Gambling Insider Jul/Aug 2020

Jul/Aug 2020 Mar/Apr 2019

The back story Assessing a changed industry’s return to form M&A FOCUS A modern analysis of industry rivalries and alliances ESPORTS A vertical claiming its rightful place in the online line-up PAYMENTS Is gambling regulation hindering innovation?

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

Julian Perry, COO, Editor in Chief

Carl Friedmann, Editor

N

ow that the initial shock of lockdown, isolation and pandemic hair-pulling has levelled off, we’re now in a stage of acceptance and resilience, which is something to celebrate in itself. No one would wish for a pandemic to wreak havoc around the world but since circumstances have dictated such a fate, we’re being called upon to find the best possible solutions to get people back to a lifestyle they’re more familiar with, and one we unanimously prefer.

The resolve of the gaming industry in particular has been a model of optimism that many others can emulate. The pressure to reopen casinos has been met with criticism and enthusiasm in equal measure, but the extent that operators are going to strike the right balance of safety for guests and employees, and providing an outlet we’ve been deprived of for so long, is worth commending. The important thing to bear in mind is that we have to base optimism and a gradual return on the big picture. The time it will take for a best-case recovery will be the inverse of how suddenly this whole episode came about in the first place.

Patience isn’t only a virtue, it’s a necessity as companies from across the industry and up and down the supply chains bounce ideas off each other. Not all of them are good but we recognise that merely having conversations about what is the best way forward is the only way we can build up again – it’s just going to take time.

As we’ve seen over the last couple of weeks, the Las Vegas Strip is coming back to life again with all the necessary measures in place to ensure proper sanitation and distancing.

But while the doors are opening and people are retuning, it’s going to be a while before the numbers add up to offset the staggering losses of the spring. We discuss this in our cover story starting on page 64, and also learn about how online casino is thriving – no surprise there – and how the pandemic has served as a catalyst for its growth, some say at the expense of land-based venues.

Evolution Gaming CEO Martin Carlesund says that most casino revenue will eventually become digital, and that online growth is just getting started. He acknowledges that as much as 90% of pre-pandemic casino revenue remained offline, but he predicts a paradigm shift, especially in markets that are heavily dependent on land-based operations. “Now they’ll see that if they would have had online, they would actually have some revenue,” he says. “New Jersey, for example, is doing a lot better than Nevada.”

That might be the case today, but if we know anything by now, only time will tell.

CF Editor

CONTRIBUTING THIS ISSUE

LEAD DESIGNER Laura Fogar DESIGNERS Rebecca Lydamore, Olesya Adamska DESIGN ASSISTANTS Radostina Mihaylova, Aimee Matthews EVENTS MANAGER Mariya Savova WEBSITE 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 Richard Carr Richard.Carr@gamblinginsider.com Tel: +44 (0) 203 435 5624 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 Sarah Croft Sarah.Croft@gamblinginsider.com Tel: +44 (0) 203 435 5628 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: David McLeish, Peter Causley, Vigen Badalyan, Ebbe Groes, Paul Brel, Savak Limbuwala, Gustaf Hoffstedt, Yanica Sant, Steffan Jones, Ivonne Montealegre, Jamie Harvey, Perrin Carey Gambling Insider magazine ISSN 2043-9466 Produced and published

by Players Publishing Ltd

AGNĖ SELEMONAITĖ

ConnectPay deputy CEO

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MARTIN CARLESUND

Evolution Gaming CEO

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 22

FEATURES 22 Big question Gambling Insider talks all things payments, as executives from ConnectPay, IDnow, Cryptoprocessing and Worldpay assess whether regulation is hindering innovation 28 Recruitment Paul Sculpher gives his take on the modern trends and challenges for recruiters within the gaming sector

ISSUES

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8 Comment Tim Poole, Owain Flanders and Iqbal Johal discuss current industry issues 14 Facing facts The latest industry data

30 Return of poker Poker is the ace in the pack right now, enjoying the kind of growth it's been bereft of for years. What does this mean for the vertical moving forward?

32 Is cash losing its crown?

Representatives from Everi Holdings, Trustly and Global Payments Inc speak with Owain Flanders about the effects of the COVID-19 pandemic and the progress of cashless gaming 34 Premier League return Operators reflect on the resumption of one of sports betting's biggest markets, while we reflect on how this return prompted unfair media criticism

16 Taking stock Tracking operator and supplier stock prices across a six-month period 20 In Numbers A gaming snapshot by Fantini Research

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36 Regulating in a global pandemic Owain Flanders examines regulation during the COVID-19 pandemic, and evaluates arguments that the risk to player safety under lockdown might have been overestimated 40 Roundtable Executives from Altenar, Play'n GO, Betsoft Gaming and BetGames.TV discuss the ever-changing climate in gaming, and how to adapt to maximise opportunities and potential

56 46 Return to sports Major sports are returning to our TV screens, but not quite as we are used to.

Gambling Insider analyses the capacity of the sporting return to date, as well as its impact on sports betting 50 Stamina of esports Can esports betting retain the new audience it has gained during the COVID-19 pandemic? Iqbal Johal speaks to analysts including EveryMatrix CEO Ebbe Groes to find out 56 Operator and player responsibility Tim Poole speaks to Perrin Carey, former chief risk and compliance officer at Stride Gaming, for an honest, in-depth interview about the issues at the heart of gaming

SLOT FOCUS 60

72 Product reviews Gambling Insider evaluates the latest products on the market that will help retail properties hit the ground running, as casinos reopen across the world

60 AffiliateCon review We look back at May's AffiliateCon Virtually Live, as operators and affiliates joined us for a day of sector insight and analysis 64 Market focus: Sweden Iqbal Johal speaks to industry representatives about the regulatory situation in Sweden, as increasing government intervention raises questions about potential conflicts of interest 66 Cover Feature: A new landscape Tim Poole analyses the new-look gaming industry, as Evolution Gaming CEO Martin Carlesund and Lightning Box Games CEO Peter Causley offer views covering both the digital and retail sectors 70 Company rivalries With the help of gaming lawyer David McLeish, partner at Wiggin, we explore the relationship between heated industry rivalries and potential M&A

FINAL WORD 70

82 No challenge too great for growth BetConstruct CEO Vigen Badalyan discusses how the COVID-19 pandemic has affected the supplier, as well as where the company goes from here

COMMENT

TIM POOLE

TEST OF CHARACTER As Tim Poole approaches two years at Gambling Insider, he reflects on how the gaming sector has continually adapted to an ever-growing list of challenges

Our industry looks a lot different now from when I started at Gambling Insider two years ago. That’s true of any industry, of course, given the unprecedented circumstances facing the global economy during the coronavirus pandemic. But the overarching lesson I’ve learned about this sector so far is that it is extremely resilient – the perfect quality for facing this pandemic head on.

That’s why I’m completely unsurprised to have seen the gaming industry come together more than ever during this incredibly arduous time, rather than counterproductively dissipating into individual factions. With regulatory pressure, media scrutiny, and religious and ethical opposition practically written into the gaming sector’s DNA, dealing with external forces has become a well-practised industry habit.

Obviously, the current crisis – especially for land-based suppliers and operators – tops anything that has come before.

To call overcoming it the industry’s Everest would be inappropriate, as summiting the world’s highest peak would bring a sense of achievement, joy and relief. Persevering beyond the COVID-19 pandemic in our case, however, is more about charging up an incline that never summits and never puts you in a position to stop, plant a flag and savour the view. As we’ve been reading about recently, those who slow down are quickly outpaced, and those who stop are soon forgotten.

In terms of sheer scale alone, though, Everest would be a fair comparison. This is by far the greatest challenge the industry – and all industries – has faced. But that aforementioned resilience is on show now more than ever.

Certain online verticals have thrived in the absence of others, industry conferences have gone virtual and retail companies

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have been quick to design equipment that will indeed keep players socially distanced when casinos return. Yes, many have lost their jobs, many have been furloughed, and whole companies and casinos have been hit too hard by this pandemic to continue thereafter.

And yet, while the pandemic has taken its victims even in a business sense, the gaming sector has maintained unity with its back against the wall. This is perhaps no coincidence given its second nature of being put in this position. Stigma and negative press, which have maintained during the pandemic, have always plagued gaming and companies have had to stand strong in the face of criticism – both justified and unjustified.

So as I look back on covering the industry with Gambling Insider, it seems perfectly logical to me that the sector remains so resilient against such a difficult backdrop. Whether it’s fixed-odds betting terminals in the UK or political opposition to mobile wagering in New York, it’s never been plain sailing for gaming. Given the nature of the product it sells and the default anti-gambling stance of many on the outside, it never will.

Naturally, however, the coronavirus pandemic has particularly exacerbated the physical restrictions facing casinos and sports betting firms to a previously unseen degree. But as live sport gradually returns and casinos slowly re-open, we face new beginnings in gaming. There will be a greater onus on having a digital presence, for instance, and anyone still in denial about online’s benefits simply won’t be around if another crisis is to hit further down the line.

But if there’s one silver lining, it’s that the creativity and togetherness this industry has nurtured will keep it fighting fit for the long haul. Though it may not be what the critics want to hear, numerous executives have told me over these last two years there will always be a demand and, therefore, an industry for gambling. At a time like this, the entertainment value it provides is an undoubted positive, especially in the face of COVID-19.

“WITH REGULATORY PRESSURE, MEDIA SCRUTINY, AND RELIGIOUS AND ETHICAL OPPOSITION PRACTICALLY WRITTEN INTO THE GAMING SECTOR’S DNA, DEALING WITH EXTERNAL FORCES HAS BECOME A WELL-PRACTISED INDUSTRY HABIT”

COMMENT

OWAIN FLANDERS

THE GREAT COVID PLOT TWIST Owain Flanders looks back at Gambling Insider’s industry predictions for 2020, and how these might have been impacted by the current pandemic donations – like the Virtual Grand National profits to the NHS – will undoubtedly have some positive impact on public image.

In December last year, my colleague Tim Poole put together a list of industry predictions for 2020. Of course, for want of a crystal ball, he had no knowledge of the incoming global outbreak of COVID-19 and quite how different the industry’s outlook would be in just over three months time.

Now that toilet roll is returning to supermarket shelves and our DIY haircuts have grown out, it’s time to look retrospectively at how the pandemic has, or hasn’t affected our predictions.

GREAT BRITISH REGULATION Seemingly, regulation is one thing that is immune to the effects of a widespread pandemic. In fact, lockdowns have made regulators even more cautious when it comes to operators and how they protect potentially vulnerable homebound customers.

In May, the Gambling Commission issued new guidance for online operators in the UK to ensure the safety of players during the pandemic, despite also concluding “there is no evidence to suggest an increase in problem gambling”. The additional guidance, which included increased monitoring of players, follows suit with the extra caution shown by regulatory bodies in other markets.

While the pandemic may have increased the Gambling Commission’s focus in the short-term, there is no evidence to suggest this will speed up the Gambling Act review or any increased regulation. In fact, the industry’s behaviour during the crisis could play favourably towards its regulatory outlook. For the most part, it seems operators have played their part in protecting players, and charitable industry

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NEW MARKETS Excitement in new emerging markets around the world is not something that has been quelled by the virus. In fact, the pandemic could even prompt further investment from those struggling in more mature markets.

LatAm in particular has seen continued investment with suppliers and operators continuing to eye up the potential of the region’s markets. Speaking with Gambling Insider in January, BtoBet CEO Alessandro Fried described the region as complex because it’s still in a regulatory phase. However, as we look forwards in 2020, it will be interesting to see how the markets open up once the pandemic has subsided.

In our 2020 predictions, we suggested Sweden will need to restore confidence after a difficult first year of re-regulation. Sadly, it seems the pandemic has had the opposite effect. The Swedish Gambling Authority has introduced a set of strict temporary rules to restrict gambling activity during the pandemic and, as a result, it seems tensions could not be higher between the regulatory body and its operators. It would be hard to disagree with Patrik Hofbauer, CEO and president of Svenska Spel, when he described these measures as “a substantial underestimation of the gaming industry’s ability to present powerful measures themselves”.

US SPORTS BETTING After 2019 saw the expansion of sports betting across the US, we hoped 2020 would test how much revenue those markets could generate. However, with the pandemic cancelling all major sport and closing down land-based sportsbooks, this full test of the market’s powers will have to be delayed until 2021.

Instead, the pandemic has created an unusual situation for sports betting operators. In Colorado, sports betting was legalised on 1 May with full lockdown in effect, while Nevada saw sportsbooks offering a drive-thru service as the Las Vegas Strip closed its doors for the first time in its history.

It’s not all doom and gloom however. DraftKings reported 30% year-on-year growth in net revenue for Q1 2020 despite the lack of sports, and CEO Jason Robins said long term growth expectations “remained unchanged”. We have also seen the pandemic motivate land-based casinos to integrate online into their sportsbook offerings – something that should pay dividends down the line.

Evidently, the US sports betting market is not down and out – only temporarily dormant. By increasing the necessity for an online market, the pandemic may have even played its part in speeding up the process of migration to mobile, although, sadly, we will now need to wait until 2021 to see a test of its true powers.

COMMENT

IQBAL JOHAL

ADAPTING TO A NEW WAY OF LIFE Iqbal Johal looks at how the coronavirus pandemic has forced us to a digital way of life, and how the gambling industry must follow suit to recover stronger than before

Now that the dust has settled after the initial impact of the coronavirus pandemic, it presents us a chance to take a step back and work out how we can move forward as an industry.

We’ve all heard the countless losses posted by operators and suppliers, both in terms of financial and personnel, with the outbreak hitting not just the gambling industry hard, but also us as individuals.

While we’re still a long way off entering anything near normality – whatever that might be – the whole predicament does present an opportunity, and a chance to reset and improve.

That’s certainly the train of thought among the dozens of executives from all over the industry I’ve spoken to or heard from during this period, and it’s clear to see what the consensus is on how we can come back stronger than before with an accelerated move to a digital world.

While technology very much played a part in our lives before the outbreak, we could rely without large elements of it for most of our daily lives. However, we were getting to the stage where in a few short years, we’d be living in a fully immersive, technological world, led by driverless cars and e-meetings.

Now, it seems the future has arrived.

This period has shown how much we can keep moving on with the use of technology, from remote working, to Zoom meetings and even weekend FaceTime quizzes. We’re now extremely used

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to having groceries and takeout delivered to our door, only visiting the shop if it’s essential.

It might have been several years before we were due to live our lives out in a digital way, but given the circumstances, we’ve fast-forwarded that trend, and there’s no reason not to see it continue.

While we all appreciate face-to-face communication, we’re going to have to get used to the fact this just might not be possible on a regular basis for the considerable future.

Our patterns of behaviour are changing and the gambling industry needs to adapt to that.

Luckily we work in a digital and forward-looking industry and the general opinion among many operators, suppliers and affiliates is they will continue to adopt a mainly remote working policy because it has proven to work so well for them.

A forced ramping up to online, aided with the suspension of live sport, has also seen two very digital verticals flourish: esports and virtual sports.

During Gambling Insider’s AffiliateCon Virtually Live, held online in May, Golden Race CEO Martin Wachter mentioned how in terms of average players, virtual sports had increased by 206% as a result of the outbreak.

While at the same conference, esports affiliate Sickodds co-founder Tom Wade spoke about a 40-times growth in esports betting, among such titles as Fifa and F1, thanks to the ease of moving to a solely online platform.

Those figures demonstrate the fact the industry is heading to a digital first landscape, and much quicker than anticipated.

That will be music to the ears of operators in jurisdictions hesitant to make the jump to online, particularly in Latin America and the US. The SBC Digital Summit in April on the state of play in LatAm very much focused on the need for the region to boost its online channel.

A region heavily supported by land-based operations will have to look to online just to keep afloat according to the panelists, and with the precarious situation in Brazil and Argentina, in terms of legalising online gambling, could this put the process into gear?

It’s the same story in the US, where many states are still against online gaming. At the same summit, Oregon State Lottery CEO Barry Pack was adamant the recovery from the pandemic will force a quicker digital transformation in the industry.

This situation could leave the likes of the US and LatAm with no other choice but to quicken the process to online and move with the times.

We’ve all been deeply affected by the COVID-19 outbreak, but that doesn’t mean we can’t learn and progress from it. The gambling industry is no different, and a huge opportunity to become virtually digital is one it must take seriously to avoid being left behind.

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The number of UK bets placed during forced lockdown in March 2020 when categorised by product (year-on-year change) GRAPH 7 Source: Gambling Commission

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UK active-players - those who have placed one or more bets during forced lockdowns in March 2020 categorised by product (year-on-year change) Source: Gambling Commission

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Gambling Insider tracks operator and supplier stock prices across a six-month period (January to June 2020). The stock price is taken from the first day of each month and last date available at press time flutter entertainment

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Six-month high – 14 (9 Jan) Six-month low – 6.99 (3 April)

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FANTINI RESEARCH

COVID CUTS EARNINGS First quarter earnings results from US gaming companies were hit hard by COVID-19, though some companies managed to show resilience.

The majority of the US gaming industry shut down in March when the pandemic began to take its toll on the US, including casinos, tribal casinos, distributed gaming outlets and sports.

However, gaming REITs and companies with online gaming operations fared better than others.

Below are some highlights following first quarter earnings by company: • AGS plans to lean on recurring revenue for the time being as casino operators will likely cut slot purchases in the near-term. Interactive is approaching the level it needs to be profitable.

• Boyd is focusing on taking steps to strengthen its balance sheet and position itself for reopening casinos when states allow. Las Vegas local operations should benefit BYD as local casinos are not reliant on destination or convention businesses.

• Eldorado Resorts is moving on with the Caesars Entertainment acquisition despite COVID-19, with CEO Tom Reeg calling the decision a no-brainer.

Reeg expressed optimism on the potential for improved operating margins for gaming following the closing of the merger.

• Everi Holdings expects to achieve positive EBITDA in the third quarter and positive free cash flow in the fourth quarter after the low point in the second

quarter. Initial reports indicate daily slot win is exceeding levels prior to COVID-19.

• Full House Resorts said it needs to generate 50 to 60% of last year’s revenue to break even on EBITDA this year. However, regional gaming typically bounces back quicker than destination markets, which should help FLL’s recovery.

• Golden Entertainment echoed confidence in its properties for reopening, saying the company should benefit from not relying on fly-in, international or group businesses.

• IGT is in a strong position to emerge from COVID-19 stronger, leaner and more competitive, with cash flow expected to return in the second half if there is no second wave of virus outbreaks.

• Melco Resorts remains bullish on the long-term growth outlook for Macau, with the expectation that the Chinese middle class and infrastructure development should help develop the Greater Bay Area.

• Scientific Games held up strong outside of gaming, utilising its diversity as a strength during COVID-19.

The company expects to exit COVID-19 leaner and ready to win.

• VICI Properties is remaining committed to being prepared for the worst-case scenario but will stay focused on liquidity, high margins and profit growth. The company’s strong liquidity means it can jump on potential acquisitions or sit back and weather the storm.

