Gambling Insider Nov/Dec 2021 by Gambling Insider

Nov/Dec 2021

Payments in kind

Cashing in on cashless: We explore just how influential payments has become in gaming

2021 REVIEW Looking back on another year in gaming, and previewing 2022 MARKET FOCUSES A closer view of the UK, Spain and the Netherlands REMOTE REVOLUTION? Are gaming companies returning to the office?

EDITOR’S LETTER COO, EDITOR IN CHIEF Julian Perry EDITOR Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITER Peter Lynch Peter.Lynch@gamblinginsider.com JUNIOR STAFF WRITER Isabella Aslam Isabella.Aslam@gamblinginsider.com LEAD DESIGNER Brendan Morrell DESIGNER Olesya Adamska

Julian Perry, COO, Editor in Chief

Tim Poole, Editor

ave you ever wondered what happens when you pay for something? I'm talking about the millions of microtransactions occuring in the blink of an eye: where your money goes, how it gets there, who it passes through and how much technology was involved in that complex-yet-immediate process. Maybe you haven't. But the folks at Global Gaming Award-winner Sightline Payments, Shortlisted nominee Global Payments and other companies of a similar ilk certainly have. Payments has become an increasingly influential aspect of the gaming sector over the years and, as such, we are closing our final issue of 2021 with an in-depth focus on the topic. It's become well publicised by now that, following the Covid-19 pandemic, cashless gaming has soared – especially so in the US. In this issue's cover feature, we delve further into cashless, while also touching on main payments themes such as variety and security. In short, everything you to need to know. And what more do we have to entice your heavily sought-after attention, when you could quite easily be watching Squid Game on Netflix, listening to an audiobook or hitting re-opened casinos, bars and restaurants the world across? Well, we like to think we've got every major area covered: remote work or returning to the office? The future of esports betting? The latest must-know trends in data and compliance? As always, we've got your back. Elsewhere, Gambling Insider brings you an exclusive interview with Betting & Gaming Council Chair Brigid Simmonds, market focuses on the Netherlands, Spain, and the UK, and there's also a Q&A with a mysterious chap who goes simply by the name of 'The Premium.' On a more social note, how wonderful to be back at industry tradeshows, physically meeting people – both new and old faces – generating new business and sharing stories about lockdowns being a thing of the past. The iGB Live! show in Amsterdam brought a feeling of nostalgia but, with SiGMA around the corner in Malta and ICE London just a few months away, we'll soon all be 100% accustomed to being back in the company of our gaming peers and colleagues. At SiGMA, you are encouraged to pick up a copy of our Malta Focus magazine, or our Gambling Insider and Gaming America titles at other shows. You won't regret it. TP, Editor

FEATURED IN THIS ISSUE

DESIGN ASSISTANTS Radostina Mihaylova, Inna Shtereva, Svetlana Stoyanova, Aleksandra Cakikj MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 BUSINESS DEVELOPMENT MANAGER Warren Wilkinson Warren.Wilkinson@gamblinginsider.com +44 (0) 207 613 5863 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 Michelle Pugh Michelle.Pugh@gamblinginsider.com Tel: +44 (0)20 7739 5768 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@gamblinginsider.com Tel: +44 (0) 207 739 9918 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 CREDIT MANAGER Rachel Voit WITH THANKS TO: Warwick Bartlett, Amit Klatchko, Gemma Jones, Christopher Justice, Joe Pappano, John Mallia, Mikael Lijtenstein, Zak Cutler, Elaine Dutton, Fredrik Elmqvist, Erik Lögdberg, Amir Mirzaee, Malte Hegeler, Marco Blume, Andrea McGeachin, Brigid Simmonds, Andrew Lindley, Nicola Rowlands, Stephanie Attias, Paul Sculpher, Willem van Oort, Xavi Munoz Bellvehí, David Brohan, Alex Czajkowski, Mark Patrick, Eriks Petersons, Rickard Vikström, Warren Russell, David Brace, The Premium, Lee Richardson, Andrey Astapov, John Connelly, Robert Filić, Igor Marković, Adam Rowley Gambling Insider magazine ISSN 2043-9466 Produced and published by Players Publishing Ltd

BRIGID SIMMONDS CHAIR, BETTING AND GAMING COUNCIL

JOHN CONNELLY GLOBAL CEO, INTERBLOCK

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 34

ISSUES

GGA AWARDS FEATURES

8 Facing facts Gambling Insider focuses its lens on various facts and figures from the global gaming industry in 2021, focusing specifically on the US market

20 Global Gaming Awards We look at the latest developments for next year's London ceremony, as the Global Gaming Awards return to the Hippodrome Casino, at the heart of Central London

10 In numbers A gaming snapshot by Fantini Research 16 The global outlook Global Betting & Gaming Consultants, the global gaming data expert, provides exclusive data to Gambling Insider 18 Taking stock We track operator and supplier stock prices across a six-month period

COVER FEATURE 22 Payments in kind Peter Lynch delves further into the world of gaming payments, with the help of several payments specialists

30 The year in review Gambling Insider Editor Tim Poole looks back at what 2021 brought the gambling industry 32 Industry predictions What lies ahead in 2022 for gambling? 34 Remote revolution? Isabella Aslam speaks to Elaine Dutton of CSB Group about whether gaming companies are returning to the office or not 40 GI Huddle Yggdrasil CEO Fredrik Elmqvist is interviewed on the GI Huddle 42 Big question: Esports After enjoying rapid growth throughout the early stages of the pandemic, what does the future hold for esports? 48 Exclusive Q&A: Brigid Simmonds The Betting & Gaming Council Chair speaks with Tim Poole about finding the balance in gambling

INSIDERS 50 Helicopter view We catch up with Sportech's new executive leadership team, following the company's financial results 52 Regulation; innovation Regulation expert Stephanie Attias gives her view on all things payments 56 Casinosaurus Rex Regular Gambling Insider contributor Paul Sculpher imagines how a 1990s-operated casino would fare today 58 A messy start Willem van Oort on the launch of Netherlands' regulated market. No one said it would be easy, but no one said it would be this hard... 60 The M&A in Spain... Gambling Insider contributor Xavi Muñoz Bellvehí discusses M&A regulations within the Spanish market 66 Operating at scale David Brohan, Gaming & Leisure Analyst at Goodbody, reflects on 888 buying William Hill's European assets

68 Alex Czajkowski More from our iGaming marketing guru... 70 CellPoint Digital Bonus content on our main theme of gaming payments 72 Ciklum Are vanity metrics misleading your shareholders? 74 Roundtable Data & compliance: We hear what the industry experts are saying 80 The Premium He's a man of mystery. But can he really help sports bettors? 82 A white paper, not a white flag Lee Richardson, Gambling Insider contributor, zones in on the UK market 84 A debut year Andrey Astapov, Managing Partner at Eterna Law, reviews Ukraine's first year as a regulated gambling market

88 John Connelly Interblock 90 Robert Filić Bragg Gaming 91 Igor Marković NSoft

PRODUCT REVIEWS 92 What's new on the market? Gambling Insider reviews some of the newest products on the market, as gaming companies work creatively with new brands

FINAL WORD 98 2021 Closing remarks RavenTrack Managing Director Adam Rowley reflects on 2021 within iGaming

Comparing Q2 2021 and Q2 2020 revenue for revenue Boyd Gaming for Boyd Gaming Corporation,Corporation, per region per region 1,173

400

1000 500

1,173

1000

(US$ million)

600

NUMBER CRUNCHING 400

100

1500

618.7

FACING FACTS 236.9

200 0

236.9

200

156.5

48.6

0 Las Vegas Locals

38.748.6

38.7

4.6

Downtown Las Vegas Las Vegas Locals

156.5

500

244

-425

% of US adults

1500

618.7

(US$ million)

ISSUES

600

800 Revenue (US$ million)

Revenue (US$ million)

800

% of US adults

Comparing Q2 2021 and Q2 2020 revenue for Boyd Gaming Corporation, per region per region for Boyd Gaming Corporation,

-425

4.6

Midwest & Downtown South Las Vegas

Midwest & -500 South

-500 Revenue

Adjusted Revenue Property Adjusted Property EBITDA EBITDA

Bet t win mo

Gambling Insider focuses its lens on various facts and figures from the global gaming industry in 2021, focusing specifically on the US market

TV ad impressions

50 34

300 200

348.5

304.4

200 100

100

300

DraftKings FanDuel

FanDuel

0 Handle Handle Revenue (Total Wagers) (Total Wagers)

Source: iSpot.tv • Over 75% of DraftKings’ 2021 impressions are from sports-related programs, compared to over 80% for FanDuel • 41% of DraftKings’ ad impressions were local, compared to 55% for FanDuel

500

200

Think that the industry gives back to communities where it operates

100

Think the gaming industry behaves responsibly in the communities where it operates 0 Say the industry employs a diverse workforce

Revenue (US$ million)

300

Believe that gambling is an acceptable form of entertainment

270.3

355

355 270.3

200

100

64.8 11.867

8.7 11.8

8.7

0 MGM Resorts

Revenue

500

0 Palace Macau Vegas Wynn Palace Wynn Wynn Macau WynnLas Operations

78 Operations Harbour

Think that the industry caters to a diverse clientele

300

1% 7%

Harbour

Casino 24% Rooms

Casino

41% 39.7 25.4

100

% of US adults Sports Casino (including poker and bingo)

GAMBLINGINSIDER.COM

Revenue ($ billion)

1.5 1.07

1.0

0.5

1.36

1.23 1.19 1.04

25.4 22.6

Rooms Food a Food and Entertain Bevera Beverage retail and

M Res

478.6

Source: American Gaming Association (AGA) • Survey results come from two online polls 165.2 - Kantar (Aug/Sept200 2021) & YouGov 165.2 (Jun200 2021) - conducted on behalf of the 27% American Gaming Association among national samples of 2,000 Americans 64.8 100 to approximate • The100 data was weighted 2 a target sample of adults based on age, 39.7 2 educational attainment, gender, race Las VegasBoston Encore Boston and region Encore 0

184

100 289.8

25.3

American toward 400 attitudes400 gaming in 2021

300

100

200

Canadian GGY by product in 2019

Revenue (US$ million)

400

200

2267.9

operating revenue distributio operating revenue distribution by sector

Americans’ attitude towards gaming in 2021

400

2267.9

Source: Pennsylvania Gaming Control Board • 14% increase in revenue from July toResorts August Melco Resorts & Entertainme Melco & Entertainment Q2 2021 • 8% decline in handle from July to August

Comparing Wynn Resorts Q2 2021 Comparing Wynn Resorts Q2 2021 revenue per revenue venue per venue

Describe gaming as a growing industry

25.3 27.5

27.5

0 DraftKings

300

348.5

Revenue (US$ million)

100

300

400

Revenue (US$ million)

400

122

(US$ million)

(Year-on-year % increase)

100

122

125

Comparing Comparing Q2 2021 a revenue for revenue two of the forbt operators inope the

August

July

(US$ million)

National TV and spend

125

Pennsylvania July and August 2021 sports betting handle (total wagers) and revenue

Revenue (US$ million)

ad activity Comparing TVfor ad activity for Comparing TVComparing ad activity TV for DraftKings and DraftKings and FanDuel for Jan-Sept DraftKings and FanDuel for Jan-Sept FanDuel for Jan-Sept 2020 and 2021 2021 and 2020 2021 and 2020

1.17

3.7% Tennessee 5.2% Indiana 5.5%

ISSUES

NUMBER CRUNCHING Canadian GGY by product Virginia in 2019

Pennsylvania 19.8%

6.0%

Others

3.8% Top 10 states by total transaction Canadian GGY byIowa product in 2019 7%volume Illinois for the 2021 NFL opening 3.1% 8.2% weekend Colorado 1%

ing in 2021

3.7%

Source: GeoComply Solutions Inc. 41% • ThereArizona were 58.2 million geolocation 10.4% across 18 states and the transactions District of Columbia from 9-12 September • This represents a 126% increase from the same period of the 2020 NFL season

27% 87

24%

Others 3.8%

Michigan 12.9%

Tennessee 7%5.2%

Iowa 3.1%

Indiana 5.5%

Colorado 3.7%

Virginia 6.0%

27%

41%

Pennsylvania Tennessee 19.8% 5.2%

Indiana 5.5%

Illinois 8.2%

Canadian GGY by Province / Territory (C$m) in 2019 Americans’ attitude towards gaming in 2021 24%Arizona

Michigan

Virginia 12.9% in 2019 Canadian GGY by product 6.0%

10.4%

Describe gaming as a 1.36 1.23 77 industry growing

1.19

1.17

California 100 Texas

Believe that gambling 75 is an acceptable form of entertainment

186.7

Revenue ($ billion)

166.3 57 106

1.23 97.8 1.07

1.04

1.17

California

95.6

Texas Florida

86.4

April 25

May

166.3

Ohio

300

Pennsylvania July

Projected tax revenue75($August million) 50

87.1 86.4

880

(US$ million)

244

750 -425

539

500

Nevada gaming revenue from March-August 2021 California

100

50 25 0

Revenue

200

1.5 Projected tax revenue ($ million) 1.07

1.0

Texas

300 1.23

400

Florida

1.36

1.19

New York

1.04

Bet to 121 money win

Bet for the thrill

Bet at least weekly

Ohio 0.5

0.0

Place at Have multiple Conduct least three sportsbook research bets per week accounts before betting

156.5 38.7

97.8

Pennsylvania

95.6

March

April

May

Georgia July June

87.1 86.4

August

New Jersey

4.6

880

500 750

244

62 539

500

-425

% of US adults

2267.9

1000

million)

2520

(US$ million)

US$ million)

48.6

106

75.3

Consolidated Source: Pickwise.com Q2 2020 AEBITDArevenue

300

200

Illinois

Source: Nevada Gaming Control Board 0 Comparing Q2 2021 and Q2 2020 omparing Q2 2021 and • The Pickswise.com Annual Sports Bettorfor Survey • Six consecutive months of over $1bn in gaming revenue revenue Boydincluded Gaming or Boyd Gaming Corporation, per first region 1,500 self-identified US sports bettors for Nevada casinos Corporation, per region • All bettors were of legal betting age, all residing in states with • July had highest revenue in that period with $1.36bn betting 100 Comparing Q2legal 2021sports and Q2 2020 Comparing Scientific Games’ Q2 1500 618.7biggest casino revenue for two of the 2021 1,173 and Q2 2020 revenue, and operators in the US consolidated AEBITDA 74 71 75 1000 70

236.9

1.17

North Carolina

383

djusted Property 250 EBITDA 0

75.3

Revenue ($ billion)

% of US adults

1000

400

100

Georgia

Bet at least Place at Have multiple Conduct Sports Selected statistics from the inaugural Pickswise.com 1weekly and Q2 least2020 three sportsbook research New Jersey bets betting yd Gamingper week accounts before Annual Sports Bettor Survey Casino (including per region 0 poker and bingo) 100

Comparing Scientific Games’ Q2 2021 and Q2 2020 revenue, 75 and 71 consolidated AEBITDA

97.8 95.6

North Carolina

% of US adults

Canadian GGY by Pro

106

200

June

24%

186.7

Illinois

100

March

Arizona Canadian GGY by Province / Territory (C$m) in 2019 Source: The Action Network 10.4% • California 27%- the country’s most populated41% state - is top with $331.1m projected online sports betting tax revenue • Michigan is bottom of the complete list with $1.7m 331.1 • Nevada does not make the top 10, because an estimated 20% of it's 231.4 annual visitors come from California

New York

75.3

0.0

1.36 1.19

87.1

New Jersey

hink that the61industry s to a diverse clientele

231.4

New York

May June July August Illinois 1.5 k the gaming industry behaves responsibly in Ohio he communities where it operates Pennsylvania 1.0 Say the industry North Carolina employs a 81 diverse workforce Georgia 74 0.5 70

Illinois betting Projected online sports 8.2% 7% tax revenue for US states per year: Top 10

331.1

Florida

hink that the industry s back to communities where it operates

New Jersey 21.4%

50 25

100

Projected ta

GAMBLINGINSIDER.COM

ISSUES

FANTINI RESEARCH

IN NUMBERS NEVADA, REVENUE STRIP RISE – SIX MONTHS OF $1BN+ GGR

• Nevada gaming revenue grew 22.25% over 2019 to $1.166bn in August and the Las Vegas Strip rose 19.91% to $625.688m.

• Strip revenue benefited in part from strong domestic play as evidenced by slot revenue growth of 38.28% over 2019. The Strip rose just 1.78% minus slots.

• Revenue likely benefited from the second full month of results from Genting Malaysia’s Resorts World Las Vegas and recently opened Circa and Virgin.

• Outside of the Strip, results were robust in all markets with 41.20% growth for the Las Vegas locals and 41.65% for downtown Las Vegas.

REGION

AUGUST 2021 REVENUE ($M)

% CHANGE VS 2019

% CHANGE VS 2020

Nevada

$1.16 (BN)

+ 22.25

+ 56.91

Las Vegas Strip

$625.688

+ 19.91

+ 97.22

Clark County

$993.433

+ 25.33

+ 67.27

Downtown LV

$64.193

+ 41.65

+ 80.54

North LV

$23.156

+ 19.37

+ 17.22

Laughlin

$41.108

+ 5.99

+ 17.04

Boulder Strip

$91.147

+ 66.60

+ 28.53

Mesquite

$12.402

+ 27.55

+ 16.51

Balance of County

$135.740

+ 31.82

+ 29.70

Las Vegas Locals Market

$250.042

+ 41.20

+ 28.01

Washoe County

$90.499

+ 4.35

+ 18.65

Reno

$65.588

+ 1.51

+ 19.17

Sparks

$14.078

+ 5.10

+ 12.66

North Lake Tahoe

$2.522

- 5.98

+ 9.34

Balance of County

$8.311

+ 37.69

+ 29.23

South Lake Tahoe

$23.633

- 0.21

+ 7.97

Elko County

$28.971

+ 7.75

+ 11.82

Wendover

$18.484

- 1.53

+ 7.46

Balance of County

$10.487

+ 29.21

+ 20.44

Carson Valley Area

$11.605

+ 17.53

+ 16.82

Other Areas

$17.661

+ 28.28

+ 17.16

GAMBLINGINSIDER.COM

% CHANGE VS

STRIP COMPONENTS

% WIN

MAJOR STRIP SEGMENTS

AUGUST 2021 REVENUE ($M)

2019

2020

2021

2020

2019

Blackjack

$79.546

+ 8.99

+ 112.76

15.17

12.69

15.25

Elko NorthCounty Lake Tahoe Reno

$28.971 $2.522 $65.588

+ 7.75 - 5.98 + 1.51

+ 9.34 + 11.82 19.17

Wendover Balance of County Sparks

$18.484 $8.311 $14.078

-+ 1.53 37.69 5.10

+ 29.23 + 7.46 12.66

Balance of County South Lake Lake Tahoe North Tahoe

$23.633 $10.487 $2.522

- 5.98 0.21 + 29.21

7.97 + 20.44 9.34

Carson Valley Area Elko County Balance of County

$11.605 $28.971 $8.311

+ 7.75 + 17.53 37.69

+ 11.82 + 16.82 29.23

Other Areas Wendover South Lake Tahoe

$17.661 $18.484 $23.633

+ 28.28 1.53 - 0.21

+ 17.16 7.46 7.97

Balance of County Elko County

$28.971 $10.487

+ 7.75 29.21

+ 11.82 20.44

Carson Valley Area Wendover

$11.605 $18.484

17.53 -+1.53

16.82 + 7.46

Balance of County Other Areas

$17.661 $10.487

28.28 + 29.21

17.16 + 20.44

Carson Valley Area

$11.605

+ 17.53

+ 16.82

Other Areas

$17.661

+ 28.28

+ 17.16

ISSUES

FANTINI RESEARCH

% CHANGE VS

STRIP COMPONENTS

% WIN

MAJOR STRIP SEGMENTS

AUGUST 2021 REVENUE ($M)

2019

2020

2021

2020

2019

Blackjack

$79.546

+ 8.99

+ 112.76

15.17

12.69

15.25

Baccarat STRIP COMPONENTS

$91.093

- 6.64%

+ 108.70 CHANGE VS

15.37

%8.28 WIN

15.18

Total Games MAJOR STRIP SEGMENTS

AUGUST 2021 REVENUE ($M) $267.242

+2019 2.22

2021 15.12

2020 11.44

2019 15.54

Total Slots Blackjack STRIP COMPONENTS

$79.546 $358.446

8.99% + 38.28

112.76 CHANGE VS + 106.32

15.17 8.56

%7.16 WIN 12.69

15.25 7.77

MAJOR BaccaratSTRIP SEGMENTS

AUGUST $91.093 2021 REVENUE ($M)

-2019 6.64

+2020 108.70

2021 15.37

2020 8.28

2019 15.18

Total Games Blackjack

$267.242 $79.546

2.22 + 8.99

86.21 + 112.76

15.12 15.17

11.44 12.69

15.54 15.25

TABLE Total SlotsDROP Baccarat

$91.093 $358.446

AUGUST ($M) -+6.64 38.28

+ 108.70 106.32

15.37 8.56

$267.242

2021

2020 + 2.22

2019 + 86.21

$358.446

$524.364

$294.626 + 38.28

$478.570 + 106.32

AUGUST $527.162 ($M) $592.668

$642.754

7.79 + 12.43 % CHANGE +VS

$1.682 2019 (BN)

+ 40.89 2019

Total Games Blackjack Total Slots Baccarat TABLE

DROP

+2020 86.21

15.12 8.56

% CHANGE VS 8.28 7.16 2019 + 77.98

11.44 7.16

15.54

+ 9.57

7.77

Total Games

$1.76 2021 (BN)

Total SlotsDROP Blackjack TABLE

AUGUST $2.427 ($M) (BN) $294.626 $524.364 $4.18 (BN)

$478.570 $3.33 (BN)

9.57 77.98 % CHANGE +VS 25.52 + 72.52

Baccarat

2021 $592.668

2020 $527.162

2019 $642.754

2019 + 12.43

2020 + 7.79

Total Games Blackjack

$1.76 (BN) $524.364

$1.255 (BN) $294.626

$1.682 (BN) $478.570

40.89 + 77.98

5.06 + 9.57

Total Slots Baccarat

$592.668 $4.18 (BN)

$527.162 $2.427 (BN)

$642.754 $3.33 (BN)

+ 12.43 72.52

+ 7.79 25.52

$1.76 (BN)

%(BN) CHANGE$1.682 VS (BN) $1.255

RACEBOOK AND SPORTS POOL Total Games

$1.255 2020 (BN)

NEVADA Total Slots

AUGUST REVENUE ($M) 2019 $2.427 (BN) $4.18 (BN)

Race Book

$2.931

RACEBOOK Total Sports BookAND

SPORTS POOL $14.343 AUGUST REVENUE ($M) HANDLE ($M)

NEVADA Sports Book RACEBOOK Race Book

AND SPORTS POOL $2.931 $19.182

- 9.79

2020 $3.33 (BN) - 0.51

% CHANGE-VS 15.56 - 23.43

15.36

3.35

%3.58 WIN

6.51

15.28

%15.79 WIN

15.36

2021 3.35

2020 3.58

2019 6.51

15.28

15.79

15.36

3.58

6.51

-2020 0.51

STATISTICS

15.79

CHANGE -VS 0.51 9.76

-2019 9.79

Room inventory VISITATION

15.28

% 9.79 - 9.32

HANDLE ($M) $2.931

2.998 Million $19.182 150,169

- 23.43 9.32

- 15.56 9.76

% CHANGE VS 3.35

2019

JULY 2019 2020

AUGUST 2019

- 9.32

- 9.2 - 9.76 FLAT

- 16.2

% CHANGE VS + 0.8

Occupancy LAS VEGAS

72.8% AUGUST 2021

-JULY 6.6 2019

Las Vegas hotel rates Visitor volume VISITATION STATISTICS

$140.32 2.998 Million

-- 7.8 9.2

Strip hotel rates RoomVEGAS inventory LAS

150,169 2021 $148.56 AUGUST

FLAT -JULY 7.6 2019

+ 13.1 0.8 AUGUST 2019

Downtown hotel rates Occupancy Visitor volume

$92.59 72.8%Million 2.998

-- 8.8 6.6 9.2

-- 23.4 14.9 16.2

Strip RevPAR Las Vegas hotel rates Room inventory

$110.97 $140.32 150,169

-FLAT 15.1 7.8

16 -+ 5.7 0.8

Downtown RevPAR Strip hotel rates Occupancy

$53.33 72.8% $148.56

fantiniresearch.com - 19.9 +2 - 6.6 7.6

13.1 -+14.9

Convention attendance Downtown hotel rates Las Vegas hotel rates

N/A $92.59 $140.32

8.8 -N/A 7.8

+ 16 -N/A 23.4

Air passengers Strip hotel rates RevPAR

3.806 $110.97 $148.56

-- 8.3 15.1 7.6

-+ - 14.1 5.7 13.1

Daily major hotel hwy. rates traffic RevPAR Downtown

$53.33 127,723 $92.59

19.9 - 11.3 8.8

2 + 1.9 - 23.4

Traffic 1- 15 attendance at CA line Convention Strip RevPAR

49,375 N/A $110.97

-N/A 12.9 15.1

+ 2.4 -N/A 5.7

Air passengers Downtown RevPAR

3.806 $53.33

- 19.9 8.3

- 14.1 + 2

Daily major hwy. traffic Convention attendance

N/A 127,723

-N/A 11.3

3.806 49,375 AUGUST 2021 127,723 94,600

- 8.3 12.9 JULY 2019 - 11.3 - 19.8

49,375 8,635

- 12.9 FLAT

VISITATION STATISTICS

Traffic 1- 15 at CA line 12Air GAMBLINGINSIDER.COM passengers LAUGHLIN Daily major hwy. traffic Visitor volume Traffic 1- 15 at CA line Room inventory STATISTICS VISITATION

