape is changing, and that you need to showcase excellence to stand a chance of longer-term success. The market is as tough as it’s ever been, and you must have the resolve to drive your vision home as well as the investment to create enough content to be appealing.

Catalin Bratosin: Find a niche in the market and work as hard as possible to bring innovation to the space. There are plenty of examples of really impressive performances from start-ups in our space. It’s an exciting vertical with huge opportunity, but hard work and perseverance are key, regardless of the status of the business.

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THE HUDDLE

Making up for lost time Gambling Insider caught up with New York Senator, and racing, gaming and wagering committee chairman Joseph Addabbo, Jr, on his thoughts on the possibility of mobile sports wagering in the state, which looks as if it has finally taken a step closer to becoming reality

It’s been a long time in the making, but mobile sports wagering in New York could finally happen. Following Governor Andrew Cuomo’s comments in early January where he announced legislation that would authorise mobile sports betting, all eyes will now be on the state to see whether it can compete with neighbouring New Jersey.

Keen advocate of New York sports betting – and crucially mobile sports betting – New York Senator Joseph Addabbo, Jr, spoke exclusively to GI Huddle to react to the comments and provide more information to his own senate bill.

There’s been some breaking news this week regarding the Governor Cuomo’s comments in New York and we know you’ve been a campaigner for mobile sports betting for a long time. Can you give some initial reaction to what he said?

You know, we were quite happy with the statement, that the Governor has embraced mobile sports betting. I appreciate and agree with him on that point but the rollercoaster started because he basically proposed a structure for mobile sports betting in New York. We differ on that point. So we’ll now start negotiating with the Governor’s office, to build on the common ground where we want to do mobile sports betting in New York, but how we do it is where the negotiations start.

Can you tell us some of the details and ins and outs of what he’s proposed and where you disagree?

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I wish I could talk to you about the details but there’s really not much at this stage. He will unveil his details on mobile sports betting and how he wants to use the lottery division in New York, not only in his state of the state, but also during his executive budget, which comes out on 19 January.

This one single entity, the New York lottery division, and to run everything through there, which he is proposing with basically one sportsbook provider, to me at this point is problematic. My bill [Senate Bill S1183, relating to the regulation of sports betting and mobile sports wagering] was reintroduced and, basically, we’re using multiple skins helping our gaming sites because quite frankly we have an opportunity here in New York.

It’s not just about doing mobile sports betting, but about revenue that we certainly need after the pandemic. It’s also about creating jobs.

We feel our bill creates jobs throughout New York State. We had 3.8 million people who applied for unemployment, so we know there are people looking for jobs out there; our economics are suffering. There lies one of the biggest differences: our bill and our mechanism for sports betting to create jobs.

After the Governor’s most recent comments, are you in a more positive frame of mind about the possibility of mobile sports betting coming than previously?

The short answer is yes. The ball is moving ever so closely to the goal line. I always said it was a question of if not when mobile sports betting in New York will be legalised. It will happen.

Now, I am optimistic that it’s going to happen this year.

That’s definitely the attitude shared by executives in the industry as well. But do

THE HUDDLE

you think if it weren’t for COVID-19, then perhaps the Governor might have leaned more towards his old stance, and that the need for revenue has maybe made him think it’s no longer about principle but the fact he has to go for it?

I thought New York should have been part of sports betting right when PASPA was overturned back in 2018. I thought we should’ve been out front. You know New York is usually out front in terms of policy and other states usually look to us to see what we’re doing. We find ourselves in a very strange situation where we’re actually on the outside looking in.

I’ve said that we’re the car in the slow lane with three wheels limping along and there are other cars, such as New Jersey, speeding by us. So I really think we’re playing catch up here. I think we should have been doing sports betting and mobile sports betting back in 2019. But let’s go forward. I’m hopeful that maybe because of the pandemic and the economic situation we find ourselves in or otherwise, let’s move forward and do mobile sports betting in New York.

New Jersey is a key point to raise as it’s a neighbouring state that is doing so well with sports betting revenue. How much of a factor do you think the Governor looking at New Jersey’s figures was in changing his mind?

I believe it was a big factor, especially in a pandemic when you want your residents to stay in the state safely and not travel to nearby states to bet. You want people to stay safe, but in 2019, a report came out that said $837 million goes from New York to New Jersey because they are doing something like 90% mobile sports betting at this point and they are doing it successfully.

But that’s our money that’s going to them.

That’s our revenue, our educational funds, our jobs basically going to New Jersey, so I do think that’s part of it. We also have a very large illegal market here in New York and basically between the New Jersey money and the illegal market money lost, we’re losing about $1bn a year in my estimation. We can debate the numbers, but the fact is New Jersey is taking our money at this point.

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As for New York, we want to keep our money and keep our jobs here so, again, I think it’s time to legalise mobile sports betting.

In his defence is the point about responsible gambling. What can New York do, aside from capitalising on revenue, to make sure responsible gambling measures are there to protect problem gamblers?

We can build upon the successful programs we already have. The New York Gaming Commission has been given accolades and awards nationally for its job in addressing gaming addiction. That’s great and we appreciate their efforts. In our assembly bill for sports betting, we actually create new revenue as a fraction of a percentage from our handle from mobile sports betting. We not only create new revenue for gaming addiction, but for pre-addiction, so that’s education to stop someone from having an addiction.

Also in our bill are safeguards. For instance, if a bettor goes above a certain monthly threshold, that account is frozen and that person is contacted to make sure they’re okay.

There are safeguards in our bill to address the problem of addiction, which is a priority for me and why those who are advocates embrace our bill, because it does create extra revenue for these programs. The Governor was kind of silent in the initial proposal that he laid out, so that’s another topic we need to negotiate going forward.

What sort of time frame are you hopeful for to get mobile sports betting legalised?

I want it tomorrow basically. I was hopeful we could’ve done a revenue package that would’ve included not only mobile sports betting but activation of the downstate gaming licences in New York as a way of raising about $1bn in revenue, before the budget. It doesn’t seem that way. Instead, it seems the timeframe could be part of the budget that gets approved in April.

From now until April, the Governor’s budget comes out on 19 January, which then starts the negotiations. You’ll see the issue of mobile sports betting evolve from now, leading up to April.

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LEE RICHARDSON

LIFTING THE LID ON BIDS Gaming Economics CEO Lee Richardson reveals what’s going on behind the scenes as we get to the business end of the UK National Lottery bidding competition It’s been 26 years since the UK National Lottery (UKNL) was launched, set up under license by the right-of-centre Conservative Government, led by John Major, in 1993.

England first had a state-franchised national Lottery in 1567, however, designed to raise money to build new ships and ports for an export drive, but that’s beyond the scope of this article (and my rather scant knowledge of Elizabethan history).

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Since the modern-day inaugural draw, held on a Saturday evening in November 1994, the UKNL has become the single-most popular gambling channel chosen by UK citizens, operated ever since by Camelot, the initial successful bidder for the franchise.

It’s now time to again put the incumbent operator under scrutiny, as the Fourth National Lottery Bid Competition, for the 2023-2033 period, lifted off late last summer.

With a launch initially delayed by the pandemic, the competition has now moved beyond the initial ‘Invitation to Apply’ stage; prospective bidders have, no doubt, been busy over the recent holiday season, with initial bid submissions becoming due over the next month or so. So what’s up for grabs here, exactly?

The UKNL has become one of the world’s top five lotteries in the past quarter century,

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“While the lottery operator returns around 96% of all revenues to players, good causes and the Government – one of the highest returns in the world – the fixed-term 2023-2033 franchise remains highly attractive to new bidders” - Lee Richardson raising more than £40bn ($52.93bn) for good causes, and contributing almost £20bn to the UK Government through Lottery Duty.

While the lottery operator returns around 96% of all revenues to players, good causes and the Government – one of the highest returns anywhere in the world – the fixedterm 2023-2033 franchise remains highly attractive to new bidders. This is despite the UKNL being globally-ranked just 59th in per-capita lottery spending, a position clearly impacted by the very broad range of alternative gambling options open to UK players, unlike many other lottery markets.

The bidding is anticipated to be fierce, and we already know the identities of some, including Sugal & Damani (which won the reserve bidder spot in the most recent bid competition) and Sazko. Gaming Economics understands that there are many others actively preparing bids, and expects these to come from lottery providers currently operating in North America, Africa, Europe and Asia.

All bidders will be acutely aware of both opportunities, and challenges, associated with this particular competition. External factors include the imminent reform of the UK Gambling Act 2005, which may not be concluded until late 2021, and which could coincide with the start of the 22-month transition period for any new Lottery franchisee. Gaming Economics anticipates the Gambling Act reform will result in the revision of the current age restrictions (which currently allow 16 and 17-year-olds to buy tickets), to instead become an 18-plus

activity only, aligning itself with all other regulated UK gambling activities. It’s already a political issue.

Camelot CEO Nigel Railton came under fire at an All-Party Parliamentary Group (APPG) session held late last year, for declaring it would take up to a year and cost £6m for Camelot to comply with any under-18s ban. This led to Carolyn Harris MP and chair of the Gambling-Related Harm on the APPG, to say, “The lottery and the products it provides should not be available to under-18s. This needs to be stopped immediately and it is wholly unacceptable for Camelot to say this process would take up to a full 12 months to implement.”

Further potential risks for the future UKNL operator could include more advertising restrictions and new affordability tests, the consultation upon which is not due to close until January 2021. One key internal risk is just how difficult it’s perceived, by prospective bidders, to unseat an incumbent franchisee. This was an issue analysed in depth by the National Lottery Commission, which reported on the process after the previous bid competition in April 2008. This body, and function, has since been absorbed by the Gambling Commission (GC), which has total responsibility for this crucial aspect within the scope of the current competition.

Vigne Kozacek, a gaming industry IT and security consultant, was with Camelot in the late 1990s when the incumbent was up against a bid from the Richard Bransonled People’s Lottery, and believes Camelot

will, again, be tough to shift: “I do think it will be hard to unseat Camelot, although there are other strong and experienced contenders around this time, perhaps the stiffest in the history of bids for the Lottery to date,” he says.

The GC will certainly not want any more threats of legal proceedings that followed previous bid competitions in 2000 and 2007.

Nor will it, under exceptional UK public spending constraints, want to incur more than the £15m the bid competition cost last time. Still accounting for nearly 70% of all ticket sales, retail remains the largest UKNL sales channel, and it’s clear the GC will want the winning bidder to further grow the non-retail channel.

A greater share of consumer spend, free of retailer commission, should enable the winning bidder to generate more for good causes. Other areas for close bid scrutiny will include new product development ideas, technical innovation and fresh approaches to promotion. The GC already has a challenging 2021 ahead of it, under pressure from politicians, the media, lobby groups and the industry. It will certainly want a controversy-free UKNL franchise operator selected by late summer 2021, targeted to produce more for good causes, and more for Government coffers.

But will it? Place your bets, and your bids.

Lee Richardson MBA is the CEO of Gaming Economics (gamingeconomics.com) and co-founder of The Big Betting Balagan podcast (bigbettingbalagan.com).

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STEVE DONOUGHUE

SEEING RED: A CAUTIONARY TALE UK gambling regulation expert Steve Donoughue has some strong views about the Gambling Commission, which many may disagree with.

Comparing the regulatory body to Soviet Russia, Donoughue explains why he disagrees with the way the Commission controls the UK market In today’s febrile world of populist politics, fake news, persistent pearl clutching and every thread on social media eventually resulting in someone being called a Nazi (Godwin’s law), it’s increasingly difficult to rise above it all when your job is to write about Britain’s gambling politics and describe the world’s biggest, in gambling regulation terms, car crash as it happens.