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FANTINI RESEARCH

ISSUES

COMPANY

Revenue

Year-on-year % change

EBITDA

Year-on-year % change

Accel

$105.228m

+8.01

$14.840m

-25.08

AGS

$54.313m

-25.64

$24.501m

-32.44

Boyd

$509.765m

-17.81

$119.768m

-39.83

Caesars

$1.828b

-13.57

$299m

-46.80

Churchill Downs

$252.9m

-4.71

$55.3m

-25.87

Eldorado

$473.069m

-25.60

$102.547m

-38.47

Everi

$113.308m

-8.46

$52.278m

-14.73

Full House

$30.853m

-23.81

$1.249m

-134.91

GLPI

$249.407m

+0.70

$253.859m

+1.50

Golden Ent

$207.157m

-13.65

$30.294m

-37.46

IGT

$940m

-17.90

$308.513m

-25.96

Las Vegas Sands

$1.782bn

-51.12

$437m

-69.90

Melco Resorts

$811.175m

-41.346

$54.927m

-85.835

MGM

$2.253bn

-29.08

$295.092m

-60.53

MGP

$209.57m

+3.017

$234.091m

+4.54

Monarch Casino

$42.211m

+14.22

$8.109m

-40.70

Penn National

$1.116bn

-13.016

$2.253m

-35.539

Red Rock Resorts

$377.388m

-15.577

$74.300m

-48.79

Scientific Games

$725m

-13.38

$200m

-39.02

SciPlay

$118.3m

-0.08

$34.8m

+53.60

Twin River

$109.148m

+429.04

$22.06

-49.727

VICI

$255.001m

+19.16

$244.704m

-34.69

Wynn

$953.716m

-42.269

$5.329m

-101.077

GAMBLINGINSIDER.COM

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FEATURES

BIG QUESTION

BIG

DIGITAL PAYMENTS

question

In an ever-changing landscape, is gambling regulation hindering innovation in digital payments?

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GAMBLINGINSIDER.COM

BIG QUESTION

FEATURES

WORLDPAY Steffan Jones, commercial VP, gaming and trading, Worldpay, gives his views on the effect regulation in payments can have on product enhancement for payments solutions in gambling BIGGEST REGULATORY CHALLENGES Broadly, the challenges are split over how you adapt and how you plan for changes in behaviour, which are driven by many things.

There’s technological advances, and consumer preferences changing and adapting, and the spending behaviours that go with that.

Then there’s merchant or operator changes that come into effect. Regulatory changes as well. All of them are interwoven, which are driving through different push and pull factors making things quite challenging and stimulating when it comes to planning what you’re going to deliver for the future.

Steffan Jones

THE EFFECT OF REGULATION ON INNOVATION Regulation and the effect it has on innovation is a fascinating topic. There are different factors that need to be considered that will depend on if regulation stimulates innovation or not. Some of those include if the regulation that comes in is really prescriptive, or if it’s quite flexible, which can engender a greater sense of creativity. Then you start seeing better and more innovative products being built.

For payments, the new piece of regulation that will be fully rolled out next year is the payments service directive (PSD2), which centres on payment service providers within Europe. There’s two main facets with it: access to bank accounts and strong consumer authentication.

When looking at the latter, this effectively means there’s been a significant portion of fraud in the online world, with the operational service that sits behind it costing well into billions of dollars a year. PSD2 directly seeks to reduce that by having certain requirements to bolster the level of security behind any online payment.

That in itself is quite a big piece for any payment services provider because they would have to conform with that in order for transactions to go through. However, there’s innovation embedded within, which companies like Worldpay are very much engaged with to say how can we build products and services that help meet those requirements, but also help our merchants and operators in the gambling industry. Then they get the benefits of the reduced level of fraud, but also still make it as easy as possible for transactions to be processed in a seamless manner.

PROMOTING INNOVATION Regulation can create an environment that promotes innovation. Another element of PSD2 is access to accounts. Right now, you might think your bank account has been the preserve of the bank that issued it. In simple terms, this second instalment means banks actually have to enable accredited access to your bank to other providers to be able to offer services to consumers and operators.

Worldpay has a service that will be able to offer operators an access where you can pay through your bank account by bank transfer in real-time, but also meet all the requirements of strong consumer authentication, which can be cheaper than previous methods for the operator.

It can be quicker with very little risk of fraud, which has come about directly from this regulation mandating these services and creating an arena where payment providers can operate within that can boost customer experience and operator’s revenue.

HOLISTIC APPROACH TO JUDGING REGULATION There’s an opportunity with any regulation for innovation; it doesn’t have to hinder it.

In my own view, it’s not as easy as does it or doesn’t it. It depends on the elements.

It’s something you need to look at more holistically than just a yes or no answer. It’s more nuanced and there are areas you can say it’s quite hard to innovate. If you think about local licensing requirements in gambling, which is very big, that can be a hard area to innovate in, but operators have to conform to that.

It’s not for me to speculate if that’s good or bad; that’s just what they have to do to comply. That, and all the obligations that go alongside it, might be for the operator to say the effort to do that could potentially have an effect on their ability to innovate in other areas. That could be the case from an operator’s point of view but from what we’ve seen, regulation can innovate and offer the opportunity for innovative products, which can be the benefit to operators and competition.

GAMBLINGINSIDER.COM

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FEATURES

BIG QUESTION

CONNECTPAY Agne Selemonaite, ConnectPay deputy CEO, talks about how regulation could potentially slow down progress, and how industry development, in both payments and gambling, is at the mercy of regulators

Agne Selemonaite

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Innovation continues to shape today’s technology-driven market. However, the pace at which it evolves doesn’t rely solely on business endeavours. Any implementation of new ideas that could possibly accelerate progress first must be in compliance with the regulatory systems. Consequently, this inherently slows down the process and raises the question: Is it possible to make significant progression leaps under strict regulation?

When it comes to digital payments, the market is at a crossroads. Evidently, the regulatory process is a necessity, needed to uphold distinctive standards and reinforce transparency. So it’s essential that the groundwork it provides enables to run a smooth business, as propitious conditions also act as a catalyst for innovation, which leads the industry forward.

We live in an innovation-based economy and although regulation is necessary, often policy changes are simply not as fast-paced as the growth of the digital market. Being able to cut through this red tape could provide more flexibility and the way to do that is by encouraging two-way dialogue between the regulators and the companies directly affected by regulatory laws.

We’re fortunate to work with one of the most progressive regulators in the EU – the Bank of Lithuania, whose innovative approach continues to drive the industry forward.

Recently, it partnered with leading industry fintechs, including ConnectPay, and developed a prototype of a smart regulation solution (regtech), that will automate the reporting of financial institutions. We’re proud to have been part of this project as it shows how collaboration between regulators and ventures can present a diligent product beneficial to all market players.

Regtech industry is reliant on innovative solutions that the fintechs can develop, so the relationship should be mutually fostered.

Fintechs are not corporate banks. By definition, they are innovators powered by tech, so they rely on flexible and agile work processes. That’s why we strongly believe in the open book policy; consistent data sharing can encourage more in-depth conversations with the regulators, which, in turn, can lead to developing more innovative solutions.

Since the gambling industry is evolving so fast, compliance monitoring should adapt at a swifter pace too. Implementing constant

monitoring, rather than yearly inspections, would enable regulators to better evaluate real-time conditions and make timely decisions. Focusing not only on the retrospective, but the matters at hand, could lead to a more fruitful collaboration and development-fostering environment.

Although the standards are there to navigate businesses towards sustainability-oriented goals, they can also reduce incentives to innovate; authorities often fail to account for all of the consequences new policies will have, like the implementation costs of compliance solutions.

Since the financial crisis in ’08, the operating costs spent on compliance have risen by over 60%. Paired with the rapidly increasing regulatory expectations and the continuous release of new rules for all FSIs, this has created a more complex environment to keep up with and innovate within.

Nevertheless, regulation plays an essential role in maintaining market order and challenging organisations to think about the bigger picture. A good example would be the SEPA initiative, which set a new industry standard by introducing standardised payment schemes across Europe and opened up immense new prospects for businesses.

Considering all the above, industry development, especially in the gaming space, seems to be dependent on compliance authorities, though the matter is not nearly as straightforward. At times, the market is affected not by the laws per se, but rather how the organisations interpret them.

The problem is they’re riddled with vague statements like “must assure” and “actuality of documents”, leaving a lot of room for interpretation (or error). In addition, regulators often approach situations differently as they do not share the same hands-on experience as mature market players. This complicates policy assessment, as not all possible outcomes are factored in. This affects many industries, including gambling. In the end, you only have a “best guess” solution, expecting it conforms to the given guidelines.

The truth is there are no “foes” or “allies” here, as we are on the same side, creating an innovation-nurturing market. Regulatory support plays an invaluable part in the matter, as it shares the mutual need to maintain a sustainable business environment.

BIG QUESTION

FEATURES

CRYPTOPROCESSING With cash use decreasing in a post-COVID world, Max Krupyshev, Cryptoprocessing CEO, discusses the negative impact of certain regulation, and the potential emergence of digital currencies

Max Krupyshev

Experts predict that the coronavirus outbreak will speed up the transition to digital payments by up to 10%. As more people pay online using digital wallets and cryptocurrency, the regulatory pressure also increases. Merchants, especially gaming operators, are facing a tough challenge: meeting their customers’ expectations and complying with regulations at the same time.

The COVID-19 pandemic has dealt a heavy blow to cash payments. According to the research firm Bain & Company's pre-COVID estimate, online transactions were supposed to account for 57% of the total value of transactions by 2025. The updated forecast is 67%.

People are worried about handling banknotes and coins, which can carry the virus. In addition to that, we’re shopping more online to avoid crowds in brick-and-mortar stores. Entertainment, too, is moving online – especially gambling.

THE COMPLEX CYCLE OF REGULATION AND INNOVATION The more we use digital means of payment, the bigger the danger of falling victim to fraud.

Increased risks lead to even more efforts on behalf of the financial regulators to control the payments industry. This, in turn, makes life difficult for many merchants and payment companies, which can't easily comply with the new rules.

Some of the new laws can achieve the opposite of what regulators intended. PSD2 is a good case in point. When it was introduced in the EU in September 2019, it was hailed as a revolution in online payments. The idea was to promote competition and innovation, and at the same time protect customers.

However, the implementation of PSD2 actually created new risks. The Open Banking model with its system of data sharing between banks and third-party payment services opens up ample possibilities for cybercriminals, phishers and scammers of all types. For example, they can pose as fintech companies collaborating with banks to steal users’ financial data.

The result is that merchants and payment service providers (PSPs) have to look for new ways to accept payments that will protect them both from fraudsters and from the excesses of regulation. There is irony in this situation: the government tries to promote innovation through laws, but actual innovation happens to overcome the negative effects of these laws.

THE SPECIAL CASE OF GAMBLING Online gaming is one of the most closely monitored industries – and at the same time one of the most competitive. This puts online casino operators in a uniquely difficult position.

Players expect their deposits and withdrawals to be smooth and fast. By some estimates, over half of card transactions on online gaming sites are declined by the bank. However, it’s the casino that customers usually blame.

Digital wallets used to be the go-to solution, but even they can't be relied upon anymore.

After the UK imposed a ban on gambling with credit cards, the leading payment app Revolut also announced that its users wouldn't be able to use the Revolut cards on online gaming sites.

Things are even more difficult in the US, where the majority of European e-wallets aren’t available. There, most online casino payouts are handled through ACH (Automatic Clearing House) payments, which can take up to five days to clear.

HAS THE TIME OF CREDIT CARDS PASSED? Digital currencies, such as Bitcoin, provide an attractive alternative, and over 100 online operators have already integrated cryptocurrency payments. Players appreciate the speed, privacy and low costs associated with crypto.

However, many are still cautious about accepting Bitcoin and other cryptocurrencies.

The key concerns include the risks of accepting “dirty” coins, potential issues with the regulators and the difficulties of converting crypto revenue into cash.

This reluctance stems from a lack of awareness, not from any actual weaknesses in the framework. Crypto payment processing has evolved enormously in the past couple of years. Any suspicious transaction is immediately flagged, but it’s virtually impossible for a bona fide payment to get blocked. It’s actually much harder to launder money or conduct fraud in crypto than it is in fiat.

In the “new normal” of a post-COVID world, digital payment innovation will speed up.

However, it won’t be in the way that regulators envisaged. As traditional means of online payment fail to meet customers' expectations, new ones – such as digital currency – will take centre stage. Instead of banks sharing user data with fintech apps, users will move away from banks altogether, embracing faster, cheaper and more private payment options.

GAMBLINGINSIDER.COM

25

FEATURES

BIG QUESTION

IDNOW With digital payments fast becoming a key part of our online lives, IDnow head of regulatory affairs, Rayissa Armata, discusses the importance of adhering to regulations to keep customers safe

Rayissa Armata

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Innovation and technology have brought traditional markets into the digital realm. Over at least the last decade, transportation, entertainment, travel, hospitality, media and retail, among others, have transformed across much of the world. High-security sectors like banking, financial services and gambling, though traditionally heavily regulated industries, are no exceptions.

Granted, sectors like finance and banking, as well as online gambling, have been slower and more cautious by nature to adopt emerging technologies because security is a major factor for them.

However, the growth of digital payments as a platform has picked up significantly with new vehicles for adoption. According to Statista and Forbes magazine, e-commerce payments are projected to reach $6.54 billion by 2023. The fintech industry’s discovery of more ways to intertwine with our daily lives means that it will no longer be a standalone sector.

In fact, fintech is commonly described as the “fourth platform”, alongside the internet, the smartphone and cloud-based solutions. This is a disruptive element in commerce, and this new world requires a new set of rules.

Digital payment platforms are now well on their way to becoming a core part of nearly all online lives. Regulations have played a vital role in upholding transparency, portability and security. It’s also interesting to see how these regulatory rules, mixed with market dynamics, impact businesses. Companies either follow the rules or shut down. It’s truly survival of the fittest in the fintech world.

Regulations and technology trends that have emerged from this wave have impacted other sectors as well. The last several years have produced financial reforms, notably in laws such as anti-money laundering laws (AML), stricter data privacy laws (GDPR), and new compliance requirements that enable traditional banking to integrate with new technologies, such as PSD2.

These terms have become ubiquitous in the industry.

As we align digitally, the most valuable feature of this world will be accessing more data safely by keeping it transparent and secure. The role of the regulator

will be paramount to protecting customers’ data and protecting against the increasing strength of cybercrime. Ultimately, regulators expect the industry to adhere to rules and avoid risk. Smart regulations, like Europe’s General Data Protection Regulation (GDPR), have slowed growth only at the pace that providers can adhere to standards. The industry’s robust growth and significant venture capital investment in fintech, regtech products and services go to smart players such as IDnow, for example.

MAKING THE CONNECTED WORLD A SAFER PLACE Our focus and primary business is still protective in orientation. Our maxim is “making the connected world a safer place”, and we make our strategy accordingly.

A framework for smart regulation must maintain secure and broader options for companies to integrate new solutions, while at the same time, protect users.

An industry which fails in compliance risks hundreds of billions in fines. In comparison, the threat of cyberattacks is predicted by various cyber threat analysts like Intsights and will cost the financial industry quite possibly several hundred billions by 2021. More than any other industry, 25% of all malware attacks hit banks and other financial services organisations, and in 2019 there were year-on-year increases in attacks with credit cards by 212%, credential leaks by 129% and malicious apps by 102%.

The steady climb of digital payments has prompted stricter regulations and a rise in costs. Technology solutions companies are taking compliance to a whole new playing field. One of the foremost challenges to digital finance is finding ways to combat the ever sophisticated and ever-evolving dangers of cybercrime. We’ve built effective solutions with the highest levels of certification in order to continually find countermeasures against such attacks.

Our work not only supports an industry with top-of-the line solutions that prevent data breaches, but we also find new ways to support public institutions charged with protecting its citizens.

FEATURES

THE HOME OFFICE

HOME ADVANTAGE

Paul Sculpher, co-director of Gaming Recruitment Solutions, explains the rapidly evolving landscape of recruitment in the gaming industry now that working from home is gaining ground Working from home – WFH – is obviously a concept with which a whole lot of people have become far more familiar in the various lockdown situations across the world. The nature of the offline gaming industry has meant it’s been unable, at an operational level, to take advantage of the opportunity to work from home, however, and has been devastated. Online betting and gaming operators, on the other hand, have in some sectors seen significant gains, which will be boosted now that there’s a lot more sport to bet on. We are taking baby

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GAMBLINGINSIDER.COM

steps towards lifting the current movement restrictions, and while casinos are finally being allowed to reopen with strict new guidelines in place, the mindset seems to have shifted from fear of the unknown to buckling up and getting ready for resumption of trading, and the bumpy ride that’s likely to ensue.

THE END OF THE OFFICE? Every element of the supply chain has been affected by the changes, whether by lack of demand or personal struggles

with social distancing. Recruitment is no different. GRS Recruitment is an agency that covers not just the UK, but all over the world too, and for us the concept of a central office has never been particularly relevant. We had already moved towards a working model that was pretty decentralised, with my co-director Steven Jackson and I primarily working from our homes, with our finance and admin function also remote, and our accountancy requirements covered by our partners a good 300 miles away.

THE HOME OFFICE

The future of the “commute to office” model has been uncertain for a while now, and the sudden onset of the virus crisis has meant many companies have had to run what amounts to a live test of the process. The upsides of the WFH culture are obvious to all, starting with money, time and stress saved by not having to commute. Once the concept really beds in, however, it offers so much more. One clear example is that the talent pool is opened up, internationally in some cases, by not restricting team members to those who live within an hour or so of the office, and you won’t find too many people who will complain about saving the cost of a season ticket and a couple of hours a day in cramped public transport.

The virus has also pretty much forced us all to learn the basics of online working and meetings. Anyone who has run a quiz (or participated in one) will be familiar with how to work Zoom or Microsoft Teams, for example, and progressed to figuring out etiquette for things like muting their microphone when not speaking.

There are downsides of course. Training needs a different approach, and the benefit gained from team members at all levels interacting casually in the office is lost, along with some of the team spirit.

Companies can no longer rely on their shiny office with refrigerators, beanbags and a ping pong table to tip the recruitment balance in their favour, for example, but speaking for myself, any part of that which is appealing is never far away, and certainly doesn’t involve an hour’s journey.

RECRUITMENT IN A WFH WORLD The gaming industry has historically been something like 60% offline work and 40% online, and we’d be lying if we said the offline element in particular hasn’t taken a hit from the virus situation. Operational roles have largely been taken off the table until operators understand what the business looks like post-virus – indeed, at least one of our placements that was in progress as the lockdown commenced has ended up not leaving their previous employer – possibly temporarily – so they don’t fall through the cracks of the furlough programme.