2019

Race Book

Visitor volume Sports Book

+ 25.52

2020

-2020 15.56

AUGUST($M) 2021 HANDLE

2020

2021

-2019 23.43

$14.343 $19.182

+ 72.52

% WIN + 5.06

2020 2020

AUGUST REVENUE ($M) $14.343

LAS VEGAS

2021

+ 5.06 2020

2019 2019

NEVADA Total Sports Book

VISITATION Sports Book BookSTATISTICS Total Sports

+ 40.89

15.18 7.77

2020

-AUGUST 14.9 2019 16 % CHANGE VS +- 16.2

% CHANGE VS

N/A + 1.9 -+14.1 2.4 AUGUST 2019 + 1.9 - 40.4

+ 2.4 % CHANGE VS - 11.5

Blackjack Total Games Baccarat Total Slots Total Games

$524.364 $1.76 (BN) $592.668 $4.18 (BN) $1.76 (BN)

$294.626 $1.255 (BN) $527.162 $2.427 (BN) $1.255 (BN)

$478.570 $1.682 (BN) $642.754 $3.33 (BN) $1.682 (BN)

+ 77.98 + 40.89 + 12.43 + 72.52 + 40.89

+ 9.57 + 5.06 + 7.79 + 25.52 + 5.06

Total Slots

$4.18 (BN)

$2.427 (BN)

$3.33 (BN)

+ 72.52

+ 25.52

ISSUES

FANTINI RESEARCH

RACEBOOK AND SPORTS POOL NEVADA

AUGUST REVENUE ($M)

% CHANGE VS 2019

2020

% WIN 2021

2020

RACEBOOK AND SPORTS POOL % CHANGE VS % WIN - 0.51 Race Book - 9.79 15.28 from 201915.79 • Visitation fell$2.931 double from July, which • Visitation declined 16.2% AUGUST REVENUE ($M) 2019 NEVADA 2020 2021 2020 the Las Vegas Convention and Visitors and 9.2% from July, with hotel occupancy Total Sports Book - 15.56 - 23.43 $14.343 3.35 3.58 Authority blamed down 6.6%, 15.4%15.79 - 0.51 RevPAR dropping Race Book $2.931 on August’s spike in- 9.79 15.28 2020rates falling 7.8%. However, 2019 Covid cases.HANDLE (M) and room Total Sports Book - 15.56 - 23.43 $14.343 3.58 room rates were 16% 3.35 over 2019. Sports Book Sports Book

$19.182 HANDLE (M)

- 9.32 2019

- 9.76 2020

$19.182

- 9.32

- 9.76

VISITATION STATISTICS

% CHANGE VS

LAS VEGAS

AUGUST 2021

JULY 2019

Visitor volume LAS VEGAS Room inventory Visitor volume Occupancy Room inventory Las Vegas hotel rates Occupancy Strip hotel rates Las Vegas hotel rates Downtown hotel rates Strip hotel rates Strip RevPAR Downtown hotel rates Downtown RevPAR Strip RevPAR Convention attendance Downtown RevPAR Air passengers Convention attendance Daily major hwy. traffic Air passengers Traffic 1- 15 at CA line Daily major hwy. traffic

2.998 Million AUGUST 2021 150,169 2.998 Million 72.8% 150,169 $140.32 72.8% $148.56 $140.32 $92.59 $148.56 $110.97 $92.59 $53.33 $110.97 N/A $53.33 3.806 N/A 127,723 3.806 49,375 127,723

- 9.2 JULY 2019 FLAT - 9.2 - 6.6 FLAT - 7.8 - 6.6 - 7.6 - 7.8 - 8.8 - 7.6 - 15.1 - 8.8 - 19.9 - 15.1 N/A - 19.9 - 8.3 N/A - 11.3 - 8.3 - 12.9 - 11.3

Traffic 1- 15 at CA line

49,375

- 12.9

VISITATION STATISTICS

AUGUST 2019 - 16.2 AUGUST 2019 + 0.8 - 16.2 - 14.9 + 0.8 + 16 - 14.9 + 13.1 + 16 - 23.4 + 13.1 - 5.7 - 23.4 +2 - 5.7 N/A +2 - 14.1 N/A + 1.9 - 14.1 + 2.4 + 1.9 + 2.4

% CHANGE VS

VISITATION STATISTICS LAUGHLIN

AUGUST 2021

JULY 2019

Visitor volume LAUGHLIN Room inventory Visitor volume Occupancy Room inventory Average hotel rates Occupancy RevPAR Average hotel rates Air passengers RevPAR Hwy. traffic at NV 163 Air passengers

94,600 AUGUST 2021 8,635 94,600 44.7% 8,635 $78.48 44.7% $35.08 $78.48 7,719 $35.08 4,387 7,719

- 19.8 JULY 2019 FLAT - 19.8 - 11 FLAT - 17.8 - 11 - 34 - 17.8 - 16.8 - 34 - 9.4 - 16.8

Hwy. traffic at NV 163

4,387

- 9.4

VISITATION STATISTICS

% CHANGE VS

AUGUST 2019 - 40.4 AUGUST 2019 - 11.5 - 40.4 - 20.1 - 11.5 - 35.3 - 20.1 - 6.7 - 35.3 - 61 - 6.7 - 3.7 - 61 - 3.7

fantiniresearch.com

GAMBLINGINSIDER.COM

2019 15.36 2019 6.51 15.36 6.51

German land-based lotteries and the online market 8000

800

7000

700

6000

FEATURES 5000

600

GBGC DATA

4000

500

3000

400

GLOBAL OUTLOOK 2000

300

1000

2024f

2025f

2022f

2023f

2021f

2018

2019

2016

2017

2015

2014

2013

2012

2011

2010

2009

2007

2008

2006

2005

2004

2020p

200

100

0 Global Betting & Gaming Consultants (GBGC), the global gaming Land-based Online GGY Online GGY lotteriesexclusive GGY (offshore)statistical (local licence) data to Gambling Insider data expert, provides on markets from around the world; visit www.gbgc.com for more

2014

online betting casino and poker GGY (USDm) Explanatory notes: This graph shows market share of land based and online casino and sports betting operators in the Netherlands. Online sports betting and casino also include offshore revenues.

Market share of the Dutch sports and casino operators (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2017 2018

2018

2019

2020p

Online casino GGY

2022f

2021f

Land-based sports betting

Online Betting GGY

2021f

Online sports betting

2023f 2022f

Land-based casino

2024f

2025f 2023f

Commentary: GBGC estimates that land-based operator Holland Casino market share will drop from 88% in 2017 to 43% in 2025. Due to the market legalisation of online sports and casino verticals (1 October 2021), operators offering those services will increase their market share. Online casinos (including poker) are projected to increase their market share from 2% in 2017 to 16% in 2025. Likewise, online sports betting operators are projected to increase market share from 3% 2024f 2025f in 2017 to 19% in 2025.

Online casino (including poker)

Online Poker GGY

Number of online player accounts in Malta (millions) 60 50 40

Explanatory notes: This graph shows the number of active and new player accounts registered at Maltese online gambling companies. Active players are those who gambled at least once during a year. New active players are those who registered and gambled at least once during the year.

30 20 10 0

2017

2018

Active Player Accounts

GAMBLINGINSIDER.COM

2019

New Active Player Accounts

2020

Commentary: The graph shows resilience of online gambling during the Covid-19 pandemic. In 2020, the number of active player accounts rose by 18.1% year-on-year (YoY), while the number of new active players rose 15.5% YoY.

2015

FEATURES

GBGC DATA

Indian online betting casino and poker GGY (USDm) 800 700 600 500 400 300

2024f

2025f

2022f

2023f

200

2021f

100 0

2014

2015

2016

2017

2018

2019

Online Betting GGY

2020p

Online casino GGY

rs (%)

2021f

2022f

2023f

2024f

2025f

Online Poker GGY

Number of online player accounts in Malta (millions) 60 50 Explanatory notes: This graph shows online betting, casino and poker gross gaming yield for India. The numbers include both offshore revenues and the ones produced by locally licensed operators. 40 30

2017

2018

Active Player Accounts

o er)

2020

2019

New Active Player Accounts

German land-based lotteries and the online market 8000

800

7000

700

6000

600

5000 4000

500

3000

400

2000

300

1000

Online GGY (offshore)

Online GGY (local licence)

2024f

2025f

2022f

2023f

2021f

2019

2015

2014

2013

2012

2010

2011

2009

2008

2007

2006

2004

2005

Land-based lotteries GGY

2020p

200

2018

2025f

2016

2024f

Commentary: Most of the revenues are coming from offshore, since only20two states - Sikkim and Nagaland regulate online poker and other skill-based games such as rummy and mahjong. Despite five states banning 10online gambling (Karnataka, Assam, Odisha, Telangana and Andhra Pradesh), GBGC estimates the market will continue growing. 0

2017

2020p

rket

100 0

2014

Explanatory notes: This graph shows Commentary: Germany has been for many years in limbo concerning its online gambling land-based lotteries' gross gaming yield, regulations. Being one of the largest and significant gambling markets in Europe, online gross gaming yield coming from many operators are targeting the market without a licence. Lotteries are Germany's most unlicensed, offshore operators servicing popular form of gambling. And, although the lotteries market saw some degree of cannibalisation Market from share the Dutch and casino (%)lotteries market will continue growing, the market illegally and online gross theof offshore marketsports (2014-2023), GBGCoperators estimates the gaming yield from locally100% licensed operators. despite the state now regulating the online gambling vertical. The main reason is that the state Online gross gaming yield (both offshore still holds a monopoly on various lottery games, be it online or lan- based. Besides, lotteries and from local licences)90% accounts for are a trusted brand, and are able to advertise through their many outlets. The new regulations online betting, casinos, poker and bingo. have imposed deposit limits and higher taxation, and this has caused some operators to lose 70% 80% of revenue. Our forecasts are based on what we know now. We suspect that gamblers will find offshore sites in which case some revision will be required later. 70% 60% 50% 40% 30% 20% 10%

GAMBLINGINSIDER.COM

ISSUES

TAKING STOCK

TAKING STOCK Gambling Insider tracks operator and supplier stock prices across a six-month period (May to October 2021). The stock price is taken from the first day of each month and last date available at press time MGM RESORTS INTERNATIONAL

CAESARS ENTERTAINMENT CORPORATION US$

r be

to Oc

r be to Oc

r be

0 pt

10.00

25.00

20.00

50.00

30.00

75.00

40.00

100.00

50.00

125.00

US$

Six-month high – 44.86 (Oct) Six-month low – 37.37 (Aug) Market capital - $21.448bn

Six-month high – 119.49 (Oct) Six-month low – 86.50 (Aug) Market capital - $25.208bn

LAS VEGAS SANDS CORP.

CROWN RESORTS LIMITED

US$

AU$ 80

15.00

60 10.00

40 5.00

GAMBLINGINSIDER.COM

Six-month high – 61.06 (May) Six-month low – 38.18 (Aug) Market capital - $28.199bn

r be to Oc

er em b Se pt

ly Ju

ne Ju

ay M

be r

Au gu st

pt Se

Six-month high – 12.82 (Jun) Six-month low – 8.93 (Aug) Market capital - $6.21bn

Oc to

em be

st gu Au

ly Ju

ne Ju

M ay

TAKING STOCK

INTERNATIONAL GAME TECHNOLOGY

ISSUES

EVOLUTION GAMING GROUP SEK

US$ 50

40 20

30 20

r be to Oc

st Au

ly Ju

ay M

r be to

ly Ju

ay M

Six-month high – 27.95 (Oct) Six-month low – 17.31 (May) Market capital - $5.69bn

Six-month high – 45.67 (Sep) Six-month low – 37.34 (May) Market capital - SEK 293.54B ($33.6bn)

KAMBI GROUP

ELYS GAME TECHNOLOGY US$

SEK 6

500.00 400.00

300.00 200.00

100.00 0.00

Six-month high – 440.00 (Jun) Six-month low – 214.80 (Oct) Market capital - SEK 6.342bn ($736.63m)

be r to

pt em Se

be r

t us

ly Ju

Ju ne

ay M

be r Oc to

Au g

pt em

be r

st gu Au

ly Ju

ne Ju

Six-month high – 5.93 (Sep) Six-month low – 4.09 (Jul) Market capital - $110.368m

GAMBLINGINSIDER.COM

FEATURES

GLOBAL GAMING AWARDS LONDON

GLOBAL GAMING AWARDS LONDON 2022 RETURN IN-PERSON The time has come to welcome the most prestigious Awards ceremony in the gambling industry back to London With the self-nominations for the Global Gaming Awards London 2022 having been made, it's time to welcome everyone back to the Hippodrome Casino. Following the success of our eighth Global Gaming Awards Las Vegas ceremony, which was held last month at G2E, it is now time to reward the strongest performers from the EMEA & Asia regions. The London Awards presentation ceremony will take place on 31 January (the Monday of ICE London week) and will have 15 categories spanning the land-based and online sectors. Operators and suppliers were welcomed to submit a short (480 character) self-nomination on the official GGA London website.

"Our Awards will recognise those who kept innovating" Fourteen of the categories are designed to reward companies from both the operator and supplier verticals, with the last category, Executive of the Year, recognising individuals who have made a significant impact on their respective organisations and/or the gaming industry as a whole. Gambling Insider Editor-in-Chief Julian Perry said: “After hosting our Las Vegas Awards in-person last week, we are thrilled to start planning the return of the Global Gaming Awards London. “The gaming industry in Europe and beyond thrived in the past 12 months despite all the lockdowns, and our London Awards will recognise all those companies who did not slow down and kept innovating.” As ever, the Awards will be powered by

GAMBLINGINSIDER.COM

ONLINE CASINO Recognising the operators who are leading the way in the rapidly growing iGaming sector. CASINO SUPPLIER Rewarding the suppliers that contribute to an exceptional and dynamic gaming floor. ONLINE CASINO SUPPLIER Rewarding the best games developers from the iGaming industry. CASINO PRODUCT Recognising the best products (online or land-based) that truly stood out in the past year.

Gambling Insider and voting will be adjudicated by KPMG in the Crown Dependencies. BetConstruct is the event’s Lead Partner and category sponsors include Digitain and Altenar. This year’s GGA London categories are: BETTING SHOP OPERATOR Recognising the achievements made by retail operators over the past 12 months. ONLINE SPORTS BETTING OPERATOR Rewarding the very best from the dynamic and highly competitive online sports betting world. RETAIL SUPPLIER Covering all aspects of the vertical, from innovative platforms to cashier systems and betting terminals. ONLINE SPORTS BETTING SUPPLIER Rewarding the companies sports betting operators rely on most. CASINO Recognising the best land-based casinos from the EMEA region.

PAYMENT SOLUTION Rewarding the companies that offer easy payment processing, the best cashless solutions, and/or digital wallets. SERVICES PROVIDER Recognising those that provide the backbone of the industry – from data suppliers to companies offering legal services, risk management solutions, hosting services etc. PRODUCT LAUNCH Rewarding the most innovative products (land-based or online) launched in the past 12 months. AFFILIATE PROGRAM Rewarding the operators who go to great lengths to run a successful affiliate program and keep their affiliate partners happy. SOCIAL RESPONSIBILITY Recognising the companies that showed a great commitment to CSR. EXECUTIVE OF THE YEAR Recognising the leaders who have made the most significant impact on their company and/or the industry as a whole.

FEATURES

COVER FEATURE

Countless transactions are currently taking place all over the world, and it’s all over in the blink of an eye. But where does your money go? Who deals with it? How does it get to the right place?

GAMBLINGINSIDER.COM

COVER FEATURE

FEATURES

PAYMENTS IN KIND Peter Lynch delves further into the world of gaming payments with the help of several payments specialists, who provide their expert analysis in this booming sector

Amit Klatchko

Gemma Jones

Christopher Justice

Payments. One short word, but one that comprises a whole host of issues and concepts that we don’t ever take a minute to consider, such is our preoccupation with getting what we pay for immediately. Countless transactions are currently taking place all over the world, and it’s all over in the blink of an eye. But where does your money go? Who deals with it? How does it get to the right place? Fortunately, several payments companies are on hand to answer these questions and more, and explain just how important a role such companies play within the gaming industry, as well as touching on the main issues they deal with on a day-to-day basis, such as security and variety. And with a pandemic continuing to frustrate many within the industry and indeed throughout the globe, the future of gaming payments is also explored by our experts.

vertical, the gaming industry is certainly no different. Variety within payments in gaming is subsequently as important as ever, a notion shared by both John Mallia, Gaming Accounts Team Manager at Trustly, and Zak Cutler, CEO of North America iGaming division at Paysafe. According to Mallia, such variety is imperative in order to deliver the best possible user journey. “As we consistently see in our own research, players have different payment preferences depending on which country they are in and what payment methods are available,” he says. “We are seeing an ongoing shift where open banking is constantly growing and taking over more traditional types of payment methods such as cards and wallets. Making sure that you offer the right type of payment method and one which is trusted and delivers the best user journey is imperative.” Such an approach, adds Mallia, “not only helps with acquiring users, but also with extracting the maximum value in the most efficient manner. In such a competitive market and with everyone striving to be the

best, ensuring that you are at the head of the queue is a necessity, not a luxury.” And for Cutler, “offering payment variety gives players choice when faced with a credit or debit card decline,” which he describes is an ongoing albeit improving issue in the US market. “A brand with a range of alternative as well as traditional payment methods is more likely to appeal to every player profile,” he adds. “For example, sports bettors who prefer using cash offline are more likely to choose and remain with a brand offering eCash for online wagering.” Research from Paysafe from May 2021 showed that digital wallets are the preferred online payment method of global consumers (40%) after credit and debit cards, drawing a conclusion that “iGaming brand with a digital wallet is going to maximise customer stickiness and therefore its overall revenue and growth.” But what does all this variety actually mean for payments companies? Well, it means adapting to the rapidly moving global gaming market, which is undoubtedly easier said than done. When Gambling Insider

PAYMENT VARIETY Variety is undoubtedly key to the success of countless industries, and with increasing customer demand across each and every

GAMBLINGINSIDER.COM

FEATURES

COVER FEATURE

asked AstroPay CEO Mikael Lijtenstein how difficult this can be for payments companies, he responded: “The payments ecosystem is incredibly complex. It involves many different players ranging from traditional banks and non-banking institutions to disruptive small fintechs. “In the context of increased competition and unprecedented digitalisation accelerated by the Covid-19 pandemic, companies need to demonstrate a level of innovation and agility to keep up with the changing landscape of payments. As consumer demands for richer payment options grow, new types of fraud, especially end user targeted scams such as phishing and identity theft, are adding an extra layer of complexity in payments.” Lijtenstein continues by suggesting that coordination is key to achieving any form of success in the industry, explaining that “innovation and the growing range of possible payment methods are inevitably affecting businesses of all sizes.” This transformation is not, however, a simple task. “Any change within payments requires coordination between different operators of the payment system, and to be successful, they need to adopt solutions that are used by both consumers and businesses,” he says. AstroPay’s CEO concludes by suggesting there is only one thing payment companies can do to stay relevant in the modern era, and that is to evolve. “Payment is the beating heart and soul of all businesses and companies have no option but to evolve to keep up. It is fundamental to foster a trusted relationship between users and their payments service of choice, and that trust can only be achieved with innovative solutions rooted in deep knowledge of the industry, particularly of the risks involved, both traditional and new challenges.” A GROWING INFLUENCE The influence of payments within the industry is something that certainly cannot be ignored, with each and every vertical seeing signs of this grip that payments has on the current gaming scene. For Amit Klatchko, Founder & Director, Praxis, this influence has “grown tremendously year-to-year in the online gaming industry.” He explains that there are several reasons for this, including UI/UX, player experience, powerful and emerging markets with localised solutions, and the fluctuating risk appetites of acquiring banks. This, he says, “has led to various challenges requiring additional work efforts, and in turn, it has created new opportunities for payments and service providers.” More important, however, suggests Klatchko, is the evolving of operators over time. Operators now realise that it is “hugely

GAMBLINGINSIDER.COM

Joe Pappano

John Mallia

advantageous to use reliable and efficient technologies” in a bid to have “direct integration with local payment providers worldwide.” Such technologies offer operators the opportunity to negotiate and onboard directly with those providers, rather than using an aggregator, which “would be more expensive and would leave them overly dependent on a single provider,” he adds. For Gemma Jones, Trust Payments’ Gaming Business Development Manager, payments “continue to have a considerable influence on the gaming industry,” particularly in online casinos and lotteries, which sit at the core of the player’s experience. She suggests that, for the industry to continue to grow, it must adapt to its user’s preferences, while also actively integrating new payment methods to suit their needs. When doing this, Jones explains, operators have to think quickly about pay-outs and how they are made to their users, “considering the best ways to make the experience as frictionless as possible.” Jones says video gaming strikes a similar chord when it comes to the increasing importance of payment processes, which is “mainly due to practices adopted by large video games providers, which use tokenisation to help their users activate new products. Sales are boosted by the lack of friction that users experience when purchasing a video game without inputting their card details, but by merely using their Steam, Apple Pay, or Google Pay accounts. “This practice is often paired with a microtransaction, another frictionless process that allows users to play free-to-play games but purchase additional virtual items. Newer gaming platforms see revenue coming almost entirely from this new practice.” It is, however, a complex onboarding process for a payments company when working with a gambling merchant,

notes the Gaming Business Development Manager. There are many requirements for this, such as; “the director’s location, the structure of the company, and information available on the website the gambling companies need to adhere to so that they can be accepted as a new client and begin to process payments. “These requirements are often a mix of scheme mandates from Visa and Mastercard; the payment processors’ own policies and rules and regulations set by the Gaming Authorities themselves. PCI DSS (the Payment Card Industry Data Security Standard) also plays a part in how a merchant will build their website and integrates payment processing in their checkout process.” Jones also highlights the point that different payment provider solutions will be influenced by the countries an operator targets, with Germany just one example of this, where “gaming clients might prefer to use eps-Überweisung or Sofort rather than PayPal or other widely used cards,” while iDEAL is the preferred Dutch payment method. “A smart payment system will also support gaming operators with dynamic routing and pricing tailored to each region to easily facilitate the connection to new acquirers and alternative payment systems,” she notes. “This step is very important when operators are looking to enter new markets and cater to their diverse user payment preferences.” Paysafe’s Cutler adds to the debate by stating that payments have “always been integral to the player experience for iGaming.” He describes the “distinct payment cycle” that occurs in online gaming, where firstly, a player needs to make a payment to deposit and begin wagering, before needing to transact once more to withdraw their winnings as a payout. “For iGaming, there’s always been no play without pay – and that remains true in 2021.”