Since my last article, and please remember I am writing this at the end of November 2020, my prediction that the Gambling Commission

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(GC) would be imposing loss limits on the industry has proved correct. The consultation, published on 3 November, called Remote customer interaction - Consultation and Call for Evidence, basically states that there will be loss limits lower than anyone can think feasible. But the Consultation is not really a consultation, and the evidence the GC is willing to use for their ideological outburst is basically paper thin and flawed.

I cannot re-state this enough, if the loss limits supported by the GC are introduced,

they will have a devastating impact on the industry. They will undoubtedly fuel a massive explosion in the black market due to the unnecessary, unwarranted and un-evidenced demands of the Commission.

The only reason for this is that the GC has been captured by the prohibitionist lobby and appears willing to do whatever it takes to show the world how tough it is after the mostly unnecessary pasting they got in the summer from the Public Accounts Committee and National Audit Office.

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By the time the British public has survived Covid-19 and Brexit and is ready to consider ‘normal’ politics again, the UK gambling industry could well be 50% smaller. Millions of British gamblers will be gambling happily on the black market, and a significant proportion of them will be descending into problem gambling due to the lack of any regulatory restraints on black market operators. All of this because the UKGC had an ideological point to prove and a desire to save its organisational skin.

In this article, I will argue that the UKGC is acting like a totalitarian regime that shamed humanity in the 20th Century, the USSR. Soviet Russia does provide some interesting similarities to the workings of the GC. Obviously the two are not 100% similar, but the effects of affordability will be akin to a 10 megaton blast above London. What I’m saying is both the USSR and the GC both seemed keen to destroy the British way of life for their own ideological purposes.

For much of the history of the USSR, very little was known by the West about how decisions were made at the top. The same is true of the GC as any attempt at finding out why it has made the decisions it has, such as through FOIs, is met with heavily redacted or plain minimalist responses. What we do know is there is a lack of consistency. Second, and linked to the former, is the Stalinist approach to having all GC utterances considered to have the weight of full regulation.

Third, a disrespect for rule-based government. In the USSR, this stretched to confining millions to the Gulags, invading and usurping foreign nations and basically acting like the global bully. For the UKGC, it is illegally imposing Covid-19 regulations. The law is quite clear that before any regulations can be imposed

there must be a consultation with the industry.

Anyone who has been trying to implement the illegal May regulations will be interested to know that the UKGC is also obliged to “ensure clear information, guidance and advice to help those they regulate meet their responsibilities to comply”. This has not been the case so far.

The publication of the affordability consultation at the beginning of November was, I’m certain, received with relief for many as it put some much needed detail on the May restrictions. It also showed up the GCs willingness to use incredibly weak evidence to back up its case for ideological action. The May restrictions were introduced on the back of figures showing a tiny number of people had gambled a tiny bit more during the first bit of lockdown. Subsequent hard facts have shown that there was absolutely no increase in problem gambling caused by lockdown but the GC felt this didn’t mean emergency (and illegally imposed) measures should be lifted after lockdown was lifted.

I refer my readers to the excellent missive

by Regulus Partners, entitled Presumption of Guilt – unpicking the evidence on affordability from 19 November 2020. This shows how yet again the GC has chosen the weakest of evidence for imposing loss limits. People saying they have on occasion spent more than they can afford is not a reason to destroy the gambling industry. The more logical question ‘Have you suffered any financial hardship from your gambling,’ was ignored with a minimal number of participants positively responding.

If you saw the UKGC’s new five-year plan and response to the PAC/NAO, the GC National Strategic Assessment 2020, you would’ve been surprised to see the Commission has understood the reasons why people gamble and how it fits into their lives.

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This is something gambling academia has struggled with over the last four decades.

The fact that this major leap in human knowledge was achieved through the work of a market research agency interviewing 18 people for 90 minutes each, reading the diaries of 53 gamblers (not renowned for their veracity) and a two-hour focus group session with 40 people would see less than conclusive evidence for making the biggest change in gambling regulation since it was legalised in 1960. But as with those gambling under lockdown or Soviet tractor production, the numbers are only really there to support the ideology.

To end my analogy that we are dealing with the GC/USSR, I want to relate the story of how Gorbachev decided to deal with the alcoholism problem in the USSR in the second half of the 1980s. While loved in the West for bringing in Glasnost and being the architect of the USSR’s eventual demise, he was not afraid to act like any tin-pot dictator.

His approach to Russia’s long term endemic alcohol problem, caused by a population with little heat, health, happiness or hope was to restrict supply by putting the price up dramatically, close off licences and start a public health campaign (sound familiar). The Russian populous responded by making their own vodka, known as samogon. As with the bootleg booze of Prohibition America in the 1920s, the venture into the Black Market meant that Russians went blind and died in their thousands. Commissar McArthur is heading for the same result with affordability.

It will be the end of the GC, but it will take with it the British gambling industry, its jobs, the taxes it generates and its reputation.

What we need is a massive campaign to stop this madness.

“The May restrictions were introduced on the back of figures showing a tiny number of people had gambled a tiny bit more during the first bit of lockdown. Subsequent hard facts have shown that there was absolutely no increase in problem gambling caused by lockdown but the GC felt this didn’t mean emergency (and illegally imposed) measures should be lifted after lockdown was lifted”

- Steve Donoughue

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JOHN GRIFFITHS

THE MISSING INGREDIENT John Griffiths, chief commercial officer at Spicy Mango, questions whether more trust is needed for a quicker evolution of the global esports betting market

Esports has been the topic of many discussions over the last few years, mostly due to its rising popularity and the increase in not only players but fans. However, esports isn’t new to the scene.

In fact, the first recorded esports tournament was in 1972, when the Laboratory for Artificial Intelligence at Stanford University organised the Intergalactic Spacewar Olympics tournament.

Fast forward over forty years and the fan base of esports has grown tremendously. This year, the total audience size grew to 496 million, consisting of 272 million occasional viewers and 223 million enthusiasts. By 2023, it’s predicted that the total audience size will rise to 646 million, with approximately 295 million esports enthusiasts.

The market might be growing, but there are many areas of esports that continue to be in their infancy, including optimising

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opportunities for betting, revenue streams and influence. In theory, however, esports should have the upper hand over physical sports when it comes to betting. The digital nature of esports means that it’s easier to monitor player behaviour and easier to capture the vast amounts of data needed to inform betting decisions.

However, a key ingredient is missing: trust. Currently, betting enthusiasts don’t have enough information or knowledge about esports to make informed decisions, holding them back from making bets in the same way they would with physical sports such as football or horse racing. By making better use of technology, esports has the opportunity to cross over into the mainstream, but the question is: is that what esports wants to do?

CREATING A STORY WITH DATA Compared to physical sports, whether it’s rugby, football, horse racing or Formula 1, the reach of esports is much larger, capturing the attention of millions of fans across the world.

The difference is that esports hasn’t yet taken the opportunity to monetise it in the same way that physical sports have; there isn’t the same media or fan coverage of esports that physical sports have already mastered over the years.

Consider a football or rugby World Cup or the Grand National - with these sports, the results of the matches, tournaments or races will often be broadcast on national television, with people being aware of the winners regardless of if they follow the sport.

Despite a huge ‘underground’ following, esports hasn’t hit the mainstream in the same way; if you don’t follow esports, the likelihood

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of watching the sport. With esports, however, there is less comradery, with tournaments often taking place late at night or in the early hours in the morning, live-streamed over the internet. Despite knowing that millions of other fans are also tuned in to the same stream and group/community chat functions being available, esports is considered less of a group sport compared to physical sports, therefore presenting fewer opportunities for engagement to be increased and an atmosphere to be created.

With this in mind, if esports did want to cross over into the mainstream world, considering how communities can be created or enhanced will be crucial in order to mirror the comradery seen in physical sports.

John Griffiths is that you won’t know too much, if anything, about the players, winners or tournaments. It is for this reason that esports betting has not yet risen in popularity, but by changing the perception of esports and creating a story with the vast volume of data esports is able to gather and analyse, there is an opportunity for the sport to break through the world of betting if it chooses to do so.

Consider the process of a football fan placing a bet on a match in the Premier League.

They know the players, they discuss it with their friends, they’ve followed the matches throughout the whole tournament. They’re presented with data on the number of successful passes, attempted goals, opposition stats and previous injuries, all of which they can use to make an informed decision on the bet they’re going to place.

Esports can mimic this journey, after all, the digital world can access this wealth of data far easier than the physical sports world can. Fortnite, for example, can use data to show potential betters the win rates of players, the success and length of time of previous tournaments, and intricacies such as specific player combat moves or weapons used.

It is with this large pool of data that greater trust can be instilled. With the help of machine learning, betting companies can assess the data in real-time and find anomalies to ensure no fraudulent or mishandled data can slip through the net. With this insight and the reduction of error, it will be far easier for potential betters to put their faith in these data-driven odds, increasing engagement as a result.

FOCUSING ON THE USER EXPERIENCE It’s clear that, alongside esports telling a better story with its data, habits need to change in order for betting to gain popularity in esports.

The changes experienced across a range of industries this year show that change is possible and fast, and the long and successful history of esports is on its side. But the audience demographic plays a key part here; esports fans may typically be younger with less disposable income, and therefore be less inclined to place a bet. However, by instilling trust in the data and showing potential betters that they can have faith in the odds, this demographic may be more willing to join the world of betting.

The user experience is also important here and is extremely different in esports compared to physical sports. In physical sports, a bet for a horse race or football match might be placed while in the pub with a group of fellow fans, increasing engagement and competition and immersing betting into the entire experience

TRUSTING THE SOURCE So is trust the missing ingredient in esports betting? The question remains over whether the esports industry wants to become mainstream, or if part of its appeal is, in fact, its ‘underground’ nature and exclusivity. If the latter remains the preferred option, betting can still play a part. By truly understanding the esports audience and the appeal of each tournament, betting companies can use data to create a story that really engages esports fans and gives them a reason to not just watch, but join in by using data to get to know each player, each tactic and each opponent, and place a bet on the outcome.

In reality, esports has the tools at its disposal to join the world of betting and monetise not just a sport, but a movement that continues to gain popularity with many different audiences. With huge pools of data and technology such as machine learning to instil trust and honesty in this data just ready to be tapped into, only the industry itself can decide the next move.

“Compared to physical sports, whether it’s rugby, football, horse racing or Formula1, the reach of esports is much larger, capturing the attention of millions of fans across the world. The difference is that esports hasn’t yet taken the opportunity to monetise it in the same way that physical sports have; there isn’t the same media or fan coverage of esports that physical sports have already mastered over the years”

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NIK SARAFI

WHAT ARE THE CHANCES? Nik Sarafi, attorney at Dr. Sarafi, a boutique firm specialising in gambling law, explains how games of chance across state lines in Germany are being examined in their respective parliaments, and the many sticking points that remain

The 2021 Interstate Treaty on Games of Chance, otherwise known by its German acronym, GlüStV 2021, has now been ratified by most of the parliaments of the German federal states and many

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expect it to go into effect on 1 July, 2021.

However, the GlüStV 2021 still lacks the necessary approval of the parliament from Saxony-Anhalt, where the new gambling supervisory authority is to be established.

If the SPD in Saxony-Anhalt continues to resist the GlüStV 2021, its entry into force may still fail.