It’s fair to say, however, that some elements even of the offline industry have kept ticking along. Compliance – one of our core areas – are still grinding away in some companies, taking the downtime as a valuable opportunity to refine strategies at the senior end, and work through the backlog of customers requiring EDD or KYC verification at the more functional end of the business. It feels like there are

new guidelines coming out every week at the moment too – currently focussed on online gambling – so the wheels of interpretation and adjustment of procedures never stop turning.

The online element of our business on the other hand is ploughing on as before, as one might imagine. The gradual consolidation of the online industry doesn’t stop companies needing to refresh their teams, and the dynamic nature of the industry means there are always plenty of firms who need specialist help to find the perfect candidate to take their business to the next level.

There are also upsides to the shift to working from home from a pure recruitment point of view. We can get a candidate list to a client more quickly at the moment. Part of that is due to the general availability of candidates to us, given they’re not stuck in an office where these conversations are difficult if not impossible.

Also, while meeting candidates isn’t something we do in all cases, everyone’s growing familiarity with the online communication process is making life easier all round.

THE PERSONAL APPROACH The fundamentals of our recruitment business have been affected, but not totally turned upside down. In a relatively small field like betting and gaming, we always like to think there’s never more than one degree of separation between Steven and me, and any candidate in the industry. Put another way, in pretty much all cases, we will either know the candidate we’re putting forward or we’ll know someone who has worked with them, so we’re very rarely in the dark about their strengths and weaknesses. We feel this is a key part of what we offer as a recruitment partner. That hasn’t changed with the lockdown and working from home situation. What has changed, of course, is the chance to get out there in the operations, meet new people and network. Previously on our travels, we’d be forever meeting new people in the industry, which aside from the general enjoyment of that, it was valuable in terms both of finding potential new clients and candidates.

Naturally the interview process is changing in this period of social distancing as well, with video calling via Skype, Zoom or equivalent. Most employers would prefer to meet a candidate face to face, of course, but when forced, a good proportion is finding that a video call is a perfectly good substitute. Whether this approach will outlive the pandemic is anyone’s guess, but there could certainly be a huge amount of

FEATURES

inconvenience avoided by running at least the first part of a selection process remotely.

THE PROCESS It’s worth a very brief word to remind everyone of the basics of online interviewing. As noted above, we’re all getting better at it, but there are obvious pitfalls to avoid. An obvious one is how one dresses. Businesslike is always best for candidates of course, and while we’ve all had Zoom calls with, shall we say, the top half of our clothing not matching the bottom half, bear in mind what happens if during your interview the doorbell rings. It’s unavoidable, employers understand we’re supposed to be staying at home and can’t control deliveries, so if you’ve gone for the cooling relief of an underwear-based clothing solution below the waist, you’re in a mess.

Following on from the entirely tedious “controversy” about books found on the bookcases of some political interviewees (in the background of their video interviews at home), I’ve seen a couple of comments from candidates who were mortified about what reading material might be visible to interviewers. Our standard response to this would be that if the interviewer was paying that much attention to the bookcase contents, the interview probably wasn't going that well in any case – or more simply, just blur the background.

Finally, there are always technical hiccups to avoid, and we all have connection problems from time to time. A degree of understanding will generally be the case.

Again, we don’t always have the option to run the interview in a super high bandwidth location, but use some common sense and if your connection is flaky, try and avoid two kids watching Netflix and another streaming a new video game at the same time.

OFFLINE TO ONLINE I’ve written elsewhere about the prospect of offline managers migrating to online, but we believe it will be an increasingly common phenomenon. We’ve certainly seen a massive increase in the number of offline managers known to us looking for a way to move into a sector with better prospects, and many of them are of exceptionally high quality. Consultation processes are underway in several of the larger offline casino operators, with a view to a very different structure post virus, at least at first. It’s tough times out there, but there are plenty of exceptional people who will fall victim to circumstance, and we’re all in prime position to help prospective employers pick the best of them.

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FEATURES

THE RETURN OF POKER

SHUFFLE APP AND DEAL Owain Flanders assesses the significance of online poker’s COVID-19 resurgence by taking a look into its recent history

What are the basic ingredients for a great comeback story? First of all, cancel all sports and temporarily halt traditional sports betting to increase traffic to alternative verticals.

Then, lock potential customers at home with access to the internet. Finally, top it all off with a wide selection of operators eager to capitalise on such beneficial conditions.

Everyone loves a comeback story, and online poker currently seems to be undergoing one of its own - albeit through rather unfortunate circumstances. After locking potential customers at home and cancelling most major sports competitions, the COVID-19 pandemic had suddenly placed online poker operators within the small category of gambling companies able to benefit from an otherwise dire situation.

Of course, the story of poker is as old as time itself, but online poker has experienced a different lifespan, one that has seen a considerable shift in popularity over

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the last two decades. For us to understand the significance of its recent unprecedented growth, it’s important to look back at this history of highs and lows.

THE MONEYMAKER EFFECT Although the history of real money online poker stems back to 1998, its first real explosion in popularity occurred in the early 2000s with the Moneymaker Effect.

In 2003, Chris Moneymaker claimed victory in the main event of the World Series of Poker after winning his entry with a $40 buy-in. Online poker suddenly became a viable skill-based way for amateur players to earn money from home, and Moneymaker’s fortuitous namesake became synonymous with the vertical’s growth in the following years.

Although the glory days of online poker were incredibly fruitful, they were also short-lived, something particularly true

for the US. In 2006 President George W. Bush introduced the Unlawful Internet Gambling Enforcement Act (UIGEA), which saw an end to the majority of US online poker operators. Those who did continue to operate in the US would come to regret it. In 2011, many top online poker operators were seized for processing illegal transactions in direct transgression of the UIGEA, including PokerStars, Full Tilt Poker and Absolute Poker.

In more mature markets in Europe, poker’s popularity continued until around 2010, but as the bigger names took a greater market share and smaller brands died out, the vertical’s growth began to subside. Instead, online poker began to grow in emerging markets such as Asia where it continued to evolve, developing a more social style to suit its new demographic.

Speaking on a panel during the SBC Digital Summit at the end of April this year, Ivonne

THE RETURN OF POKER

new players – a reboot that was ultimately ineffectual. Despite recent growth that saw MPN double in popularity to an average of 550 concurrent cash games during the pandemic, the supplier announced it will continue with plans to close the network this year.

Ivonne Montealegre Montealegre, founder and event director of the Malta Poker Festival, explained the reasoning behind this rollercoaster pattern of growth. “Before the pandemic, we experienced the Moneymaker effect where poker was well known with just a few operators taking a large share of the market,” she said. “But then poker flat-lined and emerging markets saved poker for some operators. The big brands always survived but we were facing a poker industry which saw the smaller brands swallowed.

Since 2010, it has been very difficult for poker to make the revenue it needed.”

A STRUGGLING VERTICAL Montealegre gave the shutdown of Microgaming’s poker network as an example of the market’s recent struggles in mature markets – and it would be difficult to find a better demonstration of how long existing online poker brands have found difficulty in adapting to the needs of the modern consumer.

In September 2019, the supplier announced it would be closing its storied online poker network, MPN, after an “extensive review of the poker product”. Microgaming concluded that it “had to adopt a very different strategy and business model, and that ultimately the poker network was “not part of that vision”.

For a gaming supplier that had provided poker players with its network for more than 17 years, the decision to shut down MPN cannot have been taken lightly.

In fact, Microgaming instigated a number of measures to attempt to save its poker network. In 2018, the supplier rebooted MPN, updating the existing software with the aim of “streamlining the online poker experience” to increase its attractiveness to

THE SECOND WAVE It’s not all doom and gloom, however. While Microgaming might have been unable to mitigate its network’s pre-COVID losses, it’s been a period of significant growth for those who’ve been able to truly capitalise on current conditions. With some markets around the world doubling in size, Montealegre described the lockdown-fuelled comeback as a “second wave even bigger than Moneymaker”, and as we look at the evidence from operators, it would be difficult to disagree.

The Stars Group, owner of Pokerstars, reported considerable growth in its Q1 2020 trading update as a result of the poker giant’s contributions. The operator generated revenues of $735m for the quarter, a rise of 27% year-on-year. Despite the pandemic’s impact on the operator’s sports betting segment, increased customer activity across its online poker and casino product offerings had more than mitigated any disruption from the beginning of March.

US facing operators have seen a similar story.

When contacted by Gambling Insider, Jamie Harvey, a news writer for The Big Blind blog and representative of WPN, explained how the poker operator had seen an “unprecedented increase” in sign-ups and player traffic as a result of the pandemic. As one of the few online poker networks remaining that service players from the US, Harvey said the new sign-ups had “increased exponentially”.

Since March, WPN tournaments have repeatedly broken entrant records and, according to Harvey, the biggest challenge WPN faced had been scaling up its services to accommodate for the larger numbers. “We had to take preventative measures such as making our main events two-day events because the server load was becoming dangerously high,” he commented. “This was despite the addition of dozens of more servers.”

AN UNCLEAR FUTURE Despite clear growth amid the pandemic, a question remains as to how long this popularity will last when lockdowns ease and sports return. For a number of reasons, it’ll be difficult for the vertical’s growth to maintain the pace experienced in the past few months. Undoubtedly, the economical situation of the majority of countries will become worse as a result of the pandemic, and rising unemployment could create a decrease in spending levels. Then, of course,

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there’s the inevitable reality that the return of sports will tempt most traditional sports bettors back towards their favoured vertical.

In its Q1 trading update, even The Stars Group seemed relatively pessimistic about the longevity of the vertical’s success. The operator admitted that the return of sporting events earlier than anticipated could benefit sports betting revenues but “could negatively impact the current increased activity across its online poker and casino products”.

The unprecedented nature of online poker’s comeback during the COVID-19 pandemic seems befitting of an unclear era. The truth is no one really knows. The period has seen some operators experience up to a 300% increase in revenue, but with growth recently levelling off, operators will hope this doesn’t decline in the coming months. For now, it’s too early to tell. The hopeful words of Montealegre help to maintain optimism, though, who insists we are back to “the golden era of poker again”.

“WPN HAS SEEN NEW SIGNUPS INCREASE EXPONENTIALLY. WE HAD TO TAKE PREVENTATIVE MEASURES SUCH AS MAKING OUR MAIN EVENTS TWO-DAY EVENTS BECAUSE THE SERVER LOAD WAS BECOMING DANGEROUSLY HIGH. THIS WAS DESPITE THE ADDITION OF DOZENS OF MORE SERVERS” - Jamie Harvey

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THE FUTURE OF CASH

IS CASH LOSING ITS CROWN? Representatives from Everi Holdings, Trustly and Global Payments Inc, who all specialise in providing payment solutions to the gambling industry, spoke with Owain Flanders about the effects of the COVID-19 pandemic on the progression of cashless gaming

THE PANEL Michael Rumbolz President and CEO, Everi Holdings Sam Barrett Director of gaming, Trustly Chris Justice President, Global Payments Inc

Have you noticed an increased interest in your cashless systems as a result of the COVID-19 pandemic?

Michael Rumbolz: With the pandemic, our customers have been focused on their reopening strategies which focus on the health and safety of their guests and employees. This has driven demand for the deployment of cashless solutions. We have been working with many customers to deploy our solutions for reopenings.

Chris Justice: A March 2020 survey by RTi Research indicated 29% of consumers are worried about catching the virus from cash, while 30% have converted to contactless forms of payment. Consumers feel increasingly uncomfortable exchanging cash which will impact when, where and how often they play casino games. Our solutions promote a socially distance and contactless gaming environment that brings peace of mind to customers and operators.

Sam Barrett: Before the pandemic, cashless was on the radar of most land-based gaming businesses, mainly for the simple reason that going cashless or contactless was an organic way forward to improve payments within the land-based gaming environment. I wouldn’t say COVID-19 has been the catalyst towards going cashless but it has accelerated because businesses want to protect their staff and players from potential viruses being carried on cash. It certainly has given it a stronger priority, allowing businesses like Trustly to cater towards this cashless appetite.

Are you in a position to meet the increased demand for cashless gaming?

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Michael Rumbolz MR: We have evangelised the benefits of cashless gaming for the past three to four years. We see ourselves as the leader in the market from a financial technology standpoint and strongly believe that we are in the driver’s seat moving forward with any type of cashless gaming within the casino floor.

CJ: Yes, we are. Our VIP Mobility and VIP Financial Center solutions are ready to meet the need accelerated by the COVID-19 pandemic. While true that our industry did not anticipate the increased demand for cashless gaming so soon, signs have been pointing to cashless gaming for some time now.

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SB: Yes. We’ve successfully launched Trustly Live, and the reason we entered the land-based industry from online was because we had a demand for the product from our historical customer base. Many of our online customers also have a land-based presence, so it was a natural step for us. It was clear that all the benefits we offer in the online space can be translated into the land-based industry since all players want the same advantages offered online: instant gratification and a simple UX. What specific products can you provide to cope with this increased demand for cashless gaming?

MR: Our Wallet solution and QuikTicket solutions are two products that are resonating most with our customers. It allows patrons to access funds through a simple and quick cashless, self-service ticket purchase at our kiosks that they can put directly into an EGM. Our mobile wallet solution allows patrons to remotely register for the mobile wallet app. Patrons can use their bank cards to load funds, also add funds directly from checking accounts, and move funds back to their bank accounts.

CJ: Global Payments Gaming Solutions’ VIP Financial Centre provides convenient self-service TITO, bill breaking, e-check, ATM and cash advance capabilities to casino guests. VIP Mobility provides a number of benefits to casino operators, including: reduced cash handling expenses, enhanced security, reduced AML exposure

Chris Justice

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and automated responsible gaming measures, among others.

SB: Trustly Live is already being used

by Cherry in Sweden across several land-based establishments. It allows players to make instant deposits from their mobile device directly from the bank account and if they are lucky enough to win, they’ll be able to receive their winnings back to their bank account the same day. From an AML perspective, cash can be difficult to manage, so digitalising payments by going cashless can help operators trace and track where the original payment comes from, which opens many possibilities to digitalise each payment touch point across a casino or sportsbook.

What are the main challenges posed to an operator attempting to make the shift towards cashless gaming?

MR: What is key for our customers is these solutions can be implemented at a low cost with minimal impact to operations. The beauty is they utilise the existing infrastructure we provide them today such as settlement, reporting, KYC and AML compliance. We also expect greater patron adoption because of the experience they had interacting with our services pre-COVID. We will give them that sense of security and familiarity.

CJ: Aside from learning the new technology, operators may encounter those who are not ready to make the switch to cashless gaming. Cashless gaming is a change from the utilisation of cash. With any change, it will take time for casino guests, especially those who have grown accustomed to using cash, to become acclimated to the cashless system. However, once they adopt these systems, they will become more open to using them and, perhaps, prefer them.

SB: The biggest challenge an operator will face is the education around implementing new payment processes into their current structure. There are only a few providers doing this and Trustly is the one. You don’t need to remove cash, you can continue operating the way you do today and introduce this as an alternative payment method.

There’s also no integration. We offer an application to the operator to install either on an iPhone or iPad or their desktop. They can accept and make payments without any integration required. The real work is on the process and policy change, which has to happen internally, and we now have a

Sam Barrett product that has been built to satisfy casino operators and sportsbooks, however big or small.

Is it your opinion that the move to cashless gaming will be permanent once the COVID-19 pandemic subsides? Could we see a completely cashless future for gaming?

MR: We have monitored consumer behaviour outside of gaming during the pandemic which has shown a significant increase in usage of contactless cards, mobile wallets and online purchasing.

We expect greater adoption of our many self-service solutions.

CJ: Trends in the macroeconomy show cash is fading away rapidly. Cash payments represent only 26% of all payments, a 4% decline from 2017. Since 80% of cash payments are $25 or less, it is not a preferred tender type for larger purchases.

Add COVID-19 to the mix, and we will see a faster shift away from cash to contactless forms of payment. While we don’t foresee cash completely going away any time soon, we do expect cashless gaming to continue to grow in popularity.

SB: I think the end of cash is definitely not anytime soon. Lots of people still continue to use it. Some have not yet adopted even the simplest of digital payments available. That said, people are starting to adopt it more and more.

There are so many benefits of going cashless for players, so as long as they’re aware of these benefits there will definitely be an adoption and shift to cashless.

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PREMIER LEAGUE

EXCITEMENT VS CRITICISM AS THE PREMIER LEAGUE RETURNS

Gambling Insider spoke with several operators ahead of the English Premier League’s restart, and looks into media criticism that arrived with the return of major sports

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In June, gambling operators were able to breathe a sigh of relief as the English Premier League finally returned from its three-month COVID-19 hiatus.

After a long sport-less summer in which operators were struggling to mitigate the impact of revenue declines, the return of one of the most popular betting leagues in the world would have been music to the ears of CEOs across the industry.

The anticipation ahead of the competition’s return was understandably palpable, and in their eagerness to wager on England’s top flight, fans had been giving plenty of extra attention to the prices of away teams, according to Betway.

The operator told Gambling Insider that German Bundesliga results – with home advantage lessening due to the absence of crowds – swayed punters ahead of the Premier League’s long-awaited comeback.

After the suspension was enforced in March due to the coronavirus pandemic, football restarted across Europe’s premier competitions without supporters in stadiums.

A Betway spokesperson told Gambling Insider: “Like all football fans we’re delighted to see the return of the Premier League.

Punters have whetted their appetite on the Bundesliga and other leagues which returned in the last few weeks, but I’d expect the vast majority of our Betway customers were

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waiting for more recognisable teams and more accessible live matches.

“We hope the action lives up to the billing.

There had been extra attention on the prices for away teams to win matches after the home win percentage stats in Germany’s topflight nosedived, but overall it’s a fair spread of business as we await kick off.”

Operator Interwetten also welcomed the Premier League’s return, with the competition its “most important league” alongside the Bundesliga.

Meanwhile, Alistair Gill, racing strategy analyst at Kindred Group, told Gambling Insider this league is the “big one”, despite German and Spanish leagues also returning prior to the Premier League.

“We’ve been waiting for this day eagerly since the first Premier League match was cancelled back in March - the safe return of Premier League football!” he said.

“Although we’ve slowly been seeing the return in recent week of other major European leagues, this is, for us in the UK, the Big One, and given the interest we’ve seen from players on the Bundesliga and La Liga, we have big expectations for the rest of the season.”

“A bonanza of televised and free-to-air Premier League matches over the next six weeks is a huge boost for both Kindred and our players.”

Despite the clear excitement generated by the return of the Premier League, it also instigated the usual negative media attention.

The Mirror described fear of “a gambling frenzy” ahead of the Premier League’s return.

The article quoted the words of UK sports minister Nigel Huddleston, who urged a focus on responsible gambling as sport returns to the screens of fans across the world.

Huddleston’s message is one most operators can agree with. UK operators demonstrated their commitment to spreading a responsible gambling message in replacing all gambling advertisements with safer gambling information during the pandemic – something The Mirror failed to include in its article.