FEATURES

COVER FEATURE

He continues by suggesting that the growth in influence of payments in iGaming as the industry as a whole has matured is unsurprising, given the crucial role payments currently play. The CEO explains that digital payments have diversified, with the emergence of new alternative payments methods (APMs) now offering players more choice over traditional methods like credit and debit cards. One of the first APMs on the scene, explains Cutler, was digital wallets, a strong payment method for high-volume bettors who commonly frequent multiple iGaming brands. Quoting Paysafe’s 2020 research, he explains that “sports bettors wagering 7+ times a week favoured digital wallets (35%) over all other payment methods.” Such APMs, he adds, “also offer players a literal alternative when faced with a card decline, which remains an issue in the US market, given the fragmented regulatory landscape. Digital wallets and online cash, or eCash, have served to fill this gap.” Further referencing the company’s research - which was conducted this time last year - Cutler notes that “when faced with a card decline, over a third of players will use a digital wallet (35%) and 8% use eCash.” GOING CASHLESS One such payment method that has experienced significant growth in 2021 is cashless, which is an area that has undergone plenty of change - and a lot of digitisation. This notion resonates particularly with Sightline Payments, who recently clinched the Payment Solution of the Year Award at the Global Gaming Awards Las Vegas 2021. The group’s Co-CEO Joe Pappano says cashless ecosystems provide consumers with “the same convenience they’ve come to expect in their everyday lives.” Taking a step back for a second, he notes that “you can buy groceries using a mobile wallet and stocks from an app on your phone, yet you still need to carry cash to fund your fun at the casino.” As one of the last remaining cash-based industries in our current economy, Pappano suggests it is “imperative” that the gaming industry modernises payments in order “to keep up with the demands of today’s digitally savvy consumer.” The CEO continues: “Contactless payments create opportunities that cash simply cannot compete with. Digital solutions enable operators to revolutionise and personalise loyalty rewards by better understanding consumer behaviour on and off their properties. Mobile platforms remove friction from the patron experience by reducing the amount of time spent standing in lines at ATMs, kiosks, and cages.” According to Pappano, reducing this

GAMBLINGINSIDER.COM

Mikael Lijtenstein

Zak Cutler reliance on cash lowers overhead costs to not only count, but store, transport, and acquire cash, thus optimising operator efficiency. Furthermore, digital payments “empower customers with robust responsible gaming tools that help them keep an eye on their accounts.” Pappano then points to the pandemic as a key accelerator for the adoption of contactless payments in the gaming industry. Referencing recent research conducted by the American Gaming Association (AGA), asking previous year casino goers their interest level and intent to use contactless and digital payment options, he notes that 57% of respondents said cashless options were ‘very important’, with 54% ‘very likely’ to use such options. When focusing solely on Las Vegas, those figures increase to 64% and 63% respectively. “When more than half of your customers are seeking to utilise this technology, it’s a good bet that casinos will show an urgency in adopting these new payment methods,” he concludes. On the GI Huddle in October,

Global Payments President Christopher Justice reflected on cashless gaming’s growth in 2021. He suggests that operators across the US are now really embracing cashless as “the next new wave.” And that, according to Justice, can in one way or another be linked to the popularity of mobile phones. Today, he explains, “there are more people who have a smartphone than have running water around the world. People use their phones the majority of the time and as of last year, the mobile phone became the main screen for the majority of the population. It’s a solution whose time has come, and which folks have warmed up to, and that’s one of the things today’s on-demand consumer really wants.” He notes that consumers are demanding such digital-first experiences, whether it be through applications like Amazon or Uber, and now that is being repeated in both iGaming and sports betting across the US. “So cashless to me is a real gamechanger with numerous benefits for the operator and consumer alike,” continues Justice. “While 2021 - as we’ve seen from the gross gaming revenues being reported - has been the best year ever, cashless is one of those customer conveniences that will determine whose chair the consumer is going to sit in once the music has actually stopped. “I liken it to pay-at-the-pump, where years ago none of the petroleum guys wanted to implement it because they’d make all of their profitability from their customers coming inside. But what they quickly realised was if they didn’t have pay-at-the-pump, consumers weren’t going to stop, and in fact the majority of Americans will drive to the next station if the pump doesn’t accept their card. I think the same thing is going to happen here with cashless in that it’s a solution that’s here to stay. It meets the expectations of the guest and it’s certainly going to help capture extraordinary market share for those early adopters who get in and provide that much more convenient way to play than their competitors.” Global Payments, notes Justice, is seeing this situation develop in the locations it has launched in over the last few years. SECURITY IS CRUCIAL While there is huge potential and subsequently huge excitement for payments companies in the gaming industry, there are, of course, other important factors to take into consideration when overseeing transactions. Security is a major factor. It is a topic that AstroPay’s Lijtenstein hones in on when discussing online payments, saying it “is an issue that has gained massive attention recently due to increasing cases of online fraud. As the number of digital transactions processed daily continues to

FEATURES

COVER FEATURE

increase, security has become more prominent than ever. “Using top-notch technology and IT security practices is a must in this industry, but it is far from being enough. In our experience, the main driver for safety and security is understanding the end customer as much as possible and fostering a bond of trust with them. Behavioural analytics aim at taking that bond to the next level, knowing the customer not only by the information they share or the usage they make of the service, but also based on fine-grained usage patterns such as recurrence, time of the day and special attributes.” He continues: “Combined with adaptive security, services can toughen up and ask for extended authentication processes only to users who do not comply with normal usage patterns, which is a typical indicator of the identity-theft-family of scams.” The CEO adds that applying such a strategy to enable smart fraud prevention is rapidly becoming commonplace in the gaming industry, and “is a key differentiator for payment services.” Taking a more technical standpoint, Trust Payments’ Jones explains that there are a number of standards and practices gaming companies can follow when attempting to keep payments secure. “Choosing the right payment provider is vital for gaming operators to thrive in this industry,” she tells Gambling Insider. “The right supplier needs to ensure that they are 3D Secure 2 (3DS2) ready and are PCI DSS level 1 to help reduce chargebacks and fraud and have the best level of protection for customer data. 3DS2 is an enhanced method of confirming customer identity by using fingerprint authentication, voice or face recognition, and behavioural biometrics. “PCI DSS is the Payment Card Industry Data Security Standards – a set of global security standards that ensure every company that collects, processes, stores, or transmits cardholder data maintains a secure cardholder data environment. Complying with this standard is mandatory in every industry, so your payment gateway will

need to be certified for PCI DSS.” The Gaming Business Development Manager continues: “Moreover, beyond know-your-customer (KYC) identity verification processes, transaction monitoring for AML (anti-money laundering) is also an essential undertaking - it’s essential operators pick a payment gateway that can monitor transactions and fraud in real-time.” WHAT DOES THE FUTURE HOLD? So, all in all, a very exciting and very busy time for payments within the gaming industry, both land-based and online. But what happens next? What does the future - both short term and long term - have in store for the sector? When Gambling Insider puts the question to Trustly’s Mallia, he replies by suggesting that innovation in payments is often freely bandied about, yet “rarely does it truly reflect the actual changes.” The continuous improvements in technology, he explains, alongside a constant need for better and more seamless payment methods, “means we are moving towards one direction, and we do not see it reverting.” The Gaming Accounts Team Manager is another to stress the role of the pandemic on the acceleration of this transition. “Operators want to offer a more seamless experience with less friction which allows more time in allowing users to actually enjoy the product offering,” adds Mallia. “This is also aligned with users constantly choosing to use the quickest, safest and most enjoyable experience they can find. Payments are a very significant part of that. “We can expect to see a further push when it comes to using payments not just as an enabler of transferring funds from one point to another, but also of being a provider of relevant data with features and products such as AIS, KYC data, affordability checks and

CAR T I EB

GAMBLINGINSIDER.COM

other features gaining traction and feasibility thanks to the ongoing open banking push. These and other features will assist companies in making better choices and being more compliant in an ever increasingly regulated market while allowing them to do so without impeding their users’ experience, benefiting both the end users and the operators.” Another trend that can be expected in the near future is the presence of more secure and mobile relevant authentication methods. According to Mallia, more banks will introduce more modern authentication methods, which will be more in line with the user requirements of today. “With both the payments and gaming industries maturing and becoming increasingly competitive, innovation in payments will not just determine the way forward for payments, but also for the gaming industry itself by helping gaming companies achieve their aims,” he concludes. Klatchko is another to touch on the future of the sector, with the Praxis Founder & Director focusing specifically on what lies ahead for high-risk payments in the online gaming industry. He immediately points to three things; localisation, innovation and a need for more solutions. “Competition in traditional geo-targeting has long passed its boiling point,” he says. “This leaves little room for newcomers looking to sell traditional payment solutions in well-seasoned markets. “On the other hand, local providers in emerging markets, from LatAm to MENA and South East Asia, are not managing to meet onboarding and volume demands. This opens up a niche for PSP aggregators who can relieve the burden of onboarding, while additional local solutions rise up to the challenge of providing e-wallets and local, instant banking solutions.” In order to stay in the game, Klatchko explains that operators must provide staff with the “tools to execute amendments per region, payment method and player class, in real time.” He concludes by saying that operators, in order to stay competitive with affiliates and maximise other marketing activities, must also pay close attention to “approval ratios and settlement times over price sensitivity.” Any companies that don’t will be sure to pay the price.

FEATURES

INDUSTRY REVIEW

2021: THE YEAR IN REVIEW Gambling Insider Editor Tim Poole looks back on 12 months that accelerated the winds of change, brought players back to casinos en masse and saw online gambling’s emphatic surge continue In an autobiography I read this year, 2020 was referred to as The Cursed Year. On that basis – thankfully – 2021 will very much be reflected upon as a year of recovery: economically, socially, physically and psychologically. While land-based casinos were shut for months and socially restricted for most of 2020, they were back to generate record revenues in 2021 (certainly in North America at least). Nowhere more so than in gambling’s spiritual, and historically most lucrative, home: Nevada. Like the t-shirt Joe Swanson enjoyed so much in Family Guy, we are literally talking about billions spent in Las Vegas aka Lost Wages. Gross gaming revenue was back with a bang in 2021. A common pandemic-era misconception,

GAMBLINGINSIDER.COM

meanwhile, was that somehow online gambling suffered in 2020 too. It did not. And, this year, that growth soared to new levels, as the online industry began to widen its influence in North America, continued to deliver results across Europe and even penetrated several emerging markets. But what will we look back on a few years down the line and truly remember 2021 for? There were mega mergers, regulatory fallouts and coronavirus complications. Just another year in gambling... INDUSTRY CONSOLIDATION Inevitably for the gambling and iGaming sectors, the most memorable aspect of 2021 – and recent years in general – was the

industry-changing M&A that took place. This year, in particular, it was difficult to even keep track of who was acquiring whom (Monica: you know, sometimes it’s who!). The past 12 months additionally saw whole new M&A trends develop, such as operators starting to acquire suppliers more often, and equally creating their own game studios. As ever, there were numerous affiliate M&A transactions, while the big-name US operators conducted plenty of new business, too. Notable M&A deals included: - Penn National Gaming purchasing Score Media and Gaming – $2bn - DraftKings purchasing Golden Nugget Online Gaming – $1.56bn

INDUSTRY REVIEW

suing Crown for millions lost during problem gambling sprees, and licences stripped outright from the Australian operator. To top it all off, potential mergers have fallen through as a result of the aforementioned problems, with executive reshuffles becoming the norm. In August, Crown banned over 250 high rollers amid “due diligence” reviews – but it was too little too late from the gambling giant.

- Evolution Gaming acquiring Big Time Gaming – €450m ($533m) - Kindred Group acquiring Relax Gaming – undisclosed fee - Scientific Games buying Lightning Box Games – undisclosed fee - Aristocrat purchasing Playtech for $2.9bn And that’s without touching on 888 Holdings purchasing William Hill’s European assets, or failed bids to takeover Crown Resorts. Overall, the industry’s consolidation scene became even more frantic in 2021 – and in gaming, it shows no signs of slowing down. THE CROWN IS FALLING Speaking of Crown Resorts, 2021 was undeniably a year to forget for the Australian operator. While 2020 proved disastrous on a global scale, from a business perspective Crown Resorts arguably suffered a far worse 2021. The organisation’s revenue for the financial year 2020-2021 fell 31% year-on-year to AU$1.5bn (US$1.1bn), with EBITDA down 77% and overall losses up to AU$261.6m. But while these financial results can mainly be attributed to Covid-19-enforced closures and social distancing, Crown’s regulatory troubles were all self-inflicted. As we covered in depth in the May/ June edition of Gambling Insider magazine, commission after commission, from Perth to Victoria, have looked into Crown Resorts’ malfunctioning safer gambling policies – with yet more action being taken since. There have been allegations of money laundering – with video proof – gamblers

THE UK: A REGULATORY QUESTION MARK? When discussing regulation in 2021, it’s impossible not to turn to the UK market. While Crown Resorts suffered 12 months to forget, UK-based Football Index simply ceased to exist altogether during the period. Things came to a head quickly for the operator, which had in the years prior only just embarked on national sponsorships and televised advertising campaigns. Allowing players to “invest” by purchasing shares in professional footballers, as opposed to the traditional sportsbook format, Football Index reached a stage where it was generating hundreds of millions in trades during the financial year. But it all swiftly unravelled, with a March announcement that dividends were to cut by 80% being followed by player unrest. Not too long after, Football Index went into administration – before the Gambling Commission rather belatedly, and pointlessly by that stage, revoked its UK gambling licence. Here, the role of the Commission – considered one of the world’s leading regulators in many circles – came under serious scrutiny. It declared it had investigated Football Index for a whole year and decided there was no cause for concern, despite multiple written warnings from concerned parties. Given the eventual outcome, and the Commission’s limp response once Football Index had gone into administration and left players potentially thousands out of pocket, it’s difficult to see how at any point the regulator could have warranted its lack of action. Indeed, ominously timed, Chief Executive Neil MacArthur promptly resigned, with the UK Government conducting a review into gambling regulation and the role of the Gambling Commission all the while. It remains to be seen in 2022 how any policy will affect the UK market – but there is plenty of uncertainty, given some slot restrictions have already been introduced in the region. That uncertainty further extends to the UK’s National Lottery, which may welcome a new host from 2024 onwards. THE US: A SIMPLY BOOMING MARKET Let no one fool you any longer: if anyone is pretending US gaming is not thriving,

FEATURES

due to Covid-19 restrictions, they’ve either not been paying attention or have an ulterior motive. Gaming revenue in Nevada broke records in 2021, with five months in a row of billion-dollar gross gaming revenue and counting. Pent-up demand has seen people flock back to casinos en masse and, as I wrote in my Editor’s Letter in the September/ October edition, it’s now time to genuinely ask US gaming companies if they have already recouped their losses for 2020. While 2020 was catastrophic for land-based casinos, 2021 has been so good it’s not unreasonable to suggest it is evening the playing field for the past 24 months. Online, too, saw further US breakthroughs – which is nothing new and something I’ve been writing since PASPA was overturned in 2018. New states regulated sports betting – and iGaming – and on top of the mergers we have already mentioned, huge media content deals were signed by affiliates, and leading operators like FanDuel and DraftKings. The focus on North America, too, has broadened from just the US to Canada, following the legalisation of single-event sports wagering in the country – and the expected regulation of iGaming in Ontario. EUROPEAN PROMISE In mainland Europe, meanwhile, 2021 brought more positivity for gaming. There was strong performance in Italy; the Dutch online gaming market was finally launched, while Germany saw progress too – despite a challenging set of regulations. Swedish firms thrived, Evolution in particular (as was covered in our July/August cover feature), while Euro 2020 brought a long-awaited and one-year-overdue gold rush for sports betting firms. Football almost came home for England fans, but the fact the English national team reached the final and promptly lost on penalties was probably the dream result for operators in the end. Elsewhere, Asian markets such as Macau still lagged behind their European and American counterparts, but crypto betting saw a renewed surge of interest in 2021. Events were still more or less non-existent throughout the calendar year, until the Global Gaming Expo (G2E) returned to Las Vegas in October. As such, the Global Gaming Awards Las Vegas also returned to crown their winners, while there was a virtual show for the London Awards. Overall, 2021 had its drawbacks: no year can be perfect but following 2020? It would have been difficult to avoid a year-on-year improvement. For gaming, this improvement came in spades, and this past 12 months was definitely an ace in the pack compared to last year’s fold.

GAMBLINGINSIDER.COM

FEATURES

INDUSTRY PREDICTIONS

2022: WHAT LIES AHEAD? Is it a bird? Is it a plane? No, it’s Tim Poole with Gambling Insider’s 2022 industry predictions Every December, executives and analysts from across the gambling sector may gaze up at the clouds, asking what the next 12 months have in store for them. In most cases, no one in this fast-paced industry is likely to be in exactly the same position as the prior December. Situations change rapidly and trends take shape with urgency in gambling. Just look back to 2019: could anyone have predicted a global pandemic would reshape the industry in its entirety in 2020? At the same time, though, in our sector there are certain stalwarts – occurrences that are guaranteed to happen with greater certainty as each year passes. Examples are industry consolidation, new US states legalising sports betting and Bet365 reporting incredible revenue figures... To that end, let’s preview what lies ahead in 2022. In true Gambling Insider fashion, we won’t be afraid to make a few bold predictions – because we know there are a number of safe bets we can fall back on. M&A: WHO MOVES WHERE? The easiest prediction in the world of gambling: there will be industry M&A in 2022. More difficult is to say where it will take place, although there are some patterns that are, again, easy to identify. The most recent M&A trends to develop in gambling are those of operators buying suppliers and operators creating their own game studios (like LeoVegas and Penn National). This is more than likely to continue. You’ll also get really short (hypothetical) odds on Evolution buying another company in 2022. In 2020, Evolution took over NetEnt for a sizeable $2.1bn, before acquiring Big Time Gaming for €450m ($533m) in 2021. In light of the supplier’s dominance in several markets and growth trajectory, it looks set to purchase another games studio within the next 12 months. Given the general growth gambling is

GAMBLING GAMBLINGINSIDER.COM INSIDER.COM

enjoying – mainly on the digital side – more and more of our sector’s biggest firms are likely to go public in 2022, following this year’s rush of gambling companies taking their stock to market. As discussed in our September/October SPACs vs IPO cover feature, the growing number of SPAC (Special Purpose Acquisition Company) transactions is unlikely to dwindle any time soon. There are more of them than ever in gaming, and a wide range of firms with more value built into their future growth than their historic results. They’ll be sure to capitalise on this faster, arguably more efficient, method of going public. KEEPING THINGS SIMPLE In my most specific prediction here, I’m willing to publicly declare my belief that Simplebet will become a huge industry name in the years to come – and definitely enjoy further growth in 2022. No, I’m not on the company’s payroll. Simplebet is a US-facing sports betting provider that specialises in micro-betting technology; in the simplest terms – if you’ll pardon the pun – all this means is it maximises opportunities for in-play betting on: the next pitch, the next throw, the next three-pointer. It’s good and bad news for sports bettors; it gives them ample opportunity to wager but ample opportunity to lose, lose and lose some more. Big-name operators will love this technology; and many already do, with DraftKings and FanDuel having partnered with the firm early on in its trajectory. There’s not just that, but the small matter of former MGM Resorts International CEO Jim Murren joining its board and even

YouTuber-cum-boxer Jake Paul’s investment company contributing to its $30m Series B investment round. As the North American sports wagering market matures, operators will be on the lookout for quick, sharp technology that maximises efficiency in every way it can. So watch this space – and watch out for Simplebet. AN EVENT-FULL YEAR Considering how much this industry has missed physical trade shows and events over the past 18 months,

INDUSTRY PREDICTIONS

we needn’t labour the point. The pandemic’s impact on the events sector has been huge. And, although the Global Gaming Expo (G2E) returned to Las Vegas in October, 2021 only saw land-based events return properly towards the end of the calendar year. Expect far, far more in 2022 – and not just because populations around the world have been

vaccinated, but because events companies simply have to make things happen; and even more so when you factor in virtual event overload. ICE London will be the first major watermark for gambling events in 2022 and we at Gambling Insider hope to see you all there. THE UNITED STATES OF IGAMING While Asia’s return to full force – namely Macau’s – is yet unclear, the picture has long been painted in the US. Some analysts expect Macau to return to 2019 levels in 2022 but there is no guarantee these volumes will return sooner than 2023, especially as travel restrictions continue across Asia. In the US, not only is Las Vegas thriving, but casinos across the country; with sports betting and iGaming inevitably on a similarly upward trajectory. Though technically not in the US, throw Canada into the mix and North America’s revenue growth will be off the charts in 2022. Land-based US gaming will continue to boom – this much

FEATURES

is evident. But if I were asked specifically which sector will grow the most, it’s an easy guess, although one much of the US market is perhaps yet to fully understand. Online casino has already shown its value (to the industry, not necessarily to bettors!) in that it adds huge revenue and is a stable source of income in the face of adversity. It survives both land-based closures and sporting swings, such as heavy favourites winning and fixtures being cancelled. IGaming in 2022 will continue to thrive in the US and will become the industry’s big winner. For all the hype, sports betting’s margins are miniscule by comparison. As more and more states legalise the practice, the greater question is just how much regulatory input there will be to prevent huge player losses. NO REAL CHANGE FOR THE UK? As a final point, the UK market is shrouded in mystery – or perhaps more accurately a lack of clarity – heading into 2022. The Gambling Commission and UK Government have both been reviewing various aspects of the UK sector for some time, and heading into 2022 we’ll know more about exactly what is to happen to the makeup of the market. And yet my prediction for 2022, despite all the unavoidable furore and speculation the region will create, is that very little will actually change. In Italy, gambling advertising was banned on 1 January 2019. Nearly three years later, that market is thriving. The advertising ban, as we explored in our July/August edition, had little to no impact on actual gambling levels. In the UK, we might just see the same happening in 2022. If the Department for Digital, Culture, Media and Sport introduces some vote-winning policies, like a gambling sponsorship ban in football, or even a total advertising ban, will players stop betting with Ladbrokes, Bet365, William Hill, Paddy Power and the like? Of course not. Even the reduction of the maximum stake on fixed-odds betting terminals from £100 ($138.25) to £2 in 2019 has arguably done very little to actually change gambling habits – certainly compared to something as influential as the Covid-19 pandemic. While B2 machines (effectively the category for fixed-odds terminals) saw revenue plummet, shops simply started taking more revenue in via B3 machines. Gross gaming yield may dwindle somewhat, but that will probably happen anyway when accounting for the maturity of the market. In essence, it will be business as usual in the UK in 2022; and, as the world aims to put the coronavirus pandemic behind it, much closer to business as usual for the gambling industry as a whole.

GAMBLINGINSIDER.COM GAMBLINGINSIDER.COM

FEATURES

CSB GROUP

REMOTE REVOLUTION As working life returns to a state of normality, the approach to remote vs office life has evolved dramatically. Isabella Aslam speaks to Malta-based CSB Group’s Head of Human Resources and Employment Advisory Services, Dr. Elaine Dutton

Hybrid versus remote working – a popular subject, anyone? As we sit down with Elaine Dutton to discuss society’s new working conditions, there’s a lot to cover. Dutton firstly confirms she and the CSB Group employees are mostly remote working (for the time being). Having just finished her maternity leave when the lockdown restrictions were announced, she explains how she was looking forward to returning to the office. “I was very eager to get out of the house and meet my colleagues and employees,” she tells Gambling Insider. “That’s what HR is about, meeting physically and having contact with people, but then we went completely remote

GAMBLINGINSIDER.COM

and within the space of a few months, I returned to a completely different format; with things like Zoom.” Dutton admits remote working had its challenges at the outset; however, the turnaround was a successful one. “It was insane in the beginning, but we transitioned very fast within a matter of days. One issue we overcame was people’s reluctance to turn their camera on in Zoom meetings; we had to put it as a policy. If you’re having a team meeting with nine people, you can’t have two people with their camera on and seven off. It doesn’t help people build that level of trust, especially when you have new employees on board. They need to

see who they are working with; it’s a normal part of who we are as human beings.” Agreeing that speaking to a blank set of initials [on Zoom] takes the human interaction away from a meeting, Dutton explains: “It does, it’s the reality of what we are experiencing. Employees need their camera on because we want them to be there. We used to be able to see people in the corridor, recognise if that person looks a bit tired, and go and have a chat with them and see what’s going on. You have to prompt people on Zoom and ask for a chat because these natural steps are removed when it comes to remote working.” In terms of different formats,

FEATURES

CSB GROUP

Dutton discusses how CSB employees managed the shift from in-office to remote working. “People felt cared for and that was an important point. It’s easier to do your job when the employees know you are doing it for their benefit,” she continues. “We had several interviewees explaining to us how previous companies didn’t essentially care about the pandemic. This made them feel anxious going to the office, worried about the possibilities of bringing the virus home unknowingly. And I thought that was unfair to the employee.” Safety precautions like social distancing and plastic screens were implemented across the globe in most offices. When asked if CSB also actioned these precautions, Dutton confirms: “We still have the screens, Perspex, and glass halfway through a room so both sides are separated, we are all still wearing masks in the office, as soon as you come in there are stations to clean hands.”

“There needs to be a sense

of accountability as the manager to feel relaxed and not micromanage, checking up every five minutes, saying: ‘are you working on something important or are you taking a break?” A year on from the initial ramifications of the pandemic, Dutton finds CSB in the position to alternate its staff members. In her own words: “Everyone has to come into the office but to limit the number of people in one space for eight hours a day – not at the same time. Our employees were a bit reluctant to be in large groups, too, so we have not forced anyone.” The number of days an employee must attend the office is left to the overall decision of CSB line managers. However, it is requested that staff members come in at least once a week minimum. “We need to see you and we want to see you!” proclaims Dutton. “It’s also a way to encourage people to step outside their comfort zone; it can be good for them. People can get very anxious which can quickly spiral into an anxiety disorder; situations like not wanting to leave the house and being too comfortable spending time alone,” she expresses. “I do mean this from a mental health point of view as it’s very easy to develop anxiety issues; furthermore, some people have told us this, so we say ‘we are going to push you to come into the office once a week to help you.’”