Drafting a gambling law that complies with union law seems difficult. Since

NIK SARAFI

German gambling regulations in the past have covertly pursued fiscal interests rather than protect minors and players, such regulations have been repeatedly overturned by the courts. In this context, the ECJ, the BVerfG and also the BGH have consistently emphasized that the encroachment on fundamental rights and European fundamental freedoms by a gambling monopoly is only lawful provided the national regulation is in a "coherent and systematic manner" suited to achieve the public interest objectives (protection of minors and players) and does not actually prefer fiscal interests. In addition, the licensing procedure has to comply with the principle of equal treatment and the resulting transparency requirement.

A first glance, at the GlüStV 2021 reveals that the hope for a gambling law in accordance to the union and the constitution’s provisions is in vain. Instead, the coming GlüStV 2021 continues a policy contrary to law.

Implementing the new GlüStV 2021, the federal states are planning, among other things, to lift the total ban (contrary to EU law) on online gambling from GlüStV 2021 and to make it permissible. Analogous to the distinction drawn in the terrestrial sector between arcades (Spielhallen), where only slot machines are offered, and casinos (Spielbanken), where casino games are organised, the GlüStV 2021differentiates in the online sector between virtual slot machines (virtuelles automatenspiel), online poker (onlinepoker) and online casino games (onlinecasinospiele).

With regard to online casino games, GlüStV 2021 provides various options on how to organise events. Accordingly, the federal states may decide whether to offer online casino games themselves, whether to grant concessions for such games to private providers, or to impose a ban. In any case, the number of concessions (konzessionen) to be awarded in the online casino sector is limited to the number of concessions for stationary casinos. GlüStV 2021 thus establishes a new gambling monopoly, which has to meet stringent requirements under constitutional and EU law.

The quantitative restriction of GlüStV 2021 is more than questionable. In the terrestrial sector, quantitative restrictions may make sense in principle ensuring player protection, as they limit the availability of gambling by creating spatial distances and thus reduce the

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Nik Sarafi risk that a vulnerable player (someone at risk of developing a gambling disorder when coming into contact with gambling for the first time or repeatedly) will partake in gambling. In the online sector, on the other hand, the restriction runs empty as spatial distances are an irrelevant factor as every online casino is equally accessed with a few clicks of the mouse.

However, the quantitative restrictions are also justified by the fact that gambling offered in casinos creates an increased incentive for manipulation since the organiser participates in the game himself, in that effective control in the terrestrial sector could only be achieved if the number of venues was limited. This reasoning cannot be applied to online gambling either. Since GlüStV 2021 stipulates that every game must be recorded and restored on a so-called safe server, manipulations can be detected automatically and far more effectively than is the case with terrestrial gambling.

Moreover, the claim that online gambling is more dangerous to the health of players compared to terrestrial gambling, being repeatedly invoked in the explanatory notes of GlüStV 2021, lacks any scientific proof. In particular, participation in online gambling doesn’t cause gambling disorders more frequently

than terrestrial gambling. But it’s correct that numerous studies have found that participation in online gambling is more frequently associated with problematic or pathological gambling than other forms of gambling, or that participation in online gambling is a predictor of the presence of gambling-related problems.

However, from this it can’t be inferred that online gambling was the cause for gambling addictions. Such notions are contradicted by the fact that the increase in online gambling hasn’t generally led to an increase in gambling disorders. Online gambling has been around since the 1990s, but according to the Federal Center for Health Education (BZgA), the prevalence of conspicuous, problematic and pathological gambling in Germany in 2019 was at its lowest level since 2009. While certain forms of gambling may be addictive due to a high frequency of events, the cause of the gambling disorder is not gambling, but rather susceptibility of participants based on genetic and psychological factors, among others. For most gamblers, or social gamblers, gambling is completely harmless, since they have no such dispositions. As the type of gambling does not increase the risk of developing a gambling disorder, it’s not a viable

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NIK SARAFI

argument to justify restrictions bringing up an alleged particular danger of certain types of gambling.

Another argument against the quantitative restriction of online casino games is that such games can be classified as safer than terrestrial gambling in terms of player protection, since pathological gamblers can be excluded from gambling quicker when online than playing terrestrially due to automated detection of gambling disorders. To severely restrict the entire market for online gambling in favour of a small number of vulnerable players, as provided for in the GlüStV, is therefore not justifiable.

Since social gamblers do not require extensive protection, the emphasis for regulating online gambling should be less on restrictions and more on educating gamblers about the symptoms and dangers of pathological gambling and also on effective automated analysis of gambling behaviour.

As mentioned, GlüStV 2021 is evidently contrary to EU law because, contrary to the established case law of the ECJ, it introduces a numerical limitation that doesn’t primarily serve to protect the social order, but rather favours fiscal

interests of the state. The restriction in GlüStV 2021 doesn’t serve to protect players but is primarily intended to allow the state or companies privileged by the state to divide the online casino market among themselves. In the terrestrial sector, the guiding principle is that public procurement law is repeatedly violated in order to only allow privileged companies to organize casino games.

Instead of learning by this, politicians with their draft of GlüStV 2021 are once again pursuing just such a position of power in order to be allowed to decide for themselves who is to profit from gambling and who is not. Only fiscal interests and not the protection of minors and players seem to be relevant, just as with the former regulations.

By GlüStV 2021, politicians only seek to continue their well-known modus operandi in the world of digital gambling, namely the awarding of licenses due to their own interests and not in accordance to the protection of minors and players.

If GlüStV 2021 is passed as it is planned in the current draft bill, it will once again be nothing more than wastepaper and would once again be overturned by the courts.

“Online gambling has been around since the 1990s, but according to the Federal Center for Health Education (BZgA), the prevalence of conspicuous, problematic and pathological gambling in Germany in 2019 was at its lowest level since 2009” - Nik Sarafi

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ONLINE GAMBLING IN GERMANY

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GERMANY: THE ONLINE STATE OF PLAY After an eventful year, Germany is well on its way to fully regulating online gambling.

Willem van Oort, founder of Gaming in Germany, sets out what we should keep an eye out for in the coming months

2020 was an important year for online gambling regulation in Germany. In March, the 16 federal states agreed a new State Gambling Treaty (Glücksspielstaatsvertrag 2021 – GlüStV 2021 for short), which will regulate countrywide online gambling from 1 July, 2021.

In the fall, the first online sports betting licences under the current version of the State Gambling Treaty were issued. Finally, the German states introduced a transitional regime that allows reliable operators to offer gambling services, including virtual slots and online poker, without a licence pending the entry into force of the GlüStV 2021.

GLÜSTV 2021: ATTENTION SHIFTS TO STATE PARLIAMENTS Before the GlüStV 2021 can enter into force, the treaty must be ratified by at least 13 of Germany’s 16 state parliaments. Debates on ratification have already kicked off in several states. Predictably, proponents of the GlüStV 2021 believe a well-regulated and attractive market offers the best way to protect players, while opponents decry the risks that come with further liberalising a potentially harmful product.

However, as the GlüStV 2021 is already the result of a political compromise, ratification of the treaty by enough states should ordinarily not

be a problem. Still, the possibility of unexpected political obstacles cannot be fully ruled out.

LEGAL CERTAINTY AND THE TRANSITIONAL REGIME According to German legislation, all gambling services offered in the country must be licensed.

Online sports betting operators who have been issued a license are thus on legally solid ground when offering sports betting services. For operators that also offer virtual slots and poker, the situation is more complex. Compliance with the transitional regime only protects against administrative sanctions. The transitional regime does not supersede the formal requirement that gambling offerings be licensed to be legal.

This means that, formally speaking, compliant operators are not protected from criminal or civil liability. In recent months, several disgruntled players have successfully reclaimed gambling losses in court, arguing that their contracts with operators (and even associated payment service providers) are unlawful and, therefore, void.

It is unclear if, and to what extent, compliance with the transitional regime will offer protection against such claims.

It should in any case be noted that non-compliance with the transitional regime means operators can be deemed not reliable, which will likely preclude these operators from being licensed in the future.

AFTER THE TRANSITIONAL REGIME The transitional regime is set to expire with the entry into force of the GlüStV 2021 on 1 July. From this date, all online operators that are active in Germany are expected to be fully licensed. This should, in theory, solve the legal uncertainties described above.

Unfortunately, the new licensing authority, which will be established in the state of SaxonyAnhalt, does not yet exist. Furthermore, it’s unclear whether the new licensing authority will, in fact, be ready to process license applications from 1 July onward. And even if the licensing authority will be up and running in time, the actual licence application process may take several months more.

At this point, we could end up, from July, with a licensing system without licences and even without a functioning licensing authority.

Absent any further political action, providers of virtual slots or online poker are thus likely to remain in legal limbo for several months after the entry into force of the GlüStV 2021, with all the uncertainty and restrictions this entails.

Gaming in Germany is an English-language business community for those who are professionally interested or involved in the German gambling market. Gaming in Germany offers free newsletters, regular print magazine and B2B events. For more information, visit signup.gamingin.eu.

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SPANISH GAMBLING ADVERTISING

A RESTRICTIVE MARKET Xavi Muñoz Bellvehí, gaming lawyer at Spanish law firm ECIJA, and colleague Clara Mustarós discuss the recent gambling advertising restrictions introduced by Spain’s government last November, and what it means for the country’s gaming market On 3 November, the Spanish Government passed the Royal Decree on Commercial Communications, which was published in the Official Gazette (BOE) the following day. The Decree is divided into three titles: Preliminary Title with general dispositions; Title I regulating advertising, sponsorship and promotion of gambling activities; and Title II adding statutory regulations on responsible gambling and the protection of consumers, especially the protection of minors.

We outline below the main obligations in regard to commercial communications, sponsorship and promotion of gambling activities: • Sponsorship on premises, sports teams or competitions, T-shirts or sports equipment is prohibited. Sponsorship is possible beyond the frame of these prohibitions. The existing sponsorship agreements were in force until

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31 August, 2020. Any kind of promotion for the acquisition of new customers is forbidden, including the welcome bonus.

• A promotion targeted at existing customers is allowed (like a loyalty bonus) provided that the following two requirements are met: the client has a 30-day-old opened account, and has been verified by documentary evidence.

• Free games can only be offered to registered clients.

• The use of famous persons, whether real or fiction, is prohibited. However, for the existing publicity contracts in this regard, these commercial communications will be possible until 1 April, 2021.

• The broadcasting of commercial communications through audiovisual media and during live sport events is limited to 1am to 5am. Likewise, commercial

Xavi Muñoz Bellvehí

SPANISH GAMBLING ADVERTISING FEATURES

communications of any kind, broadcasted or posted, which are captured by an audiovisual broadcast, shall be subject to the same time restriction.

• Terrestrial commercial communications must comply not only with the Advertising Royal Decree and the national regulations, but also with the regulations regarding gaming advertising imposed by each autonomous region. Likewise, communications made for a certain sports sponsorship within sports facilities or published in magazines, newspapers or similar media specialised on gambling on a national level, will not be obliged to comply with the regional regulations on advertising, but only the national ones.

• Operators are prohibited from using trademarks or trade names which they do not own. It is worth mentioning that operators have a transition period of six months from the entry into force of the Advertising Royal Decree to comply with this obligation.

Commercial communications made through digital services will be permitted when referred to: • Ads included on websites with an .es domain from authorised operators and on their mobile applications.

• Ads on webpages or apps which main activity is the offer of products and information relating to gambling provided that they have mechanisms to prevent access by minors and to broadcast messages about safe play.

• Ads on webpages or apps which main activity is to offer information on sports or horse racing using a specific section.

• Those resulting from search results. If those are from SEM actions, the key words used must be directly related to gambling.

Commercial communications sent by e-mail or other equivalent means those broadcasted as audiovisual commercial communications on video exchange platforms, like Youtube, with the following restrictions: they must have mechanisms to prevent commercial communications being addressed to minors; they must have mechanisms for hiding or blocking pop-up ads from their users; they must have mechanisms for controlling time slots.