According to the Guardian, Claire Murdoch, mental health director of NHS England, warned that operators may take advantage of the return of sport with “aggressive advertising campaigns”.

She said: “The return of football will be a moment of excitement for millions but it must not be an excuse for gambling firms to open the floodgates of addiction.

“With my colleagues having spent this year focused on protecting people from a once-in-a-generation global pandemic, the last thing NHS staff and patients need is for avoidable harm to be caused by reckless advertising from the gambling industry.”

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Alistair Gill While Murdoch’s desire to avoid any increase in problem gambling is certainly understandable, her words of warning are perhaps a little unnecessary.

The UK industry came under fire from a number of sources throughout 2019, but in reality, operators seem to have come on leaps and bounds from the industry of a few years ago.

The Betting and Gaming Council (BGC) is performing well as one united voice for the industry, both holding its members to account and fighting its corner when it’s necessary to do so. The body’s active response to problem gambling fears during the COVID-19 crisis is evidence of this.

It’s also evident that calls for stricter gambling regulation are increasing in the UK. This is exemplified in the Gambling Related Harm All Party Parliamentary Group’s recent report calling for a ban on gambling advertising, a £2 ($2.53) stake limit for online slots and a ban on all VIP schemes, among other recommendations.

With this in mind, a review of the outdated Gambling Act 2005 seems imminent, and operators should be eager to avoid giving industry critics any more ammunition to use against them. Taking advantage of the return of sport to squeeze money out of problem gamblers will certainly not work towards this aim.

Something that is apparent from the negative media attention generated by the return of sport is that the industry’s opposition will use every opportunity to

stoke fear about gambling’s potential harm that, for the most part, doesn’t come to fruition.

This was exemplified in fears over the risk of the COVID-19 lockdowns on gambling behaviour. At the beginning of the pandemic, negative coverage was also rife as the media warned of the potential dangers of lockdown.

Despite this, and throughout the crisis, the UK industry demonstrated its commitment to safer gambling by acting responsibly and not attempting to capitalise on the situation. The BGC published 10 pledges to ensure the safety of customers during the pandemic, with all of its members committing to the safer gambling measures.

In fact, in addition to pledging to protect their customers throughout the crisis, bookmakers even demonstrated their generosity in donating over £2.6m from the Virtual Grand National to NHS charities.

Of course, problem gambling is an issue in the UK and something that should rightfully be addressed by the industry. But after attending multiple industry events and speaking to executives across the board, it does seem that operators are dedicated to this cause – more dedicated than they are perhaps given credit for.

The UK industry has not always been completely perfect and for that reason it has been rightly criticised in the past, but a little recognition of the progress it had made would go a long way.

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PLAYER SAFETY RISK

REGULATING IN A GLOBAL PANDEMIC

Owain Flanders examines regulation during the COVID-19 pandemic, and evaluates arguments that the risk to player safety under lockdown might have been overestimated

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In a pandemic-stricken UK, the gambling industry could be forgiven for thinking it might take a break from the swathes of negative press it had become accustomed to in recent years. From mid-March, mainstream media was firmly focused on the new invisible killer, COVID-19. This meant problem gambling, often the focal point for a number of media companies, suddenly took a back seat to a much more immediate and widespread danger to public health.

However, as the UK Government outlined plans for lockdown measures and employers began making use of furlough schemes - trapping problem gamblers at home with a potentially diminished income - it soon became very apparent that there would be no escape from the media spotlight for operators. In fact, as the anti-gambling headlines rolled in one by one, it was clear that the pandemic might have had the opposite effect.

Among a string of articles, the BBC described NHS fear over a “new wave” of gambling addiction, and the Guardian reported the lockdown might lead sports bettors to make riskier choices on online casino sites. Meanwhile, in the House of Lords, 22 MPs urged the British Government to impose strict curbs on gambling during the lockdown, while Swansea East MP Carolyn Harris described the pandemic as “absolutely disastrous” for those suffering from gambling addiction. All of this made clear that rather than stifling industry criticism, the pandemic galvanised its opponents towards a louder cry for regulatory action.

It was the industry itself that responded to these concerns with newfound solidarity.

The Betting and Gaming Council (BGC) did everything it could to allay lockdown fears, including issuing a 10-point pledge promising extra steps would be taken to

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PLAYER SAFETY RISK

Yanica Sant protect customers. In a bid to ease concerns further, operators also agreed to halt all TV and radio advertising for their products for at least six weeks, replacing them instead with safer gambling messages.

Despite its critics’ claims that it could not be trusted to do so, the industry came together to protect its customers under the leadership of the BGC. However, questions have been raised as to whether this was all absolutely necessary. While action might have been needed to quell the concerns reported by the media, has the pandemic actually increased any risk to problem gamblers?

While it might have forced betting shops and casinos to close their doors, it certainly hasn’t stopped the industry from speaking up on its own behalf. From March, virtual summits have allowed operators, regulators and affiliates to voice their opinions on the pandemic’s effect on player safety, and the general consensus is that the danger posed to problem gamblers might have been overestimated.

Speaking as part of a safer gambling panel during the SBC Digital Summit in late April, Yanica Sant, head of EU affairs & policy for the Malta Gaming Authority (MGA), said the data the regulator received did not show as “drastic” a change in player behaviour as was expected during the pandemic. “The data does tally with what operators are saying,” she confirmed. “What we were expecting was a much more drastic change in player behaviour than has actually happened.” This is also reflected in reports of the industry’s behaviour during the pandemic, which for the most part has been praised by regulators.

When contacted by Gambling Insider, Sant confirmed that although some operators did

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attempt to exploit the situation via marketing, “the vast majority of operators had acted in a responsible manner”.

It’s evident the MGA placed significant trust in its operators not to abuse the crisis from the very beginning. In fact, its only real action came in March, when the regulator warned its licensees against using any COVID-19 themed wording in promotions or marketing. Sant had a simple explanation for why this was the MGA’s chosen strategy. She said the MGA did not opt for restrictive measures as a reaction to the pandemic as it “did not have evidence suggesting that this was necessary”. This was a similar strategy employed by the Gambling Commission in Britain that, despite providing guidance for operators on how to protect customers during the crisis, enforced no new regulatory measures.

In Sweden however, we have seen a different story entirely. In April, the Swedish Government announced its proposal for a string of measures intended to “reduce the risks in the gaming market as a result of the outbreak of COVID-19”. At press time, the Government intends to implement the regulation in July, including an SEK 5,000 ($530.10) per week deposit limit for gaming accounts and vending machines, mandatory limits on playing time for online casino, and a maximum bonus offer limit of SEK 100.

Ardalan Shekarabi, the social security minister of the Swedish Government, described “increased risk of unemployment, sick leave and financial uncertainty, combined with a decline in wages”, as the reasoning for such measures, and it would certainly be difficult to argue with the prevalence of these issues during the pandemic. However, it could be argued this

combination does not create “major risks in the field of play” unless operators are behaving irresponsibly to begin with, which, as Sant confirms, has not been the case with the majority of operators.

Kindred is one operator that vehemently disagrees with the Swedish Government’s regulatory intervention. The owner of Unibet and 32Red published a response to the measures, criticising the Swedish Ministry of Finance for the lack of evidence supporting its “alarmist hypothesis”. While the response does not produce any exact figures in regards to the effect of the pandemic on problem gambling, Kindred argues there is no evidence in its own or its competitor’s data to indicate any increased risk. “Rather, the overall gambling industry has experienced a drop in gambling activity,” the operator concluded.

But what might be the danger of imposing temporary restrictions on the Swedish gambling industry for the length of the pandemic? Kindred argues that it may force customers towards unsafe black market sites.

While the “black market” argument is one we have heard reiterated by those who oppose stricter legislation in any regulated market, it holds particular weight in Sweden where channelisation rates are not reaching targets set out at the beginning of re-regulation last year. Figures published by Copenhagen Economics and highlighted by Kindred estimate that every fourth krona played in Sweden goes towards the unlicensed market for online casino games.

Speaking with Gambling Insider recently, Gustaf Hoffstedt, general secretary for Swedish online gambling trade association Branschföreningen för Onlinespel, also agreed with Kindred’s concerns. “We expect channelisation to drop even further,” Hoffstedt said. “Maybe as low as the figure before re-regulation. Sweden re-regulated for the very reason that channelisation was very low and, 18 months later, the Government is taking measures it seems will push punters outside of the licensing system.”

In contrast to Sweden’s approach, Sant argues for evidence-based legislation - the utilisation of data as a backbone for policy making. This has been the strategy used by both the MGA and the Gambling Commission throughout the pandemic, and so far it seems to have paid off. Once the pandemic has subsided, other regulators might do well to learn from these examples to build more sustainable markets moving forward. After all, a strong and honest relationship between regulators and their licensees is vital for customer protection, both in deterring customers away from the illegal market and driving operators towards self-regulation and responsibility.

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STAYING IN THE KNOW A panel of experts gather to analyse the ever-changing climate in gaming and how to adapt to maximise opportunities and potential

THE PANEL Stanislav Silin CEO, Altenar Magnus Olsson Head of sales and account management, Play’n GO Erik Köhler Marketing manager, Betsoft Gaming Richard Hogg CCO, BetGames.TV

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What is the state of innovation for suppliers in terms of offering gaming operators engaging content?

Stanislav Silin: The very term “engaging content” already points to UX. And that is certainly one area of innovation that suppliers, including Altenar, have been putting efforts towards. Another way to engage would be to extract pieces of supplier content, and package them in a way for the operator to make such content available to their players in new or unexpected ways.

We did something similar with in-banner betting together with Trustly and some

operators earlier this year, and this is an idea we’re looking to expand on.

Magnus Olsson: For us, innovation comes in many forms and is a constant moving target rather than something that can be reached. When most people think of innovation, they think of new, game-changing ideas that no one has ever seen before, but it can also be a new way of doing something old or bringing something new to a familiar topic.

We are driving innovation on many levels simultaneously; the common

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denominator is the ambition to enhance player experience. The extensive scope of our portfolio enables us to address a multitude of needs and aspects of player experience through various innovations.

Of course, the search for innovation cannot compromise the standard of our products. As we aim to make the most innovative games we can, we also strive to make sure that these are products our operators can trust, and our players can play knowing they are secure. Sometimes, in the quest to create something new, you can overlook the basics; we strive to create innovative gameplay without compromising on the security of our partners in regards to bonus abuse or other factors.

Innovation for Play’n GO is evolving through our entire roadmap of games. We aim to cater to those that enjoy the gameplay, whether they are new to this type of digital entertainment or slot game aficionados. This also means we have different expectations for different games. Some are specialised, in a way, and aimed at a particular type of entertainment, while other games have a wider audience and are more volatile in the number of active players and rounds.

Richard Hogg: Innovation right now needs to be all about taking the lessons learned from the last few months and putting it into building a pandemic-proof portfolio. We’re not out of the woods yet when it comes to COVID-19, and while sports betting may be returning, I expect players’ approach to gaming to continue in the same trend that we’ve seen recently.

Players right now want content that offers extended entertainment. Suppliers needs to be offering gaming content that offers a lower spend with far more regular play without emptying wallets in a matter of hours. Games orientated towards betting on live outcomes, such as the live dealer proposition, have also far outperformed RNG-based betting gaming, such as slots.

Operators looking to keep their players engaged during the months ahead would do well to take note.

How do you work symbiotically with consumers, operators and current trends to ensure new and exciting experiences for players?

Erik Köhler: As one of the leading gaming providers in the igaming industry, we are working to satisfy both operators and players simultaneously. We are doing this using our Betsoft key tactics – quality, speed to market, innovation and adaptation.

Our skilled team is working on a daily basis to provide the very best slots possible, while our account management team

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Erik Köhler provide the best support and guidance to the operators. By listening to our players and operators, we’re adapting our games, according to their feedback, while still keeping our high quality Betsoft touch.

SS: The exact method of collaboration really depends on the operator, but what’s important is that through our account management team, we find ways to communicate and work together on improvements for player-facing content.

Ultimately, it’s the operator’s guidance that helps us define what experience is likely to be the best for their players. After all, they know better what sells to both direct players and to their marketing partners or affiliates. We also see a continuous trend towards a regular need for the operator to create some element of fresh UX all the time, however small or significant it may be. This would require the supplier to be very adaptive and be able to respond quickly to such ideas, and this is exactly what we hope to get even better at with some of our partners later this year.

RH: We gladly sit down with our partners on a regular basis to discuss potential collaborations and insights we can apply to further optimise our delivery. As part of that, we offer a wealth of system bets and in-game features, all of which drive player engagement. We also deliver a highly immersive betting proposition, with elongated betting sessions that ensure a far higher retention rate than other suppliers.

The fact that our games intrinsically attract a lower spend with far more regular

play (as well as lending themselves to the fixed odds outcome format), has ensured that we have been popular with sportsbook customers over the past few months. Key now is to work symbiotically with our partners to ensure that they stick around even with sports betting coming back.

To that end, we’re looking to optimise our products accordingly, and have already reduced the play time for three of our most popular lotteries by 25%. In just a few weeks, this has proven to greatly boost engagement – as well as bet-counts and revenue.

MO: We get continuous feedback from all corners of the industry and use it to build, improve and create ideas; the more data you have to work with, the more you can extrapolate from it. Affiliates, players, operators, employees; and anyone with interest in slot games feed into the information that we can gather. This is fed back to our development teams through internal processes and becomes part of an ever-increasing knowledge database.

We can use this wealth of information to gauge what players feel they’re missing from their slot experiences; what they want to see more of, what they want to see less of, etc. From there, we can fine-tune our development accordingly.

Beyond that, we also want to provide experiences that our customers don’t expect, again bringing innovation into play. Our time in the industry has given us so much knowledge you begin to recognise patterns and paths, and eventually, you can get an informed idea of what is needed next.

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How has the pandemic forced a reassessment of strategies to engage and attract new players?

MO: As a company that operates mainly in the online space, we were obviously in a strong position to deal with these events when they occurred. Digital entertainment has seen an uptick of activity during these trying times.

Clearly, the strategy to provide great entertainment experiences online was in place already before, not to say the raison d'être for our very existence, so we haven’t seen a need to change anything in that regard fundamentally.

RH: Diversification is going to be essential moving forward. Pre-pandemic, we’d expect to see operators focusing up to 70% of their efforts on sports and nothing else. This has proven to be a tough lesson for many.

Operators focusing on retail environments are also going to have to broaden their online presence, as we have no idea when land-based will be returning to ‘normal’.

As betting habits have shown, there also needs to be far more focus on alternatives beyond just RNG-based gaming. Most sportsbook players that have been converted to casino have proven unaccustomed to riding their luck on algorithms. As a result, live-betting products have proven to be a winning strategy – and anyone looking to engage and attract new players during the summer months should take this on board.

EK: I believe that I’m not alone when I say that the pandemic came as a shock. There are a lot of players out there who lost their normal routines, and many more players who have now started to gamble for the first time. Since we are focused on casino games, we’ve also seen an uplift from players who previously played the sportsbook, but now have fewer sports to play on. Nevertheless, to be a gambling provider in these times, we feel the responsibility to provide the most responsible slots possible and make sure players feel safe.

SS: Even though as a B2B provider we don’t attract players directly – this is what our customers are good at – the pandemic has, indeed, got every bookmaker thinking on what to do when there are close to no sporting events. Whereas we all believe that situation will get back to normal, something had to be done quickly to recover the massive drop in traffic once every major league went down. Quite predictably, Altenar turned focus to esports and virtuals, and this created an uplift on those verticals. It’s fair to say that all our data and content suppliers have followed the same strategy and we were aligned in our development efforts.

Where do you see the main areas of potential growth?

RH: Online is going to be key for the rest of this year and will be a far safer bet than

retail. This is particularly the case for the UK and Europe, which was already struggling before recent events.

Despite betting shops also being far more popular in emerging markets such as Africa and LatAm, I also expect to see the same, and the numbers have backed this up with an accelerated transition to online. With much of the southern hemisphere now entering the winter season, I expect that to continue given we haven’t yet beaten COVID-19.

SS: We have a good network of our existing customers, as well as a number of recently signed deals, so improving the volume and profitability of the existing client base is something we believe to be the main area of growth potential. That’s one of the drivers that we’ve been adding to our regulatory approval list as we are, for example, getting our software approved in Denmark and Portugal at the moment to respond to our existing customers’ expansion in those areas.

It’s quite rewarding to grow by helping and seeing our existing partners grow as well.

MO: Diversification through innovation with quality and loads of fun would be the simplest way to put it. When you’re experiencing the next generation of slot entertainment, which is anchored in traditional slot gaming but bringing something new and exciting to the market, it shows an evolution in gaming that’s more complex and immensely enjoyable.

We see excellent growth potential in this movement, and we’re excited for the world to see what’s to come.

Obviously, we’re also continually evaluating new markets. Our strategy to operate primarily in regulated markets still is a primary aim. Any market that’s regulated, or making moves towards regulation, is on our radar.

EK: Betsoft Gaming is always looking to grow in general. And speaking of LatAm, we’re expanding there and have completed some interesting partnerships.

It’s a very interesting market with great growth potential compared to Europe where the igaming industry has been growing for the past 15 years, but is now quite saturated. We believe our games are specific for different types of players and not targeted to just one or two countries.

We have a large portfolio of games that will suit all different players and we believe that will give us a head start growing in LatAm compared to our competitors.

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How do you weigh online vs. landbased opportunities?

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MO: Land-based entertainment is still a cornerstone of the industry, and that means it can still present plenty of opportunities, as long as you put yourself in a position to take those opportunities.

We’re based in online, but we haven't forgotten the importance of being accessible in a land-based environment. Our portfolio of games can appeal to anyone, in any space around the world, and we have the right product to bring our portfolio of games to land-based casinos, integrated resorts and even shipboard establishments. That product is OMNY, a server-based gaming solution, designed and developed to deliver a functional and flexible multi-channel solution to the challenge of modern gaming.

Right now, we’re focused on bringing great games online and then using our OMNY product as a vehicle to make these games available to land-based as well.

SS: There are various degrees of land-based, and some land-based is really a particular way of using the same online product. We already have some of our customers that make use of our online product in a retail environment, so the land-based concept is not new to us. If we speak of a purely land-based, self-service betting terminal, then that’s something we showcased at ICE 2020 for the first time and are currently getting this product ready to go live in production.

The pandemic has had everyone re-evaluate the value of land-based, and whereas it shouldn’t be ignored since it’s still a massive chunk of the industry, online has only been strengthened and transition to it has been accelerated in my opinion.

EK: This is a very interesting topic as land-based casinos have been in existence for many more years than online casinos.

I think land-based casinos will be popular for many more years, but eventually will become much smaller, and most land-based will have to either shut down or go online.

Most people realised now during the pandemic that we’re living in a digital world, and we’ll manage to run a business online, not only the gambling industry but also many other industries. This is just the start of the online area and it’s growing every day. The online gambling industry is a very good example how we can keep running a business without meeting each other in person.