GAMBLINGINSIDER.COM

CSB prides itself on its empathy toward its staff. In an environment where not every company acts similarly, the boundaries at CSB have been set in ways where employees and employers work together, not necessarily forced back to the office; but rather to bring back normality in working process. “To be honest, needing them to be back at the office isn’t really about productivity, we are a very performance-driven organisation; we’ve got clear KPIs (tailored to each person), very clear targets delivered at the outset of the year, and regular feedback,” she says. “It’s very easy for us to monitor how people are doing and we don’t need staff in the office. The reason we push people to be in the office is more about the relationships of employees with their colleagues, it’s not about the output or productivity, it’s about keeping these relationships and maintaining a social fibre between people to perpetuate that connection.” The ethos of the company shines bright through the first few questions of this interview; when we explain this to Dutton, she mentions that family values are of huge importance to CSB – at the forefront of the company: “We try as much as possible to maintain our company as a family-based organisation, in the sense where we treat people with compassion. By all means, we are results-driven and we want to be the best but there is a genuine sense of care for other people.” In 2020, thousands struggled during the first set of lockdown restrictions, especially dealing with so much time spent alone. With a background in psychology, Dutton is sensitive to the subject of employees’ mental health. “I can spot when someone is struggling. Certain emotions lie dormant in many people, and a situation like Covid can bring it all to the surface. This is why some people need help to get themselves out of a dark place. We need to ask our employees if they’d like to be more present in the office to help them combat these issues. And in doing so, some people have said ‘yes please, I don’t have family here in Malta, I don’t function well on my own, so in these cases, we make an expectation to help them personally.’” Productivity and progress The discussion of productivity surrounding professional performance, or a potential lack thereof, in the workplace is a high topic of conversation across the board in many industries. Nicholas Bloom, a professor at Stanford University in California, and specialist in studying work practices, including remote work, has previously voiced the pros and cons in productivity in office workers:

Dr. Elaine Dutton ‘During short-run activities, such as writing reports or undertaking repetitive tasks, the productivity level is high; however, the problem lies in longer-run creative activities which hold the challenges when working from home and not being interactive.” General office conversation is seen as a hindrance to productivity compared to the varied increases in efficiency levels rising in employees working from home. Or is it? “There could be a slight truth in the fact that productivity might suffer a little bit, but in reality, that ‘office chit-chat’ is building relationships,” Dutton insists. “That ‘office chit-chat’ is human communication." Dutton explains how the conversation in the office is not a catalyst for inefficiency, but rather, productivity utilising requisite communication: “I would be hesitant to say productivity declines when people are in the office because it could be productivity that comes out differently; for example, somebody could initiate a great idea to improve the company that wouldn’t necessarily be voiced if they were at home.” Many professions require different types of working environments. Some employees thrive in the hubbub of a workplace, communicate better working as a team and feed off the inertia of a busy environment,

FEATURES

CSB GROUP

whereas other roles benefit from a quiet environment. Different individuals may have different preferences, too. To gain quantitative research on the debate between remote and hybrid working, Gambling Insider conducted a poll on LinkedIn asking what types of working conditions people preferred post-pandemic. The highest figure showed 36% in favour of a fully remote workforce, with the lowest number accounting for 17% choosing two days per week. However, the results were quite evenly spread: CSB also conducted a survey. “People prefer the hybrid way of working,” Dutton states. “The nature of our jobs allows the best of both worlds; the ability to be with colleagues and understand what they are required to do in the office, but at the same time, concentrate and be quiet working at home.” Malta stands as a European iGaming hub, with hundreds of iGaming companies operating in the highly sought jurisdiction. IGaming is one of the region’s fastest-growing industries, along with blockchain, and Malta is establishing itself as a popular place to call home. CSB has supported the industry since its inception and Dutton has worked with numerous clients over the years. She sheds some light on her knowledge of working in the gaming industry: “The full remote working option was very popular. I have had many companies that designed fresh remote working policies. I know that some gaming operators – whether it’s about the culture of the employees or that they have more international employees – who want to be back home in their countries, we’ve had a lot of people wanting to be predominantly remote.” This topic raises the question of whether the iGaming industry is more suited to working

GAMBLINGINSIDER.COM

“The reason we push people to be in the office is more about the relationships of employees with their colleagues. It’s not about the output or productivity, it’s about keeping these relationships and maintaining a social fibre between people to perpetuate that connection” online than in the office. Dutton proffers: “Online is more suited because you aren’t dealing with anything tangible (like tangible paper, original signatures, or certificates). Working in gaming gave me an insight into clients being online as well. However, here we often have them drop by the office, so need to have physical premises to meet people.” Thousands of businesses and employers have been weighing up the dilemma of how to bring their employees back to work in a safe environment. The subject of ‘no jab, no job’ is a sensitive one. Where some companies have made the vaccine mandatory for all new hires (think: MGM Resorts and many Nevada casinos), others believe it to be an employee’s personal choice. Dutton explains that CSB does not feel it “has the right to impose the vaccine on anyone.” “The moment you start policing employees can create a very negative repercussion very quickly. That is not the type of relationship we want to

have with our staff.” CSB has voiced to its employees that it believes in the vaccine and its benefits in protecting its team members; however, it does not believe in “forcing anyone.” Dutton explains that the company does take note of who has had the vaccine due to the safety of others who may have chronic conditions. “We aim to be in a position where if anyone joins the company or becomes pregnant, and they need to know how safe the office would be, we want to be able to answer that.” Regardless of the company not forcing vaccination, CSB’s employee coverage stands at 95% double jabbed, meaning the office has achieved herd immunity. Overall, working remotely is based on adhering to essential job responsibilities from the employer and the employee: “I feel it is important to know how to manage a remote workforce. I can understand the hesitation around the concept of remote working, but only if objectives and performance targets are not set beforehand.” Dutton continues: “If there isn’t any sense of agreement from both parties on what is expected (and vice versa), then it can’t work. This is the piece of the puzzle that remote working needs to thrive. There needs to be a sense of accountability for the manager to feel relaxed and not micromanage, checking up every five minutes, saying: ‘are you working on something important or are you taking a break?’ CSB maintains its values in treating employees fairly; with this comes respect from team members. “Employees also need to relax because they start doubting if their employer knows they’re working - when we know you are,” Dutton concludes. “This worry can cause anxiety, so there needs to be a very good working relationship based on trust between both employee and manager, based on very clear tasks and expectations. Both parties can then leave each other alone, but know what to expect from one another. You're doing your job and I’m doing mine. Everyone is working. That is how remote working can be implemented efficiently and how it does not diminish productivity.”

FEATURES

THE HUDDLE

Disruptions and user experience Yggdrasil CEO Fredrik Elmqvist speaks to Tim Poole about the evolution of gaming, the importance of user experience and how key disruptions have impacted the industry You’ve been at the helm of Yggdrasil for almost 10 years. How do you reflect on this? Coming towards 10 years exactly, it’s been an interesting adventure in that sense. I think it is fair to say that the industry has evolved a lot since then. We believe it’s a better user experience to let the players select from various types of games instead of just having a smaller, limited range. And I think that disruption has been pretty big because it led to more innovation, and this was allowed because we had taken down the barriers around manual fund transfers, which enabled a slow evolution of more providers. At Yggdrasil, we see third-party partnerships coming and joining our development cycle, they are licensing our intellectual properties to get their content into our big network. I think that is the next disruptor; we are kind of in the middle of it, we see our top line growing pretty well due to that; we never wanted to be a hub. Aggregation has been there all the time, we wanted to disrupt the aggregation by developing this piece of tech called GATI (Game Adaptation Tools & Interface) in the regulatory landscape, allowing each part of a chain to do what they do best. So we are kind of in the ideals of that and sailing through it at the moment, which is very exciting. Given these disruptions, on a scale from 'slightly different' to 'unrecognisable,' just how much would you say the industry has changed during this time? Well, for me, a lot. I can only look at the casino side and slot side of this mainly. There I see a lot of disruptions, but it all started with seamless wallet and free spins. Seamless wallet broke down the barriers; and that led to branching to new innovations that led to new disruptions. Everything is driven by the user experience. What I see now if I compare the casino with sports betting is that it’s been pretty big with tech and software. I think there will be a lot of

GAMBLINGINSIDER.COM

innovation coming from the US in sport. I do think casinos still do have disruptions to come, based on what we are doing with GATI, opening up third parties, enabling people undertaking R&D (research and development) based on being convinced on a strategy or user experience. So do I see a change? I’ve seen a lot more sports involvement in the last year. You mentioned as well how Yggdrasil has adapted and, as you say, perhaps caused some disruption. In the next 6-12 months, given the Masters Programme and your aim to be seen as a global publisher, what is on Yggdrasil's roadmap? We focused a lot on the B2B technology side; we are a provider to the operators but also to the studios. You see a lot of focus on the tech to make it scalable, which is very important. Today we are actually doing a lot more with a lot less resources, which is a huge difference from two and a half years ago. What we are working on now is to be seen as not only a B2B company, but as a B2B company working on consumer and gambling B2C products. So, you will see more of this, and will see new types of games coming out, games like Vikings Go Berzerk Reloaded. A different focus from the beginning, on the R&D front, is focusing on the gambling user experience. We are taking back the B2C experience, focusing a lot more on our own intellectual property. We are also focusing a lot around monetising on the “GEMs,” the Game Engagement Mechanics that we licence to our partners. Because we see that when the players recognise the mechanics, it’s a win-win for the studio. You’ll see more known and working mechanisms but with permutations from us and our partners. We are going to be much tighter with the B2C experience of the products. It’s been implemented since August, but it will continue – it’s part of a strategy.

THE HUDDLE You touched on GEMs and GATI earlier, and I know these are big products for you. In terms of distribution and change, obviously something that impacts the industry as a whole is M&A. This year we have had several examples, Evolution – Lightning Box, 888 – William Hill, Aristocrat – Playtech, to name a few... What a list! How do you review 2021 in terms of industry consolidation, and the deals and trends that are driving the sector at the moment? I think it is very interesting. You see a lot of interest between the UK and US, a lot of shareholder value is also created in Evolution deriving from the US and continuing for several years, even NetEnt had a lot of shareholders coming in from the US. I see gaming moving into a new phase and I find it so interesting. That is why there is never a dull moment or quarter in this industry; new innovations, new deals, global macro trends, they all have an impact. SPACs are coming in and changing things around again. There’s a lot of money involved, in the US regulating sports, in casinos following after. Then there is, of course, a very tough regulated landscape in Europe that is struggling, probably the lowest it’s ever been before in the regulated markets. You need to keep an eye on the global macro and the local macro – again, never a dull moment. Absolutely, never a dull moment and no two days are the same. Do you have any thoughts on the operator-supplier merger trend, while not too common we are seeing a lot of it. As time goes on, do you think we will see more? It’s usually driven by the operator who wants to have production from a strategic point of view; they think it’s going to differentiate themselves with new content and be easier to market. I think it is just a strategy but this is nothing new, it’s been like this for a very long time; several B2Cs have it, Paddy Power had it, it’s really nothing new. I don’t think that online game providers really understand the complete quality in user

experience, until guys like Megaways came about and really turned this upside down and focused completely on user experience targeting the players; that was the disruption itself. I think you are going to see a much more fragmented landscape between B2Bs and B2Cs in terms of collaboration and flexibility. Work with your frenemies – have a collaborative and flexible approach.

FEATURES

own intellectual property, in-house games and licensing intellectual property. We are going to declare some kind of strategy towards the West, and we will most probably announce something on that over the next few weeks. For us, 2022 is a year of exciting, tighter accumulated strategies.

When it comes to M&A and being acquired by another company, what is Yggdrasil’s stance and approach to this? And what about perhaps going public? Well, I would say there is a big barrier today in the public market. I think given how the banks are treating gaming today and especially in Sweden, I think it makes it tougher to have an IPO there. I would say that back in the day, having an IPO was almost a preferred way forward for the shareholders to exit the business or continue rolling forward. Today we work with a private equity company, Bridgepoint. If I would bet, I would bet more about looking at the option to potentially sell the company or merge the company. When it comes to Bridgepoint’s strategy – you’d need to ask them how they are philosophising around this; but for me personally, I can say there is an interest in continuing the journey one way or another. It depends on who we talk to and who wants to do a deal. We are open to discussion but it depends who and how, and so forth. There are currently no ongoing activities. So, looking ahead (and looking back), how do you sum up 2021 and what is Yggdrasil’s outlook going into 2022? Looking back, we don’t rate 2021 as a bad year, we see it as a good year; we have delivered our promises and KPIs, we managed to sell some GEMs to partners and we built a top line. I think we have had a pretty decent year, with a very strong Q4. 2022 will be more focused on the B2C and user experience. This means a lot of motivation, less games coming out; but more games proportionally will have our

GAMBLINGINSIDER.COM

FEATURES

BIG QUESTION

After enjoying rapid growth throughout the early stages of the pandemic, what does the future look like for esports?

Kambi, COO, Erik Lögdberg

Erik Lögdberg

GAMBLINGINSIDER.COM

What was at one stage a largely niche pastime, esports is currently one of the fastest-growing global entertainment industries with an audience of more than 450 million people worldwide. Buoyed by the success of popular games such as League of Legends, Counter-Strike: Global Offensive and DOTA 2, as well as the growth of streaming services like Twitch, esports is now estimated to be worth more than $1bn in revenue this year at a growth rate of 15% year-on-year, according to Newzoo. Such strong growth is why, particularly in recent years, esports has become such an enticing opportunity to the sports betting industry. Indeed, more and more betting companies have begun offering markets on esports and many have invested significantly in their respective esports betting products, in some cases treating it as a standalone vertical alongside casino, poker and sports. As the question this article poses might suggest, there was a particularly large surge in the popularity of esports betting at the height of the Covid-19 pandemic. The cancellation of major sports across the globe resulted in a more limited offering comprising the likes of Belarusian soccer, table tennis and esports in early 2020. By way of example, in March 2020 the number of esports bets placed on the Kambi network was approximately 250% higher than in the same period the previous year. Interestingly, when the global sporting calendar returned to normality, the interest in esports remained high, which served to

underline that the growth of esports betting was no flash in the pan. Data from the Gambling Commission, for example, showed that gross gambling yield from esports betting continued to rise into May 2020 once the sporting calendar had resumed, while other ‘niche’ verticals reported a decline. The potential for esports to be a significant part of the sportsbook has never been clearer. Of course, the future growth of esports betting is largely dependent on how it is regulated on a country-by-country basis, or, in the case of the US where licensed sports betting in general is still in its infancy, on a state-by-state basis. This forms part of a wider industry trend which has seen many regulators across the globe permit betting on esports; while also attempting to establish a framework that ensures the highest standards of integrity monitoring are upheld, and that esports is protected from manipulation. Since the repeal of PASPA in May 2018, an increasing number of US states such as New Jersey, Colorado, Nevada and West Virginia have regulated esports betting, and more states are expected to follow suit in the future. Many US sports teams have entered into partnerships with esports betting providers too. In general, esports is immensely popular in the US and, as we don’t feel anyone has really cracked the esports betting product or market yet, we believe it offers a significant opportunity

BIG QUESTION

moving forward. Another area we see ripe for disruption and growth in the esports betting market is in-play wagering. This is a particularly immature aspect of esports betting as the data value chain has largely not been as structured as in football or tennis, for example, but we see significant opportunities to deliver a fast, automated and friction-free live betting experience for esports bettors. We believe whoever can combine risk, trading and algorithmic expertise from traditional sports with esports data management expertise will be in a strong position to

FEATURES

do just that. These are still early days in the evolution of esports betting. However, as the market continues to grow, the future looks incredibly bright for esports, and it will no doubt become an increasingly vital component of the wider sportsbook offering going forward. Erik Lögdberg joined Unibet in 2005, quickly becoming head of live betting, with responsibilities including operations and product development. This period coincided with the growth in live betting and the formation of Kambi. Erik is now COO of Kambi and leads on product and operational matters.

Amir Mirzaee, COO, Bayes Esports

Amir Mirzaee We get this question a lot and the only thing to say is that without a doubt, the trajectory is unchanged and still unparalleled across all sports. Before, during and after the pandemic, growth has been stable between 50-100% year-on-year by any meaningful metric. With this growth comes key findings and developments that reveal a bright future for esports, specifically in the betting realm. Thanks to deep insights gained from transaction-level details of our clients, we’ve seen a phenomenon where the number of betting transactions has slightly decreased, but transaction value per ticket has shot up, setting total turnover far above last year’s. That is to say that, while the pandemic has seen lots of hobby punters give it a go with esports and subsequently move on, total turnover is showing stable growth via an ever-expanding fanbase. This is in line with the trends we were seeing even before the pandemic. We are also seeing that new stars in betting aren’t born overnight. There are quite a number of solid titles that have had good traction on the player side, like Mortal Kombat, Rocket League or Fortnite, but player interest isn’t the

only factor in determining whether or not a title is suitable or preferred for betting. What sets the “Big 3” game titles apart – that is CS:GO, DOTA 2, and League of Legends – is that these titles grew consistently and built massive followings over the course of the last two decades. Their game mechanics are well understood and are constantly refined (unlike EA’s sports titles, which only see substantial changes in game mechanics annually). It is also the case that the teams who play these titles are continuously delivering matches packed with displays of high-quality performance, and these matches offer a good balance of predictability vs. turnaround-and-upset moments. Getting to – and maintaining – that level of traction and comfort in terms of betting behaviour continues to be a major challenge for any new game titles coming to market, including Valorant, Call of Duty Warzone or PUBG Mobile. Valorant, in particular, is an exciting challenger in the strategic first-person shooter space, since it is at the forefront of a new breed of game titles designed with esports in mind from the start. It is a game format expertly tailored to deliver a fast-paced, exciting viewing experience for the crowd. For the time being, however, the “Big 3” game titles continue to make over 90% of all esports betting revenue (not counting eleagues content like FIFA 21, NBA 2k, etc.) and taking a spot among the “Big 3” will not happen overnight. In terms of eleagues, we have seen a massive boost in betting volume simply because the game mechanics, and resulting meta, are so similar to their traditional sports counterparts. This makes them particularly attractive for betting especially because the nuanced ways in which game mechanics differ change the experience for punters. One of many instances of this nuance can be seen in FIFA 21, where a simple 1:0 lead is much harder to turn in the last 10 minutes of the game than in real football. This has certainly made eleagues

a betting favourite in the past year (both for operators and for punters). Sadly, because EA Sports is not currently engaged in establishing a data offering, the eleague market is among the more fragmented, unregulated markets, creating a space for content and data providers that target the black and grey markets. If we look at it from the content side, the amount of inbound business we’re seeing is just absolutely staggering, so much so that it could be likened to that of a gold rush. Game publishers – looking to follow in Riot’s footsteps – are beginning to come out in favour of creating infrastructures that support esports organically. New league brands are chasing the ESL in an effort to become the next big brand in the events space. New game titles and teams are shooting out of the ground as well. It’s simply mind-blowing. Amid the rush, fans are increasingly eager to connect with their favourite esports in meaningful ways. This is, in some ways, facilitated by the quality and diversity of the digital offering, which is largely driven by official data. At Bayes, we see it as our mission to provide high-performance infrastructure and access to clean, undelayed data feeds to support any kind of digital esports use case , from in-depth analytics to betting offerings. With Riot, ESL, Beyond the Summit, and OGA as our exclusive content partners, we’ve laid the groundwork for what data services need to be to the esports industry, in terms of driving standardisation and integrity. Amir Mirzaee has been active in tech business for over 15 years as founder, strategy consultant, Business Development professional, and as the head of a family office. Most recently, he spent six years as the BD lead at Google and Waze, and has spent the last three years investing in tech startups across Europe and the US. Amir is acting as COO, managing commercial, business, legal and financial operations at Bayes.

GAMBLINGINSIDER.COM

FEATURES

BIG QUESTION

Malte Hegeler, Head of Product Development, OddsMatrix – EveryMatrix Firstly, it is important to recognise exactly how transformative the pandemic was for esports betting. Our own research showed that the shutdown of live sports resulted in this vertical growing 40 times over. The extraordinary bubble of esports betting did not suddenly pop once the Premier League and other major sports resumed operations, either. We have found on our platform that betting revenues on esports events are nine times higher than they were in the pre-pandemic era. One industry-wide report predicted that the esports betting market will be worth more than $13bn by 2025, up from $800m in 2019.

Malte Hegeler

"With traditional esports, their ascent into the mainstream has been no less impressive" Clearly, a large reservoir of potential for esports betting remained untapped prior to last year. Sports-themed games events that emerged onto betting platforms proved an extremely popular option for bettors, with the knowledge barrier for understanding the mechanics behind FIFA and NBA2K contests easily overcome. These simulation titles remain popular mass-market choices within today’s sportsbooks, as quick-fire matches from across the world constantly take place around the clock. With the more traditional esports disciplines, such as CS:GO, their ascent into the mainstream has been less dramatic but no less impressive. Once a niche pastime, competitive gaming now commands massive sponsorship deals, huge prize pools and is covered on major TV channels. While Dota 2 might not ordinarily pique the interest of a Premier League fan, the $40m prize pool on offer in The International this year certainly provides a point of intrigue for many who would not typically take in a major esports tournament. Many football fans will also have been interested enough in Jesse Lingard’s recent purchase of a Rainbow Six Siege team – rebranded as JLINGZ esports – to take a close look at the game mechanics

GAMBLINGINSIDER.COM

on YouTube. The patronage of global sporting superstars does not stop there and also includes Sergio Aguero (founder and CEO of KRÜ Esports), Gareth Bale (Founder of Ellevens Esports) and David Beckham (Co-owner of Guild Esports). Unfortunately, the traditional sports betting world for some time turned a blind eye to the continued ascent of CS:GO, League of Legends and similar titles. This is out of a lack of understanding of the genre and its devotees, who sit outside of the demographic that enjoys regular sports betting. What is needed is for true esports market knowledge to be integrated within a reliable and quick sportsbook platform, to appeal to a generation that sees little or no difference between esports stars on Twitch and football superstars on the pitch. That deal points to one of the major challenges that still needs to be resolved within esports: the lack of reliable data from below the top level, both on the teams and from the organisers of tournaments. While the likes of the ESL are very well-served with credible data, the next tier of esports events – which are still very popular – features semi-professional players who can suddenly quit mid-season, making it difficult to build reliable pre-match markets, and with inferior in-game data. Ultimately, operators entering the esports space need to select a solution that is comprehensive, powered by people who hold a deep understanding of the vertical and who can offer partners the widest range of compelling products. At OddsMatrix, our enhanced platform currently features more than 50,000 live events every month across over 370 tournaments and with 95 different bet types. Those numbers are constantly growing. Operators also benefit from real-time odds, stats, scores, settlements and automated trading, as well as the option for operators to configure their own odds to customise profit margin. The future growth and continued development of esports betting is guaranteed, so selecting the right partner now can ensure operators get on the front foot, to stake a claim in a vertical that is only just getting started. Malte Hegeler leads the product development for EveryMatrix across all its sports products. Having a deep understanding of bookmakers’ needs, thanks to his 10+ years of experience in trading and sportsbook development, Hegeler is a key contributor to the recent revamp of OddsMatrix’s front-end and back-end capabilities, as well of the launch of the Esports Services in 2019.

FEATURES

BIG QUESTION

Marco Blume, Pinnacle Solution, Trading Director

Marco Blume

GAMBLINGINSIDER.COM

The pandemic was no doubt a boost for the esports betting space. But it was by no means the catalyst that made it a mainstream betting product, as some claim. Esports took root decades back, and from a betting point of view, there have been viable products in action for over 10 years now. These offerings have evolved into first-rate betting destinations in their own right and will continue to succeed despite external disruptions. The shutdown of the sporting calendar thrust esports in front of a new, largely traditional sports betting audience, but we must not forget the massive fanbase that esports already had worldwide. And it’s this community that we have to appeal to in shaping esports products for the future. Cross-selling from sportsbook is something we should aspire to. But tailoring esports offerings to the mass market, and not to the unique requirements of the esports fan first, is to do a disservice to the millions worldwide who have enjoyed betting on CS:GO, Dota 2 and the like, long before soccer and tennis seasons went on hiatus. We are at a fork in the road in the esports betting journey. On the one hand, we’re seeing leading operators and suppliers finally take this vast market seriously, delivering broad content in a way that legitimises the space but perhaps doesn’t excite the audience. On the other, there’s an increasing number of standalone esports betting destinations that live for the gaming community. They’re run by esports fans and deliver betting experiences in a way that these same fans enjoy. The future success of this space probably lies between these two approaches. There’s no reason why major sportsbooks can’t deliver esports content in the same manner as specialist operators. It does require a rethink in delivery though. Esports fans are undoubtedly more engaged with their pastime than the average soccer fan would be. This means that as an industry we must serve them at a higher level. Authenticity is key to building trust over time, and successful esports operators of the future will be those who have taken their products to this unique audience on different levels. Content should be specific to individual esports titles, not just adapted from the core sportsbook variety. Pricing should be sharp, fair and accurate. After all, these titles are data-driven and their fans are well-versed on the risk-reward of competitive gaming. All of this content should be packaged in a way that suits the specific demands of the esports audience. The future of esports is as its own betting vertical. Esports encompasses over 35 traded titles, so crowbarring the catch-all

term alphabetically between Darts and Formula 1 on a sportsbook will undersell the offering and deter acquisition. Specific hubs are needed for esports fans to find their own space to bet in. This could mean spin-off brands, tailored betting layouts, or darker-themed aesthetics; but at its core, it requires giving the esports fan a destination of their own, not an add-on to an incompatible sportsbook environment.

"The mobile gaming sector is booming and yet remains pretty much untouched from a betting POV" If we can get this right as an industry, esports can sit as a tier-one, top-three sport across the board and not just within a niche few betting companies. In the meantime, we’ve got to keep our fingers on the pulse of this ever-changing sector. The mobile gaming sector is booming and yet remains pretty much untapped from a betting point of view. The last PUBG Mobile Global Championship saw over 64 million fans tune in over its four-day Finals event, yet PUBG Mobile is hardly represented as a betting product. This is just one example of many where new titles are finding major regional audiences – in this case Indonesia and India – and it’s our responsibility as esports advocates to serve these fans in the same way we do with the likes of LoL and emerging titles such as Valorant. We’re on the right path as an industry. But it’s important to remember that the esports audience is a unique one. We won’t be successful in the future unless we tailor betting experiences to them and treat them with the respect they deserve, with esports as its own gaming vertical, built for the community by experts from within it. Pinnacle’s Trading Director Marco Blume oversees all trading activity across Pinnacle and its B2B brand, Pinnacle Solution, and has been pivotal in shaping the group’s pioneering risk management practices and esports product over the last decade.