They also refer to those broadcasted as audiovisual commercial communications on social networks. With the same first two restrictions mentioned above and a third outlining that they must have mechanisms to segment the target audience and be addressed only to persons who follow the channel of an operator, persons who have shown and interest or persons registered with an operator. Advertising agreements with tipsters are possible as well, yet they cannot be famous persons.

The Royal Decree entered in force on the following day from its publication on 5 November, however, there are many exceptions in this regard and many provisions which enter into force later.

Here are some of the main obligations regarding consumer protection and responsible gambling polices. Note that these obligations have been in force since 5 November, 2020.

• Gambling operators are subject to a comprehensive policy of corporate social responsibility. Likewise, they shall proactively inform consumers of the risks inherent in gambling activities and its consequences.

• Gambling operators shall designate a person responsible for safe gambling who will act as a point of contact with the Spanish Gambling regulator DGOJ, and who shall ensure the compliance with the responsible gambling polices.

• Gambling operators must have a direct link to information on safe gambling on their websites and mobile applications, named “JuegoResponsable” or “Juego Seguro”, which shall be clearly visible. Likewise, they must have the following provisions clearly visible and identifiable: The prohibition of playing to minors, establishing the necessary controls to prevent access of minors to gambling activities and; the possibility of exercising the faculty of self-prohibition.

• Gambling operators shall enable a customer service telephone through which information and assistance on safe gambling shall be provided. This service

shall be offered at least in Spanish and shall not be subject to additional pricing.

• Gambling operators shall establish mechanisms and protocols to detect risk behavior of registered users, and must communicate to the DGOJ before 31 January of each year: the updated version of the basic description of the mechanisms and protocols of detection; the protocol of action; the total number of people with risk behavior detected; and the actions carried out and the follow-up and effect on the same.

• When the gambling operator notices that a user with an active account is registered to the RGIAJ (General Register of Gaming Access Bans), the operator must proceed to suspend the user account.

The Royal Decree has the aim to pursue good gambling practices, to promote moderate and non-compulsive gambling attitudes and, especially, to protect minors and other groups of risk. All this, with the aim of preventing the potential adverse effects of gambling activities, trying to raise awareness throughout the society. However, it is undoubtedly an excessively restrictive framework and we hope that its application and interpretation by the DGOJ will be a little more f lexible in doubtful cases. In this regard, it’s necessary to clearly define the framework of what is allowed. The penalties applicable to this sector in Spain are extremely high, disproportionate in some cases, and, therefore, before the criteria and precedents are well established, we recommend that the operators verify any advertising action.

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E-SPORTS IN INDIA

A SLEEPING GIANT Ranjana Adhikari, co-head media entertainment and gaming practice at Nishith Desai Associates gives Gambling Insider an update to the e-sports vertical in India, and which legislation operators need to look out for IMMENSE POTENTIAL FOR E-SPORTS IN INDIA With the market for online gaming in India making giant strides, the still nascent e-sports sector is at the verge of seeing a significant boost in the very near future. As per an industry report published in 2020, the estimated number of e-sports users in India is 17 million, and the aggregated revenue of Indian e-sports

Ranjana Adhikari

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start-ups in 2020 is approximately $68 million.

We have also seen recent reports of Indian e-sports start-ups raising significant capital from investors. These figures are certainly encouraging, and with the growth of cellular internet, as well as more affordable fibre internet connections, there is nowhere to go but up for the e-sports sector in India. While e-sports have not been formally recognised as a sport in India, as it has been done in jurisdictions such as China, an important development in Asia is the announcement that e-sports will be an official medal event at the Asian Games, to be held in Hangzhou, China, in 2022, which is sure to see participation by Indian players.

E-SPORTS REGULATION IN INDIA The e-sports Federation of India (ESFI) is a prominent non-profit organisation dedicated to the promotion of e-sports in India, and has been organising and promoting a number of e-sports tournaments in the country.

ESFI is not a statutory body, but is affiliated with international organisations such as the Global e-sports Federation and the International e-sports Federation.

There is no specific regulation in India to address and regulate e-sports. That said, while there is no license regime for e-sports, there are a number of laws that companies offering and organising e-sports must adhere to while offering the same to Indian customers. These laws may be specific to publishing or regulating the content, and acceptance of any payments from players and prizes distributed, data protection issues, intellectual property rights, consumer protection and tax. The impact of the below laws would also depend on whether a company looks at offering their games from overseas or through an entity incorporated in India. It’s important for companies to be carefully structured from a tax and regulatory perspective. • Content-specific laws (applicable to all types of publications): The content of the game, and the characters within the game, would be governed by applicable content laws, such as the Indian Penal Code, 1860, the Indecent Representation of Women (Prohibition) Act, 1986, the Prevention of Insults to National Honour Act, 1971, or the Emblems and Names (Prevention of

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Improper Use) Act, 1950. The extension of some of these laws to online medium have also been debatable, with varying approaches adopted by courts. However, it’s relevant to consider them while looking at the Indian market. Few of these laws attract criminal penalties as well.

• Payments considerations: The Reserve Bank of India regulates payment systems in India, and prescribes certain norms including know your customer (KYC) requirements, payment gateways and payment aggregators, and pre-paid payment instruments such as in-game wallets, to name a few. In the event it’s a foreign e-sports operator offering their game in India, certain foreign exchange restrictions would have to be taken into account, along with restrictions on onboarding local payment gateways.

• Data protection law: Current data protection law prescribes compliance requirements only for Indian entities inter alia collecting and processing certain forms of sensitive data such as financial information, and health and medical information among others.

There is a proposed overhaul to the current data protection regime in the form of the GDPR-inspired Personal Data Protection Bill, 2019, that is pending with the Parliament.

• Consumer protection law: India has a new consumer protection law, enacted as recently as July 2020. The consumer protection law among other things protects the consumer from unfair trade practices and misleading advertisements. The recently notified e-commerce rules under the consumer protection law may require overseas entities “systematically” offering their services in India to incorporate an entity in India, as well comply with certain requirements.

The applicability of the e-commerce rules on companies offering their games in India would depend on the facts and circumstances of each case and will be required to be evaluated separately.

• State gaming laws: The industry advocates that e-sports sit as a completely different genre to any other form of gaming. However, one can’t ignore the possible application of the gaming and gambling laws of the country, as the laws do not recognise a bifurcation if the format has elements of chance associated with it. The Constitution of India divides legislative powers between the Centre and the States, and the legislative power to make laws on ‘betting and gambling’ has been vested exclusively with the States.

Some States have adopted the provisions of the Public Gambling Act, 1867, a pre-constitutional enactment, while others have introduced their own laws, which are largely consistent with each other. Most gaming enactments prohibit gambling products but exempt games preponderantly

of skill. Whether a game, or even specific in-game elements such are loot boxes are exempted or not is a question to be determined on the specific facts of each case.

• Intellectual property laws: There could be a number of intellectual property implications for e-sports companies. For example, the music incorporated in the video game, or the software on which the game runs, are protected under the Copyright Act, 1957.

The names and logos associated with a game would be protected under the Trade Marks Act, 1999. The intellectual property laws have been amended to be compliant with the Agreement on Trade-Related Aspects of Intellectual Property Rights.

THE PUBG CONTROVERSY Though riddled with controversy, one of the most prominent and recent players in the e-sports market in India has been Tencent’s PlayerUnknown's Battlegrounds (PUBG). As per reports, PUBG had approximately 600 million downloads and 50 million active users in India in early 2020, which is an indication of its immense popularity.

However, PUBG came under attack in India for a number of reasons. In early 2019, the police authorities of certain districts in the States of Rajasthan and Gujarat banned PUBG following complaints on the negative effects that the game was having on minors.

In 2019, a public interest litigation was filed before the Bombay High Court on behalf of an 11-year-old from Mumbai, where it was argued that PUBG promotes immoral conduct such as violence, murder, aggression, looting, gaming addiction and cyber bullying, and thus should be banned.

The High Court did not ban PUBG, but directed the Ministry of Electronics and Information Technology (MEITY) to review the content of PUBG, and issue necessary regulatory directions if it is found to be objectionable. The High Court had also directed the Medical Council of India to decide whether the game had an adverse effect on children.

Unrelated to this Bombay High Court decision, PUBG, being an app based in China, was banned in September 2020 by the Government of India for being “engaged in activities that are prejudicial to sovereignty and integrity, defense and security of the country”. Post this ban, PUBG announced that it would soon launch PUBG Mobile India, an app wholly based in India. However, as per news reports, the launch of the Indian focused app is still pending MEITY’s confirmation. Similarly a number of other games were also banned by the Indian government that had a similar China connection, like Clash of Clans, Heroes Evolved and Happy Fish.

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“With the market for online gaming in India making giant strides, the still nascent e-sports sector is at the verge of seeing a significant boost in the very near future” CULTURAL AND RELIGIOUS SENSITIVITIES There is likely to be pushback in India on games that could be seen to be a danger to children. There has been a number of public interest litigations filed in various high courts that highlight the dangers of addiction to gambling, and the resulting financial crisis that people face. These petitions stress how it’s the unemployed youth that are particularly susceptible to addiction to gambling, due to the alluring prize money offered. In fact, as per reports, the National Commission for Protection of Child Rights (NCPCR), created by the Government of India, is against the relaunch of PUBG in India, “until legislations are in place for such online games”. The NCPCR has spoken out against PUBG in the past, due to the alleged bad influence on children.

Religious sensitivities run high in India and there have unfortunately been frivolous cases filed in the past on these grounds. For instance, the AR game Pokémon Go had certain in-game items to be collected at temples.

This led to a public interest litigation being filed in the High Court of Gujarat alleging that this hurt religious sentiments.

THE ROAD AHEAD With the immense potential India holds, it’s no surprise that there is an increased interest in the sector, with market leaders now focusing on the Indian market. We hope to see the sector growing with leaps and bounds in 2021.

And while legislation is still some time away, having a proper framework in place would give this industry stability in policy and much required impetus, going a long way in recognising the legitimacy of the same.

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CANADA: A TECTONIC SHIFT

CANADA: A TECTONIC SHIFT FansUnite Entertainment CEO Scott Burton analyses the impact of single-event sports betting finally getting the green light in Canada

Scott Burton For the better part of the last decade, there have been myriad attempts to overturn Canada’s federal ban on single-event sports betting. Each time it felt like there was enough momentum for a change, but inevitably they came up short.

Last month, however, a tectonic shift occurred in the Canadian gaming industry

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that could have major ramifications for the global gaming community.

Canadian regulators and politicians signaled their commitment to a pair of significant changes, one federal and one provincial, that if passed will generate new revenue streams, drive money back into the country’s economy and put Canada on equal footing with the world’s great gaming jurisdictions.

Introduced in November by Minister of Justice David Lametti, Bill C-13 replaces Bill C-218. It proposes to lift the federal prohibition against provincial and territorial governments offering single-event spowrts betting. Reading the tea leaves and listening to public statements, the bill seems to have broad support and enough weight behind it to get passed. No timing has been given, but I believe a target date of fall 202 for implementation – before next year’s NFL season kicks off – is on people’s minds.

Numerous factors combined to accelerate the shift, including economic losses from the COVID-19 pandemic, the rapid legalisation of sports betting in numerous US jurisdictions and the proliferation of offshore betting.

According to the Canadian Gaming Association (CGA), Canadian gamblers annually send roughly CA$4bn (US$3.14bn) offshore to online sportsbooks, a figure some industry analysts believe is low. Bettors also wager another CA$10bn each year with illegal bookies.