RH: As a company, we’re live on over 1,300 websites and in over 1,700 retail outlets across four continents, although our strategy is always to be desktop and mobile first, with our retail presence supporting our online operations.

Stanislav Silin This approach has paid off this year, especially in South Africa. Walk into any betting shop in the country and you’ll most likely have a section devoted to purely BetGames.TV’s products. The strength of our brand means that our partners are able to migrate their retail customers online during lockdown by purely organic means, with retention sitting as high as 35%.

Retail will of course continue to be a key part of our strategy moving forward, but I certainly anticipate that for the next few months, we will be very much focusing on enhancing our online proposition.

Do you have plans to target any other sectors in the industry during this time of uncertainty?

SS: We’ve used these times to boost some areas of our product offering that were previously given less focus and attention.

We’ve seen an uplift in traffic on the virtuals and esports for example, and that earned us some important experience and has allowed us to improve the product. With the return of the main sporting events, we hope the new types of players we got on esports and virtuals are there to stay.

RH: We’re actively looking to help our partners future-proof against a second wave of the pandemic, particularly in the case of retail. This is especially the case for retail operators who are going to take a significant

hit when it comes to social distancing. We’re here to help them migrate online quickly and start diversifying their revenue streams.

We’re also looking at increasing our focus on sports-related products in line with our focus on tailoring delivery for our partners and look forward to announcing more soon enough.

MO: The strategies we have for targeting other sectors were in place already last year, and that hasn’t changed. It’s our way to operate with a multi-year plan to base our decisions on meta trends and long-term developments. Quite simply, we have a plan, and we’re sticking to it.

EK: Betsoft gaming is always adapting to keep up with the latest trends and looking for new opportunities. In these times, our main focus will be to provide the most responsible slots. For us, the most important thing is that players feel safe and enjoy playing our games. Together with operators we have a big responsibility. We want to focus on the markets where we can make an impact on responsible gaming and keep gambling fun and thrilling, and not leave our players in financial trouble. We’ll focus on LatAm going forward and keep the responsible knowledge that we have learned from the regulated markets such as Sweden and Italy. I can’t stop pointing out how important it is with responsible gambling in all markets.

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A RETURN TO SPORTS

A STAGGERED RETURN

Tim Poole assesses the slow and steady comeback of betting on major sport

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“Goal! The crowd goes wild as Mo Salah slots home Liverpool’s second!” It’s a phrase we’re not likely to hear anytime soon – even when English Premier League football returns from its coronavirus pandemic-enforced absence. As the comeback of the German Bundesliga showed us earlier this summer, football played behind closed doors has a distinctly different feel to it. The same applies for other sports that, at press time, have either resumed or are planning their resumptions: UFC, NASCAR, MLB and golf being notable case studies.

From a betting perspective, this does make a difference. A lack of atmosphere makes for reduced viewing, which impacts wagering levels. But the continuation of sport in a reduced form is a necessary step towards an overall return – and ultimately far better than no major sports to bet on at

all. This is the situation facing sportsbooks across the world today, who have gone from thriving betting volumes to barely any at all, and now they find themselves somewhere in the middle.

Mid-May marked the beginning of the sporting calendar’s revival, as UFC action returned in the US, followed by NASCAR, while Bundesliga football resumed in Europe. In the short term, Rush Street Interactive saw its sports wagering handle for a single weekend double that of any other weekend during the COVID-19 pandemic, with Kindred Group also seeing a doubling of turnover. Speaking to Gambling Insider in light of the Bundesliga’s return following the first weekend of action, a Kindred spokesperson commented: “The first major league in football returning was a welcomed contribution to making the situation we all find ourselves in more

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A RETURN TO SPORTS

‘normal’. We could see the wish for betting on live football was longed for and an example of this was that the turnover across the weekend more than doubled compared to the weekend before.”

That same day, however, a Betway spokeperson offered Gambling Insider a cautious appraisal. They said: “Betway punters welcomed the return of the Bundesliga and it was evident they were crying out for football from a league where players were more recognisable.

Although most recreational punters prefer a wider spread of leagues and additions of other sports, particularly horseracing, to make up the perfect Saturday, and that looks a little way off yet.”

It’s this type of ‘half-way house’ scenario operators and suppliers must become accustomed to, at least in the short term.

Prior to athletes gracing their pitches and racetracks in a limited capacity, sportsbooks had to rely on table tennis betting (with the sport still constant throughout the pandemic), football in Belarus and Nicaragua, and occasional FIFA tournaments involving professional footballers as their best sources of pure sporting activity. The other option, of course, was to turn away from sports betting and utilise alternative verticals possessing overlapping qualities with traditional sports. Esports, virtual sports and perhaps poker were the biggest candidates.

(Casino and slots, for instance, are different functions altogether to sportsbook.)

But as our esports-focused feature on page 50 explores, there’s a debate as to how high esports betting revenues will remain once major sport is back for good. The same could be said of virtual sport, even if markets like Italy have become very virtual-centric over the years. For the traditional sports bettor, volumes will not alter too dramatically

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until the Premier League, Grand Slam tennis and the like continue, as well as NBA, NHL and NFL in the US. This very topic was explored during a sports betting panel at AffiliateCon Virtually Live, as Alex Donohue, director of Pressbox PR, discussed a lack of longevity for niche offerings. He said: “If you’re a Premier League fan, most of the bets you place will be around the teams and players you know and love. While there will be some novelty on having a bet on Belarusian football, one of the misconceptions from people outside our industry is gamblers have switched uniformly from betting on the Premier League to some of this obscure sport. One of the problems you have is overkill of these niche offerings and an opportunity for fatigue to set in with the customer base.

While you might have a bet on the first night because it’s interesting and new, that could wear off quite quickly.”

Fellow panellist, Betsson Group SEO marketing owner Warren Sammut, agreed that a lack of familiarity means traditional football leagues will not be displaced.

Sammut explained: “I think to be following a sport you need to be invested to a certain extent, which can take months if not years.

The new offerings helped [during the lull] because it created something new and something exciting to follow. But I think the return of major league sports is very high on the agenda and there’s a lot of appetite for these sports to come back.”

Horseracing, too, is on the road to recovery, though any famous meetings on the calendar both this year and next may be subject to the same eerie silence as empty football stadia. It’s once again a case of rejoicing at a watered down version of the sport, rather than having no action at all. Early signs across all sports point towards bettors returning to their favourite

sportsbooks as major leagues restart.

The higher the number of returning sports, the higher the number of returning bettors.

Naturally, however, the sporting calendar has already suffered some irreversible short-term blows, with the Olympics and European Football Championships postponed until 2021. High-level tennis doesn’t appear to be ending its hiatus either, while certain football leagues have already been suspended for the season. A prime example is France’s Ligue 1, with champions Paris Saint-Germain a regular fixture in the casual punter’s weekend accumulator, containing heavy favourites across European football.

But there’s hope that major leagues in England, Spain and Italy will be back soon, with Germany already offering the football betting industry a framework to build upon. Many other sports, too, are in different stages of a gradual reopening.

Like the overall sporting experience, sports betting firms will have to cope with a new normal. Reflecting on projections of the biggest betting summer ever, chiefly thanks to the Euros, is not something executives will enjoy doing while cursing their luck.

Yet steps – baby steps – are in place for a staggered return, and reflecting on a period when no major sport was on the horizon at all, the current situation is one the industry can willingly embrace with open arms.

“EARLY SIGNS ACROSS ALL SPORTS POINT TOWARDS BETTORS RETURNING TO THEIR FAVOURITE SPORTSBOOKS AS MAJOR LEAGUES RESTART. THE HIGHER THE NUMBER OF RETURNING SPORTS, THE HIGHER THE NUMBER OF RETURNING BETTORS”

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ESPORTS

SKY’S THE LIMIT It took the coronavirus pandemic to wake the sleeping giant of esports betting. Iqbal Johal looks at how far the vertical can grow in the upcoming year

Unfortunately, it sometimes takes a catastrophic worldwide pandemic for things to change. When businesses and industries are forced to adapt and look at alternatives to survive, they can unearth solutions that were right under their noses but were never acted upon. Sleeping giants can wake years ahead of their time but are more than ready to thrive.

That’s been the case with esports in the gambling industry. A vertical that was considered a dark horse for operators and suppliers, which wasn’t expected to reach its potential for several more years. That was until disaster struck.

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The coronavirus pandemic led to the suspension of all major live sport in mid-March and the industry had to look elsewhere to fill the void. Some turned niche, with several operators offering marble racing and table football. Instead of competing on how obscure they could go, it turns out they really didn’t have to look very far to fill it.

The esports product has been steadily rising in recent years. Statistics from Newzoo showed industry revenue grew by 22% year-on-year in 2019, and was projected to rise a further 15% in 2020 to $1.1bn. The total esports audience

was estimated to grow 12% in 2020, to $495 million people worldwide. These predictions were made before the pandemic.

But the gambling industry wasn’t quite taking the plunge with esports before March, despite all the signs pointing to the vertical being a potential future moneymaker.

“Before the pandemic, esports was extremely niche,” explains EveryMatrix CEO Ebbe Groes to Gambling Insider.

“When you look at our existing clients, they would have had esports appearing alongside other minor sport offerings such as cricket, darts and futsal, somewhere down the list.

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“It was small back before COVID-19, but we did have the advantage that we were well aware of the space, and had just signed esports dedicated Luckbox as a client. We had already taken a step with esports, but in terms of introducing it and winning market share for our existing clients, we had done very little and had no results.”

And since the outbreak? In April, research from 2CV and ProdegeMR estimated revenue from esports betting will double to $14bn in 2020, after the vertical posted global gambling revenue of $7bn in 2019.

Furthermore, statistics from OddsMatrix – EveryMatrix’s sports betting solution – showed in the two months from the suspension of live sport in mid-March, there was a 40-times growth in the esports betting market, with 80% coming from sports titles Fifa and NBA2K. Plus, 10% of real sports players were now esports bettors, with a turnover on esports higher than 33%.

Groes pointed to the importance of ‘cross-over’ titles such as Fifa attracting sports bettors to esports, and while he was surprised at the initial boom in esports betting, he expects new players to stay with the vertical.

He said: “What was a big surprise to us was the interest it had and that it was completely different than we thought.

We started pushing sports titles such as Fifa and NBA2K in mid-March, which

is the single biggest thing for the rise in popularity.

“Then by the end of March, we had as many Fifa games live in a week as we had football games in the week pre-COVID, around 3,000 live events per week.

“When live sport fully resumes, we’ll probably have three or four more times Fifa events than live football events.

When we started we didn’t have any, which is a staggering development.

“I am pretty confident that new players will stay with esports. While people are starting to bet on football again, esports betting hasn’t dropped three weeks into live sport returning. We had a period where esports was growing weekly but now that’s more stabilised.

“I think instead of becoming a minor sport ranked in the late 20s, esports will be at number four or five, when it comes to most popular offerings by sportsbooks.”

It’s been a stark learning curve for suppliers such as EveryMatrix, and indeed operators, to how far esports can go.

And the general consensus is esports can stand alone as an offering, rather than being a bolt-on to other verticals.

There are several reasons that make esports an attractive product and even standout, in comparison, to live sports.

The fast-paced nature of esports is to its obvious advantage, as well as the familiarity of watching players sports

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“IT SHOWS A WILLINGNESS TO BET ON THINGS THAT ARE ENTERTAINING, EASY TO UNDERSTAND AND FAST PACED. ESPORTS HAS ALL OF THESE QUALITIES BUT IT WAS JUST NOT UTILISED BEFORE. IT TOOK COVID-19 FOR SPORTSBOOK OPERATORS AND SUPPLIERS TO REALISE THIS AND NOW WE HAVE. WHAT HAS BEEN LEARNED CANNOT BE UNLEARNED SO THIS WILL BE A STEADY PART OF THE OFFERING GOING FORWARD, AND WE HAVE ONLY SEEN THE START OF IT”

Ebbe Groes

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ESPORTS

“WE ABSOLUTELY BELIEVE THIS PERIOD WILL RESULT IN A PERMANENT GROWTH FOR ESPORTS. THE LOCKDOWN RESULTED IN ESPORTS GETTING SUCH A HUGE PROFILE BOOST THAT WE FULLY EXPECT IT TO ACCELERATE ESPORTS BETTING GROWTH OVER THE LONG-TERM” - Paul Brel bettors will be familiar with through Fifa. And given its football ties, the rules are already understood. Also, when it comes to betting on a second division match in Denmark – Groes’ native country – to a high quality Fifa game, the EveryMatrix CEO is choosing the latter every time.

“While players like to bet on the Premier League because they watch a lot of games, what about the rest of the time?” asks Groes. “They bet on lower leagues in countries they have no idea about, or fast-paced sports like table tennis. But it’s very unlikely people would spend a Saturday afternoon watching table tennis and having beers with their friends while rejoicing on table tennis, but they’re betting on it.

It shows a willingness to bet on things that are entertaining, easy to understand and fast paced. Esports has all of these qualities but it was just not utilised before. It took COVID-19 for sportsbook operators and suppliers to realise this and now we have. What has been learned cannot be unlearned so this will be a steady part of the offering going forward, and we have only seen the start of it.”

Another interesting topic when it comes to esports betting is the use of data. The trouble with live sports betting can be the delay by several seconds when someone is making an in-play bet, with the operator using the delay as an insurance policy against a customer betting with realtime data inside a stadium. Also, the fact data providers have data collectors who manually record data from their observations. But the advancement in technology at esports’

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disposal could make live betting a seamless, and delay-free experience, something that could put it ahead of live sports.

“Live sport data is recorded in a way that is less speedy and accurate to what you can do with esports, where you can generate a feed directly from the game with every event that is going on,” Groes points out. “This is electronically generated so the data feed is on another dimension, but we have not started that yet. But we could plug into a potential API directly from the game engine itself which means a zero second delay on anything. With esports, the delay can be removed. There are so many things that can be done to enhance the entire experience that can’t be done for normal sports. I expect in a year from now we’ll see esports products we don’t see today.”

The comparisons between esports and live sports is a point reiterated by Loot.

Bet, a dedicated esports bookmaker, operated by supplier Livestream. Head of communications at Livestream Paul Brel, also touched on the real-time data point made by Groes, agreeing that this is a major element that makes esports betting so attractive, rather than the use of expensive data gathering systems.

Brel tells Gambling Insider: “From an operator’s perspective, the fact all data is received from tournament operators in real-time with no delays makes esports betting more precise and faster.

“In terms of betting mechanics, esports and traditional sports are already very similar, sharing the same key principles.

All operators provide betting offerings on a range of disciplines, and customers

select what they would like to bet on, while live trading is similar for both sectors.”

For the esports-first bookmaker, unsurprisingly they’ve been one of the beneficiaries to the boom. This is despite focusing more on the traditional esports titles, such as CS:GO and Dota, with only 24% of Loot.Bet players occasionally betting on traditional sports. While before the pandemic, ‘crossover’ sports titles hadn’t been popular with the bookmaker, this all changed in March with Fifa generating more bets than popular esports titles StarCraft 2, Rainbow Six and Call of Duty combined, which led to an expanded offering of sports titles.

But before the pandemic, business was growing for Loot.Bet, with monthly bet volumes tripling over the course of 2019, and its user base increasing to a “sizable” amount.

While Groes called esports “niche” pre-March, Brel disagrees and said esports betting in general had been significantly growing.

But with that prior growth, and a new audience of sports bettors betting on titles they’re familiar with, this has led to a dramatic rise in recent months.

As Brel puts it, growth has been “dramatic to say the least” in lockdown.

“During the first couple of weeks, we saw betting volumes, traffic and new registrations on our platform surge by around 20%, 30%, and 50% respectively.

“Subsequently, betting volumes grew by roughly 20% each week – much more than we had anticipated, even considering our significant natural growth and the numerous major events in the esports calendar.

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ESPORTS

Savak Limbuwala

“The fact that esports, and hence esports betting, is rapidly going mainstream shouldn’t really surprise anyone who’s been paying attention to technology and popular culture over the past decade or so.”

Accessibility is another key factor to esports’ growing popularity. It’s an immersive vertical that doesn’t discriminate in ways physical sport might. While playing sport might be limited if you have a physical disability or poor weather, esports has no such drawbacks. “Anyone with the necessary gaming hardware can play the esports they follow, whenever they want, from wherever, and plug-in to a vibrant community of like-minded individuals around the world,” Brel points out, which can make fans feel more connected.

The popularity might only increase, considering the attraction esports has to the younger generation. Loot.Bet research shows 78% of its users are aged 18-25, as the generation Z audience, those born in the mid-to-late 90s, are more interested in video games and digital communication rather than traditional sports. With this in mind, estimates before the pandemic suggesting that esports will catch up with all sports combined (in terms of betting volumes) within 10-20 years, and reaching the $100bn mark, might happen sooner.

Brel also believes new players will remain interested with esports for the rest of their lives, making clear that esports betting isn’t trying to compete with traditional sports.

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Brel concluded: “We absolutely believe this period will result in a permanent growth for esports. The lockdown resulted in esports getting such a huge profile boost that we fully expect it to accelerate over the long-term.”

They say timing is everything and that couldn’t be more apt for Winners.Bet. The esports-first bookie, part of esports resource Win.gg, went live in January, just in time to reap the benefits of the rapid growth.

As Winners.Bet COO Savak Limbuwala says, 2020 is the true breakout year for esports betting, and those late to the party risk missing out on the rewards.

He told Gambling insider: “The launch of our betting site was an organic step in the development of the business, with our brands providing esports fans with a set of comprehensive, end-to-end esports resources.

“In terms of how far esports can go, there really is no limit to its potential, with its ease of access, inclusive element of the games and ever improving tech.

I see no reason why esports can't be challenging the traditional global sports of football, basketball and tennis in the year to come.”

Limbuwala agrees with the previous contributors that technology is the main driver for esports to thrive, which makes it a 24/7 vertical, and that the younger generation will lead to its continued growth.

He adds: “Its main advantages over traditional sports lies with the technology. As long as you have access to a decent internet connection, you can play, watch or talk about esports anytime, anywhere.

“With the huge growth of esports in general, the younger generation of sports bettors are the ones who will continue to drive the vertical onward and upward for years to come.”

There has been a lot of learning taking place during the coronavirus pandemic regarding esports. Suppliers and operators now know a massive opportunity with the vertical presents itself. Expect the innovation with data and technology to take esports betting to great heights over the next 12 months. Expect operators to focus on esports as a standalone product, and also expect plenty more esports-first bookmakers to appear in the coming months.

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NO ROOM FOR AMBIGUITY Perrin Carey, independent analyst and former chief risk and compliance officer at Stride Gaming, speaks to Tim Poole about how the gambling industry can truly change its culture

Perrin Carey

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Following a recent ruling from the Gambling Commission, supplier Playtech paid a £3.5m ($4.4m) fine to charity for social responsibility failings. Its subsidiary, operator PT Entertainment Services, originally escaped the fine having been closed since the original offence. The case in question saw customer Chris Bruney take his own life and leave a suicide note attributing his decision to problem gambling. Instead of intervening at any point, however, PT Entertainment Services allowed Bruney to deposit vast sums, encouraging him with further bonuses as he lost £119,000 in the five days leading up to his death.