BIG QUESTION

FEATURES

Andrea McGeachin, Chief Commercial Officer, Neosurf Esports became a lifeline to swathes of lockdowners and quarantiners during the pandemic. Not because they enjoyed the isolation, quite the reverse. The world of esports became the valuable daily community that was accessible to them, providing human interaction, mental stimulation, challenge and, more important than anything, enjoyment in dark times. And it’s the enjoyment that has accelerated the volumes of esports players exponentially over the past two years. Data tracking at Neosurf shows a 38% increase in transactional deposits to the ewallet by the gamers playing, as well as a 42% increase in use of vouchers by the same.

Andrea McGeachin

money is one of the main motivators of proposition growth and, fuelled by the trend of mega payouts in mainstream sport, esports has an embedded foundation on which to flourish. The launch of the Olympics Virtual Series this year should leave no one in any doubt that esports is at the starting line and not the finish line. Penultimately, technology has two angles: the ability to develop and the money to do it. Both stand to serve esports well. The old adage of ‘it takes money to make money’ sits well with the prize money, the investment and sponsorship ready to align itself with what is seen as a huge growth opportunity. And with money predictably will come the

"Penultimately, technology has two angles: the ability to develop and the money to do it. Both stand to serve esports well" There are no signs that the growth trajectory will not be maintained in the post-pandemic era, and there are five key reasons for this: – Firstly, esports was already a recognised mainstream activity; lockdowns just gave more time and space for people to play, pay and game. Universal recognition has been one of the main beneficiaries of the pandemic. The numbers were already enormous before. The adoption of payment methodologies is now seen not only as safer payment solutions, but as part of the whole esports experience. There are no indications that universal recognition will do anything other than continue to fuel growth in the future. – Secondly, the emergence of esports from ‘gamers-only community’ to ‘full ecosystem’ within the gambling space is what has grown in the gambling sector. The general drive to digitisation that was experienced across many sectors was equally felt in esports, and we now have generations of people comfortable with the concept of digital as opposed to physical. If anything, this applies to esports more than any other area and is a trend that is likely to sit behind further exponential growth in esports in the coming years. Thirdly, professionalism has arrived, and with it the financial gains on offer to the high-level winners. History has shown that

technological developments with the more and more captivating, quality, challenging and irresistible titles that will adopt ‘Apple’ status and a similar following. Finally, education benefited, eventually, from the pandemic, with rapidly developed distance learning models. The education agenda has started to make good use of esports in these models. So, we now have education not only adopting digitisation, but also esports as a means of capturing and retaining the interest of learners. Put more directly, we are educating future generations in esports as a way of life, as well as infusing them with technological excellence and enticing them with the prospects of monetary gains. There is no other outcome likely to make growth in esports even more energised than we saw during the pandemic. The agenda that Neosurf has in this journey is to be at the heart of it, genuinely positioned as a key part of the ecosystem. Andrea McGeachin entered payments in 2007, and has been working at a senior level in the online gambling sector since. Andrea heads up the Neosurf Commercial team, which since 2016 has grown exponentially, filling the gap from Ukash loss as well as driving further and more smart services for our clients as a strong APM solution.

GAMBLINGINSIDER.COM

FEATURES

BETTING & GAMING COUNCIL

ALL YOU NEED IS BALANCE Brigid Simmonds, Chair of the Betting & Gaming Council, catches up with Tim Poole to discuss how alcohol and gambling compare, advertising, social media abuse and driving industry change To go back a little bit in terms of your career, you worked quite a lot in the alcohol industry, can you tell us some more about your background? For 10 years I was Chief Executive of the British Beer and Pub Association, but before that, for 17 years, I ran something called Business in Sport and Leisure, which again was talking with politicians. It was wider, there was a bit on the gambling side, and on the alcohol side, but it was also about watching sport, which is my passion. It did planning and it did employment, which I think are important too. How does working in alcohol and gambling compare? It’s quite an interesting starting point. When I started with the beer and pub sector, they’d

GAMBLINGINSIDER.COM

slightly lost their way with government and seen endless increases in tax. We had Gordon Brown, who was Scottish, so whiskey got a good deal, but nobody else got one. I think we reintroduced them to believing that pubs are quintessentially English, you’re better off drinking at a pub because someone is looking after you than doing it on the riverbank, and that the average politician has 53 pubs in their constituency. There are enormous amounts of pubs and brewing is [a big industry]. Even if you’re Heineken, you brew in the UK. So I think we moved that dialogue on. We need to do the same for gambling. I believe that alcohol and gambling are both things that people choose to do in their leisure time. As long as you drink responsibly, you gamble responsibly and moderately, there is nothing wrong with that. I have a slightly different view about tobacco. I have never worked in that because it’s just bad for you, but the alcohol and gambling industry are actually quite similar. We need to work hard to make

BETTING & GAMING COUNCIL

sure that we are playing our part, but we also need the government to work with us and help us to do that.

even if it’s something innocuous, they find some reason. I’m quite good at ignoring those sorts of things and I don’t really react. I believe that if you’re going to say things to people, you should think about whether you’re going to say them to their face. If you’re going to put it just in an online context, then I don’t think that’s the right thing to do. I have my own standards of behaviour and I try to talk about facts and what the industry is doing. What it needs to do is absolutely clear. We’re not perfect yet, but going forward we’re not targeting vulnerable customers.

What has alcohol got right, in terms of advertising, but also in terms of public image, that maybe gambling can learn from? The advertisements became really quite fun. You look at some of the advertisements, for example Diageo’s, and they’re clever. I think some of our advertisements need to be clever as well, but alcohol is quite a competitive market and quite a mature market, which I think means you get competitive advertisements. When we launch our replacement for ‘when the fun stops, stop’, we’ll have something generic that goes with that, and we’ll expect our members to remove the current one and put our new strapline on it. You mentioned the replacement for when the fun stops, stop, do you have any thoughts on the Tap Out ad, the Bet Regret one with the big wrestler? I was a trustee of GambleAware, when I was at the BPA, so I know quite a lot about it, and I actually sat on the board of Bet Regret. I’m probably not the right person to ask that question of because I’m not the audience they’re after. I think they did their own research just as we’ve done our own research on our new campaign, and you have to listen to what consumers say — what people say — who do gamble, and gamble on a very regular basis. It’s easy to stand on the side-lines and throw stones. How do you balance praise from the industry with the constant anti-gambling campaigning you’re inevitably going to get? To be honest, there are some people out there that are simply anti-gambling, They may claim that they’re not, but they are. Whatever I say or whatever the industry does, they’re never going to be satisfied. I don’t believe in prohibition, it didn’t work in the States in the 1920s, and it won’t work here. What you need is balance. I hope we are putting forward something that is balanced with lots of facts and lots of information.

FEATURES

Brigid Simmonds We do get some praise. Last Saturday, we won an award from the three armed forces because of the money we raised from the Britannia Stakes at Ascot last year. I think we raised £1.2m ($1.6m). There are people out there who appreciate the work we’re doing, but you do have to take a balanced view of it and sadly, there are some people who don’t feel able to do that. I think you also need to understand what a complicated subject this is. In beer, there isn’t a black market, apart from a white van man going around and delivering to the back of a pub, but it’s not there really. In gambling, there is clearly a black market. We know from the work we’ve done with PWC, that the numbers of people taking part in the black market has increased. We want to make sure that doesn’t happen, and I don’t think sweeping it under the carpet and banning it all is the answer. We just need to make sure we have the regulated industry. I read a lot of things that people say that just do not reflect the industry we are today and the progress we have made in the last two years. When you read something like that, do you just have to get on with the job and ignore it? It’s a bit like ignoring all of the people who abuse me on Twitter. No matter what I say,

When the Football Index saga was first bubbling on the surface, I wrote a news article about it and got abused for it. BGC CEO Michael Dugher has come in for flak for hitting back at Twitter abuse. I think, in the heat of the moment, people can say things that they regret afterwards. But Football Index is not an area that we work in. Reading the report that the Government came out with, it was as much an FSA regulated issue as it was with the Gambling Commission, but we weren’t involved in that in any way, shape or form. It’s not my role to comment on how businesses work commercially, that’s just not what the trade association is there to do. What we are there to do is promote best practice. In terms of your members, which are the ones that drive industry change the most? I won’t name companies, but what I will say is that I have been really pleased at the engagement we’ve had from our members. Obviously, larger members have more people and more time to engage in these sorts of things, but all of our members are engaged. We do have very clear rules of membership at the BGC, and that people have to abide by these codes. The engagement has been really good. When I was interviewed for the job, I met the chief executives and said I’m not going to do this unless a) you’re prepared to work together, and b) you will put safer gambling at the heart, and I think they do that. If someone were to say to you that the BGC is just seen as a mouthpiece for the industry, what would be your response? The Trade Association is there to collect the views of our members. A lot of what our members say is very technical, and it is our role to put it into plain English, and to put it into something so that everybody understands what we’re trying to do. I don’t think we’re a mouthpiece. Our members understand what they’re doing, I just think that in many cases, it’s possibly better that what they’re saying to us is what we say publicly, rather than them saying it directly.

GAMBLINGINSIDER.COM

FEATURES

SPORTECH

HELICOPTER VIEW With the departure of former CEO Richard McGuire and CFO Tom Hearne, Gambling Insider speaks to Sportech’s new leadership, CEO Andrew Lindley and CFO Nicola Rowlands Hi Andrew, Sportech’s H1 2021 interim results show a significant increase in wagering handle since pre-pandemic. What is the main strategy for the business moving forward? Andrew Lindley: The main strategy of the business leading up to now has been to tidy up the whole Sportech model with a view to reducing the size of the business. This also includes reducing the cost base and getting it to a set of manageable businesses with good potential for growth, rather than necessarily nursing some of the older businesses which require significant investment. The Football Pools were sold some years ago, more recently we have divested ourselves of two other businesses, and that leaves us with two or three core competencies. One of which is the venues business in Connecticut, the other is our lottery technical supply, and the other is online retail, again centred in America, which is pari-mutuel only. The venues business has always had the opportunity of being licensed for sports betting, and we have kept hold of that business in anticipation of receiving a licence and powering Connecticut with sports betting as the new and hot product. What are the biggest challenges Sportech has faced (aside from the pandemic)? AL: We obviously had a disappointment in the middle of the year when we were told we wouldn’t be getting a sports betting licence of our own, but we have worked very hard with the third licensee in the state and the three licensees are the two enormous tribal casinos in

Connecticut. We’ve managed to partner with the equally sizeable Connecticut Lottery Corporation (which is a very, very pleasing result for us) to offer their sports betting product in our venues, which will give our venues the opportunity for growth and sustainability for the long term. So one of our key operational focuses is getting that right and making that an operational beacon across America. What are the achievements and attributes that are making Sportech successful? AL: The lottery business is a UK-based technical business, in Chester. We have a young team of dedicated engineers there who have a very modern cloud-based platform for omni-channel gambling. Our own proprietary lottery vertical stands as the core tenet of that platform, albeit the platform has capability to run any vertical in the gambling space, and we expect to take that product forward into the market – and grow the business with that. Then we have the online retail in America, MyWinners, which is Connecticut-based and is the online retail element of the venues business; and largely serves the Connecticut market. We also have another brand called 123bet which serves the rest of the American market to the extent that it’s available, which is quite a lot of the States but not all of them. We have seen some good growth in particular in the online piece in the last year or so with Covid. One of the core opportunities is to continue that growth going forward. And that, in terms of operations and strategy, is the helicopter view of the interim presentation.

Nicola, could you please run through the headline numbers? Nicola Rowlands: Sportech revenue stands at £13.4m (£18.54m) which is 70% up on last year, but obviously last year was Covid-stricken so that explains the increase. We are getting back toward 2019 levels; we are not quite there yet but the recovery is definitely almost there. Bottom line profit and loss saw a £24m profit, mostly due to the profit on disposals, so the consideration and the proceeds from those disposals are what the value of those businesses were on the balance sheet. This has driven quite a positive impact to the valuation of the balance sheet, with the cash being held on there from disposals at the moment, ready and waiting to be returned to shareholders we announced during August; the £35.5m buyback (or up to), leaving us with sufficient cash to drive these remaining businesses forward. Nicola, what are your plans and strategies to execute innovation within your new CFO position? NR: From a finance point of view, it’s very much working closely with RSI (Rush Street Interactive) – who are the technology behind the lottery that we’ve partnered with. It’s about making sure our systems work with their systems in driving the revenue forward, and we work very much together as a team; bringing the financials through with our numbers effectively and working closely with them on that. We definitely have a much smaller condensed team from a finance perspective and that’s kind of leveraging the investment we’ve

“From a finance point of view, it’s very much working closely with RSI (Rush Street Interactive) – who are the technology behind the lottery that we’ve partnered with”

- Nicola Rowlands

GAMBLINGINSIDER.COM

SPORTECH

made in the systems over the recent years, to drive efficiency and automation. In terms of your last role as COO, Andrew, what are the most successful attributes that you’ll bring to your new position as CEO? AL: That’s a good question. It dovetails very nicely because obviously as a COO, one is very close to the operational delivery of the business on the ground. So I’ve now had two years of getting my head around all of the Sportech businesses and indeed the landscapes in which Sportech operates, and whilst Richard [Sportech’s former CEO] has probably been more focused on some of the corporate exercises I outlined at the beginning – I’ve always been in touch as well and helped with those. As we move into a period of greater operational focus, I will ensure the full weight of the company now (with my position of CEO) is brought to bear on operations.

Alongside this, we will deliver the kind of excellence that is required in the Connecticut venues to become a beacon product across America, and project Sportech forwards as a new and disruptive force in this very fast-growing sports betting market. Moreover, in a slightly different format than is perhaps making headlines currently – which is of course the online market – we will very much be about the domestic retail, sports bars and capturing people on the ground. Given Richard McGuire and Tom Hearne have stepped down and you both are stepping into the new roles, what kind of support do you expect the team would need in their absence? AL: The simple answer to that is Richard and Tom have extensive experience in the corporate world and Nicola and I are new to these roles, therefore we will be relying on them to pick up

FEATURES

the phone and discuss with us points of order that are perhaps new to us. This ensures we have got great mentors to help us along and make sure we don’t learn by making mistakes, because we will be able to learn from them with a bit of luck! Do you have an M&A strategy moving forward? AL: We don’t have an M&A strategy currently; we have three very opportune businesses that we need to focus on operationally, giving them the full force of the team. I have quite an extensive background in M&A myself; I was a lawyer highly involved in a number of those strategies, so we have the right expertise involved if the opportunities arise. But as it stands, we don’t have a formal strategy for M&A at the moment.

Is there anything you would like to say about your new role as CEO? AL: The core message is a move into a period of operational focus, that is the mantra for the business now.

“In a slightly different format than is perhaps making headlines currently - which is of course the online market - we will very much be about the domestic retail, sports bars and capturing people on the ground”

- Andrew Lindley

GAMBLINGINSIDER.COM

FEATURES

STEPHANIE ATTIAS

REGULATION; INNOVATION Stephanie Attias, CEO and Founder of Regulate-Me.com, discusses the regulatory challenges and innovative opportunities facing iGaming payments As Bill Gates once stated: “The advance of technology is based on making it fit in so that you don’t really even notice it, so it’s part of everyday life.” This couldn’t be truer in a post-pandemic world which has accelerated major technological advances to create a new digital lifestyle. With people staying at home due to global lockdowns, the iGaming industry has experienced higher revenues and greater opportunities than ever before. However, while 2021 has significantly accelerated technological changes and innovation, the iGaming industry is still challenged by: fluctuating market trends, laws and regulations, as well as rising payment fraud and chargebacks. In this article, we will analyse the most common challenges affecting the iGaming industry (I) and the transformation of payments in the iGaming industry with the rise of in-game digital assets usage via different blockchain technologies (II). (I) THE MOST COMMON CHALLENGES AFFECTING THE IGAMING INDUSTRY A. REGULATORY CHALLENGES One of the biggest challenges facing the iGaming industry is adapting to ever-changing regulations. Indeed, the iGaming industry is highly regulated and there is still no global policy that regulates online gaming, gambling, or esports across borders. Therefore, depending on the country you operate in, your business will need to follow specific regulations, obtain specific licences depending on your target market, and perhaps even rethink your business strategy. At Regulate-Me, we know how complicated it can be to understand which regulations apply to your business. Indeed, depending on the structure of your game, applicable laws can include: gambling laws, sports laws, data privacy laws, anti-money laundering laws and even laws on prize promotions or limitations

GAMBLINGINSIDER.COM

on certain sponsorships depending on your advertising strategy. Although there is no global policy, what each country has in common is the need for strict Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. The first goal is therefore to make sure you identify each player for any potential risk, including age limits to mitigate the potential for money laundering and crime risks on your iGaming business. Make sure your business obtains ongoing legal and compliance advice to train your team on such measures, and update your legal

documents to ensure sufficient AML and KYC requirements are being met. B. FRAUD AND CYBER SECURITY THREATS Another ongoing concern for both the end player and your iGaming business is fraud. With increasing cyber security threats, it is your business’s role to safeguard online payments and use prevention tools to keep your clients’ data safe at all times. Indeed, players share sensitive personal data with your business and it is primordial for them

FEATURES

STEPHANIE ATTIAS

to feel confident that their data protection rights are being met safely and securely. Remember that remaining compliant will build trust and encourage long term relationships with your clients. HOW DO YOU PROTECT PERSONAL DATA AGAINST CYBERSECURITY THREATS? Legal advice is key. Data holds a central role in any business nowadays, and you must ensure your business obides by GDPR and any other applicable data protection laws. Although the pressure to retain players is very strong nowadays, keep in mind that this must be done in a consented way. To remain compliant, make sure your business has custom policies in place, have your legal documents reviewed before you enter into a new transaction with a third party, verify and store each player’s consent, verify data transfer clauses to ensure data is transferred securely according to applicable regulatory requirements, and make sure your website is fully up to date with regards to data protection laws. ONCE YOU HAVE PROTECTED PERSONAL DATA, HOW DO YOU SAFEGUARD ONLINE PAYMENTS AGAINST FRAUD? Consistent monitoring is key. Your business should not only monitor initial sign-ups, but also repeat log-ins, withdrawals, deposits, actual gameplay, as well as strict Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. We strongly encourage you to keep a close eye on regulatory changes affecting each individual market where your business operates. The higher your awareness, the more your business will remain compliant and therefore avoid major fines. Over the past few years, fluctuating regulatory environments and increasing technological innovations have transformed payments in the iGaming industry, which are gradually shifting towards a more open methodology involving the use of in-game digital assets. (II) DIGITAL ASSETS: THE FUTURE OF PAYMENTS IN IGAMING? With the rise of cryptocurrencies and digital assets, 2021 is currently witnessing the creation of a new ecosystem for video games and a transformed iGaming economy. The most direct change is the gradual introduction of crypto currencies as acceptable deposit and reward options, to solve problems relating to fraudulent transactions encountered by players on online games. Indeed, due to increasing cyber threats and high risks of fraud, some players now refuse to link their bank account directly to gaming websites or gaming applications. This is where tech-based alternative payment methods are

GAMBLINGINSIDER.COM

determine whether or not such NFTs need to be regulated. While the industry has moved ahead extremely quickly, regulators are already taking a closer look at how these technologies fit within existing legal frameworks. NFT sales may also raise significant money-laundering compliance considerations for market participants. Keep in mind that if your iGaming business hosts giveaways, sweepstakes and other promotions, regulators will apply traditional regulatory principles, even if the prize is an NFT. If you promote an NFT, you will therefore need to include a free alternative method of entry (AMOE) and ensure clear and visible disclosures of the AMOE. Securities regulators have already stepped in to regulate cases where NFTs operate like currency substitutes, and we have seen class actions targeting a crypto currency exchange Stephanie Attias for failure to clearly disclose the AMOE in a sweepstake promotion offering cryptocurrency as the prize. Therefore, if your business is dealing being introduced. Nowadays, iGaming platforms with sweepstakes, be careful not to misstate the are striving to provide players with secure, prize or how the winner can claim or use it. efficient and anonymous means of handling To conclude, laws surrounding money associated with games. It is also in their cryptocurrencies and NFTs are evolving interest to be at the forefront of innovation, as it extremely rapidly and it is more important allows such gaming platforms to lower than ever to obtain ongoing legal advice. On 24 transaction fees. The trend is now for game September 2020, the European Commission creators to build and release materials for players even adopted a digital finance package that to enjoy, all based on blockchain technology and includes a legislative proposal for the regulation with the potential of enabling crypto transactions of crypto assets, the Markets in Crypto assets (this entails strict regulatory requirements which Regulation (the MiCA Proposal). The MiCA need to be identified on a case by case basis). Proposal includes regulations that could apply This leads us to the concept of in-game to NFTs in certain cases and defines a crypto transactions. Recently, we have witnessed the asset for the first time in the EU as: “a digital introduction of NFTs (non-fungible tokens) into representation of value or rights which may iGaming as digital assets with real-world value. be transferred and stored electronically, using distributed ledger technology or similar technology”. Therefore, it is strongly recommended to understand the potential impact of existing and forthcoming regulations, licensing, market communications, and compliance requirements on your iGaming business.

"Laws surrounding cryptocurrencies and NFTs are evolving rapidly"

WHAT IS AN NFT? An NFT is a certificate of ownership of a unique digital asset, stored on a blockchain, which also enables the transfer of such ownership. Essentially, this means a player can acquire a unique item, which can’t be replaced with anything else, such as visual art, videos, music or collectibles within a video game, and the player can then sell that non-fungible unique item for real money online. However, keep in mind that there is a strict case-by-case analysis on the manner in which an NFT is sold or marketed. This case-by-case analysis is used to

Ms. Stephanie Attias (LL.M, LL.B) is a certified Privacy Professional and a member of the International Association of Privacy Professionals (IAPP). Stephanie graduated from Fordham University School of Law (New York, USA), with an LL.M in “Banking, Corporate and Finance Law”, and with a Master of Laws in “Business Law and Economics”, followed by a Master of Finance in “Financial Engineering” obtained with Magna Cum Laude Honors. Since 2011, Stephanie has worked in leading international law firms worldwide and gained experience working with EU, US and international regulators. After advising top-tier companies, Stephanie founded Regulate-Me.com, a Compliance One-Stop-Shop, focused on providing innovative tailor-made compliance services for businesses in the: iGaming, IT, Data, Finance, Crypto, Digital Marketing industries. In other words, Regulate-Me allows you to outsource your legal and compliance tasks, while you focus entirely on growing your business.

FEATURES

PAUL SCULPHER

CASINOSAURUS REX Regular Gambling Insider contributor Paul Sculpher assesses what would happen if a UK casino today were to be run the same way as in 1994 Recently I was trawling through the murk of LinkedIn, as recruitment people are wont to do, when I came across an actual casino dinosaur. Now I think we all cling onto elements of our early careers as being the right way to do things, but this

GAMBLINGINSIDER.COM

was a genuine “side bets are bad, open door is bad, technology is bad, all management since the 1990’s are useless number crunchers” Casinosaurus Rex individual. It got me to thinking – what if you ran a UK casino right now, today, in the same way as you’d have run one in the last year the old C. Rex appeared to think they were “properly” run, circa 1994? What would happen? There are, to say the least, a few problems. I think the first one is pure commercials. I don’t think anyone would disagree that a good proportion of casino trade back in the 1990’s was from, shall we say, dubious sources. I was only a dealer (m’lud!) so I can say without fear of

prosecution that I was 99% sure some of the bigger punters in the casino I trained in were criminals of some sort. The idea of running source of funds checks for AML purposes in our 1994 casino, plonked into 2021, would be trouble. Not only would you never see the genuinely suspect players again, you would of course lose a good swathe of your non-criminal players, due to unwillingness to provide the information, laziness or fear of the taxman. So you’ve sliced out a good lump of your better players. That’s not the end of it, though, because you’re really going to struggle to replace them. You’re still in 24-hour rule territory, you see, so anyone who wants to visit has to have signed up 24 hours in advance. That kills the possibility of impulse visits unless you’ve a member in your party who can sign in their guests – although impulse visits aren’t likely unless people are walking right past, as you can’t advertise, not even a website. Back then all you could offer was prescribed sized classified adverts for the restaurant. The catering efforts are an interesting question. Casino catering in the UK has been downgraded over the years, from A La Carte menus cooked by serious chefs, to something in some cases not far north of a Wetherspoons menu. That’s not universally the case, but both the largest two chains of casinos have broadly standardised their menus and you won’t find too many kitchen workers paid a long way above minimum wage. I’m somewhat split on this issue – for smaller sites, I think you just need to have a food offer as fuel for gamers, but there’s still a sliver of market for customers who both want fine food and will game to any extent. One thing’s for sure, you’re not going to make significant profit from your upscale food offer, so it had better lead to crossover income. Your other issue is the bar experience. A swanky bar is a key part of the process of turning people from non visitors to

PAUL SCULPHER

occasional visitors, to people who like to have a modest punt once they’re comfortable. But – oh no – 1994 rules mean you can’t have alcohol on the gaming floor (as anyone who worked as a shift manager around this period will have stated at least 100 times every Saturday night). Those of us working in casinos back then will also remember they weren’t the most welcoming of places, with thick smoke (not anymore!), low ceilings and usually a tiny bar, purely as a service. The 1994 casino is a bit limited in terms of gaming options, as well. Just the two slots, which if we’re being honest were largely run back then as a mysterious box that was a pain in the backside to empty and count. No electronic roulette – the Casinosaurus doubtless does not approve anyway – so really it’s just tables. You’d just about got the option to offer Casino Stud Poker back then (and “Super Pan 9” – great) by 1994. Proper side bets were a gleam in someone’s eye. Side bets are in fact a divisive issue, and I can see the argument for non-progressive bets both ways. Anyone can point to the revenue generated by them, but I don’t think many have assessed the impact of both the frustration caused by a slower game, and danger of rapid bankroll exhaustion. One thing’s for certain in my mind, though, progressive side bets are a must. They add a different dimension to casino gambling, where you can genuinely turn a £100 ($135.38) buy-in into life-changing money in one shot. Without them there’s an erosion of the casino experience for some people. The challenges don’t stop there, mind. You can’t have debit cards, just three cheques per person, per day, backed up by a “Cheque Guarantee Card” (ask your parents, kids) unless you set up a complicated facility. ATMs weren’t permitted, and by all means stick your smiling friendly faced receptionist out there on reception, but almost nobody had door security – I’m sure it’ll be

okay. That’ll do nicely on a lively Friday night… And one more thing – you’ll be needing to close at 4am, and 2am on a Saturday night, just when it’s getting fun. Even staffing was a ton easier back then, with far superior options for the skilled dealer abroad, when being a UK licensed casino professional meant something overseas. If you operate with the same bloated 1994 rota and super low gaming minimums to match, you’re just not going to make enough money, with staff far more expensive overall today. Oh and no tips to supplement the salary. In fact running a 2021 casino on a 1994 roster, with tipless wages adjusted to the point where you could actually get enough staff, bankrupts you before you’ve been trading a month. You’d need to adopt the old policy of banning fraternisation with customers, too – back then as a dealer you could get fired for being in a photo with a member of your casino. That works a lot better when you have a very small number of respectable players (respectable in terms of spend level, not always in terms of respectable individuals) than when you’re trying to bring new trade through the doors. In short, if you tried to operate the same way today as you did in 1994, you’d be dead in the water. You can’t afford the staff you’d have had back then, your ancillary income is devastated, and a lump of your primary income is a victim of modern AML regulations. Online gaming soaks up some portion of your core market – the sofa can be more tempting as a gambling location than having to get up and put actual clothes on. Oh, and if you thought you were going to turn a blind eye to problem gambling issues,

FEATURES

Paul Sculpher which operators might have done back then to a small extent (and there weren’t anything like the same regulations anyway), the combination of the National Self Exclusion Scheme and stringent penalties for not doing the right thing will see you in big trouble. It’s easy to remember the golden days and for our Jurassic joker to pooh-pooh the efforts of managers since then, but the truth is the market and the operating environment has changed. In a dynamic world, adapting to change is key, and bleating that everything’s worse than it was when Casinosaurus roamed the pit just evokes thoughts of oncoming asteroids and imminent fossilisation. There is more than one way to both skin a cat and run a casino – not necessarily complementary skills – but harking back to 27 years ago doesn’t form part of any method with a chance of success.