Throw in recent allowances for legalised US sports betting in Canadian border states such as New York, Michigan and soon Washington, and the current laws risked sending even more money outside the country. While this news hasn’t exactly made tsunami-level waves internationally, those of us in Canada realise just how big this can be. Even with the single-match restrictions, Canada has ranked in the top 10 of gambling nations in every major statistical survey of the last decade, with CasinoCanada.com estimating that 76% of Canadian adults engage in some form of gambling annually.

Removing the constraints will keep more money in legal channels and propel the industry’s revenues and innovation.

“There’s tremendous potential for sports betting to take off in Canada and I definitely think there’s demand from the public,” said Paul Burns, president and CEO of the CGA, at the announcement press conference.

“We just think it’s time.”

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The current setup is anathema to serious bettors, who actively avoid Canadian Government sites. The Government shut down choice and forced Canadian gaming companies to operate entirely in other countries. This push for new regulation is a forward-thinking move by the Government, though, presented with reams of data by businesses and gaming commissions that clearly illustrate the time is right for change. The Government saw the marketplace potential and made a much-needed shift.

Previous attempts at decriminalising single-match sports betting were once met with resistance by the NFL, NHL, MLB, NBA, Major League Soccer and the Canadian Football League. Those barriers have since evaporated, with most leagues now having signed deals with betting partners. The likely federal shift goes hand in hand with a second government policy change that will be equally as important in the long run.

Ontario, Canada’s largest province with nearly 40% of the country’s population, announced in early November it will remove gaming oversight from the Ontario Lottery and Gaming Commission, and place it under the purview of the Alcohol and Gaming Commission of Ontario (AGCO) through a dedicated subsidiary. The biggest impact of this move is it aims to create a regulated,

private gaming marketplace and open the province to outside gaming operators.

To put this in context of just how big a market Ontario can be with regulated gaming, look to the US state of New Jersey.

In 2019, the state with a population of 8.9 million people (nearly five million fewer than Ontario), generated US $4.5bn in legal sports wagers. And New Jersey has already surpassed that mark in 2020.

While Ontario would be the only Canadian province operating under the new regulatory model, for now, the widely held belief is a successful implementation of the new structure will lead to adoption of similar guidelines across the country as a whole.

This would increase sports betting, esports betting and online gaming offerings, and make Canada a prime destination for a wide swath of new businesses and tax revenues.

Listening to the CGA and AGCO, the goal is to move quickly to allow gaming operators to come into the province. Though they will still need to go through a yet-to-be determined Ontario licensing process, Canadian companies such as ours – already licensed in jurisdictions such as Malta and soon the United Kingdom – may see a light-touch, fast-track approach to acceptance in the province.

Ontario might as well have put up a “Welcome Home” banner aimed at Canadian gaming companies. FansUnite has been around for seven years and yet, until now, we’ve been shut out from doing business in our own country. By opening up to outside operators, Ontario

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shuts the door on unregulated sites, gives Canadian gaming companies the opportunity to showcase our products in our home country, paves the way for more innovation and keeps talent at home.

We know they can also effectively work to shut down bad actors as Australia has shown in the past.

Combined, the changing laws are going to impact every level of the country’s sports and gambling industries. Anticipate a bevy of moves from Canada’s largest companies who are already in the space or have publicly stated they plan to be, such as Great Canadian Gaming Corp, Rogers (Sportsnet), Bell (TSN), and Score Media (theScore).

Yet, as big as this is for Canadian and outside companies, the real winners are Canada’s consumers. They are about to be deluged with a plethora of choices, such as in play/in running betting, bet builder (allowing bettors to build their own multiples and get instant markets), cash-out options and access to new prop bets from single-game matches. It’s not even the end of this year’s NFL season, and bettors and gaming businesses are already looking forward to the 2021 season, as well as the implementation of the new regulations.

It’s been a long time coming. Now it can’t come soon enough.

Scott Burton is CEO of FansUnite Entertainment.

Learn more at FansUnite.com and follow him on Twitter @fans_burton.

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ANALYSIS: SLOTS

SPIN CYCLE

Just about every country is unique in terms of where it stands on slot machine legislation. But the UK has followed a more circuitous route than most. Paul Sculpher, director at GRS Recruitment, and Nick Arron, a solicitor and lead partner in the gambling team at Poppleston Allen, discuss the path that brought us to now, lessons learned, and effective ways to forge ahead

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PAUL SCULPHER There is a squadron of categories referring to slots currently within the legislation, and it’s been a moving target as long as I can remember, shaped by commercial forces, problem gambling concerns and shifting interpretations of what can be made to look legal on a machine.

Categories are primarily split in reference to the venue where machines are located, with B1 at the top of the tree – casino slots. Category A would have been at the top of the table with potentially unlimited stake and prize, but has never been legalised as they were destined for the fabled Regional Casino category, which was scuppered years ago.

B1 slots are currently up to £5 stake and £10k or £20K prize if linked to a progressive jackpot, and are restricted purely to casino licences, of which there are around 140 in operation in the UK (COVID restrictions notwithstanding, and we’ll no doubt see some never to re-open).

The rules regarding B1 machines have shifted over the years too, with 20 per licence permitted right now, and the curious sight in several UK properties such as Empire Leicester Square and Genting Southend of twin licences in the same building, arranged physically so they can be discrete businesses and double up their slot allowances.

In my early days in casinos as a trainee dealer in the old Stanley Southampton casino, the original limit was two slots per casino, and you were stuck with coin-operated slots only, paying out via tubes and eventually belt-fed

hoppers. It seems like only yesterday that, as a shift manager, I’d repeatedly have to get horizontal on the floor and clear a tube jam with a coat hanger thanks to someone putting the coin bins in the wrong way round.

Eventually technology moved on along with the law and we moved to six, then 10 and now 20 slots per licence, with the parallel movement to the aforementioned hoppers, then TITO and card-based cash systems.

Prizes moved on apace as well, from the £500 per machine in the early days to now.

It’s actually been a formative experience for the casino industry, moving from where we were to where we are. Many UK casino executives would bemoan the lack of interest in slots held by site managers, and while I think it’s a lot better now than it was a decade ago, the low percentage of site income offered by slots years ago has in some cases clung on in management approaches; slots are still seen by a minority as a box that sits in the corner.

In truth they represent a critical income driver that should, along with the electronic roulette product, carry equal weight on the priority list for management attention.

NICK ARRON There are several other categories for slots in the UK, and they’re generally a whole lot more contentious.

This starts with seaside arcades, which are allowed to offer slots in Category D, which can pay up to £8 (or more if they are coin pushers and cranes machines) and be played by children. This, as one might imagine, is not

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really in line with how many other countries approach the provision of slots, and leads to accusations of “training” kids to gamble.

Bingo clubs and other membership clubs such as working men’s clubs and snooker halls have generally had special provision under the law, which has changed over the years but generally allows them a limited number of higher stakes machines to go along with the (theoretically) better controlled environment that’s on offer.

Then we get to arcades and pubs. The machines allowed to be offered here used to be identical under AWP (Amusement with Prizes) rules, although that name does imply they bear no problem gambling risk, which clearly isn’t the case. You could argue all day how minimal that risk is, but with the potential for £20 to get eaten in a matter of minutes, disposable incomes can be at risk at speed.

The rules for arcades and bingo also took a turn back in the early 2000s, when parties identified an opportunity to work with the law to offer higher prizes on their slots. It takes a bit of figuring out, but by offering multiple simultaneous games of prize bingo, and that prize bingo having a cash prize of £25, operators were able to offer slots with £500 prizes on slots known by operators variously as Section 21 and Section 16 machines (depending which element of the law they were, well, bending).

This was all good, but the 2005 Gambling Act slammed this door shut. After this, the change in rules seemed to accelerate. Arcades and bingo clubs were allowed an allocation of higher prize (B3) machines on a per licence basis, which led to some enterprising operators

Paul Sculpher

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subdividing their sites into multiple licences (with arcade licences being easier to secure than casino licences) in order to allow more lucrative high prize machines. Since then there has been an 80/20 rule to more fairly determine how many higher prize machines are permitted. This led to the beginning of the situation we see today.

PAUL SCULPHER That’s all without mentioning arguably the biggest change to all slot and electronic gaming – FOBTs. The FOBT was introduced in 2001 when presumably some enterprising betting employee realised there wasn’t any legal difference between betting on the outcome of a 37 runner horse race, and a 37 compartment roulette wheel. Their genesis came as quite a surprise to at least one casino operations project manager, me, when I was walking down the street in Maidenhead to see a Ladbrokes shop advertising roulette machines.

We in casino land had presumed until that point that the electronic roulette we had recently started rolling out in casinos would be the exclusive preserve of the better protected casino environment.

The history of the limits applied to gaming on FOBTs is generally well known, but suffice to say that in 2018, when the maximum stake was reduced to £2 per spin (from £100), there was a major impact on the market. The damage to the betting shop industry may not have been quite as bad as feared, but certainly many shops closed and without question many gamblers, the majority of whom were in control of their gambling, no longer had a handy place to gamble the way they wanted to right there on the high street. This led to the current situation.

NICK ARRON As we stand now, casinos are sat with 20 B1 slots per licence, while bingo and arcades can have up to 20% of their machines as B3, while AWPs in pub and the rest of the arcade footprint can offer stakes up to £1 and prizes up to £100.

One thing we’re seeing is the rise of arcades (adult gaming centres or AGCs) in high streets, presumably to fill the void created by betting shops closing. It seems clear that the idea is to offer a gaming experience somewhat akin to the higher stakes and higher prize option that’s been hooked out of betting shops. Every change to the status quo, of course, is subject to the law of unintended consequences, and this one is no different.

Operators’ thoughts are now turning to the Gambling Review, and the implications for the slot business in the UK. It seems clear that the emphasis will be mainly on curbing the perceived excesses of the online world, but all verticals will be under the microscope.

Nick Arron On the slots side, certainly with reference to my specialist area of offline casinos, there’s a strong hope that the Gambling Review will finally address the machine allowances. On the face of things, it doesn’t really make sense that casinos are limited to 20 slots in a highly regulated and well managed environment; if one is safe, from a problem gambling point of view, then why wouldn’t 50 be safe, if there’s demand.

The current conversations seem to revolve around possible harmonisation of machine allowances. That’s a reference to harmonisation with the new casino licences created by the 2005 Gambling Act, which were allowed two slots per gaming table (for small licences) and five per table (for large licences). While you wouldn’t really be able to say the 2005 Act was a great success in regard to the experiment for 16 new licences – half of them haven’t even been developed, and likely won’t be – at least it’s fair to say that the increased machine allowances haven’t led to any recorded surge in problems with machine gaming. They also haven’t led to the mysteriously terrifying prospect of “machine sheds”.

An increased slot allowance for casinos, meaning smaller sites could offer perhaps more than 30 slots, would be a welcome boost to a sector that has been battered more viciously than most by the pandemic situation, and it’s tough to see much risk attached to the prospect. It remains to be seen how much appetite there is for any concessions to operators, whether online of offline, but this Gambling Review may be a pivotal point for all sectors of the industry.

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MARTIN LYCKA

PAVING THE WAY Martin Lycka, SVP of American Regulatory Affairs at Entain, speaks to Gambling Insider about the proposed legalising of online gaming in Ontario, which could pave the way for the rest of Canada to follow suit

The Ontario provincial government has committed in its 2021 budget an announcement to establish an internet gambling market in the province, potentially paving the way to full regulation in Canada.

This presents choices critical to the future path of the industry.