The example showed that, despite much technological advancement within the field of responsible gambling, the industry can never truly progress in this area without a genuine change in mentality. For Perrin Carey, a compliance professional with over 15 years’ experience in the field, this means a shift in focus towards risk management.

Gambling Insider caught up with Carey to discuss one of the most important issues facing the gambling industry.

The tragic case of Chris Bruney prompted you to comment on our LinkedIn post sharing the story. Can you tell us more about how you view this side of the gambling industry?

With this very sad and sensitive case that has come to light, the reality is it won’t be unique. That’s the tragedy of all of this.

There are and will be many cases which are unreported, unidentified, undisclosed.

There are many reasons for that. I worked in the industry, not for a huge amount of time – 16-17 months – having been drafted in to support Stride and their operating company Daub Alderney. But I brought with me experience within other industries – not just financial services but international education and immigration.

We talk in this industry about social responsibility, and I’ve thought long and hard about what that actually means, and whether or not it actually drives change.

My personal opinion is that it probably doesn’t; it doesn’t come at this issue from the right angle. My view is the angle this should be coming from is absolutely from a risk management perspective. This isn’t about carrying out social responsibilities; this is fundamentally an ethical, moral and risk management-orientated issue. Organisations across different industries have to consider not only the risks their customers pose to them – AML (anti money laundering) and CFT (combating the financing of terrorism) – but the stack of risks that go back in the other direction. This is why I don’t like, and I don’t mean to discredit it, the aspect of ‘we’re acting socially responsibly’. The real question is are you mitigating the risk you pose to your customers? Drill into that question and then come up with some clear, evidence-based data, decision-making and actions that demonstrate that mitigation.

The other side of the social responsibility concept I struggle with – and all industries do this – is how it’s used from a perspective of ‘look aren’t we good because we’re socially responsible?’ It’s your absolute moral and ethical obligation. This isn’t about being good because you are socially responsible. You, as a business, have to manage and mitigate these risks. You have to do that in an absolutely clear,

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transparent and robust framework.

If you’re not doing that, you’re not performing your fundamental and core obligations. You’re accountable, not just responsible, for what you do as a business.

How is the gambling industry faring with risk management at present?

My experience is that – and this is a personal view – because we’re living in the gambling space under this concept of social responsibility, it isn’t emphasising the need for risk management. We haven’t really addressed the fundamental questions and therefore the fundamental outcomes we expect. Until that happens, I don’t think you’re going to see any real change in the outcomes. Let’s learn from the tragedy.

Because, if we don’t learn, there will be others. It’s got to be about absolutely drilling into the risks, understanding how we’re monitoring those risks. Looking at the data our operators have on their customers, we should be investing millions into this as an industry. It needs to be more substantial, though I know there are efforts ongoing within the UK, some of them being led by non-profit contributory organisations, others by the regulator and others by the industry itself.

This brings me onto what I see as the centric change that needs to occur, which centres around culture. If you can’t change culture, you won’t get a shift towards true risk management. If you don’t change culture, you won’t move

away from a shareholder-centric model of approach. So long as your business operation is shareholder-centric – and many organisations are learning this the hard way – you'll ultimately collapse, because it’s a short-term method of business operation. It’s not about sustainability, long-term growth, contribution or collaboration. If there’s one aspect of corporate governance where gambling operators are decades behind financial services businesses, it’s in this multi-stakeholder model. This, very simply, means all stakeholders have equal opportunities within your business model.

Your customers, therefore, should have equal opportunities to your employees, shareholders and third parties.

These are the reflective practices already occurring within financial service businesses and other corporations around the world. The UK is actually, in terms of financial services, leading the charge across Europe. The FCA (Financial Conduct Authority) started this journey in 2018 by launching cultural assessments. These assessments are already occurring and I don’t think it’s going to be long before the Gambling Commission does this; I know from the work I did with the GC they look to the FCA as a regulator to follow.

What conclusions have you drawn from your own research into governance, compliance and culture?

My research isn’t specifically in the gambling space; my research lies in

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“WITH THIS VERY SAD AND SENSITIVE CASE THAT HAS COME TO LIGHT, THE REALITY IS IT WON’T BE UNIQUE. THAT’S THE TRAGEDY OF ALL OF THIS. THERE ARE AND WILL BE MANY CASES WHICH ARE UNREPORTED, UNIDENTIFIED, UNDISCLOSED” - Perrin Carey

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governance and whether or not we can influence organisational culture through different methodologies. The methodology I’m looking at currently is whether we can influence organisational culture by introducing narratives. As human beings, we live our lives through story. It’s how we make meaning within everything we do. It’s what supports our decision making and everything we do on a day-to-day basis. We make stories for the world to make sense.

An extension of that within the gambling space would be can we change the narrative of our risk management frameworks and the stakeholder models by injecting different narratives into those organisations? The evidence that’s coming out so far would be yes.

Those stories have to have a framework and operate in certain ways. It can’t just be any old story; the story needs to do certain things and follow a pattern. But it’s actually one of the most powerful ways of changing organisations. It may be a strategy operators can use as evidence, for example, when the Gambling Commission asks how companies are instigating cultural change.

This recent case is an exact example of this kind of story. Every single employee within an operator’s organisation needs to read this.

Human beings are influenced not by what we understand but what we feel. I’ve seen this in boardrooms, it doesn’t matter what industry you’re in; it isn’t the data that influences our decision making as much as how we feel about something. Therefore, stories like this are tremendously powerful when it comes to changing patterns of human behaviour. Every employee of every operator in the UK should read that story. Will they? No. But should they? Yes. With scrutiny only increasing as a result of these kind of examples, a short-term ‘cash-grab’ mentality is clearly not sustainable – and ultimately self-defeating – for the industry. How can change be achieved in this area?

Organisations make a choice. They choose to be an evolutionary organisation, meaning they sit in their space and respond to how the environment is around them. They follow Charles Darwin’s theory of evolution and survive as a consequence. There's another type of organisation, which I call a behavioural organisation. They’ve actually set themselves up to be deliberate in the decisions they make. They influence their environment, not vice versa. They influence their stakeholders, customers and the journey those customers are taking. In other words, they’re market disruptors. My view of the gambling sector is that it’s really enjoyed itself for the last 30 to 40 years. It’s been in this fantasy situation where it’s lived in an unregulated, fairly evolutionary space.

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But now the world is definitely changing.

It’s been changing in the UK since much tougher regulation and a proper regulator coming into the space in 2014. Ever since then, they haven’t really known what to do, because they don’t have the systems and culture in place to be behavioural. I have come across a couple of operators in the space that appear to be getting this picture and appear to understand that they can be deliberate and intentional, shaping the market around them. But at the moment, they are few and far between; there are still organisations asking the question ‘are we compliant?’

You can never answer the question ‘are we compliant?’ because the answer’s always no.

In a world of regulation, compliance doesn’t exist but non-compliance does. So you will always be non-compliant. The issue is by how much? The way you measure that is by looking at your risks and doing what you can to mitigate those risks. I’ll be honest with you – the operators I’ve seen are a million miles away from this. That’s not to be critical, because it’s hard work. But if you’re making the money you’re making, yes, it’s hard work, but get on with it. That’s my view.

But what about player responsibility.

Players who are not problem gamblers can blame a bookmaker for a lost bet out of pure frustration, and for what is ultimately their choice. How much responsibility lies with the player here and can that be incorporated within this kind of framework?

Absolutely and I think it needs to be incorporated. This is why the partnership between an operator and its customers needs to be as wide open as possible. It’s that channel that enables the operator to understand the risks the customer poses and to express clearly the risks posed to the customer. Within that comes what you’re calling player responsibility. I understand the concept of players taking responsibility, for the fact they understand that by playing, they undertake certain risks. Just like there are risks in me choosing to buy a packet of cigarettes from my local Morrisons. I’m undertaking the risk that there are health consequences should I smoke those cigarettes. The same if I buy a bottle of wine and drink that every evening.

This is the open channel of communication and transparency that needs to exist between an organisation and its stakeholders. Within this, you’ve got your customer. But I think the reason it hasn’t got the traction is because we’re not looking at this from the point of view of this exchange of risk. I think this really needs to be an educational journey, and operators may have to lead it so players can understand more clearly the risks being undertaken. I don’t think there is enough clarity. Often the trouble is the language used by the operator isn’t transferrable.

“MY ADVICE WOULD BE TO ASK FOUR QUESTIONS. WHO DO YOU SERVE? WHAT DO THEY NEED? WHAT DO YOU HAVE? WHAT DO YOU KNOW?” - Perrin Carey During my time in the industry, we thought we were making ourselves clear but actually, we could only have said this if we had done proper consumer research. We could canvas 1,000 customers and ask whether they understood key terms, conducting focus groups, etc. If you did that every six months and could say 98% of people understand these terms, we could then be confident of our marketing messaging. There’s an illustration of how I think the relationship between operator and customer can be enhanced a hundred-fold by simply engaging and saying ‘we really want to make this clear to you, because you’re gambling, that there’s a risk you might lose your money. You need to understand this.’

This is absolutely where it has go.

Ultimately, what would be your advice to an industry with this juxtaposition – the drive to maximise profits and the essential need to protect vulnerable customers?

My advice would be to ask four questions.

Who do you serve? What do they need? What do you have? What do you know? They’re very simple questions. Players need to be protected. They’re a customer of yours. Why would you not want to protect them? They need to be valued, understood and to have fun. They need to know they can trust you.

These are the things your customers need; are you providing those things? I don’t think operators have asked ‘What do you know?’ enough. The reality is if they were to begin to really look at the data they have, the amounts of information they can take from that would make them know a lot more. But it takes effort, graft, grit and determination. The industry genuinely has something to offer.

It just needs to really look hard at itself and say ‘How are we doing this?’

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AFFILIATECON VIRTUALLY LIVE

EVENT REVIEW

A step into the future Iqbal Johal reviews AffiliateCon Virtually Live and looks at how the industry has dealt with the coronavirus outbreak, with the esports vs virtual sports debate one of the main topics Being adaptable during the coronavirus pandemic has been one of the key themes and takeaways for the majority of businesses across many industries.

With face-to-face communication on hold during the current crisis, being able to quickly move to online has helped companies all over the world survive.

The gambling industry is no different.

Nor are we here at Gambling Insider.

So when it was deemed the third AffilateCon scheduled for 12 and

Gennadiy Vorobyov

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13 May in Sofia, Bulgaria, would be postponed, the decision was quickly made to make it a Virtually Live conference, crammed into one day on the 12th.

It was a glimpse into the future of communication, with panelists and speakers interacting directly from their homes. There was a range of stellar speakers from all sides of the industry, be it operators, affiliates and up-and-coming markets such as virtual sports and esports. Viewers were given a first-hand view of how the industry has dealt with the COVID-19 pandemic, and what lessons can be learned to come back stronger.

In keeping with the online theme, Netpeak Bulgaria CEO, Gennadiy Vorobyov, kicked the day off with an insight to SEO techniques and trends in the current period.

Unsurprisingly the digital marketing agency CEO admitted betting search terms had decreased significantly during the pandemic, with all major sport being suspended in mid-March, before slowly returning in June.

Vorobyov said: “My research into betting projects showed for the last two months the trend has gone down.

Alex Donohue Searches have decreased but impressions and clicks have increased.

“It is normal and our expectation is it should get back to normal, not to the same volumes but it should be back, maybe at 50% for the next three months.

“Right now the searches depend on what the big players in betting are offering. For example, looking at what’s active for matches and betting at Bet365, the keywords didn’t change. The volume has decreased but the exact search terms are the same.”

The suspension of live sport meant affiliates and operators had to offer something different, whether it’s niche

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Louise Agran markets or different verticals. The general consensus of the panel looking at how sports betting operators and affiliates are recovering was cautious optimism, despite the initial interest of niche offerings such as stay at home darts or the flash-in-the-pan Belarusian Premier League.

“One of the misconceptions is gamblers have switched uniformly from betting on the Premier League to obscure offerings,” Pressbox PR Director Alex Donohue explained.

“To me, it seems like that hasn’t really happened and we’re not really going to be able to judge the recovery until we have proper recognisable live sport and live horseracing under our belts.

“One of the problems you have is overkill of these niche offerings and an opportunity for fatigue to set in with the customer base.”

While the panel was quick to praise the adaptability of affiliates, from pivoting to promoting the niche offerings, the outbreak has had an impact. On March 26, the Racing Post temporarily ceased publication of its newspaper after

34 years of daily UK circulation before reopening to coincide with the return of British horseracing on 1 June. As CMO of parent company Spotlight Sports Group Louise Agran explained, “No sport means no betting and very little content”.

In terms of the move from retail to offline, while Agran admitted the pandemic will accelerate some of the online trends, she still sees a future for betting shops.

She said: “We see firsthand what a vital part betting shops and managers play for customers and within communities, and I think there’s still a lot of people who enjoy the whole experience of going to betting shops.

“I would still be relatively optimistic about the future of retail bookmaking.

I don’t think it’s something that is going to fade away quickly now. I think there’s a lot of life in it yet.”

It’s not all been bad news, as the success of the virtual Grand National suggests. It raised £2.6m ($3.2m) for NHS Charities Together, with a peak

Warren Jacobs

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Assaf Stieglitz audience of 4.8 million viewers, shown live on ITV in early April.

“As a massive racing fan and someone who has been in the gambling industry all my working life, the virtual Grand National for me was probably the proudest I’d ever felt about our industry,” admitted Donohue.

He also praised the industry when it comes to responsible gambling during this period.

He added: “What I’ve been impressed by in the regulated industry, is that operators and affiliates have been incredibly responsible in the way they’ve marketed themselves, obviously learning lessons from past mistakes. I think the industry has stepped up and been incredibly responsible.”

Those views were echoed by ActiveWin managing director Warren Jacobs, in the affiliate and operator panel. Jacobs explained why he believes those within the industry have excelled in addressing customer protection concerns.

He said: “The industry has made massive strides when it comes to the understanding of responsible gambling.

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“In any meeting of any value for a reputable gambling company, there will be a compliance person present, contributing to the strategy and making sure it’s front of mind.

“I genuinely believe the majority of gaming companies are far more responsible for their actions. I’d assess that the industry’s responsible gambling efforts are player-focused and with a long-term vision.”

Back to the theme of adaptability, Assaf Stieglitz, Odds1x2 and PlayWiseCasino co-founder, agreed this was vital across the industry to survive.

Speaking in the Tal Ron All Stars Panel, he said: “The main thing is to diversify.

Nobody could have anticipated how this pandemic would halt sport totally.

“We started an operation in the casino space not so long ago called PlayWise and we pushed it a bit, but then came back to our comfort zone and focused on sports.

“If I could, I would do this differently by enhancing this casino offering and also focusing on esports – the things that are ongoing right now.”

And he would have good reason to target esports, with the vertical one of the strong performers as operators look to fill the void of live sports betting. Quoting statistics, SickOdds co-founder Tom Wade suggested there’s been a 40-times growth in esports betting during the pandemic, and is hopeful a significant percentage of new players remain.

“I see it as ‘why wouldn’t people stay and watch esports?’ because of my background, but people will probably transcend back to live sports,” Wade said.

“My hopeful estimate is we will see 30 or 40% of the new audience stay with esports in some capacity; a pessimistic view would be 10 to 20%, which would still be a massive rise.”

Tom Wade

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Martin Wachter The big debate currently is which vertical is more sustainable; virtual sports or esports? There was no guessing where Wade’s loyalties lie.

“With virtuals, you’ve got a whole host of sports, which are determined

by RNG before the match even starts,” he explains. “That’s interesting but I see it as you’re betting on something that already has an outcome.

“With esports you’ve got real players who are playing with real skills such as hand-eye coordination, reaction speed and teamwork.

“Also things can happen that could change the entire game. There’s also a lot of strategy behind it so it’s the fact people are actually playing it, as opposed to virtual sports.”

Backing virtual sports’ corner, Golden Race CEO, Martin Wachter, mentioned an increase in virtual sports activity, saying statistics he found show “virtual sports has increased by 206% as a result of the impact of COVID-19, in terms of average players.”

So considering the virtual sports vs esports debate, Wachter vehemently defended his own vertical, unconvinced that esports will sustain its current growth.

“Operators have said they have seen some growth in esports as it’s acted as a cover for real sports but they think it’ll go down when real sports are back.

Virtuals, though, were strong before and will be strong in the future,” he said.

“I don’t see esports continuing its growth after the pandemic. I wish them the best but I don’t see them as competition as it’s a different audience of players. But I don’t want to hear they’re ahead without figures, I’m sure virtuals sports are far ahead and will be in the future.”

Let the esports vs virtual sports debate rumble on, long into the coming years.

“WHAT I’VE BEEN IMPRESSED BY IN THE REGULATED INDUSTRY, IS THAT OPERATORS AND AFFILIATES HAVE BEEN INCREDIBLY RESPONSIBLE IN THE WAY THEY’VE MARKETED THEMSELVES, OBVIOUSLY LEARNING LESSONS FROM PAST MISTAKES” - Alex Donohue

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MARKET FOCUS: SWEDEN

BACK TO SQUARE ONE It’s been 18 months since the re-regulation of the Swedish gambling market, but Iqbal Johal explores whether the introduction of temporary measures is a backwards step for the Nordic nation Nothing is ever straightforward when it comes to Sweden and the gambling industry.

Following its re-regulation on 1 January 2019, there has been more than the odd teething problem. First, the market was re-regulated under strict measures, such as the restriction of bonuses to just one welcome bonus.

That means operators are unable to provide monthly bonuses or promotional offers, like they can in the UK, for example.

Then there has been endless talk about channelisation rates since January 2019. The market was regulated to meet channelisation targets, among other reasons. Swedish Gaming Authority (SGA) coordinator Marcus Arronsson announced the country had achieved the 90% target, reaching 91% in H1 2019, but these figures were quickly lowered down to 87%. However, an independent estimation made by Copenhagen Economics puts that figure at 80 to 85%, but other estimations have it even lower.

So when the Government’s social security minister Ardalan Shekarabi announced in April that measures will be implemented from July until the end of the year to curb against problem gambling in response to the COVID-19 pandemic, you can imagine they weren’t greeted with a lot of enthusiasm.

Restrictions included a weekly gambling deposit limit of SEK 5,000 ($545), set time

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limits to players’ casino activities and a SEK 100 cap on bonus offers. Although in May, sports betting and horseracing were made exempt from the measures.

In an already restricted market, these measures will do nothing to help falling channelisation rates, and in fact, could have the complete opposite desired effect.