GAMBLINGINSIDER.COM

FEATURES

WILLEM VAN OORT

A MESSY START, BUT A START NONETHELESS Gambling Insider contributor and Founder of Gaming in Holland Willem van Oort discusses the convoluted launch of the regulated Dutch online gaming market. After many years of political wrangling, it opened on 1 October, but not without some unexpected and perhaps unwelcome last-minute surprises...

LAST-MINUTE POLICY U-TURN Only 10 days before the opening of the Dutch regulated market, the Netherlands Gambling Authority announced a set of new measures to force yet unlicensed operators to shut down their offering to Dutch consumers. Starting 1 November, 2021, the Netherlands Gambling Authority will implement new prioritisation criteria for deciding whether to take enforcement action against a specific

GAMBLINGINSIDER.COM

operator. This decision will (generally) be based on the following four criteria: 1. The current number of Dutch players/customers 2. The harmfulness of the illegal offering 3. The extent to which the illegal offering (successfully) competes with legal alternatives 4. The extent to which the illegal offering is actively targeting Dutch consumers Specifically, this means online operators

with a large customer base in the Netherlands will henceforth be first in line for enforcement action. The Dutch regulator also announced higher, more impactful fines, starting at 4% of turnover achieved in the Netherlands. This new enforcement policy was drawn up in response to the new enforcement directive sent by Minister Sander Dekker for Legal Protection to the Dutch Lower House a week prior, the aim of which was to force

WILLEM VAN OORT

existing Dutch online players to switch to legal alternatives available from 1 October. Dekker’s enforcement directive represented a sudden and unexpected break with previous policy, which prioritised eventual market channelisation (to which operators currently subject to the cooling-off period were expected to eventually contribute) over providing immediate market exclusivity to fully licensed operators. TEMPORARY MARKET DEPARTURES As a result of the Netherlands Gambling Authority’s new enforcement policy, major international operators that were found to have illegally targeted the Dutch market in the past, such as Kindred Group, Betsson, Entain and LeoVegas, announced their temporary withdrawal from the Dutch market; not to jeopardise their prospects of a future remote licence. For some of these operators, the decision to temporarily withdraw will have a major short-term financial impact. In a conference call to investors, Kindred announced that barring Dutch customers from its offer would negatively impact EBITDA by approximately £12m ($16.2m) each month, or, in other words, c. 50% of group EBITDA (2020). Betsson is estimated to take a lesser but still very significant 27% hit to total operating income. NEW LICENSEES Meanwhile, on 29 September, the Netherlands Gambling Authority announced the first 10 remote licensees (out of a total of 29 initial applications). The following 10 companies were the first to be awarded an online licence: 1. Betent BV: An online spin-off of the Casino City gaming hall chain, which operates several land-based casinos in the Amsterdam area 2. Bingoal Nederland BV: An established Belgian provider of betting and casino games 3. FPO Nederland BV: Fair Play Online is a subsidiary of the Janshen-Hahnraths Group, which is primarily known for its Fair Play land-based casino chain 4. Hillside (New Media Malta) Plc: AKA Bet365 5. Holland Casino NV: State-owned Holland Casino is currently the only legal provider of (land-based) casino table games in the Netherlands 6. LiveScore Malta Ltd: A well-known sports media company, LiveScore also provides sports betting under its LiveScore Bet brand 7. NSUS Malta Ltd: Owner of the GGPoker brand 8. Play North Ltd: A small casino operator based in Estland and Malta, which currently operates Pikakasino and Rocket Casino 9. Tombola Ltd: The UK’s largest provider of online bingo games

FEATURES

10.TOTO Online BV: TOTO is part of the Netherlands’ national lottery, Nederlandse Loterij, and current sports betting monopolist in the country Notable first-round absences: • JVH gaming: Owner of the land-based Jack’s Casino chain • Novamedia: Owner of the Postcode Lotteries format and largest charity lottery operator in the Netherlands • ZEturf: Current horseracing monopolist (It is widely expected, however, that several other licensees will be announced in the next two to three weeks – at the time of writing). TECHNICAL OUTAGES AND LAUNCH DELAYS As the regulated online market opened on Friday 1 October, the Dutch national player exclusion register (CRUKS) experienced a series of malfunctions, making it impossible for new players to register and already registered players to log on with licensed operators. These problems persisted throughout the weekend, causing several newly licensed operators to postpone their launch until the subsequent Monday. On Saturday 2 October, only TOTO Casino, BetCity.nl, and GGPoker managed to open their (virtual) doors. Holland Casino, Fair Play Online, and Batavia Casino (Play North) only launched on Monday 4 October. The remaining licensees, Bet365, Bingoal, LiveScore Bet, and Tombola were expected to open by the middle of October. FUTURE ADVERTISING WOES? Just two weeks before the regulated Dutch online market opened, five Dutch incumbent gambling operators (Holland Casino, Janshen-Hahnraths Group, JVH gaming, Nederlandse Loterij, and ZEbet) founded a new online trade association, Vergunde Nederlandse Online Kansspelaanbieders (“Licensed Dutch Online Gaming Operators” – VNLOK). VNLOK’s first public initiative was the launch of a new voluntary advertising code, the Reclamecode Kansspelen (“Advertising Code Games of Chance”), which was supposed to enter into force on 1 October. However, these hopes were dashed when leading Dutch consumer protection organisation Consumentenbond blocked the proposals, claiming that the protections offered by the new advertising code were “far too weak” and hardly (if at all) exceeding the legally mandated minimum. Consumentenbond further claimed that VNLOK showed little inclination to compromise and further threatened to lobby for a total online gambling advertising ban, if its demands for additional restrictions were not met. Meanwhile, the CEOs of 14 prominent

Willem van Oort charity organisations (and charity lottery beneficiaries) published an open letter in a Dutch national newspaper, warning that any future gambling advertising restrictions (which they deem unavoidable) should not impact the Dutch lottery sector. Based on experiences from other European jurisdictions that instituted (near) total advertising bans, we know that such advertising restrictions primarily benefit incumbent operators. Despite their apparent failure to introduce a sector-wide advertising code, the major Dutch land-based incumbents will thus not be terribly inconvenienced by further advertising restrictions – especially now that most of their international competitors will at least be temporarily out of the way. While, for now, it still remains to be seen whether further (online) gambling advertising restrictions will eventually be introduced, there already exists significant social pressure to do so. It is not inconceivable that incumbent operators will add to this pressure. Especially if their land-based brands, which after all feature the same names and trademarks as their online channels, will be excluded from any such new advertising restrictions. Depending on one’s perspective, these recent developments might make the Dutch online market either a bit more or a bit less competitive. In any case, “never a dull moment,” as the saying goes, when it comes to gambling in the Netherlands. About Gaming in Holland Founded in 2011, Gaming in Holland is the leading B2B community for the gambling and lottery sectors in the Netherlands. With over 3,000 members, Gaming in Holland offers newsletters, print magazines, webinars, and live events to local and international audiences who are interested in the regulated Dutch online gambling market. Next year, on April 4-5, 2022, the first Gaming in Holland Expo, a Netherlands-focused trade show and product exhibition, will take place simultaneously with the annual Gaming in Holland Conference.

GAMBLINGINSIDER.COM

FEATURES

ECIJA

M&A IN THE SPANISH GAMBLING MARKET Regular Gambling Insider contributor Xavi Muñoz Bellvehí (xmunoz@ecijalegal.com), gaming lawyer at Spanish law firm ECIJA, analyses the M&A options for entering the Spanish gambling market THE MARKET The Spanish gambling and betting market was regulated in 2011 by Law 13/2011 and a series of statutory regulations. There are currently around 80 operators holding gambling licences and around 65 actively offering their online gambling and betting services in Spain. The third

GAMBLINGINSIDER.COM

window for the Spanish gaming licences closed at the end of year 2018. Since a new licensing window is not expected any time soon and gambling licences are non-transferable, they can only be acquired or sold in the framework of an M&A transaction. Therefore, any company wishing to enter the Spanish gaming market can only obtain

a Spanish licence by acquiring an already existing operator. And any operator wishing to sell all or part of his business should prepare for it. The offering of any gambling or betting activity in Spain is subject to obtaining a prior licence. The Law foresees three types of licences: General Licence, Singular Licence

FEATURES

ECIJA

GENERAL BETS OperatorsOTHER holdingGAMES a there willCONTESTS be operators who will not be able LICENCES and Authorisation.

General will be able to apply for to continue or even start their business – and Roulette Contests Fixed Licence odds sports betting any type of Singular Licences at any time will be willing to sell. As Spain is based on a Poker Fixed odds horse betting (unlike General Licences there is not a closed-licence system, the only way to enter the Baccarat Otherlicensing fixed oddswindow betting for Singular specific market will be through an acquisition process. Licences assports long as the company already The acquisition process of a Spanish online Black Jack Pool betting SINGULAR has the covering General Licences). gambling operator will entail all the normal Bingo Pool horse betting LICENCES With the passing of the “2018 General steps of any corporate M&A acquisition process. Complimentary Pool other betting State Budget Law”, a tax reduction entered Games Nevertheless, due to the specific regulations to into force in the gaming taxes, under which, which an online gambling operator is subject to, Slots Exchange sports betting with the exception of draws and promotional specific issues from its regulatory sector shall be Other exchange betting games, the taxable base of all other games taken into account. Overall, the process can be will be on the win (defined as the wagered divided into the following steps: amounts minus the pay-out of prizes). The currently applicable taxation is as follows: STEP 1 – THE SEARCH OF THE TARGET COMPANY: The research of a target company should be among the 80 companies in Spain holding TAXATION TYPE OF GAME gambling/betting licences. However, only a Fixed odds sports betting 20% on win few of those companies would be interested Fixed odds horse betting 20% on win in selling or accepting an investment and, Other fixed odds betting 20% on win therefore, some research and shortlist has Pool sports betting 20% on win to be made. From the feasible targets, Pool horse betting 20% on win the buyer will have to select those holding the licences they are interested in acquiring Pool other betting 20% on win (betting; casino games; contests). Exchange sports betting 20% on win Within those companies, the buyer shall select Exchange other betting 20% on win the company which fits its purposes and Contests 20% on win budget (ie. the expected prize, client base, Other games 20% on win technology, team). Likewise, potential sellers Draws and shall have to concentrate on said aspects to 20% on win promotional games make its company attractive to potential buyers. Additionally, there is the annual tax of 0.00075% on the gross income of the operator, which will have to be paid by all brands in the market. Finally, the special tax regime applicable to the companies located in the tiny Spanish enclaves of Ceuta and Melilla must be highlighted. Such operators will have a reduced taxation for all games, a 10% on win, representing a 50% reduction in comparison with the rest of the operators in Spain. And they also have a reduced taxation on corporate tax and other taxes. On 3 November 2020, the Spanish Government passed the Royal Decree 958/2020 on Commercial Communications. Such regulation which is now fully in force has restricted quite significantly the publicity options for gambling operators. M&A STRATEGY To structure an M&A transaction in the Spanish online gambling market, the first factor to take into account is that the direct transfer of gambling licences is prohibited under Spanish law (section 9 of Law 13/2011, of 27 May, on Gambling Regulation). However, the shares of the company holding the licence can be acquired. We believe that due to the high number of operators in the market

GAMBLINGINSIDER.COM

STEP 2 – VALUATION OF THE TARGET COMPANY: Once the target company has been identified, the seller will have to execute a business valuation process which will have to take into consideration issues regarding the business operations, productive assets, historical performance, KPI’s, evolution of

“To structure an M&A transaction in the Spanish online gambling market, the first factor to take into account is that the direct transfer of gambling licences is prohibited under Spanish law”

the gross gaming revenue (GGR), number of active players accounts, potential fines, etc. To obtain some of this information, it might be necessary to directly contact the target company. In doing so, the parties shall sign a non-disclosure agreement (NDA). STEP 3 – SIGNING OF A LETTER OF INTENT: Depending on the amount of information pending to be confirmed and the pending points to be agreed upon regarding the conditions for the transaction (total or partial acquisition; upfront price and earn out; price conditioned or already agreed upon; time schedule for the execution of the agreement; keeping all or part of the team, etc.) the parties shall sign and execute the Letter of Intent broadly detailing the main aspects already agreed upon between the parties. STEP 4 – DUE DILIGENCE PROCESS: The investigation and verification process to make sure that the transaction fulfils with all the necessary conditions will have to take into account in addition to all the usual issues (i.e. business, financials, tax, employment, corporate) specific issues for an online gambling operator. Such issues shall include, but not be limited to: • Date of issuance and renewal of the licences and any potential risk related to the licences. Bank guarantee in place • Software agreements with all and any provider who conforms to the gambling platform, the games, the CPD, the safe and any other necessary element • Corporate compliance level of the company: Online gambling operators are

FEATURES

ECIJA

subject to a high level of corporate compliance obligations (i.e. special subject to AML obligations; need of DPO in personal data protection; and others). Therefore, the validation of the fulfilment of all the necessary obligations under Spanish law shall be of the essence

"Fines in the Spanish gambling sector can be very high, going up to €50m ($57.7m)" • Specific gambling regulatory validation: Check if there is any fining procedure in process. Fines in the Spanish gambling sector can be very high, going up to €50m ($57.7m), although we have never seen fines above €1m. Two serious breaches within a period of two years entail a very serious violation of Spanish law, and can therefore entail an economic sanction from €1m to €50m, as well as the potential loss of the gambling licence, the existence of previous fines from the gambling regulator also has to be carefully checked. STEP 5 – SIGNING AND CLOSING OF THE SALE AND PURCHASE AGREEMENT (“SPA”): The clauses of the SPA that will have to be more vigilantly negotiated will be: • Representations and warranties of the seller: The findings of the due diligence process will have to be duly analysed and included in the representations and warranties of the SPA. • Limitations of responsibility: taking

Xavi Muñoz Bellvehí into account the buyer will be assuming any contingency or liability that may arise in the future, the limitations of the liability for the R&W made by the seller will play a key issue in the negotiation of the SPA. • Price and payment structure: the operation may be structured in a wide variety of ways. The acquisition may be total (100% of the shares of the company) or partial (51% of the shares of the company or less). Additionally, in both cases, the parties may be interested in deferring or conditioning the payment of the price to the obtainment of specific results (i.e. partially conditioning the payment of the agreed price to the maintaining or increasing of the company’s results or certain KPI’s, and/or performance of key personnel). Likewise, the potential granting of stock options or vesting plans for key employees, the establishment of call options for the investor to buy the shares not acquired in the initial equity investment, and any other mechanisms, shall be duly established in the SPA. STEP 6 – NOTIFICATION TO THE DIRECTORATE GENERAL FOR THE REGULATION OF GAMBLING (“DGOJ”): The transfer of shares will have to be notified to the Spanish gambling regulator (DGOJ) once executed, together with all the relevant information on the new owner of such

GAMBLINGINSIDER.COM

gambling licence (related parties; ultimate beneficial owner; etc.). Finally, it shall be noted that corporate restructuring operations such as mergers, splits or spin-offs of branches of activity are subject to the obtainment of a previous authorisation by the DGOJ, which will depend on the following factors: • That the company fulfils all necessary requirements to hold a gaming licence under Spanish law (this is in accordance to article 13 of the Law 13/2011) • That the corporate restructuring operation is duly executed in accordance to corporate applicable laws and regulations • Then, the DGOJ shall grant a “pre-approval” of such corporate operation, which will be valid for three months • That the new company acquiring the gaming licence shall assume any responsibility for any issue regarding the gambling activities developed by the gaming operator. In these cases, the execution of the operation gets more complicated as the authorisation is compulsory and has to be obtained previously to its execution, and therefore slowing down the procedure. Each M&A operation will be different and we consider essential to both, buyers and sellers, to plan well ahead the transaction. Some of these transactions may also have an added level of complexity as the selling company may be a gambling operator located in Malta, Gibraltar or Ceuta.

FEATURES

GOODBODY

OPERATING AT SCALE David Brohan, Gaming & Leisure Analyst at Goodbody, says 888 Holdings’ acquisition of William Hill’s international assets highlights the trends dominating today’s gambling market We are currently experiencing a truly exciting time for the gambling sector. The shift to online gambling continues to accelerate at pace following the Covid-19 pandemic, and the leading players are increasingly recognising the importance of having a robust online offering, ultimately enabling them to operate at scale. These considerations were clearly at play in 888 Holdings’ recent acquisition of William Hill’s non-US international assets from Caesars Entertainment. The deal is a perfect indicator of the trends dominating the gambling landscape, and the acquisition is set to have a notable impact both on the wider market and the opportunities it provides for 888 going forward. ACHIEVING SCALE OUTWEIGHS SHORT-TERM DRAWBACKS If we look closer at the financial elements of the acquisition and its implications for 888, it is clear that the monetary benefits arising from the deal will far outweigh current investor concerns. While the leverage will be high for the group immediately post-completion, the increased scale means that the acquisition will be highly cash generative, enabling 888 to deleverage quickly and regain a stable financial footing. In the longer-term, the business will benefit from access to transformational opportunities, including improved market share positions and greater-than-anticipated cost synergies due to the fact that 888 owns its own technology. There is additionally increased exposure to the sports vertical, which can create cross sell opportunities throughout the group’s verticals. POTENTIAL FOR GEOGRAPHIC EXPANSION AND PRIME MARKET SHARE Online gambling is an industry where scale is key. While 888 as a standalone business has

GAMBLINGINSIDER.COM

invest in the US and other additional growth markets, allowing the group to take prime market share through geographic expansion. For instance, it expects to launch in 2-4 US states a year, targeting a market share of 3-5% in each of the states they are active in. 888’s expansion in turn would reshape competitor market share within the industry, placing it in fourth place behind Flutter, Bet365 and Entain, but ahead of peers such as Kindred Group and Betsson. BALANCING ONLINE WITH RETAIL UK retail has undoubtedly suffered a massive revenue hit due to the multiple Covid-19 lockdowns over the past 18 months. Therefore, one of the main concerns investors have had about acquiring William Hill’s international assets was the performance of its online business. In 2020, online revenue grew by just 8%, significantly below 888’s growth of 52%. However, a lot of improvements have been made to this part of the business and its online platform is now starting to bear fruit, as evidenced in its performance for the first half of this year – with revenue growing by 38%. This puts the group in a strong position to mitigate any negative headwinds that may arise from UK online regulatory change. However, with the pandemic easing, there are still a number of benefits from having bricks and mortar stores, not just for 888 but for other players in the sector looking David Brohan to scale up their omni-channel offering. Consumer demand for in-person gambling has seen strong momentum since the reopening grown significantly in recent years, and easing of restrictions. this acquisition places it in a very strong position Also, should advertising restrictions as one of the leading operators. The deal would be introduced into UK online gambling, mean 888 now sits within the top three operators storefronts may prove to be a valuable in the UK and Spain, and in the top five in other advertising asset. So long as operators are key markets including Germany, the Netherlands, able to secure short average lease lengths for Denmark and Ireland. their stores to ensure flexibility, we expect to The enhanced scale and diversification see many groups retaining their presence on the deal delivers would enable 888 to further UK high-streets.

FEATURES

ALEX CZAJKOWSKI

THE FOUR P’S PLUS OF GAMING MARKETING Online marketing and iGaming veteran Alex Czajkowski provides a gaming industry twist to the four P’s of marketing Most people have heard of the classic four P’s of Marketing: Product, Price, Promotion and Place (never mind Positioning, Packaging and...). These of course apply to iGaming, as well. But when I’m speaking to clients about international iGaming marketing, there are four P’s I think are even more important. And a fifth must-have P as well. “Product” is the obvious one. You need to provide the products the market you’re

Gaming, yes it owns the casino café business, which is large) in the Philippines. People at casino cafes will literally line up behind a terminal with RTG’s T-Rex rather than play on a PC that has just, for instance, Habanero games. This reflects an acceptance of the internationalisation of the products – just as in cinema. Language and currency, most definitely players prefer their own. This leads us to the next essential P:

"There’s little point in launching a casino in Japan without pachinko slots, China without baccarat (live dealer especially), North America without blackjack, UK without roulette" targeting expects and demands. There’s little point in launching a casino in Japan without pachinko slots, China without baccarat (live dealer especially), North America without blackjack, UK without roulette. But do all the products have to be “customised” for the local markets, e.g. everything for China in red? Probably not – colours do have different meanings in different cultures (in Thailand, for example, every day has its own associated colour!) and their use on your site or in your apps does need to be tested to optimise effectiveness. But look at the success of, say, Playtech’s games in Asia or RTG’s (Real Time

GAMBLINGINSIDER.COM

“Processing." If you don’t have Interac in Canada you’ll miss half of the market. No Klarna or Giropay in Germany? No UBI in India? No online banking in Thailand? You won’t get off the ground. Players prefer to pay their way, and will find an operator which provides that rather than change their behaviour. And while there are more people learning English in China right now than speak it in the rest of the world, English is not the lingua francaso many people think it is. Although 56% of Germans can speak English, 90% prefer to use a site that is in their native language.

Definitely forget about using Google translate. Our industry has a highly specialised vocabulary, and, in some markets, actually a “coded” slang that you must deal with to communicate with players. So that brings us to our third P: "People." You need native or near-native speakers manning your chat and phone lines, writing your copy, doing your social (be it via LINE in Japan, Indonesia and Thailand, WhatsApp in Malaysia, or of course WeChat and Weibo in China). The fourth P may come as a surprise: "Performance." The speed of your site/app is directly correlated to your success in the market. There are varying degrees of tolerance (Ozzie put up with slower sites as they have fewer options) but in competitive markets, a slow site/app is a death knell. And I believe there is a fifth, way too often overlooked, P: "Plan B." Always have a Plan B. Regulations change (see Germany’s stupid and draconian new rules that took effect this summer), market conditions (a 25% drop in GDP in Thailand did nothing to help operators as, since the tour guides didn’t need to get their uniforms cleaned, the cleaners couldn’t buy their noodles; and the noodle shop guy can’t play baccarat without that income…). So count on something blowing up – plan for it. Product, Processing, People, Performance and a Plan B. As Amex used to say, “don’t leave home without them.”