We strongly believe that any gambling regulation, including any in Canada and elsewhere, is most successful when it creates a robust regulatory framework based on strict but fair and reasonable product, tax, and technical and responsible gambling requirements. Our extensive experience in countries around the world has shown that regulation that achieves this is best placed to counter the risk of black market activity that may otherwise emerge.

The two key objectives of the intended Ontario regulation are to create a competitive regulatory environment while protecting consumers from any social ills associated with internet gambling, including sports betting, poker and casino products. The Alcohol and Gaming Commission of Ontario (AGCO) will be given the authority to conduct and manage internet gambling in the province while at the same time act as its regulator.

The budget announcement doesn’t provide for any other details of the future regulation beyond Ontario’s intention to continue engaging with the Canadian federal government to encourage legislation of single sports wagering. It is widely

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expected that the AGCO and the Ontario government will launch public consultations on the individual aspects of the Ontario internet gambling regulation, such as product types, taxation or technical and consumer protection requirements in January or February this year.

Canada has a rather chequered and convoluted history of gambling regulation.

The individual provinces have been granted the authority to regulate gambling in their territories, with the federal government only having residual competence to deal with certain overarching regulatory aspects.

Most provinces have obliged and introduced land-based casino as well as lottery legislation. The lotteries of British Columbia and Quebec have dipped their toes into the online sports betting waters; Quebec has even tried its hand at offering online poker.

At the same time, there are two factors that have inhibited more rapid regulatory developments so far: 1) no single province has yet introduced comprehensive regulation of online gambling and 2) the Canadian Federal Penal Code, in a rather antiquated fashion, prohibits single sports wagering while allowing parlay bets on three or more events. As a result, for Ontario and the

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other Canadian provinces to successfully regulate in the future, changes will be required on both provincial and federal level. To make things even more complex, the Canadian First Nations have a right to introduce and administer Canada-wide licensing regimes; Kahnawake has for years led the charge in this respect.

Yet, the Ontario announcement, together with recent legislative efforts on the Canadian federal level, clearly demonstrate that Canada has firmly embarked on the path towards regulating internet gambling in the foreseeable future.

There have been numerous attempts in the Canadian Federal Parliament in the last decade or so to do away with the previously mentioned ban on single sports wagering.

Although they have all failed, they have created momentum for a renewed push towards allowing Canadians, the proudest ice hockey nation in the world, to wager on their favourite as well as many other sports in a much less complicated way.

In November 2020, the Canadian federal government picked up what originally was a Private Member’s Bill put forth by Kevin Waugh MP designed to revoke the ban on single sports wagering and converted it into a government sponsored bill. As a result, clearing the path for all types of sports betting has become a government policy,

and by implication, stands a much better chance of gaining support of both Houses of the Canadian Federal Parliament. It is fair to say in this respect that the change of heart at the highest echelons of the Canadian federal government has been aided by the fact that all the Canada-facing major leagues have now thrown their weight behind full legalisation of betting, no doubt spurred on by the fast-paced regulatory developments south of the Canadian border.

The federal bill, named C-13, is quite straightforward in its wording. It will just repeal the section of the Canadian Penal that allows for no wagering but parlay wagering. All the other regulatory details will be left to the provinces, such as Ontario, to design and implement.

The only exception from this rule is the

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federal government’s decision to maintain pari-mutuel wagering on horse racing within the federal purview, without allowing single bets on horse racing.

The federal legislative process is scheduled to run its course throughout 2021, with first reading of the wagering bill expected to take place in January or February.

A successful outcome of the federal legislation process, that will run throughout 2021, would mean that Ontario could extend the portfolio of products that it intends to regulate following the plan set out in its budget announcement. Permitting single sports wagering would further boost the attractiveness of the market in the biggest Canadian province with a population of 14 million, which would rank it fifth among the US states. In addition, any prospective Ontario regulation is expected to be used as a blueprint in other Canadian provinces. In particular Alberta is expected to take the plunge if and when Ontario has regulated.

Although the details of the Ontario regulation are not yet clear, the Ontario authorities have previously done their homework and consulted with a wide spectrum of operators, both domestic and foreign, on all key aspects of online gambling regulation. Advice has been sought on best practices but also crucially on matters other jurisdictions that have already regulated this space have struggled with. This trend will no doubt continue in the framework of the upcoming public consultations.

In any case, I strongly believe that it’s advisable that Ontario, and ultimately the other Canadian provinces that will have chosen to regulate online gambling, introduce reasonably strict but, at the same time, sufficiently attractive regulation because this will attract a critical mass of operators into the regulated market. This presupposes permitting the fullest possible scope of online gambling products and legislating for a sensible tax rate as well as robust technical, responsible gambling and integrity requirements. Meeting these criteria will arguably help Canadian authorities preempt inception of a black market while ensuring a high level of consumer protection and a steady stream of tax revenue in a post-pandemic era starting in 202.

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FEATURES

LIVE VIDEO CONTENT

LIVE VIDEO ON DEMAND Long-time marketing executive Alex Czajkowski talks us through the exponential growth of live video content, and its implications for online gaming “The revolution will not be televised”, Gil Scott-Heron warned us in 1970.

Everything else will be.

Facebook Live had 3.5 billion viewers two years ago. Live stream broadcaster Twitch set a new record for hours watched in October 2020, reaching 1.6 billion, representing a 99% YoY growth from October 2019.

Live streaming viewership across major platforms increased from 3.89 billion hours in Q3 2019 to 7.46 billion hours in Q3 2020.

And the stats on the interaction with these live streams are shockingly high, like 101,362 “engagements” on average, and 165% more comments than on-demand videos. People like live online video, one upside from COVID-19 and worldwide lockdowns. So what are the implications for online gaming?

Of course, you have live dealers. It started with Adam Anhang’s live dealer for Stanley Ho in Macau 20 years ago,

Alex Czajkowski

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essential for the Asian market since “Lady Luck doesn’t live in a PC”. More recently, industry leader Evolution, with their live dealers, has seen their total operating revenue jump for the three months to 30 September 2020 to €140.2m ($166.3m), up 48% from €94.7m in the third quarter of 2019.

And you have live streaming of sports events, such as the FA Cup that has UK regulators in a sweat over deals that allow Bet365, William Hill, Coral, Ladbrokes, Unibet and Paddy Power to show the games online till 2024. This space will continue to boom as live betting on sports has replaced ante-betting over the past few years.

You have, or could have and should have, live online horse racing, certainly a boon to Asian operators, providing virtually around the clock racing to watch and bet on.

In these days of COVID, you have operators setting up cameras

in their land-based casinos, offering proxy betting, where “Betty” sits in for the player, following their hit or twist instructions. Players then bet on the outcome of that seated player, replete with recent hand history and historical RTP. There are even cameras on non-RNG-based slots where you can control your bet against mechanical one-armed bandit results, with an infinite number of players possible playing along, each following their own strategies. If Lady Luck doesn’t live in a PC, which has motivated the whole live dealer niche, this too could apply to increasing the appeal of slots.

How we handle features with a variable choice remains to be seen.

Beyond the product itself, firms like Bambuser.com bring the live sales component into the mix. “Tune into our live webcast from 7-7:30pm for free spins and other promos for live viewers.” And customer support? There’s nothing like face-to-face support to get through that deposit process, rife with up-sell and cross-sell opportunities.

There is no aspect of our player interactions that can’t be supplemented or improved by real-time video interaction. With the rise of 5G (the health worries are a myth, we’re told by experts) for latency-free video communications, this will only become more prevalent in the online gaming industry.

Of course, people will still play their favourite RNG slots games. But that will be supported by live video pit bosses, suggesting this game has been particularly loose tonight, or this jackpot is now at $X million, or we have this new game with similar volatility and RTP but way better paylines than your current favourite. You don’t even have to tip after their suggestion pays off, but just wait for the ability to do just that.

Sorry, Gil, the revolution will be televised.

It’s just our definition of what is televised has changed. It is our revolution.

INSIDERS

ALEX CZAJKOWSKI

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

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RICHARD HOGG Betgames.TV

PETER CAUSLEY Lightning Box

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RICHARD WILLIAMS Keystone Law

HARRY VON BEHR Spotlight Sports Group

INSIDERS PETER CAUSLEY

Getting the best of what's out there Lightning Box CEO Peter Causley explains why he first created the gaming company in 2004, and reflects on the roller coaster year just past BEFORE WE TAKE A LOOK AT 2020, CAN YOU GIVE US A BIT OF BACKGROUND ON LIGHTNING BOX? WHAT LED YOU TO CREATE THE COMPANY MORE THAN 16 YEARS AGO? I’d been working in the industry a long time before starting Lightning Box. I spent 11 years with Aristocrat and eventually wanted to get out there and do it myself. David Little and myself started up the business as an exclusive supplier to IGT in the land-based industry.

“The land-based industry is very interesting but it’s held back by technology and what the regulators can approve. A new land-based platform can take two or three years to develop and two years to roll out in the market.

At its very best, the latest technology hitting the venue floors is five-yearold computer technology, whereas in the online space it’s a lot faster”

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THERE MUST HAVE BEEN A LOT OF DEVELOPMENT SINCE THEN. WOULD YOU SAY LIGHTNING BOX IS A TOTALLY DIFFERENT COMPANY TO THE ONE YOU STARTED WITH? Absolutely. When we started, we were 100% focused on US terrestrial casinos; we didn’t even know what online was. We parted ways with IGT around 2008-2009 and began the task of growing our client base from scratch. By the time 2015 came around, we were probably 90% online and only 10% land-based, so it was a total turn around in a matter of about four or five years.

The land-based industry is very interesting but it’s held back by technology and what the regulators can approve. A new land-based platform can take two or three years to develop and two years to roll out in the market. At its very best, the latest technology hitting the venue floors is five-year-old computer technology, whereas in the online space it’s a lot faster.

NOW IF WE LOOK BACK ON 2020, IT WAS A TUMULTUOUS YEAR FOR MOST. WHAT WOULD YOU SAY WAS LIGHTNING BOX’S GREATEST ACHIEVEMENT FOR THE YEAR? I think we saved the best until last. We just released a game called ChickenFox5x Skillstar on 18 November exclusively on Sky and Paddy Power. This is our foray into skill based gaming. It’s about imbedding a skill-based game in the middle of a slot game. It doesn’t affect the RTP of the slot at all. It’s a standalone skill game, which we have given the players to play, once they

trigger the bonus. They can choose to play that skill game or skip ahead and go straight to the bonus.

For the three weeks it’s been out, it’s been very well received. Getting the first of that skill-based franchise out there has been a massive achievement for the team and it’s been at least 18 months since we first discussed it.

WHAT IS YOUR MAIN FOCUS WHEN DEVELOPING INNOVATIONS LIKE SKILLSTAR? HAS YOUR CREATIVE PROCESS CHANGED SINCE YOU STARTED LIGHTNING BOX? The creative process is a lot more fluid. We try to have sessions where we engage in innovative thinking and greenhouse ideas.

We are working harder on prototyping without the expectation that it’s going to go to market. We might start off with 20 ideas, which become ten prototypes that might become three or four games that actually make it to market.

When we were smaller nearly every idea went to market, but now we pick the best of them. Some of them shoot sprouts. Some don’t. Some become full-fledged trees and oaks. We aren’t as precious about our own ideas anymore. It’s about getting the best out there.

CAN YOU EXPLAIN A BIT ABOUT THE DIFFICULTIES CREATED BY COVID-19 AND WHAT ACTION YOU’VE TAKEN TO OVERCOME THEM? Of course it hit our land-based partners pretty hard. It delayed some releases there. We were going to go live in Greece and it’s pushed back our US launches. But they’ve kept the faith with us and are weathering the storm well.