That’s the view of the secretary general for the Swedish online gambling trade association Branschföreningen för Onlinespel (BOS), Gustaf Hoffstedt. The secretary general has been vocal about potential government interference when it comes to Swedish regulation, a point supported by the measures coming directly from the social security minister. But more importantly, Hoffstedt is now worried the Swedish market might take a step back, with channelisation rates potentially dropping to before January 2019 levels.

“I believe the market in Sweden is too restricted currently but what is more important is the regulation we see right now

Gustaf Hoffstedt

is so different to the regulation that was presented to the operators from 1 January 2019,” Hoffstedt explains to Gambling Insider.

“The biggest fear with these new restrictions is it will drive players to the black market.”

“What was more troublesome from the Copenhagen Economics statistics was the estimation online casino has channelisation of 75% and is still dropping. This was prior to the new measures.

“We expect channelisation to drop even further, maybe as low as the figure before re-regulation. Sweden re-regulated for the very reason that channelisation was very low and now the Government is taking measures that it seems will push punters outside of the licensing system and we will be back to the very situation we faced two years ago.”

On the face of it, the reasons for the temporary measures seem clear. The Government was concerned a rise in online gambling activity would arise from people spending more time at home, and were hopeful these measures would limit that. However, Hoffstedt was critical of that train of thought without any evidence. By May, the SGA stated that no such increase in online casino activity had taken place. However, figures from the Swedish Tax Authority show a dramatic increase in horseracing betting, one of the verticals exempt from the measures.

“Considering horseracing betting has increased by 30 or 40% in Sweden, the COVID-19 measures are full of contributions,” Hoffstedt says adamantly.

“The Government believes consumers shifted to online casino and the Government

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believes online casino is more hazardous than just about every other gambling vertical.

The problem is the Government hasn’t been able to prove this is the case.

“Therefore, it’s obvious that the revised restrictions are not connected to any kind of customer protection measure.”

Instead, the BOS secretary general points to government self-interest. With government representation on the board of horseracing betting company ATG, and its majority hold in state-operator Svenska Spel, Hoffstedt isn’t surprised that horseracing and sports betting are exempt.

He added: “I think we are getting closer to a situation when we have to face the real reason of government interference when it comes to fair competition regarding gambling in Sweden.”

Hoffstedt also said that while it’s a difficult task for the Government and regulator to make the licensing measures attractive to punters, both parties could do more.

He concluded: “We certainly hope the SGA and Government will shift sides and safeguard the system. At the moment, they are both the greatest threat to the licensing system but we hope that they can come over to our side and protect it.”

Operator Kindred Group is also concerned about the market, and indeed the new measures. CEO Henrik Tjärnström said in May the operator is “concerned the Swedish gambling market continues to shrink” while the new Government measures will lead to a continued decline.

The SEK 100m fine by the SGA in March to subsidiary Spooniker Ltd for offering incentives in a non-compliant way, which Kindred argues is based on “unnecessary ambiguity” in regulation, certainly won’t help the operator’s opinion about the market.

Speaking to Gambling Insider Insider, group head of communications, Alexander Westrell, reiterated Kindred’s concerns, also citing government interference.

He said: “From the beginning, we’ve expressed that we believe the new proposals from Minister Shekarabi are a step in the wrong direction.

“We wish for the Swedish Gambling Authority to be allowed to carry out its regulatory duties without government interference. This is absolutely the time for the minister to trust his own agency and give them more space. SGA should focus on channelling, as that is a basic prerequisite for a well-functioning licensing process.”

“The new proposals will only direct Swedish customers to the black market where there is zero customer protection.”

“If the regulated companies were to be seen as a part of the solution instead of the problem, we can fight the black market together and provide the customers a sustainable and responsible gambling market.”

“The way chosen by the Government will result in worsened consumer protection for which the Government now must take full accountability.”

While we’ve heard an array of criticism of the new temporary measures from the Government, the state of the Swedish market and the SGA, it would only be fair to hear from the other side, so to speak.

When reaching out to the SGA, the gaming authority directed Gambling Insider to their own reports in May, both responding to the measures and providing a mandatory update of the impact the pandemic has had on the Swedish industry.

The monthly report showed that online and betting turnover decreased by 6% year-on-year in March, and 5% in April.

With January turnover up 21%, it suggests the impact of COVID-19 had actually reduced online activity, rather than increase it like the Government feared.

Even the SGA was sceptical of the measures, saying it is all “for a temporary

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strengthening of player protection, but questions some of the expected consequences of the proposals”. They believe the proposals will only have a marginal effect on player protection.

While the SGA doesn’t have any objection to measures taken in the “emergency situation”, it said the changes ahead of July could be time consuming, and there was a risk many licensees won’t be able to meet the requirements on time.

The authority did mention that the SEK 5,000 weekly limit doesn’t go far enough, stating it’s a “relatively high amount in itself”, with figures in 2019 suggesting “when referring only to those who play for money”, those over 18 years averaged SEK 5,072 in bets made, or lost, annually in the regulated gaming market.

It pointed to the fact five to 25% of players account for up to 90% of total wagers in the gambling market, suggesting the limit will only affect big-money players who can still switch between other operators and unlicensed markets.

These findings continue to question the measures, although the SGA believes it can cause an “interruption in players’ gambling”, which can be seen as a positive from a responsible gambling point of view, while it also thinks the mandatory casino time limits will have a positive effect.

There are always going to be positives and negatives when further regulations are put in place. In this instance, it’s right that player safety is at the forefront of the industry at this present time, more than ever. However, such measures should look at the wider picture and statistics. It can lead to a dangerous precedent with the Government overriding gaming authorities, and with the bigger picture in mind, the general consensus is the COVID-19 measures will do more harm than good to the Swedish market.

Alexander Westrell

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NEW HORIZONS

Evolution Gaming CEO Martin Carlesund and Lightning Box Games CEO Peter Causley help analyse the gaming sector's short and long-term outlooks as COVID-19 restrictions begin to lift

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NEW HORIZONS

Cast your mind back to July 2019. Macau casinos had just posted a 6% annual growth in June revenue, while Nevada’s casinos generated an 11% rise. Combined, the two gambling hubs took $4bn in revenue for the month alone, while sportsbooks were gearing up for a new football season and major tennis tournaments in Europe, and were fresh off the NBA Playoffs in the US. The phrase ‘how times change’ has never felt more cliché yet, at the same time, never more apt. With the world gripped by the coronavirus pandemic, no one in the gaming industry could have foreseen the downturn in revenue that has befallen numerous areas in the sector.

But there is industry-wide hope following the most unprecedented period in gaming’s history. Online casino, poker, esports and virtuals have capitalised on a growth opportunity, with increased interest from stay-at-home players. With major sports also returning and casinos beginning to reopen around the world, the gaming industry will be hopeful it’s on the road to recovery – without any second waves of COVID-19 cases. Analysts at an ICE Asia panel in June, for instance, discussed the possibility of Macau returning to 2019 revenue levels in H1 2021; New Zealand casinos are also now able to function with no domestic restrictions whatsoever. (The country has declared itself free of COVID-19 but still has travel limitations in place.)

In the US, the road to recovery looks far longer – and far more socially distanced – with bond credit rating agency Moody’s projecting a 70% reduction in EBITDA for Las Vegas firms in 2020 and Fitch Ratings saying pre-COVID levels would only be re-attained by 2023.

Moody’s analyst Adam McLaren told Gambling Insider levels could rise in 2021, however, and there will be a genuine buzz pervading the Las Vegas Strip if operators can get the requisite safety measures in place. In other words, things will be very different for gaming in the coming months – but there is reason to be hopeful.

Peering over from what is hopefully the summit of what the sector has been presented with, a new landscape is coming into view.

The online sphere

The coronavirus has affected the land-based and online sectors very differently. While sports betting organisations have taken a hit, online casino has taken in the bulk of new players looking to take their business elsewhere.

So much so, in fact, jurisdictions such as Sweden and Finland have imposed new player limits during the pandemic. While there have been increases in online volumes (as much as 140% in Australia, according to its regulator), the industry maintains there is little data to suggest overall gambling levels have surged uncontrollably, or that problem gambling has risen to levels higher than pre-pandemic. But the fact remains verticals such as online casino, poker and live casino

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have coped far better than betting shops, casino hotels and the like.

A prime example is Evolution Gaming. The live casino provider has been “unaffected” by land-based closures, although this is something CEO Martin Carlesund is not particularly pleased to announce, given the circumstances.

In April, the supplier reported a 45% year-on-year rise in Q1 revenue to €115.1m ($124.2m), primarily crediting the growth to the absence of sports betting. Even during the pandemic, Evolution has done “very well”, as Carlesund tells Gambling Insider, wary though he is of benefiting from the “horrible situation in the world”.

From a neutral perspective, the executive has inevitably witnessed changes in player behaviour during a period of extended lockdown, describing a “paradigm shift” for the industry. Carlesund explains: “Of course it won’t change as drastically; it will revert a little bit to what it was before, at first. If you take travelling, for example, we had a peak for travel where people were flying everywhere. But, coming out of this pandemic, we’ll be a little more cautious, not travelling as much as before. If it does return to its pre-pandemic rate, it will take a long time.”

Travel is one example of enforced change, while another is inevitably a greater focus on digital gaming. Land-based companies may have always seen online as the enemy, as discussed at an industry conference earlier this year, but the pandemic may have helped persuade both businesses and regulators to see online as less of a threat. Carlesund says: “Of course, I see a growth in the player numbers that I think will be persistent after the pandemic. We will return to some kind of business as usual or as it was, but not really to 100%. It will change the view of online, player behaviour and regulation.”

Regardless of – but at the same time driven by – the pandemic, the Evolution Gaming CEO believes the majority of casino revenue will become digital in the future, warning the “online evolution has just started”. While as much as 90% of pre-pandemic casino revenue remained offline, according to the executive, he projects the landscape will be significantly different in the long run. “The biggest changes will be in markets that are heavily dependent on land-based,” he explains. “Now they’ll see that, if they would have had online, they would actually have some revenue. New Jersey, for example, is doing a lot better than Nevada. In total, 90% of revenue in casino is still land-based, 10% is online and 2 to 3% is live. So really the online evolution has just started. In the future, I think 50 to 70% of casino will be online. Maybe this [pandemic] has increased the speed a bit but the potential has always been there for online casino in general.”

While he reiterates his hesitance to discuss what live casino has gained from the situation, Carlesund feels the industry will have benefited from being forced to think in greater terms about long-term sustainability.

He says: “I do like that the world is a bit shook up, and

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NEW HORIZONS

maybe thinking one step further: What does this mean?

How do we address the future? Should we travel as much?

This is good for a lot of business, I think. Where are we going with this? How will the world look? Many people are looking at this right now, a bit distressed, but I think those thoughts are good.”

Martin Carlesund

The land-based view

Where online has been fortunate, however, the land-based sector has suffered hugely due to the coronavirus. In the US, 100% of land-casinos were closed, as operators and suppliers began to see revenue, EBITDA and profits plummet. The aforementioned monthly figures in Macau and Nevada sum up a bleak picture, although they were far from the only jurisdictions to be afflicted. Even after reopenings in Macau – casinos resumed operations in February after two weeks of closure – travel restrictions have significantly reduced financial projections.

Wynn Macau, for example, expects adjusted EBITDA for April and May to fall somewhere between $118.8m and $126.1m, representing a 157% drop.

Hope is returning, though, with optimism generated by the June reopening of the Las Vegas Strip, the Hard Rock Seminole in Florida and many other iconic properties, not just in the US but globally. Yet the pandemic’s effect has left a large vacuum for the casino sector. Thousands have either lost their jobs or been furloughed. Executives across the board have taken pay cuts, forgone salaries completely or donated them to furloughed workers, and reopened casinos will have a completely different look post-pandemic to anything that had ever gone before.

Offering analysis from a land-based point of view, Lightning Box Games CEO Peter Causley sees long-lasting

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effects on the make-up of the industry. A slot games studio, Lightning Box works with both online and land-based operators. With clients in UK, Greece, Latin America and the US, Causley admits the least the supplier can expect is the delay of new game launches. The company’s partners have had to furlough a large percentage of staff, with fewer redundancies. Indeed, there’s no denying the “diminished” revenue potential of the casino floor in the coming months, chiefly due to social distancing measures.

Causley tells Gambling Insider: “With social distancing being with us from now and into the next 12 months or more, leading to every second slot machine in a bank disabled, obviously you’d think the purchasing of new games by venues will be diminished. Casino estimates are around a 40% reduction in slot offerings (since not all machines are in a bank), but possibly only a 25% reduction in revenue due to greater utilisation of remaining slots. Pair the above with lost revenue for casinos over the past three months and it becomes an inevitable downturn in sales for suppliers. Only the greatest optimist could see otherwise.”

The executive does see a silver lining in the potential resurgence of leased games, which will not eat into a casino’s diminished capital expenditure budgets. He adds: “If we were initially expecting 10 of our ‘for sale’ games to be launched over the next 12 months, that may change to four ‘for sale’ games and one leased product.” Like Carlesund, the Lightning Box CEO also sees the post-pandemic world acting as a catalyst.

"In total, 90% of revenue in casino is still land-based, 10% is online and 2 to 3% is live. So really the online evolution has just started.

In the future, I think 50 to 70% of casino will be online" - Martin Carlesund More specifically, he foresees changing attitudes towards revenue-sharing products in light of reduced budgets on American and Australian gaming floors, along with potentially improved sharing rates for suppliers in the ultra-competitive UK retail sector. “This will culminate

NEW HORIZONS

in more of a partnership between the manufacturer and venue operator, wherein they both share in the ups and downs of game performance,” he theorises.

“So there will be less risk for casinos, shrinking their capital expenditure, while still giving them access to new content and providing incentive for suppliers to keep innovating.”

Convergence

Perhaps the most pertinent way of assessing gaming’s new landscape is not by viewing online and land-based separately, but rather evaluating acceleration in the convergence of the two. Carlesund’s point, regarding online being perceived as less of a “threat” is poignant here. While the land-based sector was at a standstill, the state of New Jersey best exemplified the divide, with the Garden State’s main headline being a record fall in overall revenue for April, and online revenue more than doubling to a record $80m. The Evolution CEO remarks: “The Las Vegas Strip was dark and shut down – billions of dollars have been invested and there was nothing happening. Each of these casinos could have been operating online. If I were there, I would think about that.”

Faced with a choice between online revenue and none at all, therefore, land-based properties can no longer afford to take a judgemental view. This is especially true of the period ahead where, as Causley has pointed out, casinos can expect reduced handle. In fact, the Lightning Box CEO believes the next 12 months could see staggering levels of progress in this area. “We had already seen great convergence of slot design for land-based and online a few years ago,” he explains. “Now we will definitely see those largely

Peter Causley

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"We could see growth towards convergence in the next 12 months that we would have previously expected to take 10 years. This of course will just mirror what we see in the general business community" - Peter Causley retail-operating businesses accelerating towards getting into digital or growing their existing digital revenues, even if only to balance up their risk profiles.

We could see growth towards this outcome in the next 12 months that we would have previously expected to take 10 years. This of course will just mirror what we see in the general business community.”

A new horizon

While the last issue of Gambling Insider examined the immediate impact of a pandemic, the scale of which the industry had simply never seen before, our current issue is filled with optimism. Providing there are no second waves of the virus, gaming has hopefully seen the worst of the crisis and we’re looking at a new horizon. Online companies have been able to adapt, helping weather the storm. But for land-based casinos, this new horizon will inevitably offer a period of downturn – even if it's nowhere near the absolute zero of the pandemic’s peak. Progress will be slow and, initially, results far below pre-pandemic levels.

As we move towards this new landscape, involving an ever-increasing intertwining of the online and retail spheres, it’s important to note we’re not out of the woods just yet. With guests in Las Vegas always seeking the ultimate tourist experience, genuinely maintaining social distancing will be tough. Measures are in place, with properties around the world making a concerted effort to prepare for a safe reopening.

And, with the industry pulling together more than ever, there is much to look forward to. But with gaming only just setting off on the long road to recovery, the hard work is just beginning.

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COMPANY RIVALRIES

LET BATTLE COMMENCE Tim Poole looks into the effects of heated industry rivalries, while assessing the potential of this competition inadvertently leading to M&A

David McLeish Everyone loves a rivalry. Ali vs Frazier, Red Sox vs Yankees, Alien vs Predator. Classic rivalries stand out amid a sea of regularity.

Ask a Tottenham Hotspur footballer how they’ll prepare for a Premier League match and they’ll utter the bog-standard cliché “we take it one game at a time”. Until they face Arsenal, when months of pent-up emotion – and in many cases hatred – rise to the surface for a fixture singled out above all others on the calendar.

The intensity of a rivalry is not just restricted to London derbies, nor sport itself. The Cold War fascinates many historians, while the political fundamentals

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behind USA vs USSR stem from a very basic rivalry in itself: capitalism vs communism. In the current climate, political life exudes bitter rivalry every day: left vs right, Brexit vs remain, Donald Trump supporters vs the rest of the world.

In business, and gaming in particular, things are no different. A land-based casino in the US, however, will have little reason to declare a turf war against a sports betting supplier based in Eastern Europe, but two UK-based sports betting operators competing for the same target market are far likelier to tread on each other’s toes.

This is a hypothetical example but, at

Gambling Insider, we’ve seen true stories over the years of companies with such heated relationships they have refused to sit at the same table at awards ceremonies.

Provided there are no underhand tactics or overzealous personal grudges, is intense competition between rivals a bad thing? The best tennis players in history will remember their greatest rivals and how much they raised their game for them; they may not even remember some of their other career opponents. Former prime ministers and presidents often owe their biggest adversaries debts of gratitude when they reflect on their tenures. Unless a rivalry

COMPANY RIVALRIES

spills over to an unusually extreme degree, there is usually mutual respect after the event, or a knowledge that one’s performance was exponentially boosted simply to get one over a rival.

THE M&A ANGLE Examples of gaming companies being at loggerheads are still plentiful within the industry. Besides what goes on behind the scenes, a recent example was Sportsbet’s legal case in Australia, when it sued rival operator Sportsbetting.com.au over claims its name violated intellectual property rights. Where intense competition may perhaps become an incestuous concept, however, is when potential M&A becomes a genuine prospect.

What happens to close competitors when there is a chance enemies could forge an alliance? Employees at Ladbrokes and Coral will know the feeling, so too soon will workers at Flutter Entertainment and The Stars Group. And though the landscape is very different now, it was once a possibility for stakeholders at DraftKings and FanDuel.

David McLeish, partner at London-based legal firm Wiggin, which acts on a number of deals within the gaming sector, says leadership and personality are key influencers when it comes to the marriage of two erstwhile opponents. As historical precedent shows, the anticipated outcome of joint leadership may undermine any prospective “dream combinations”, although the ownership structure of an organisation will also play a part.

McLeish tells Gambling Insider: “One of the key dynamics with mega mergers is the make-up of the leadership team of the combined business. You can go back to Bwin and PartyGaming going down the route of co-CEOs and I don’t see that being repeated.