ALEX CZAJKOWSKI

FEATURES

NOT JUST A DREAM Part two of Alex Czajkowski’s column discusses personalised, scalable and automated content Player communications, regardless of platform, have to have three essential qualities: timeliness, relevancy and authenticity. Yours don’t. Neither do mine, yet: close but no cigar. Because, like you, we are held back by the

Alex Czajkowski

reams of data, the lack of personalisation tools, the time, the staff, the resources, the translations... So we show welcome offers to players who are already members. Football specials to players who only bet on horses, or sports the player never bets on (and no it’s not cross-selling, it’s an irrelevant waste of space, time and opportunity – players bet on what they think they 'know'). Banners for matches after the event has completed – or way too long before the match kicks off. And all of that is across platforms: the site/app, your social channels, affiliates, emails, etc. It’s understandable; we’re dealing with hundreds or thousands of matches and bet types; of course the marketing guys put up what they think will be the most popular matches of the day. We do have tech that allows to automatically update the listed prices, but does it put them in the bet slip? Typically, no, it’s up to the punter to click their way through and build their own accumulator. Of course, if you’re in multiple geos (as you must be), you may need multiple language versions of everything. Here, new technology comes in to help save the day. Stewart Vassie is probably best known for being Co-founder of Oddschecker, one of the best and most useful sites for sports punters, and as an affiliate. He sold that off to Sky and then started Botsphere to automate sports betting trading desks. He then sold that, so he nows his way around sportsbooks... His new venture, co-founded with Oddschecker alum Lee Pickrell, NowBetNow, looks to automate much of the sportsbook

marketing function and address the concerns iGaming firms face listed above: providing personalisation at scale. When I saw his firm push out 70,000 comms on the first Premier League weekend, I was impressed and wanted to know more. A couple of convos later, I can’t wait to get my hands on it for my next sportsbook client. NowBetNow identifies players’ preferences, down to their most bet team. It not only produces the relevant content to put in front of that Leeds fan, but actually can build bets around their preferences – and drop them on to the bet slip with a single click or two. Faster, easier, more relevant and more personalised. At scale. “Information drives sports betting,” Vassie says (and casino play I add, as he nods approvingly). “But the difference between comms and compelling comms, making the comms part of a conversation that changes their behaviour, only works when the player feels they are getting real value.” NowBetNow can present the real-time prices as simple as “here are the prices for the first goalscorer in the Leeds match,” but that’s relatively old hat (presenting it to a known Leeds bettor is new hat). NowBetNow not only presents live real-time data but knows that the player bets on Leeds, Manchester United and Wolves (for whatever reason!) and can build those accumulators right in the banner. One click – from the operator’s website, app or affiliate site – enter the amount they want to bet and it’s done. “This is easily scalable across languages, we’re already in seven,” Vassie said. “The trick is what do they call Tottenham Hotspur in their market and sportsbook back-end? Tottenham Hot Spurs, Hot Spurs, Spurs, Tottenham? Have those variables place – which we do by working closely with our customers – and we can template the offer in any language and feed in the data for the teams.” Real-time, relevant, accurate offers to players are vital to provide the three essential qualities of player comms: timeliness, relevancy and authenticity. NowBetNow seems to have solved a lot of marcomms problems with this new solution.

GAMBLINGINSIDER.COM

FEATURES

CELLPOINT DIGITAL

PAYMENT ORCHESTRATION Mark Patrick, Global Head of Payments, CellPoint Digital, argues that the future of iGaming payments is local have two options when building out their payments ecosystem. Those brands looking to transact across different countries can work with an international PSP for all their acquiring needs. This approach has positive and negative sides. It can help reduce the time and effort needed to manage a complex payments ecosystem, but likely incurs high costs in the form of sub-optimal transaction rates. In addition, this doesn’t allow for any back-up options in the event of failed payments. Working with a single PSP also limits the payment methods and currencies Mark Patrick the merchant can offer, creating friction for the end customer. Another option is for merchants to build out Merchants are adapting to a customer journey their own payments ecosystem – comprised that has changed forever, especially those of various PSPs – in-house. Recent figures within the global iGaming market which suggest that over half (57%) are already continues to experience unparalleled growth; working with more than one processor. largely accelerated by casinos and major sports Doing so allows the merchant to create venues forced to shut down during the pandemic. multiple relationships with several PSPs The online gambling market is expecting annual ‘on-the-ground’ in their country of choice, growth of 12% from 2021-2026, with online protecting them to a certain degree from revenue increases of 135% in a booming payment rejection, and offering some element US market. New Jersey is set to become the of control over transaction costs. Manually first state to hit $1bn in annual iGaming developing and maintaining a complex, revenue in 2021. international payments ecosystem in-house, With this, the iGaming industry is presented however, is extremely time-consuming. with an unmissable opportunity to scale Perhaps more damaging is the fact that it cross-border. To effectively do so will mean can cause severe delays for agile merchants building relationships with – and serving looking to move into new markets. – customers in different territories. This comes with challenges. Typically, these customers GOING LOCAL TO GO GLOBAL have legacy payment systems only designed As a rule, customers want to pay in their for domestic use, or they find themselves local currency, using a familiar method, both faced with the expensive rates demanded of which change on a country-by-country by international Payment Service Providers basis. But partnering with local acquirers (PSPs). With that in mind, how can iGaming and PSPs allows merchants to plug into the companies scale internationally with a flexible local ecosystem, not only offering preferred payments ecosystem to match? The answer, currencies and payment methods, but also surprisingly, might lie in going local. utilising the experience of domestic partners to help enhance their payments journey. MECHANISMS TO PAY CROSS-BORDER When it comes to the future of iGaming, IGaming companies looking to expand integrating several local acquirers instead of into new countries and territories typically one main international player may provide

GAMBLINGINSIDER.COM

the best outcome. It means merchants are empowered to protect their bottom line, and deliver a frictionless payment experience for their customers. UNLOCKING LOCAL PARTNERSHIPS WITH PAYMENT ORCHESTRATION Payment Orchestration Platforms allow iGaming companies to master complex payment needs, while keeping things simple. By integrating directly with local acquirers and PSPs, Payment Orchestration Platforms enable merchants to quickly and efficiently roll-out complicated payment ecosystems in new markets. This can be done at a fraction of the time and cost of integrating directly. The platform can then orchestrate every transaction end-to-end, resulting in a fluid payment journey. In practice, this means allowing customers to pay how they want, in the currency of their choice, regardless of their location. For merchants, payment orchestration can simplify back-end processes, reduce operational costs and protect them from failed payments, as well as the negative customer experiences that go with them. Furthermore, having access to multiple PSPs means any declined transaction will be re-routed to the next acquirer, ultimately reducing failed transactions and the cart abandonments that tend to follow. INTERNATIONAL OPPORTUNITY, LOCAL STRATEGY The opportunity for iGaming companies to scale internationally has never been greater. To protect conversions and build long-lasting relationships with consumers in new markets, they must prioritise the payments experience. Through payment orchestration, merchants can quickly integrate with several local providers to allow customers to pay how they want. Only by embracing a robust local strategy will merchants be able to offer a truly seamless global payments experience.

FEATURES

CIKLUM

BEWARE OF VANITY METRICS Eriks Petersons, Digital Transformation Director at Ciklum, discusses how iGaming businesses can move forward via the power of data In the age of digital everything, it comes as no surprise that iGaming is experiencing rapid growth, expected to reach a global market value of $112bn by 2025.

aren’t necessarily all that helpful. To have long-lasting success and continued growth, business leaders will need to look beyond these numbers to make meaningful, strategic decisions. The good news is that vanity metrics such as those above can be made more valuable in a few different ways.

SO FAR, SO GOOD It is, however, a heavily regulated industry, and regulations are anticipated to tighten in the coming months and years to ensure the protection of online players. For businesses in the industry, this means using every tool at their disposal to successfully navigate the challenging waters; and data and analytics is an invaluable tool for ensuring continued – and astounding – growth. THE POWER OF DATA Much like online retailers, the iGaming industry collects huge amounts of data points from its end-users – through actual account registration, or by tracking the way in which a customer engages with the online gaming platform. The data available is an invaluable tool for marketing or providing personalised services – a key driver behind customer acquisition, retention and revenue growth. The value of data to businesses can only be unlocked by applying analytical capabilities (such as AI and machine learning solutions), which can uncover patterns and extract key insights that enable businesses to make data-led decisions, drive revenue and customer retention; improving the end-user experience. THE METRICS THAT MATTER Tracking, measuring and analysing data is key to gain useful business insights. And in fact, you likely will have heard of vanity metrics –so-called as they are the stats that help make a business look good. In the iGaming industry, vanity metrics might include: - Gross gaming revenue: GGR is determined by the amount of money wagered and the amount of money paid out. In simple terms, the amount of bets made minus the

GAMBLINGINSIDER.COM

Eriks Petersons amount of winning payouts. - Net gaming revenue: NGR is what is left from GGR after a business deducts its operating expenses – such as bonuses and fees. - Registrations: Number of player registrations. - Deposits: This refers to the total deposit amount over a given period of time. - First-time depositors: FTDs is the number of players who have deposited money into a casino account for the first time. For businesses that are successfully growing, we would expect to see an uplift in the above vanity metrics – perhaps even hitting all-time highs continuously. As the company grows, there will be more money to invest in marketing, which will in turn drive registrations and the other vanity metrics mentioned above. However, the problem remains that vanity numbers won’t really offer true insight, and growth is not endless. On their own, no matter how impressive they might look, these metrics

MAKING METRICS WORK FOR YOUR BUSINESS Businesses will always need to track vanity metrics – it’s making them work harder that is the key. Here are a few actionable ways in which the iGaming industry might glean valuable insight from vanity metrics: 1. Instead of simply measuring raw GGR or NGR, try instead measuring both metrics according to each customer. Both metrics become much more valuable this way; for example, if the overall revenue keeps going up, but the revenue per customer is going down, it will indicate the business will need more customers to continue growing at this pace. 2. Another example is to track net gaming revenue to gross gaming revenue margin. Taking the same scenario as above, both numbers will continue going up, but tracking the margin will indicate at what expense. 3. Similarly to the revenue examples above, deposits or depositing customers can also be expressed as ratios – for example, new customers compared with all customers, or average deposit per customer. In this way, the same metrics can provide a wealth of useful insights, instead of simply being a vanity project. Understanding user trends and behaviours is key to making insightful business decisions. Data and analytics has a wealth of insight to offer iGaming businesses, and will be key as the industry continues to experience ever-tightening regulation. The first step is understanding exactly which metrics to measure – and how.

FEATURES

ROUNDTABLE

ROUNDTABLE: DATA AND COMPLIANCE Industry leaders from Continent 8 Technologies, Internet Vikings and W2 discuss compliance risks within gaming, as well as the storage and protection of data, with Peter Lynch David Brace, Technical Account Director, Continent 8 Technologies

Rickard Vikström, CCO & Founder, Internet Vikings

Warren Russell, CEO, W2

WARREN RUSSELL:

WHAT ARE THE GREATEST COMPLIANCE RISKS FACING THE GAMING INDUSTRY

RICKARD VIKSTRÖM:

IGaming is an agile and fast-developing, yet relatively young, industry. As a consequence, it is exposed to a number of compliance risks. Be it GDPR, licensing challenges or staying on top of ever-changing regulations across multiple jurisdictions, our compliance departments always have their hands full. However, I would like to emphasise the issue that is beyond our control at the moment. That is the absence of a working banking system which increases the risk of money laundering and other fraudulent activities. Unfortunately, the payment and payment/bank withdrawal system for iGaming is counter-effective. We are being largely pressured to work with iGaming-specific banks because there is hesitancy in the larger banks. On the contrary, the industry should attempt to build an ecosystem where they work together with the well-known reliable banks, who are good with such pivotal elements as KYC (Know Your Customer) and AML (Anti-Money Laundering).

GAMBLINGINSIDER.COM

One of the key factors the operators and all stakeholders within the industry need to understand is the changing face of regulation; now more than ever legislation is driven by public opinion and international politics. Be that data sovereignty due to Brexit, responsible gambling highlighted by public figures and multimedia platforms, or the opening up of new markets. The positive and negative impact of any changes needs to be taken into account and failure to properly understand that will cause the biggest issues. If we simply look at ‘risk to the industry’ being fines levied, then this is often due to systems and processes not keeping up with change, rather than a deliberate attempt to flout or ignore regulation.

DAVID BRACE:

The sheer velocity of the expansion in regulated markets, globally, represents the biggest challenge to all parties in the gaming industry. The number of new jurisdictions looking to take advantage of the boom in online gaming, coupled with the race to be first to market in every location, represents the biggest compliance risk to the industry. Every new market has its own set of rules covering some or all aspects of licensee’s businesses, from KYC & AML responsibilities to age verification, and player locations requirements to data sovereignty and locality requirements. This, combined with the recent surge in M&A activity worldwide, means many organisations are facing a mountain of compliance work in combining new obligations with merging and revalidating existing regimes of acquired organisations.

ROUNDTABLE

RICKARD VIKSTRÖM:

Without a shadow of a doubt, data protection should be one of the top priorities of every company, especially in the iGaming sector. Currently, personal data is the main target for internet hackers. It is extremely valuable on its own, not to mention online payments & transactions. While iGaming remains one of the fastest-growing industries in the world, continuously increasing the amount of online data and revenue it accumulates, both businesses and players remain prey to online criminals. First and foremost, it is critical to control how data can be accessed, as well as having different layers of security so that not all information is stored in one place. Unfortunately, there will always be security flaws, hence we need to construct architecture that is able to withstand intrusion, just as we have been learning and building physical security over the past 100 years. For instance, the Marriott/ Starwood hack is the perfect example that shows how costly having all data in the same place can be. Not only were they fined £18.4m ($25.3m), but 500 million customers and the brand’s reputation were compromised. Another crucial point I would like to bring to everybody’s attention is the importance of both external and internal security. When it comes to data security breaches, everybody instantly thinks of external intruders. However, an angry employee, who can destroy his or her company by easily stealing data, still remains an unresolved issue. Something that is considered to be a taboo topic for many.

FEATURES

DAVID BRACE:

Data is arguably the most valuable asset that an online gambling organisation has, and the rise in publicised high-profile data breaches reflects this. What’s more, the volume of data collected and stored by all organisations is increasing. It is predicted that cyber crime will cost the world $10.5tn annually by 2025 – no business is immune, and companies of all sizes are being hit by increasingly sinister attacks that have the potential to take them offline. This causes disruptions to products, services and revenues, but most importantly reputations. The iGaming industry is one of the most attacked sectors; our quarterly DDoS statistics show a sizable increase in the number of attacks, as well as the severity. For this reason, it is more important than ever for all organisations to take cybersecurity and data protection seriously. Those that do will ensure they are as protected as they can be against these incidents, while those that do not will find themselves incredibly vulnerable; and far more likely to suffer a data breach and the consequences it brings.

GIVEN THE RISE OF TECHNOLOGY THAT AGGREGATES INFORMATION, HOW IMPORTANT IS IT TO PROTECT DATA

WARREN RUSSELL:

Data protection is the single biggest risk facing any organisation that processes Personally Identifiable Information. The fines and reputational damage an organisation can face under GDPR far outweigh pretty much any other regulatory penalty, so protecting your customer data cannot be understated. We work in a highly competitive sector so anything that damages the integrity of your brand or your solution is going to give you problems, serious problems – and this is only looking at it from a business perspective. If you take into account the actual reason for being security focused, neither I nor anyone else wants their personal information available for use for nuisance or nefarious actions. So ignore data protection at your peril.

GAMBLINGINSIDER.COM

FEATURES

ROUNDTABLE

DAVID BRACE:

We have more than 20 years of experience protecting data in the online gaming space. Our knowledge tells us that organisations, in terms of data security, should take a layered approach. There is a range of solutions this should include: DDoS, WAF, Endpoint Protection, and Security Information and Event Management (SIEM). Most recently, we have enhanced our Secure offering with Managed Threat Detection & Response solutions. This is a complete end-to-end proactive threat solution combining advanced SIEM/EDR/SOAR/ ML technologies with proven 24/7 SOC resources. This gives businesses and organisations unprecedented visibility, and response capabilities, against known and unknown threats – at a time when cybercriminals are really upping the ante.

RICKARD VIKSTRÖM:

My number one recommendation is access control and segregation. Don't have it all in one place – simple as that! We always recommend different layers and microservices, or at least multiple tables within the database instead of a single unified database, to avoid the entire information being retrieved due to cross-site-scripting vulnerability. On the other hand, it is easier said than done. It is quite challenging to architect a system that is equally efficient and secure without overly complicating it. The main issue with architecting a system like that is that it takes a long time to build. In the meantime, ideally, you should be working with security access-control lists (ACLs) from the beginning. It will pay off in the long run.

GAMBLINGINSIDER.COM

WHAT IS THE BEST PRACTICE WHEN IT COMES TO STORING DATA

WARREN RUSSELL:

There are so many solutions and companies out there that will help, give you guidance and sometimes even conflict with one another. I guess it comes down to principles, and the key one is people. People are your biggest risk, clicking on that malicious link, password reuse, removable media… etc – this is the most common form of cyberthreat leaving businesses exposed – so it all begins with staff awareness; everyone, regularly. Make sure it is at the top of your list of things to do – are my team aware of data protection risks? From there, it becomes more technical and pretty much common sense – keep your security architecture and processes confidential – the more people who know them the higher the risk (a common question in an RFP), then encryption, IDS, IPS, secure transfer… the list goes on. Too much for the character limit I have here!

FEATURES

ROUNDTABLE

WARREN RUSSELL:

HOW CAN THE MANAGEMENT OF DATA HELP WITH RESPONSIBLE GAMBLING PRACTICES

RICKARD VIKSTRÖM:

Data management is directly linked to responsible gaming. For example, if (though I should probably say when) a large well-known iGaming operator gets hacked, someone can steal its customers’ contact details and then market to unlicensed or offshore casinos. This is something that has already happened in the past and will continue to happen in the future, because there is too much money involved. Nonetheless, we as an industry need to work together to upgrade our systems and tighten security measures, to protect the players. I will repeat myself again: the best practice is to segregate the data and limit the number of people who have access to it, as well as have firewalls in place; so that data cannot leave the hosting environment or your company premises.

GAMBLINGINSIDER.COM

We are experts in using data to maximise business opportunities, not just in gambling but across all different types of verticals – targeted marketing is the ever-present now, regardless of the platform you are on or across. Now we need to become experts in managing that same data to help identify patterns and highlight any risks. I am sure many of us saw the recent Paul Merson documentary which gave some level of insight into the data that is available to operators; and while I am in no way advocating that it is the operator’s sole responsibility to prevent gambling harm, I think this is a much larger topic where many stakeholders, including the player, all have a degree of responsibility to one another. I think the operator and its relevant supply partners are very well positioned to act as the ‘warning bell.'

DAVID BRACE:

Data can be used by operators to identify unusual behaviours in both individuals and groups, raising flags for player protection or unusual betting patterns. Responsible gambling is a major talking point in the industry and, with proper data management, companies can be more proactive with their approach to analysing behaviours and profiles of players, to identify if someone could be a problem gambler. The maturation of the machine-learning method of data analysis can also help with responsible gambling practices. The ability to automatically explore, analyse and leverage data at machine speed rather than human speed could revolutionise the way organisations interact with their customers, including making interventions as soon as possible problem play is identified. Machine learning provides organisations with the ability to automatically generate an understandable big-picture view efficiently, taking a vast number of disparate data points and turning them into actionable strategies. By leveraging this, operators and suppliers can take responsible gambling, and safe gaming, to the next level.

FEATURES

THE PREMIUM

“MONEY TALKS” Mystery man, The Premium, talks with Isabella Aslam about his sports betting consultant service, high customer returns, his celebrity persona and why he will never share his true identity...

We are really interested in ‘The Premium’ here at Gambling Insider. Can you please explain the concept and why you chose to go by a third-person persona? We provide recommendations for clients on a number of sporting events that would include: the NBA, NHL, NFL, and MLB and also the ATP Tour. We became very good at identifying bets with the expertise I provided, and thought we should be compensated for that expertise. It’s a results-driven business and we differ from traditional consultants; I provide a lot of

methodologies that I teach my clients. The sports betting industry is a great way to earn a passive income, there are a lot of different ways you can set yourself up for success, and that’s what I teach.

You use particular statistical models via machine learning to identify bets... Without telling me your secrets, how do you find the best angles for your clients, and what are your strategic ways? Naturally, in the 21st century, nobody The Premium uses many tools in his arsenal really trusts anybody they’ve just met. that include predictive modelling projections So, why should players who don’t know you and can’t see you trust your advice with their money? That’s a valid question. The Premium teaches players how to think properly, alongside providing sports betting picks and recommendations. There’s a bad aura around consultants when it comes to this industry. And I’m trying to change that and put a lot more credibility behind what sports consultants can really do for clients. The bare minimum some consultants do is send out picks, and if it wins – great. The Premium prides itself on client retention. I am doing a very good job of

“If I wasn’t making money for my clients they wouldn’t sign up for my services and they wouldn’t renew their services, and we wouldn’t retain customers. There is no better feeling than making money”

GAMBLINGINSIDER.COM

and data analytics. His ability to study in-depth previews of team matchups helps to identify market inefficiencies that aids in his advantage. Using statistical models via machine learning (alongside human thought processes) provides The Premium additional resources to make calculated decisions for his clients.

THE PREMIUM

retaining my clients and receiving upgrade requests. By having a range of VIP packages, it gives the clients options to see how I operate. There are clear examples of what we offer with an introduction email explaining our service; there are a lot of additional services we include free of charge. We also provide consultations via direct message on Instagram. Is it just you who speaks with your clients or do you have a team behind The Premium? It depends what days, but The Premium is the one who is going to be making that contact. I am the one who is most well versed when it comes to clients and understanding them. This is a very niche, albeit great idea. As there aren’t really any other consultants who give such personable contact with clients in terms of the ambiguity that The Premium has, who would you say your competitors are? There are a few, but I wouldn’t say we have many competitors. Our statistics, what we do and provide our clients, is what does the talking. Any competitors would simply be other individuals that offer services like handicapping and selling picks. What other ways do you differ from a typical sports betting consultant? Where we differ is where we target higher niche clients. We are typically higher priced but I provide more value. Our mantra is: pay The Premium in exchange for premium consultation. The Premium is within the top 1% [success rate] and we feel like we are the best. I am honest and tell clients that if you are charged $5 or $10 daily, then it won’t come with the quality. We charge you the premium but we provide that premium return and premium consultation for our clients. Out of the VIP packages: daily, weekly, monthly, quarterly, half yearly, yearly and even personalised options, which would you say is the most popular choice gaining the most success rates? Our monthly. With 30 days of consultations for clients, we provide a considerate discount for their first package, which allows them to test out the system. We also have the custom-tailored packages. We work with the client’s needs, so we would be able to lower a monthly average to have them for a longer term. Gambling is largely undertaken by bettors as doing it for the ‘game’ or the thrill. In terms of betting on someone else’s picks, do you think this takes the fun away from the customer? Absolutely not. The Premium does the research so you don’t have to. And that really is the

bottom line. We want to take the headache out of the equation. Clients are paying me to do the research, it’s a huge time commitment. I have high-net-worth clients who finish work and don’t want to come home and have to go through the books. I do it for them. Obviously, we are hoping to win every bet that we provide, in the off chance that it’s not, it adds more entertainment for the client; they can sit back and relax, understand that the work has been done and enjoy the game. That was a really good answer. That’s what we do! The Premium answers and The Premium returns, Isabella! You’ve got a lot of confidence in what you’re doing and what you’re saying, how have you got the time to do this for every client making sure they receive accurate results? It’s a pressure business, I would be lying to tell you that every day is amazing. But I truly care. I take it as a personal hit if I lose because clients are paying me and putting their trust in me. Any consultant that says “we win every day and we are going to make you thousands” is lying. It’s unpredictable but I can promise you, sports betting, in terms of gambling, is one of the best ways to make money. The Premium wants to make its clients money, and drive return and investment. In terms of caring for your clients, a topic that is always rife in the air but one especially now, what is your stance on responsible gambling and how do you implement this? The Premium maintains complete privacy for all clients, I always advise them to have the means to afford to bet. And if they don’t

FEATURES

Do you ask potential clients about their financial background? We don’t get involved with individuals’ backgrounds or financials, for their own privacy. From a personal standpoint, I want customers to bet responsibly. You have mentioned your status as an online celebrity. It would be a crime if I didn’t ask, can you tell us who you are? Absolutely not. The Premium will remain in full confidentiality. I find people are interested in knowing who I am, and I understand that, but that’s what brings the art to the brand. Well, it’s rather the term ‘celebrity’, it gives off the illusion that you could be a famous movie star. I would say celebrity due to my fan base and following. So, The Premium is the celebrity. People find me entertaining; I have an entertaining component with the brand that we have built. I come across as arrogant or very confident in my abilities, but at the end of the day my statistics do the talking. So, money talks? Yes! Absolutely, Isabella. Money talks. If I wasn’t making money for my clients they wouldn’t sign up for my services and they wouldn’t renew their services, and we wouldn’t retain customers. There is no better feeling than making money. Lastly, do you find the level of retention has grown globally, since sports betting became more popular? I have clients from all over and it’s amazing to see internationally how much the world has respect for sports betting. ESPN is highlighting betting odds now. Sports betting used to be

“Where we differ is where we target higher niche clients. We are typically higher priced but I provide more value. Our mantra is: pay The Premium in exchange for premium consultation” then it’s best to get their finances in order and then eventually use our services. My take on responsible gambling is we don’t want clients that are in over their heads. It’s an entertainment value at the end of the day. We want to make a lot of money, but it also brings a lot of entertainment value for the client.

something that was looked upon in a negative light. The NFL’s stance five years ago is completely opposite to now. There’s a much cleaner representation these days and it’s seen as a lot of fun. I believe sports betting and sports in general is getting even bigger and better than it ever was.