As far as online goes, during lockdown we saw some peaks in May and June figures, which were up 20% to 30%. It really has refocused people on the online world, especially in America where there was little foot dragging.

Some land-based casinos with a lot of clout were almost anti-online gaming, but now you don’t hear any of that sentiment. The market is telling them, investors are telling them and their players are telling them that they need to have an online profile.

RICHARD HOGG INSIDERS

With the customer in mind BetGames.TV CCO Richard Hogg speaks to Gambling Insider about personalisation and the key to customer engagement, with the pandemic still taking hold of different jurisdictions worldwide

“Our key learnings have been to try and help operators keep engaged with their customers.

We want their customers to be engaged for longer periods of time and enjoy the offerings, have good opportunities to win and try to mitigate any losses they suffer financially”

WHAT IMPACT HAS BETGAMES.TV SEEN ON LIVE GAMES, BOTH IN GENERAL AND FOR ITS OWN PRODUCTS AS A RESULT OF THE PANDEMIC? A lot of our customers are sports bettors rather than casino players.

Sports bettors tended not to have much activity during lockdown so we saw a lot more interaction with sports betting clients moving to our product, if they weren’t already on it. Of course, this meant we also got a lot of traction from existing clients focused on moving their sports bettors to playing our games, and many understood that our product really assisted in keeping their sports bettors engaged. We signed up a lot of new clients with that in mind.

We have seen live-dealer, in the traditional format, flourish during the pandemic. Our revenues haven’t suffered as such by people who are used to playing our games migrating to a traditional live-dealer type product. In fact, we’ve seen live-dealer products added to some sportsbooks for the first time due to specific regulation allowing it, such as in South Africa. Of course, players were then able to trial their product but we saw a lot of them come back to us because they were used to our format and games, and liked the fixed-odds outcome on our product.

OPERATORS HAVE HAD TO SCRAMBLE TO ADAPT TO SURVIVE WITH ONGOING LOCKDOWNS AND THE SUSPENSION OF LIVE SPORT. WHAT HAVE BEEN YOUR KEY LEARNINGS THIS YEAR IN TERMS OF THE PRODUCTS PLAYERS ARE LOOKING FOR? Our key learnings have been to try and help operators keep engaged with their customers.

We want their customers to be engaged for longer periods and enjoy the offerings, have good opportunities to win and try to mitigate any losses they suffer financially. We must be mindful of the situations people have

found themselves in during the current climate, with the risk of redundancies and financial woes put on people. We see it time and again with legislators imposing loss limits in several jurisdictions. We really want to work with our operators to make sure they’re able to sustain their own environment and the end users aren’t suffering financially for it, and understand their limits. Our games lend themselves to that. We look at the UK and Greece where they look at restrictions on bet sizes, which is fine with us because our customers are the smaller bettor types. Our average stake is less than £2 ($2.69) in wagers, so we welcome these changes to legislation and are happy to work with them, so players can enjoy themselves with the intention of winning.

GIVEN YOUR GLOBAL PRESENCE ACROSS LATAM, AFRICA AND EUROPE, TO WHAT EXTENT DO YOU LOOK TO PERSONALISE FOR EACH REGION? We are always looking to personalise our products to each different region. We see our current portfolio of games working across all jurisdictions and we see the same types of games resonate in similar jurisdictions. But we now know we have to tailor them as we go and enter into new markets, to suit the clients in the markets they operate in.

WHAT DO YOU SEE AS KEY FOR PLAYER ENGAGEMENT AND RETENTION DURING THE YEAR AHEAD? We’re going to have to be very mindful of the situations people are finding themselves in as the coronavirus pandemic is still playing a part in people’s daily lives. As a business, we’re obviously looking at how we can increase value for our stakeholders but also how we can increase value for our clients and, in turn, their clients. It’s a question of building a sustainable ecosystem that works for a number of variants across the industry and the people who are involved in it. We’ve worked tirelessly to make sure we’ve delivered a very sustainable product for our clients amid the backdrop of the pandemic; and we must give a huge thank you to the teams who have delivered given the circumstances.

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INSIDERS RICHARD WILLIAMS

Is now the time to Act? Richard Williams, gambling and regulatory partner at Keystone Law, speaks exclusively to Gambling Insider about the government review of the 2005 Gambling Act

required. The Gambling Act only came into force in 2007. It was legislation in 2005, but 13 years is actually a very short period to have a piece of legislation like that, so it seems strange to be replacing a piece of legislation now.

WHAT ARE YOUR THOUGHTS ON THE REVIEW AND THE NEED TO START FROM THE GROUND UP AGAIN? I think the industry was well aware that this was coming down the road. Obviously we've had the House of Lords report, we’ve had the Betting and Gaming Council, we've had the parliamentary groups who have criticised the Gambling Act, and we’ve had a number of politicians who have very strongly opposed the deregulation of gambling, so I suppose everyone was prepared for it.

I’m not minimising the very negative aspects of certain elements of gambling, and the harm and the addiction and so on. Some of the horror stories you hear are extremely unpleasant, so I’m not minimising that in any way. But in terms of whether the Gambling Act itself needs a complete overhaul, whether it needs to be replaced with a complete new piece of legislation, I’m not sure that’s actually

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DO YOU THINK PROBLEM GAMBLING IS A MAJOR ISSUE IN THE UK? I think all the statistics seem to indicate that there is actually a static amount of problem gambling; it’s certainly not something that’s massively on the increase. I’m not able to delve further into those figures to say whether that's just the tip of the iceberg and actually the statistics don't represent the true cost, but most commentators seem to agree that the levels of serious problem gambling are static. But that doesn’t mean to say that you just then ignore the people that are in those very bad places who are addicted to gambling.

There will always be people who have an addictive behaviour by their very nature.

So whether it’s alcohol, whether it’s gambling, whether it’s buying handbags or shoes or supercars, there will always be people who are in that category. And it’s those people we have to protect. I find it difficult to sometimes square the fact that gambling is so tightly regulated, when in my view people have to be given some of their own responsibility to manage their own affairs. The state only steps in when there's a really serious harm.

WHAT ARE THE POSITIVES THAT THE REVIEW CAN BRING? I think if I was a land-based casino operator, I would see this review as a chink of light. They are probably the only aspect of the gambling industry that will see this as being a positive.

It’s well known that for the last 15 years, as remote gambling has got bigger and bigger, land-based casinos are the people who have been really hit.

So I think there’s an opportunity now for land-based casinos to start to be able to compete with online operators for that gambling spend. So whether it’s through sports betting, entertainment, or just part of the overall entertainment and night out package, I think there are some positive signs for the land-based casino industry.

WHAT DO YOU THINK WILL BE THE OUTCOME OF THIS REVIEW FOR THE INDUSTRY? Well, it can’t be good news financially for the remote gambling industry on the whole. Any sort of restriction like this on consumer spending is going to hit their bottom line basically. It will depend on what sanction of the gambling industry you’re in. I think as you go into the higher risk products, the people who are very much focused on, for instance, VIP activity in the remote casino, the slots end of the market, they’re going to find there will be some pretty dramatic restrictions on the amount consumers can spend with those operators, and it’s bound to affect their bottom line.

It’s a bit like looking back at around 10 or 15 years ago when Formula One decided to do away with tobacco advertising. It’s a long process, and when you’re reliant on that money for your advertising revenue, it’s certainly very difficult to turn that off overnight. But I would imagine we’re going to see some advertising restrictions coming in sport at the very least.

HARRY VON BEHR INSIDERS

Third-party time Harry von Behr, managing director (Sport) - Spotlight Sports Group, examines a key strategy for driving engagement in 2021

As a year like no other ends, we’re able to collectively, as an industry, look ahead to an exciting period for sports betting.

2021 is packed with huge sporting events, with the eyes of an entertainmenthungry audience fixed on Tokyo, Florida or multiple venues across Europe from the comfort of their homes. But how do operators maximise the sports betting opportunity and take their customer experience that step further?

With a highly competitive landscape, and the bar for customer experience being raised even higher by other industries, it’s imperative that gambling operators add value to every customer interaction. Sportsbooks are no longer just places customers visit to place a bet, then return several hours later to see if they’ve won. They are entertainment hubs, filled with content, analysis, stats and insight on events taking place around the clock, to a global audience.

Technology also continues to accelerate but the landscape has shifted slightly.

While advancements in technology are undoubted over the past five years, it’s becoming increasingly evident that

providers are delivering similar experiences.

This, combined with major operators bringing their tech in-house, has led to a dearth of innovation and left customers lacking something genuinely new. Finding a niche offering is becoming more difficult.

This is where curated content takes the sports betting experience even further.

And there’s a wealth of content out there.

Blogs, vlogs, picks and opinions infiltrate our social media pages, especially around key sporting events. Finding the right insight through the noise can be difficult for customers. The key here is a combination of statistical analysis and expert opinions that have betting experience to back up their choices. In fact, from our research, we’ve found that players are 37% more confident with their stakes as a result of reading an expert's opinion on the event.* The key metric that operators need to measure here is dwell time: the time from the moment your player engages the operator’s site or mobile app to when they drop off or return to their search engine.

The process here seems straightforward enough; the more offered onsite the longer the customers spend viewing the page.

However, not only is the general layout of the site important, but the content that fills the site and the quality of that content is key to longer customer engagement and ultimately a better experience.

According to our research from A/B testing on leading sportsbook operators in the UK, high-quality third-party content leads to a 41% increase in dwell time and, as most sportsbook product managers will tell you, the longer a customer spends onsite, the more likely they are to place a bet. But apart from the ultimate goal of engaging a customer to the point they place the bet, why is third-party content important and valuable?

On the last count, there were over 9,500 betting sites worldwide. That’s a lot of competition. How you differentiate yourself is the key. Third-party content is a fundamental way you can take that betting experience further. Clever acquisition strategies get customers to your site. It’s what they see when they get there that builds brand loyalty and retention.

But why would a customer spend longer on your site if they think you’re encouraging them to place a bet? That’s where the independent authority that a third-party content offering gives you an advantage. This independence will be reflected in the player’s confidence in you as a service provider, and in their own ability to make a judgement on a sporting event. In the simplest way possible, the more confident a customer, the more likely they are to engage with your product. But it’s not just confidence you're inspiring, it’s reassurance. While using third-party content, your business is giving an impartial view of the sporting event. This allows players to place bets after being informed by a company who has nothing to gain from the bet, building trust with your players that you’re providing a responsible route to place a bet.

So what about different execution tactics? In the wider marketing landscape, anything under 2,000 words is considered short-form content. However, we know that is different in the gambling world.

While the reasoning behind the content is vital, the key takeaway delivered on a sporting event is ultimately the verdict.

Delivering just the right amount of content to inspire confidence in your customers makes your platform distinctive. Whether the content is a fully integrated solution or used within a blog, it adds that value to your customer experience. This is also enhanced during the live in-game betting experience when events on the field happen at pace so the content needs to be digestible and actionable based on what is happening in front of the player.

More insight means more excitement.

That buzz of anticipation is what makes audiences visit betting sites in the first place. Enhancing that makes them come back. Yes, your technology, the key features, markets and prices all play a part. But if you want to add real value to your customer experience, your third-party content strategy is what will set you apart from your competitors and deliver that sports betting experience that goes beyond the odds.