You need real leadership to make deals that look good on paper work in practice and, if you’ve got two former rivals, who’s going to end up in the driving seat? Is one CEO going to stand aside or is one CEO really going to want to report to the other? That decision may come down to personalities or, more often, which business is bigger. It could also depend on the ownership dynamics of the companies involved and the level of equity held by management.”

WEAKENING BARRIERS? If anyone reading this is worried about sharing an office with those they have tirelessly competed against, McLeish believes the recent Flutter-Stars merger may act as an indicator moving forward. A key consideration of a merger or acquisition, as he explains, is on the

anti-trust side. But if market share is viewed on a product-by-product basis, rather than as an overall share of the online segment, more leeway exists. “A key early focus on deals is around the competition aspects,” he adds. “For example, when Ladbrokes and Coral merged, they had to sell off a substantial number of shops, which ended up going to Betfred.

“The online gambling product-by-product analysis applied by the UK Competition and Markets Authority on the Flutter-Stars deal, with Stars holding no retail interests, surprised some and will be a helpful guide for future deals in the online space – but you still have to look at it on a case-by-case basis.”

McLeish believes that M&A can lend itself perfectly to a growth strategy if a potential acquire or merger partner offers one or more means of access to proprietary technology, a diversification of product offering, or an extended geographical reach. While share price and underlying company performance are obvious dictators of destiny, these drivers are key and have played a part in B2B and B2C firms crossing paths, best exemplified

by DraftKings’ purchase of sportsbook supplier SBTech, and Playtech’s acquisition of Italian operator Snai.

“Some of it comes down to companies, particularly operators, gaining their own technology foothold and realising economies of scale,” says McLeish. “It makes sense for DraftKings to acquire SBTech on the basis it allows them to control their technology roadmap in the US market, which is effectively like 50 different countries that all have their own peculiarities from a licensing and technical perspective.”

LET BATTLE COMMENCE The overall movement of industry M&A towards these kinds of cross-market – or B2B to B2C – combinations may ultimately act to intensify direct rivalries even further. If you’re a sports betting operator, for instance, a greater chance of success presents itself by looking to acquire an operator in another vertical, or a software provider. Your closest rivals, therefore, will not only remain in competition with you over market share, they may even become competitors in the field of M&A itself.

For that reason, inter-sector rivalries remain an important facet of the gaming industry. And while they may incite emotional negativity, they can certainly drive positive economics in terms of competition, performance and, ultimately, provide the player with the best possible experience.

FEATURES

“BECAUSE WHAT’S COME OUT OF THE FLUTTER-STARS GROUP MERGER IS VERY MUCH LOOKED AT ON A PRODUCTBY-PRODUCT BASIS RATHER THAN A PERCENTAGE OF ONLINE GAMBLING MARKET SHARE, THE DECISION MAY HAVE LIFTED SOME CONCERNS IN THE UK MARKET FROM AN ANTI-TRUST PERSPECTIVE” - David McLeish

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PRODUCT REVIEW

WHAT’S NEW ON THE MARKET

Aztec Sun - Booongo

Gambling Insider previews some of the newest products available in the gaming market today

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TIKI TOWERS – GENESIS GAMES Tiki Tower is a line game with five reels that allows the player to extend the rows from three to eight rows, giving a total of 80 pay-lines. To reveal a row, the player needs to land the Tiki Tower symbol on the 2, 3 and 4 reel.

Aside from this easy feat, players can enjoy the mystery symbol stack feature on all Tiki Towers that land. When Tiki Towers land, a mystery symbol will be revealed in full stack, giving players more wins with bigger combinations.

And once players reveal eight rows and land three more Tiki Towers on a spin, they’re awarded seven free spins.

This recent release by Genesis Games under the Radi8 product line pays up to 3,000 times the wager amount. Similar to other Radi8 games, each wager in Tiki Tower will earn players Radcoins in Rad+, which can be exchanged for Free Spins, Wild Boosters, Bonus Rounds and Loot Boxes.

AZTEC SUN – BOOONGO Adventure awaits all those who are ready to bask in the light of Booongo’s latest Hold and Win game, Aztec Sun. The secrets of the Aztec temples will all be revealed in the developer’s new 3x5, 25 paylines slot, which features both stunning graphics and immersive soundscapes.

Collect at least six Aztec Suns and then hold in the thrilling re-spins series for even more suns to come out and shine. Intrepid explorers will have the opportunity of winning 1,000 times their stake when 15 suns land on the reels and award the Grand Jackpot.

Hold a little longer, and players could receive high paying symbols in the bonus round where at least three scatters could land on the reels and award an additional eight free spins.

With Hold and Win mechanics offering a balanced, cutting-edge math model providing numerous ways to win, Booongo’s latest title is designed to give every player a chance to shine.

PRODUCT REVIEW

NYJAH HUSTON: SKATE FOR GOLD – PLAY’N GO Grind your way to gold in the latest Play’n Go slot, Nyjah Huston – Skate for Gold. The game is a five-reel slot created in collaboration with one of the world's most influential stars of skateboarding, four times World Champion Nyjah Huston.

Nyjah Huston – Skate for Gold is an innovative title, and it’s clear to see that the theme of skateboarding has influenced not just the style and design of the game, but has also shaped the gameplay. With Nyjah in various action poses representing several of the game symbols, the special features, Wildboard and SKATE, revolve around Nyjah performing tricks on the reels and landing combos, unlocking Wilds and multipliers for players.

The slot specialists are becoming increasingly known for their successful collaborative titles, and it seems this slot is no exception. The game has the potential to grab the attention of a broad audience; its theme and simple mechanics will appeal to casual slot players.

At the same time, its unique gameplay and features will pique the interest of more seasoned gamers.

PEARL BEAUTY: HOLD AND WIN - PLAYSON Playson takes players on an exciting quest in search of the jewels of the sea in its latest slot, Pearl Beauty: Hold and Win. This beautiful Asia-themed video slot is set on a 3х5 grid with 243 ways to win.

Its All Pays mechanics allows for great wins with symbols landing in stacks.

The main game features a wild symbol and bonus symbols drawn as stunning pearls. Six or more of these trigger the Hold and Win bonus game, where only bonus symbols stick on the reels.

Pearl Beauty: Hold and win - Playson

FEATURES

Tiki Tower - Genesis Games Incorporating the ever-popular major and mini bonus symbols which deliver respective in-game jackpots, there’s a special Golden Pearl symbol that collects the value of all visible bonus symbols when it lands. Once the whole grid is filled with bonus symbols, no matter their type, players win a grand jackpot worth 1,000 times of total bets.

Pearl Beauty: Hold and Win is an immersive adventure to the Orient and is packed with features that will keep players entertained for hours.

FISHING GOD - SPADEGAMING Introducing Fishing God, the first multiplayer fishing game approved by the Malta Gaming Authority (MGA). Fishing God combines skill, luck and competitiveness in one package, offering players a new way to interact with each other while playing on their favourite online casinos.

Fishing God offers a different experience compared to conventional slots by allowing players to decide the desired reward and actively hunt for it. In this game, you have control over your rewards by choosing fish to target and earn them by taking them out.

Fishing God allows up to four players to play simultaneously in the same game room, adding a layer of competitiveness and interaction that makes the game even more exciting.

There are special fish with exciting power ups that help you in your hunting.

Each of the special fish will have unique features that let you take down many fish at the same time for bigger rewards.

Experience Spadegaming’s signature fast-paced, high-reward gameplay in Fishing God and become the best fish hunter in the world.

CARE AND PROTECT RANGE – TCSJOHNHUXLEY TCSJOHNHUXLEY recently launched its Care and Protect range of products, designed to protect gaming staff and players in the fight against COVID-19.

As casino operations start to resume around the world there’s a wide range of mandatory measures required to ensure the safety and wellbeing of casino staff and players. TCSJOHNHUXLEY has developed a portfolio of key products ready to support customers with all they’ll need for their table game operations.

The Care & Protect range of chip sanitisation products has been designed with flexibility in mind. From the Mini Chip Sanitiser 24-chip unit that sits on a gaming table, to multiple stacked mobile units that can sanitise up to 600 chips at one time, all of the Care & Protect products conform to the

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PRODUCT REVIEW

Fishing God - Spadegaming highest safety standards, incorporating innovative, patent pending design.

The Chip Sanitisers utilise UV-C light technology, enabling chips to be sanitised in minutes, neutralising harmful germs that can cause infection. They feature a unique patent pending design that ensures every surface of the chip is completely cleaned before being put back into play. It also incorporates a safety mechanism, so the machine will not operate unless the unit is completely shut, guaranteeing no harmful UV light can escape.

Where larger quantities of chip sanitisation is required, the mobile trolley is ideal. Incorporating its own power unit to ensure a continuous power supply for up to eight hours and with no need to connect to power, the Mobile Chip Sanitiser Trolley can be moved around the gaming floor where and when chip sanitisation is required, giving total flexibility.

COVID-19 PROTECTIVE RANGE – MGR MGR has developed a whole line of protective shields for slots and tables.

The V1 shield is self-supporting, without the need for additional support structures, produced with a UV-treated transparent polycarbonate screen, it allows a functional and comfortable performance. The panel can be customised with logo and the structure with various colour finishes.

V2 is the evolution of V1, because it integrates all the specifications of V1 with the special “slide & hide” technology, to be able to extract the screen only when actually needed. With V2, MGR has tried to develop a functional but also comfortable product that doesn’t hinder customers and operators.

V3 is the supplier’s best seller solution, because it’s very functional for various solutions within the casino. It’s certainly useful between one slot section and another but also for electronic roulette stations and live gaming tables.

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V4 is MGR’s solution for upright machines. It can be fixed to the cabinet without having to puncture or damage them and without the aid of a support.

It’s a product that manages to combine economy, ease of use and shipping efficiency.

V5 is a solution for the protection of gaming tables, blackjack and baccarat to allow customers to play live without worries. It’s an interlocking module solution that doesn’t require drilling or damaging the table and nor much packing and shipping space.

MGR has also created a special line of polycarbonate masks for dealers, waiters and employees, ideal for those who have continuous contact with the public and need extra security, both for themselves and for the customers.

They have adjustable Velcro back attachment and CE certification as well.

In addition to its shields and masks, MGR has created two lines of sanitizing gel dispensers: a smart and inexpensive one, focusing on a consumer product with a five-litre tank, and luxury one, with an automatic jet and glossy finishes.

D1 is the supplier’s best selling dispenser, customisable with the customer’s logo and with colours, it contains a five-litre tank and is valid for a very large area such as the reception areas or floors. It can be triggered with a manual push function.

D2 is all galvanised steel, customizable in various glossy finishes: chromed, satin, golden or rose gold. It has a 0.8-litre tank of gel and an automatic sprayer with photocell.

This is ideal for VIP rooms or high-level restaurant areas, clubs, private rooms.

In addition, we have invested in joint ventures with one of our partners for the creation of this self-supporting thermal scanner with facial and mask recognition.

It recognises the temperature, the presence or absence of the faceplate and connects the device with sliding doors or electric turnstiles – all automatically without the help of an operator.

V1 protective shield - MGR

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ActiveWins

BBIN

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

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

With 20 years of experience supporting over 500 clients and more than 1,000 professionals around the world, BBIN is one of the most suitable partners in the East. For connecting with industry dynamics, BBIN not only keeps enriching four product categories - live casino, casino games, BB Luck and sports, but also upgrading two main services: game API and white label solution.

Agilysys

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

AGS

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

Ainsworth Game Technology

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

bet365

www.bet365.com / T: +44 8000288365 / E: support-eng@customerservices365.com bet365, a leading, multi-award-winning international online gambling operator, has over 53 million customers with products translated in 20 different languages that support 24 different currencies. bet365 offer a cohesive suite of products, from sports betting to casino, live casino, games, poker and bingo. Their long standing policy of pursuing licences in regulated markets ensures tailored betting and gaming products to millions of customers on a global scale. The affiliate website and backend is all created in-house, and with one of the industry’s largest dedicated affiliate teams, the programme constantly challenges itself to deliver the very best service both in terms of response rates and day-to-day account management.

BetConstruct

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

Aristocrat

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

BetGames.TV

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

Aruze Gaming

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

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Betgenius

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

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Betradar

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

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Comtrade Gaming

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

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

Betsoft Gaming

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

BMM Testlabs

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

D DataSpade Inc.

BtoBet

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

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

C Casino Technology

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

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

Degree 53

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

Digitain LLC

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

Colossus Bets

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

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CONNECTIONS

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

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Gaming Laboratories International (GLI)

EGT

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

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

Gaming Partners International

EnergyCasino

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

Everi Holdings Inc.

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

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

Ganapati PLC

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

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

Greentube Internet Entertainment Solutions GmbH EveryMatrix

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

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G GameArt

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

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

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Habanero

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

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Helio Gaming

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

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CONNECTIONS

J JCM Global

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

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IGT

www.igt.com / T: + 1 7026697777 / E: info@igt.com IGT enables players to experience their favorite games across all channels and regulated segments, from gaming machines and lotteries to interactive and social gaming. Leveraging a wealth of content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, IGT's gaming solutions anticipate the demands of consumers wherever they decide to play.

Kambi

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

Interblock

www.interblockgaming.com / E: info@interblockgaming.com Interblock is a developer and supplier of fully and semi-automated luxury electronic table gaming products. Its multi-player gaming devices set industry standards and provide the ultimate in luxury interactive entertainment experiences. The Interblock brand is globally recognised for gaming solutions and technical support in more than 166 jurisdictions.

Intertops

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

INTRALOT

www.intralot.com / T: +30 2106156000 / E: info@intralot.com INTRALOT, a public listed company established in 1992, is a leading gaming solutions supplier and operator active in 44 regulated jurisdictions around the globe. With €0.7 billion turnover and a global workforce of approximately 3,800 employees (2,200 of which in subsidiaries and 1,600 in associates) in 2019, INTRALOT is an innovation - driven corporation focusing its product development on the customer experience. The company is uniquely positioned to offer to lottery and gaming organizations across geographies market-tested solutions and retail operational expertise. The company has designed a new ecosystem of holistic omni-channel solutions across verticals (Lottery, Betting, Interactive, VLT) for Lotteries digital transformation. INTRALOT has been awarded the prestigious WLA Responsible Gaming Framework Certification by the World Lottery Association (WLA) and the WLA certificate for the Security Control standard.

Konami Gaming, Inc.

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

L LeoVegas Affiliates

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

Lightning Box

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

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M Merkur Gaming

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

Microgaming

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

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NOVOMATIC

www.novomatic.com / T: +43 2252 606 0 / E: communications@novomatic.com The NOVOMATIC Group is one of the biggest international producers and operators of gaming technologies and employs nearly 30,000 staff worldwide. The product range includes land-based gaming products and services, management systems and cash management, online/mobile and social gaming solutions as well as sports betting solutions.

O Ortiz Gaming

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

P paysafecard

NetEnt AB

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

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

www.paysafecard.com/business / T: +43 17208380 / E: success@paysafecard.com Paysafecard, part of Paysafe Group PLC, is the global leader in prepaid online payment solutions. Available in 42 countries at over 500,000 sales outlets, it can be used in thousands of online shops worldwide.

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

Play'n GO

Newgioco Group

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

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

Playtech

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

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FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Prestige Seating Technology

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

R Rymax Marketing Services

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

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CONNECTIONS

T Tal Ron, Drihem & Co.

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

TCSJOHNHUXLEY

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

Trustly Group AB SBTech

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

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

Scientific Games

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

Sirplay

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

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

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

U UltraPlay

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

Y Yggrdasil Gaming

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

Synergy Blue

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

GAMBLINGINSIDER.COM

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FINAL No challege too WORD great for growth Vigen Badalyan, BetConstruct founder and CEO, speaks with Gambling Insider about the supplier’s experiences during the COVID-19 pandemic and the rise of live casino

“LIKE THE REST OF THE WORLD, WE HAVE HAD TO EXPERIMENT TO WEATHER THE STORM. THE PANDEMIC HAS CAUSED SELF-PURIFICATION. IT’S AN OPPORTUNITY FOR ALL TO IDENTIFY WEAK POINTS AND UNDERSTAND WHERE THEY FALL BEHIND AND WHAT NEEDS IMPROVEMENT. WE ARE NOW EVEN STRONGER AS WE MANAGED TO ADAPT ON TIME TO RESPOND TO THE NEW REALITY”

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Headquartered in London, BetConstruct has developed a number of offerings since Vigen Badalyan founded the company in 2003 including sportsbook, live casino, poker and fantasy sports. Badalyan went on to become CEO of the company in 2017.

Despite the challenges imposed by the COVID-19 pandemic, BetConstruct has already had a busy 2020. In May, the supplier received Malta Gaming Authority approval for its virtual sports offering, while in June, furthering its reach in Europe, it was awarded its Swedish online gambling and betting license.

BetConstruct USA also continues to develop.

Earlier this year, the supplier partnered with the Iowa Tribe of Oklahoma to launch its Mobile Social Casino System. The agreement strengthened BetConstruct’s position in the burgeoning US online gaming industry.

Could you tell us about some of the most important developments you’ve seen in BetConstruct since you founded the company?

We started as a B2C operator back in 2003, further forming the B2B arm for the business in 2011. Years ago when we tried to buy solutions for B2C operations, the then market players were reluctant to communicate with us and we faced difficulties. So we thought we should create those solutions ourselves.

Throughout these years and now, we’ve put two things as a priority: building brand recognition and creating as strong a product as possible. Those two processes will be in effect for as long as our businesses operate.

Of course, the current pandemic has caused major difficulties for a number of businesses in the industry. How has it impacted BetConstruct’s own operations and performance?

Like the rest of the world, we have had to experiment to weather the storm. The pandemic has caused self-purification. It’s an opportunity for all to identify weak points

and understand where they fall behind and what needs improvement. We are now even stronger as we managed to adapt on time to respond to the new reality.

Have you seen any trends in its impact on the operator partners you deal with? Are they favouring any specific BetConstruct products, for example?

Our partners have embraced the new reality and diversified their lineups with verticals such as virtual sports, casino slots and live casino. Land-based casinos have also been very flexible. Many now use the live casino offering we have. We build and supply branded tables in a short time to cater to their wants and needs.

What is the potential for online casino and live casino moving forward? Do you think it will maintain its growth in popularity?

There is no way back. Although overall sports wagering has declined, operators have casino games revenue. I believe this will continue because it’s always hard to change players’ habits and force them to return to past realities.

What is your plan for BetConstruct for the rest of 2020?

In 2020, we will keep on adapting and improving ourselves, and continue to fine-tune and polish our products to suit regions. The world has to learn to live with this new reality. Eventually, we’ll be able to offer operators a complete platform enriched with refined solutions and licenses.

We’ve also addressed the challenges the pandemic imposes and launched PandaMR, a startup that provides the global event industry with tools for designing and organising virtual events.

It’s an addition to our products and startups making up SpringBME, which will be further developed.