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FEATURES

PRODUCT REVIEWS

WHAT’S NEW ON THE MARKET Product output in the gambling industry continues to gain strength as we settle into 2021. Gambling Insider previews several of the hottest currently available WIN SYSTEMS: WIGOS Wigos has been developed by Win Systems, a leading technology supplier providing management systems solutions, electronic roulettes and slot machines to the casino and lottery industries. In only 10 years, WIGOS has been installed in more than 340 casinos, connecting up to 100,000 player positions in more than 20 different countries, enabling Wigos to reach TOP4 worldwide CMS ranking. Wigos has attained a high level of excellence thanks to its reliability, adaptability and product quality and the system provides complete confidence to operators in their day-to-day business, while innovative solutions add significant value to the operation and player offerings. Wigos continues integrating innovative features to cover all aspects of daily operation with powerful yet easy to use solutions. The CMS includes on-the-spot business intelligence tools for real-time floor optimisation. Also, PlaySafe protects the health of players and staff during social distancing periods, without modifying the casino layout or requiring additional panels in between gaming machines.

Winstats allows casino managers to have access to key real-time and historical statistics from multiple casinos with interactive graphs and detailed information from their mobile device at any time. Intellia is an effective decisionmaking solution based on real time information to maximise revenue and reduce downtime in day-to-day operations. And WinUp is a player

app customised with casinos images and content, permanently keeping in touch with players to give them a unique experience. Making the decision to migrate a casino management system can seem daunting, but Wigos CMS has an experienced team that has already migrated over 90,000 slot machines from most large existing systems across the industry.

R8 Roulette

ALFASTREET: R8 ROULETTE Alfastreet's R8 roulette is the perfect example of timeless design when it comes to gaming machines. The Original square shaped eight station roulette was actually invented by Alfastreet almost three decades ago, and since then, there have been several uplifts made but the machines still remain the same: luxurious, spacious and impressive. Besides, the original is always the original and that's why this is by far the most sold eight station roulette in the world, with close to 3,000 units sold worldwide.

Additional testimony of its quality and ingenuity is the fact that this product is still a favourable product on many levels of gaming and in many reputable gaming jurisdictions. To this day, we can also count multiple units running with no disturbance since 2000. The R8 offers generous space for each of the players, easy access to bill validators, ticket printers and player tracking, perfect visibility of the wheel, touchpads

and much more. Besides, with all the obvious advantages, the R8 provides maximum privacy to the player, and when combined with the latest and top-of-the-line hardware components, this product comes out as a hybrid that’s staying on the top of our sales list since our humble beginnings 30 years ago. To satisfy the need for a smaller footprint, we launched our Lucky8 roulette a few years ago, and we managed to gain very respectful sales numbers. More or less everyone was sure that the R8 was going to be forced into retirement. But today, we’re all proved wrong. R8 is running strong and we’re preparing additional upgrades and improvements to be revealed to us. We will combine the latest edition with our brand-new software package that includes everything an operator or a player can think off, and more. Together, these two will make a roulette product that's going to be spinning around the world for many more years, defying the limitations of time.

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WIGOS

PRODUCT REVIEWS

INSPIRED ENTERTAINMENT: V-PLAY PLUG & PLAY Inspired Entertainment has developed a solution to make it easier for operators to get their award-winning scheduled Virtuals: V-Play Plug & Play. V-Play Plug & Play, launched in June 2020 and a complete end-to-end online and mobile product solution, allows operators easy access to Inspired’s virtual games with minimal integration effort. Plug & Play is simple and quick to install via the Virgo RGS, making Inspired’s proven virtual products available with no sportsbook integration or UX development needed. This scalable solution allows casinos to offer their players 14 channels of award-winning Scheduled Virtual games 24/7 via a simple wallet integration with minimal operational overheads, since Plug & Play is hosted and supplied as a fully managed service.

Integrating V-Play Plug & Play makes Inspired’s full remote gaming server (RGS) content library available, including slots, table games and instant win games in addition to its virtual sports. Operators don’t need a bet management system to use Plug & Play because it includes a full bet management tool, delivering a complete sports betting experience with custom branding options available. Plug & Play builds on existing RGS wallet integrations (either direct or via aggregators) and Inspired's award-winning virtuals are available through these initial

ZITRO: 88 LINK PRESENTED ON ALLURE Zitro’s sensational 88 Link is a multigame progressive link that includes two sets of differentiated games: 88 Link Wild Duels, inspired in traditional Chinese legends,

88 Link

FEATURES

V-Play Plug and Play aggregators: Scientific Games, SBTech, Playtech, Pariplay, GAN and Iforium. The centralised Virgo support tool facilitates bet queries, audits and game suspensions. Once used mainly to augment live sports offerings, virtual sports filled the live sports gap during the pandemic lockdown. Virtual sports have become more

widely known and valued, especially since the national TV broadcasts of Inspired’s Virtual Grand National and Virtual Kentucky Derby races. Those national television broadcasts reached audiences around the world and were extremely popular, proving that virtual sports are realistic enough to take centre stage.

and 88 Link Lucky Charms, based on ancient Japanese talisman. Both games come with four exclusive game titles per machine each of which is packed with features such as free games and extensive wilds, providing a variety of appealing

gaming experiences. In addition, 88 Link combines the extremely popular ‘243 ways’ multiway game mechanics with the hugely successful Link King Style bonus and adds a super exciting energy ball to it that gets loaded while playing, advancing the player how close they is to get to the bonus round. With the link-up feature, players can choose the betting amount and opt for the various jackpot levels. Players love the thrilling bonus, which is triggered with only one wild symbol once the energy ball is charged with enough energy, even during free games. Wild symbols will retrigger free games and adrenaline is taken to exceptional levels when the screen gets filled up with wild symbols bringing the mega jackpot as close as ever to the player in each bonus round. 88 Link is presented on the fantastic Allure cabinet, which has three 27-inch full HD screens, and the graphics on the upper screens of each machine in a bank configuration work together, thanks to the SynchroScreens functionality, creating a harmonious visual spectacle. Allure also includes the digital button panel SmartDeck providing more comfort to players and higher efficiency to operators.

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FEATURES

PRODUCT REVIEWS

INTERBLOCK: GOLDEN BALL ROULETTE Interblock’s newest electronic table game (ETG), Golden Ball Roulette, offers a unique spin on a classic table game favourite.

Enhanced with never-before seen patented technology and unique lights, sounds and gold hardware, this exciting ETG provides roulette players with an opt-in side bet to increase the level of entertainment, time on device, and hold percentage of this otherwise traditional game.

Golden Ball Roulette elevates the player experience by presenting players with the ability to win up to 1,000:1 when a Golden Ball is randomly launched onto the wheel in place of the traditional white ball. This exciting feature is tied to three unique game concepts chosen and customised by the operator.

Available in 4, 6 and 8 seats, Golden Ball Roulette is housed in the company’s popular MiniStar cabinet and is enhanced with beautiful chairs, hardware, and sign packages embellished in gold along with stunning animations and graphics that will attract and retain players.

Golden Ball Roulette For more information on Golden Ball Roulette, contact your Interblock sales representative today. The product is the latest from the leading developer and supplier of luxury electronic

table gaming products, with its multi-player gaming devices setting industry standards and providing the ultimate in luxury interactive entertainment experiences.

best live game simulations on the market.

Apart from the superior animation and six extremely attractive video croupiers, the game also offers a multitude of customisation possibilities. It can be customised to squeeze the cards from the top or from the side, increase or decrease the reveal speed, or even accelerate the game to fast or super-fast.

Alternatively, the casino can apply the

Automatic squeeze option to speed up the game overall. VIP players have the option to customise their card squeeze by themselves.

Baccarat is a game of strategy where statistics play an important role. That is why the new 3D payout animation increases the player engagement even further by offering complete transparency of the game. What's more, in the multiplayer version, players can monitor the bets other players make and further increase the excitement and strategic overview. And just like the live game, Spintec Baccarat also offers the possibility of participating in the game without placing a bet.

Apart from the main game, the players also appreciate the possibility of placing several different side bets with high winnings. Along with the standard Score bet, Natural win and Pairs, it is also possible to bet on Spintec’s unique side bets like Tower bet, Super tie, Field and Golden 8. Of course, we have also included the world-renowned and hugely popular Lucky 6.

And in the special moments when the excitement and the drama of Baccarat needs some additional push to get it from hot to scorching hot, it is always possible to reach for the ultimate tool and enable the Tournament option.

Spintec’s Baccarat SPINTEC: UPDATED BACCARAT Spintec’s Baccarat integrates either a live or a virtual croupier and is available in Karma and Aura ETG solutions in a compact, amphitheatre or stand-alone setting. The latest update to the attractive automated game brings an even more exciting new feature of card squeeze, which makes the game extremely enticing. The animation is life-like and exciting, making it one of the

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FINAL An online WORD awakening Gaming industry analyst and SpringOwl Asset Management CEO Jason Ader speaks to Gambling Insider on why he envisages an uptick in M&A deals in 2021

represented a value of £13.83 ($18.75) per share and valued the operator, previously known as GVC Holdings, at approximately $11bn. But by mid-January, wide-ranging expectations in valuation led to MGM scuppering the deal. Despite these latest developments, Jason Ader gives us his insight of what the deal meant when it was still in its initial negotiation process, as well as an overarching view of trends in the gaming market.

“There’s been this awakening that land-based businesses are vulnerable and the timing of the recovery is very uncertain, especially in Las Vegas, which is very dependent on business travel, and that doesn’t look like it’s coming back anytime soon” In early January, MGM Resorts made a proposal to acquire Ladbrokes and Coral operator Entain, but has since walked away from the bid. MGM Resorts offered 0.6 shares for each Entain share, which

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What’s the lesson learned from MGM's decision to abandon the Entain deal?

I think land-based companies need to buy online companies. The pandemic has just accelerated that philosophy and I think there's more to come.

Entain said the $11bn valuation undervalued the company. Given its market share in the European sports betting market, would you say that was fair?

You never make your highest bid your first, so I think there was room to go up but the UK takeover code makes the dialogue awkward. The board of Entain recognised the premium was a little below the customary premium, which would have been closer to 30%.

If it were to be salvaged, how big would the merger be for MGM Resorts to seriously compete in the online gaming market worldwide?

There’s not that many ways to become a serious competitor in the online gaming market. DraftKings is one and FanDuel is another, which is owned by Flutter with a gigantic portfolio, and Bet365 is private, which leaves two companies standing out vulnerable to being acquired, but in a good way. One is 888 as it’s hard to imagine someone won’t take a good look at that company and figure that it’s

a good idea to be acquired. Same for Playtech.

Also both companies are undervalued relative to what the land-based companies trade at.

Would you say the pandemic has accelerated casino operators in expanding their business through such acquisitions?

The pandemic has accelerated such acquisitions for two reasons. One is they realise that online businesses are now real growing businesses and some of the companies specialising in online now have bigger valuations. Number two is that it’s really tough when you have a bunch of buildings in Las Vegas and New Jersey and around the country, and nobody can go in them. So there’s been this awakening that land-based businesses are vulnerable and the timing of the recovery is very uncertain, especially in Las Vegas, which is very dependent on business travel, and that doesn’t look like it’s coming back anytime soon.

Has the pandemic finally taught land-based operators, particularly in the US, that online gaming is an opportunity rather than a threat?

We’ve talked about online before and it’s been a prediction of mine that online gaming will thrive during the pandemic and that land-based companies were going to end up acquiring online businesses. There are more land-based buyers than online gaming companies, so for 888 and Playtech, it’s like having 10 buyers who want to buy into an apartment building but there are only two units left. The guys who own the last two units are in a pretty decent spot and that’s the point to make.

There’s a lot of Las Vegas and land-based companies who are scratching their heads and want to get into the online space, and they see the likes of Evolution, Kambi, GAN and DraftKings thrive, which puts everything in play. I feel 888 and Playtech are at the top of the list of potential targets.