GAMBLINGINSIDER.COM

FEATURES

LEE RICHARDSON

A WHITE PAPER, NOT A WHITE FLAG Lee Richardson MBA, Gaming Economics CEO and Co-Founder of the Big Betting Balagan, discusses the upcoming UK Gambling Act review The UK Gambling Act 2005 (UKGA) gained Royal Assent in April 2005, brought to the statute books by a UK Labour Government led by Prime Minister Gordon Brown. Informed by the ground-breaking Gambling Review (the ‘Budd Report’) of 2001, the wide-ranging UKGA was the first to specifically regulate internet gambling in the UK, and enabled gambling companies to advertise on TV and radio. It also created a new national regulator, the Gambling Commission (GC). In December 2020, the UK Conservative Government announced the terms of a formal Review of the UKGA, with an anticipated year-long consultation and review process, followed by a White Paper “…due before 2022”. While such a review barely featured in its 2019 General Election manifesto – the main gambling-related pledge was a short statement to “….continue to take action to tackle gambling addiction” – some industry observers (but many lobbyists), believed such a review was overdue. Critics of the Act – and there are many, of various apparent qualification – claimed the UKGA was not fit-for-purpose and, in particular, ‘unfit for the digital age’. Some in the industry beg to differ. Wes Himes, Executive Director for Standards and Innovation at the industry trade body, the Betting and Gaming Council, has described that accusation as a “…sound bite…”, rather than an accurate assessment of the existing Act. Others have a similar perspective. When asked at a recent conference on the potential impact of the UKGA Review, one observer said the industry needed “…an appropriate balance between consumer freedoms and choice on the one hand, and prevention of harm to vulnerable groups and wider communities on the other…” With clear reference to the so-called ‘consumer affordability’ topic – which garnered a record-breaking 13,000 responses to the GC in consultation – that view encapsulates well the fine balance the Review needs to strike, and the dangers in getting that wrong. For example, some are calling for a ban of all gambling adverts, in all places; the Royal Society

GAMBLINGINSIDER.COM

"What the industry needs is a cogent, evidence-based assessment" a new Ombudsman, ostensibly to take lead responsibility for dealing with disputes between consumers and gambling providers. This topic was also aired at a recent industry conference, where different gambling sector Alternative Dispute Resolution (ADR) models were debated, with a general consensus that, with various, existing ADR services – such as the Independent Betting Arbitration Service (IBAS) – already in Lee Richardson place, this negated the need for such a new, Parliamentary-appointed office. Apparently, IBAS disagrees; Chairman Andrew for Public Health is just one. That would include Fraser recently said that the current system, sponsorship, so what implications does that have with nine separate ADR bodies, was “…not ideal, for sports like horseracing, which has a special, and it would make more sense if IBAS took over symbiotic relationship with betting, relying the role as the sole gambling ombudsman.” heavily on that sponsorship income channel? One more example of the divided thinking on How do you deal with the National Lottery an important consumer protection issue. (TNL), which, rightly, promotes hard its financial Since the UKGA Review was announced support of a wide range of sports, plus the almost a year ago, we have seen develop a sponsorship of hundreds of athletes and polarised debate, with entrenched opinions on Olympians? Any UKGA-driven changes to many sides. We’ve also had ample evidence of the advertising and sponsorship of sport by ill-conceived proposals which either over gambling operators must surely be factored in simplify the apparent issues, misunderstand the to the current – and imminent – Fourth TNL gambling industry and its modus-operandi Bid Competition; and bidders absolutely need or, even more importantly, misinterpret the to know where they stand, and soon. motivations and expectations of the vast To help analyse, assess and adjudicate on all majority of its satisfied consumers. of these opposing views and perspectives, we What the industry needs – and should have a brand-new minister for Gambling in place. continue to demand – is a cogent, evidence-based A recent Government reshuffle saw Croydon assessment of what sustainable changes are South MP Chris Philp appointed, within the needed to the existing UKGA, and how DCMS, with specific responsibility for overseeing these deliver lasting improvements for the the UKGA Review. His in-tray is already full. consumer, while preventing harm. Let’s hope One item certain to feature prominently in his the White Paper, still due before New Year’s purview is whether or not the industry will get Eve, delivers just – and only – that.

FEATURES

ETERNA LAW

UKRAINIAN GAMING: A DEBUT YEAR Andrey Astapov, Managing Partner at Eterna Law, assesses Ukraine’s first year of legalised gambling Ukraine is a new prospective destination for the gambling business. We see that the market holds some great potential and that it develops rather quickly, though some issues still need to be resolved. Gambling in Ukraine was only legalised approximately one year ago and, in such short timeframes, Ukraine has demonstrated positive results. The gambling market has been launched and many gambling companies have already started to operate. At the same time, there remain some important points on the agenda. For example: the reformation of gambling taxation that was promised one year ago and was supposed to be conducted soon after the legalisation. And, of course, some loopholes currently exist in the Ukrainian Gambling Law, which remain unclarified by the Gambling Commission. Despite these negatives, however, the Government of Ukraine has done a great

GAMBLINGINSIDER.COM

job, and this year proved to be successful and very productive for the newborn sector of the Ukrainian economy. So, let us briefly discuss this first year of legalised gambling in Ukraine, covering its major achievements, disappointments and controversial moments: A BRIEF OVERVIEW OF UKRAINIAN GAMBLING FOR NEWCOMERS The Ukrainian Gambling Law adopted on the 14th of July, 2020 offers a full spectrum of licences for different gambling activities. Notably, a separate licence shall be obtained for each activity. So, what gambling products are currently available in Ukraine? The scope of legalised products is wide and includes land-based and online casinos, betting activities, gaming machine venues and online poker. There is also a gambling service licence that is

widely known as the B2B licence. Such licence provides the possibility to develop various software for the gambling industry and is particularly interesting for many IT companies. THE FIRST ECONOMIC EFFECT OF LEGALISING GAMBLING Ukraine has shown very positive economic effects from its first year of legalised gambling. Indeed, in 12 months there have been around 50 issued gambling licences covering all five types of gambling activities mentioned in Ukrainian Gambling Law; this includes land-based casinos, online casinos, betting (available online and offline), gaming machine venues and online poker. Besides that, the Gambling Commission has already issued around 60 permits that confirm the compliance of the premises with legal requirements to a range of hotels in Kyiv,

ETERNA LAW

Odesa, Lviv and some other big Ukrainian cities. What do such numbers demonstrate? That the legalisation of the gambling market brings the first visible results – many gambling operators already started to run and the market as such is launched. Furthermore, the results are quite promising – by the end of the year and even in the six months since the market began its existence, state budget revenues received from payment of fees has already reached one billion. The first billion in the state budget is a great milestone for the Ukrainian gambling market. But given the potential of the market, this is far from its limit. The main problem that restrains foreign investment is, of course, the delay of adoption of a new tax law for the gambling industry. NEW TAXATION FOR THE GAMBLING INDUSTRY Current taxes applicable to gambling operators are not adapted to the needs of the gambling legislation in Ukraine. The reason for this is that the taxes applicable to gambling operators in Ukraine are high in comparison with other jurisdictions and especially in consideration of licence fees. Many international operators think twice before entering the Ukrainian gambling market. Often they are not ready to follow lengthy procedures for obtaining a gambling licence and invest in a country where, in addition to the high cost of licences, tax rates are also high. If the taxation system will continue to exist in its current format, it will be difficult for Ukraine to compete with other jurisdictions that offer significantly more attractive conditions, as well as attract foreign investment and global gambling leaders to the country. However, there is a reasonable solution. Currently, the draft law on amending the taxation of the gambling industry is registered for its first reading in the Parliament of Ukraine. This draft law intends to unify the taxation system, as well as balance the gambling taxation by substantially lowering tax rates. Just compare the numbers. As of now, Ukrainian operators have to pay different rates of income tax for different gambling products. For instance, 10% of the income from gambling for gaming machine operators, and 18% of the income obtained from betting and other types of gambling activities (except for gaming machines). Meanwhile, the new draft law introduces a single GGR (gross gaming revenue) tax for all types of gambling activities. All gambling operators and lottery operators will pay the GGR tax at the same rate – 10%. For some types of gambling, it decreases the tax rates by almost double.

FEATURES

Besides that, the draft law offers two more significant changes. First of all, it offers to absolutely exempt winnings from taxation which do not exceed a certain amount (approximately, UAH 48,000/$1,800). Secondly, the draft law also intends to cancel all triple fees, which are currently established by the Gambling Law for the annual instalments paid for some gambling licences (i.e. betting licences, online casino licences, and licences for gaming machines). As of now, such triple fees are set out for the period until the introduction of the state online monitoring system, which will provide state control over the activities of all gambling operators. WHAT TO EXPECT FROM THE UKRAINIAN GAMBLING MARKET IN THE NEAR FUTURE The adoption of the draft law on taxation is a very urgent question on the gambling agenda at this moment if Ukraine wants to attract more leading foreign investors to the country. So, hopefully, the Parliament of Ukraine will adopt the new law at the beginning of next year. The new taxation system will help to eliminate current legislative barriers that make it impossible for the market to realise its potential in full. And Ukraine should expect a substantial increase in revenues to the state budget in the form of new licence payments and tax revenue. Additionally, the profit for the state budget is generated not only from licence payments. The establishment of land-based gambling venues as well as the launch of new online gambling websites requires considerable investment and involves a range of industries. Gambling operators regularly pay taxes, create jobs, and invest in marketing strategies and brand development. So the state economy, in general, is substantially stimulated. Today, the positive economic effects are already obvious. Gambling legalisation has resulted in additional budget revenues and substantially stimulated a few cross-related industries of the economy – in particular, the tourism, hotel and advertising businesses. We expect that this tendency will keep up and Ukraine’s economy will be further stimulated due to such a newly established sector. But it would be beneficial to receive answers to two questions that concern many operators and still remain uncommented on by the Gambling Commission, or other state authorities in Ukraine. First of all, the Gambling Law and all licence conditions are rather vague on the matters of the location of gambling operators’ servers. For many operators, server location is a strategic business decision. For example, if there is a requirement that servers must be located in Ukraine, it means additional and

Andrey Astapov usually substantial financing for companies. It has been suggested that this issue could be regulated by the current draft law on taxation. However, there are still many debates about whether such servers must be located in Ukraine, or whether operators shall not have any limitations on the business-oriented option to locate servers outside of the country. Finally, another significant issue concerns the certification of gambling equipment. The Gambling Law mentions that international certificates can be recognised in Ukraine. And yet it is silent on the procedures with which they can be identified. Until now, the Gambling Commission has not yet recognised any international certificate that can be used in Ukraine. THE VERDICT So, as a brief conclusion concerning the first year since gambling legalisation, we can confidently state that some great work has been performed. The Government of Ukraine approved licensing conditions for each type of licence, created the Gambling Commission, adopted some other regulatory acts and successfully issued numerous gambling licences. However, there is still much work to do if Ukraine aims to develop a competitive gambling market with large amounts of foreign investment. As mentioned above, the main and key question is the adoption of the draft law on gambling taxation, the resolution of open questions with the location of servers and the recognition of international certificates. Ukraine’s history with gambling is difficult. But as many experts promised one year ago – and as the market development looks right now – the results are quite positive. Hopefully, the best is yet to come.

GAMBLINGINSIDER.COM

INSIDERS

ALEX CZAJKOWSKI

In every issue, Gambling Insider commissions guest columns and interviews with people at the heart of the gaming industry - to discover more about the challenges its leaders, pioneers and innovators face. These contributors form The Insiders

JOHN CONNELLY Interblock

ROBERT FILIĆ Bragg Gaming

IGOR MARKOVIĆ NSoft

INSIDERS JOHN CONNELLY

The supply chain Interblock CEO John Connelly speaks to Gambling Insider about continuing the supplier’s growth, despite pandemic-enforced obstacles

"Absolutely we were impacted by the pandemic. With that said, I am very proud of my team's ability to keep lead-times to 12 weeks or less"

Interblock Gaming bills itself as a provider of luxury gaming products, so it is not surprising its booth at the recent Global Gaming Expo in Las Vegas was cloaked in black curtains and had an invitation-only entrance policy. When Gambling Insider received its golden ticket into this exclusive setting on the final day of G2E, we managed to sit down with the very busy John Connelly, CEO of Interblock Gaming, for a few minutes. Connelly discussed the return of the big conference, how Interblock is dealing with worldwide supply chain issues and what the gaming industry can expect from the company going forward. WHAT PRODUCTS/SERVICES DID INTERBLOCK UNVEIL AT THIS YEAR’S G2E? We continue to grow our portfolio of Stadium technology and Pulse Arena games. These electronic table games are attracting new players to the casino floors, both with live dealers and automated dealers. Our Stadium games have new form factors and updated software. Technology

GAMBLINGINSIDER.COM

is very important in making the electronic games profitable for casinos and attractive to the players. WERE YOUR PRODUCTION TIMELINES AND/OR NEW PRODUCT REVEALS DISRUPTED BY THE PANDEMIC? IF SO, HOW? Absolutely we were impacted by the pandemic. With that said, I am very proud of my team's ability to keep lead-times to 12 weeks or less. That is longer than we would like, but still within a reasonable time frame for our customers. We are seeing forecasts to cut that down to 9-10 weeks, but that is subject to change on a month-to-month basis based on supply chain issues. WHAT WAS THE GOAL FOR INTERBLOCK AT G2E? We were very excited to show off all of the new aspects of our games. G2E is such an important show for the gaming industry. All of the companies exhibiting here bring their new products and services. This show is the benchmark.

WHAT ARE INTERBLOCK’S GOALS FOR THE REST OF 2021 AND INTO Q1 OF 2022? One of the primary goals is to continue to place a very large emphasis on yielding up fixed assets on casino floors. We are using technology to drive up hold to our casino partners while reducing operating expenses and continuing to provide an enjoyable player experience. One of the ways we are working to accomplish this is a new software platform called Global Version. The feedback has been extremely positive so far from all our customers. Another initiative we are pursuing is to enter the online segment of gaming from a B2B perspective. There is tremendous demand from current customers to supply our technology to them in this space. I am happy to say we have been experiencing a tremendous growth rate post-Covid, so we are looking to add new talent in the company – as long as it is the right talent.

INSIDERS ROBERT FILIĆ

Leveraging real-time technology Robert Filić, Director of Player Engagement Platform at Bragg Gaming-owned Oryx Gaming, discusses casino experiences, real-time data and boosting engagement levels

"What has revolutionised the engagement tools offering is the use of real-time data. It’s an asset that helps operators communicate" Visiting a land-based casino is an experience. When you enter the premises, you are captivated by flashing lights and thrilled by the ringing bells of winners, and exciting jingles from rows of slot machines. The entertainment factor is high and, struck with the anticipation of winning big, you are there to have a good time. Visiting a casino is also a social experience where friendly staff welcome and guide players through a vibrant atmosphere, surrounded by other customers enjoying themselves. Online casinos are not short of excitement, but they offer a very different experience to that which you find in person. A major distinction is that iGaming is almost always a solitary experience without human interaction, forcing the industry to think of other ways to engage players and enhance the experience. This is where new technology comes in. Over the last few years, we have seen an increase in the number of engagement tools launched by suppliers and operators to take online gaming to the next level. They often

GAMBLINGINSIDER.COM

aim to make the experience more social with initiatives, such as offering the chance to compete and interact via tournaments. Other popular features include quests and jackpots that are also proven to significantly boost engagement levels. What has revolutionised the engagement tools offering is the use of real-time data. It’s an asset that helps operators communicate with players while they are active in a casino or a particular game. For example, a player can be greeted when logging in, rewarded for achievements, or offered incentives when needed the most – all in real-time. Players can also directly be offered games they haven’t tried before based on their preferences, which further improves retention and lifetime value. Features like this offer instant gratification and help players feel looked after, enhancing their experience and creating a more social and unique approach. This can be compared with a hostess in a land-based casino, armed with all the data collected on the player – such as their behaviour and preferences

– to help them navigate through the casino floor and offer incentives when needed. Analysing and interpreting real-time customer data gives suppliers and operators an understanding of player behaviour patterns, and how to immediately improve the user experience. Constantly striving to offer players what they want by fully engaging them instils a feeling of importance and will ensure they come back for more. For operators, this also leads to maximised player value, improved KPIs and better financial results. Real-time data enriches your toolbox with plenty of possibilities to engage with players and to offer a better experience. Products leveraging this make it possible for operators to use gamification principles in their online casinos, make the experience more social via direct relevant communication and enable automation of the user journey. Using tournaments as an example, we have seen fantastic results among our clients. Tournament tools have been proven immensely effective in growing the participation in casino games with operators seeing bets, rounding the number of players up to almost 300% in some cases. Combined with free incentives, the numbers rise even higher to an over 300% increase in bets, more than a 400% spike in the number of players. This is a significant and invaluable achievement at a time where more operators and suppliers than ever before are fighting for the attention of players across regulated markets. Therefore, data is becoming an increasingly important tool in an operator’s arsenal and, if utilised correctly, it can hugely benefit all stakeholders with the players seeing the biggest advantage. Player demographics are different in each market and being able to offer localised, and targeted promotions, to individual players in real-time is the next step in ensuring the industry delivers entertaining, engaging and relevant gameplay to today’s online casino players.

IGOR MARKOVIĆ INSIDERS

Revenue sharing business models NSoft CFO Igor Marković writes exclusively for Gambling Insider, delivering insight into revenue sharing business models in the betting industry leaders from both sides, by doing what we know best in our industry separately. On the other hand, in bad times, and especially with Covid-19 restrictions, a client knows that even in such difficult circumstances, it has to have trust in its partner. A revenue share model means companies share good and bad results and it is in both parties’ best interest to always overcome obstacles as soon as possible. This model is the most profitable solution in the long run. We see it every day, as understanding our clients’ needs and the specifics of every single market gave us specific insight. We believe it’s the best practice worldwide.

Revenue sharing has its advantages; I cannot say this is ultimately the best way in accomplishing KPIs (or profitability), but I can assure you it works. Revenue sharing refers to firms’ practice of sharing revenues with their stakeholders. Thus, in this business model, advantageous properties are merged to create symbiotic effects in which additional profits are shared with partners participating in the extended value creation. One party can obtain a share of the revenue from another that benefits from increased value for its customer base. In short, it’s fair. We believe the revenue share model NSoft prefers is the best way for both sides. It brings growth, prosperity, revenues and profitability for all parties included in this business solution. It is a partnership: in stable times companies grow and make progress together; bringing new solutions and becoming market

TRACKING REVENUE SHARING As previously mentioned, in this business we are partners. Also, in the revenue sharing model, it is fully understandable and clear about how revenue is collected, measured and distributed. The events that trigger revenue sharing, such as a currency, period, price and hold are always visible to everyone involved, so contracts always outline these methods in detail. REVENUE SHARE MODEL IN PRACTICE If the operator has gaming revenue, the supplier receives a share of it. If the operator has higher revenue, then the supplier will get the same, if not an even smaller share of it. On the other hand, operators can make losses. The supplier then can apply unique risk management systems, and continues to provide products and services without charging share in those periods of losses. Benefits of this model for operators: A clear benefit for the client is that there will be no capital investment needed to purchase a product or data. This is the biggest and most important item on the pro list. In this case, a betting supplier is the one who invests in the client, so to speak. This is sometimes the deciding factor for startups to choose one or

the other operator, as the initial investment can be high and limiting for new companies. Another opportunity and option for operators using a revenue share model gives the affiliate the freedom to work in their own way, in their own home countries. On the other hand, the supplier does its best and the affiliate does its best. It’s a perfect match. DIFFERENT REVENUE MODEL TYPES Of course, there are a lot of other revenue model types, including: A transaction-based model, a classic way for any business to make money. The revenue from this is generated by directly selling an item or service to a customer. Licensing/one-time purchases, entailing selling software products by licence, used by a single customer or a group of users; for example, a majority of video games. Unlike licensing, subscription/recurring payment enables a user to receive access to the software by paying a subscription fee on a monthly/annual basis. Popular examples include Netflix, Spotify and Adobe products. The pricing tactic with pay-per-use is mostly utilised by different cloud-based products and services that charge for the computing powers, memory, resources and time used. Examples of this are Amazon Web Services and Google Cloud Platform. One type of monetisation app is freemium/ upselling, where a user may access the main project for free but charge for additional functions, services, bonuses, plug-ins and extensions. Companies that adhere to this are Skype, Evernote and many video games. Lastly, and certainly not the least, there is also hybrid pricing, an advertisement-based revenue and commission-based model. Revenue sharing is a somewhat flexible concept that involves sharing operating profits or losses among associated financial actors. Revenue sharing can exist as a profit-sharing system that ensures each entity is compensated for its efforts.

GAMBLINGINSIDER.COM

FEATURES

PRODUCT REVIEWS

WHAT’S NEW ON THE MARKET Gambling Insider takes a closer look at some of the newest products on the market, as gaming companies work with creative new brands and concepts THUNDERKICK: GODS OF ROCK! Serving up a unique blend of gameplay, theme and blasting soundtrack in its latest release Gods of Rock!, Swedish game developer Thunderkick has another massive hit on its hands. Gods of Rock! is a high voltage rock game that plays out on 6x4 reels with 466 connecting pay ways, in which the Gods have descended to shake the earth with their thunder riffs. With Thor on drums, Medusa on guitar and Lucifer himself as the lead singer, Gods of Rock! is one hell of a show! The game comes with special Charged Wilds that land to increase reel multipliers and a gradually building crescendo of features that can explode into rewards of up to an incredible x20000! We spoke to the team behind this untamed rock slot:

What’s the story behind Gods of Rock!? With Gods of Rock!, we knew from the very start that we needed something intense &

ARISTOCRAT GAMING: DUNE SLOT In a first that changes the gaming industry forever, Aristocrat Gaming™ will release specialty Dune slot games in casinos timed to the US theatrical release of Warner Bros. Pictures and Legendary Pictures’ highly anticipated Dune film. This new game development is timed to a major film’s theatrical release, representing a landmark in entertainment and further demonstrating Aristocrat’s leadership and commitment to innovation. Furthermore, a release of this kind deepens the ties between the gaming and filmed entertainment industries. “We are thrilled to have the privilege of releasing the Dune slot game alongside the feature film for the first time in company history,” said Jon Hanlin, Aristocrat Gaming’s Senior Vice President of Commercial Strategy and Business Analytics. “Once players leave the movie theatre, they can continue the story

and fun on casino floors nationwide.” An adaptation of Frank Herbert’s seminal bestselling book from Academy Award®-nominated filmmaker Denis Villeneuve (Arrival, Blade Runner 2049), Dune is scheduled to open around the world beginning September 15, and in the US on October 22 in theatres and on HBO Max. Dune the slot game will feature a generous number of sights and sounds from the film with themed gameplay unique to the game. Dune the slot game appears, appropriately, on Aristocrat’s new and

GAMBLINGINSIDER.COM

action-packed to jive with the hard-hitting mechanics of the game. We wanted to do something extra epic and thought, hey, what is more climactic than a full-blown Arena-Rock Concert! We also felt that we wanted to add that “Thunderkick-twist” and everyone was psyched by the idea of seeing well-known deities portrayed as rock stars, so we just went for it and didn't look back. The hardest part was probably deciding which Gods and Goddesses to pick, as we wanted a good diversity in both mythologies and an equal guys-to-gals ratio for the band. We had to scrap a few interesting ones along the way but we’re very content with the final line-up, powerful, iconic figures that could easily be thought of as Gods of Rock! The game has had an incredible start, and many seem to really appreciate it which is very cool!

technologically advanced Neptune Double™ cabinet. Neptune Double provides players with an out-of-this-world theatrical style experience with curved 49-inch monitors and 4K visuals, state-of-the-art sound, and a custom-designed, adjustable sound chair. Dune the slot game has a $500,000 multi-site progressive jackpot. Unique to Dune the slot game are new mechanics such as multiplier stacks, which add increased volatility and excitement to the base game, and frequent scatter triggered features that use proven game mechanics in new ways.

PRODUCT REVIEWS

ZUUM: GRAND CRYSTAL 2 AND CRAPS GAME ZUUM has created a new Grand Crystal 2 machine with Craps game. The excellent and clear graphic user interface keeps the players focused on the game and extends time on the device. In addition to ambient music, a very realistic announcer is played on a new generation sound system. This helps the players to follow the game flow and adds a live dealer feeling to the electronic table. The topper screen also contributes to the excitement with animations and keeps players informed about the current game state and past statistics. Together with the high visibility LED Ring it attracts players to come and play at the machine. The results for the game are determined by two dice in an in-house developed dice RNG which has been certified by independent laboratories. With more than 15 years of experience, ZUUM has developed several specific electronic table games to provide customers with numerous attractions for players. In addition to the Craps game, it has in its portfolio other classic table games including Roulette, Blackjack, Baccarat,

PROMATIC GROUP: BRANDED GAMES Branded games aimed at grabbing people’s attention, and attracting new players to casinos and gaming centres, have long been setting industry trends. Centred around a movie, famous person, theme, a popular topic (Jurassic Park, Dracula, Rocky or Scarface,

FEATURES

Sic Bo and some Bingo variations. All machines are available in different configurations from standalone stations, round and oval compact tables to ZUUM Colosseum Arena, ensuring extreme flexibility putting ZUUM machines on the floor. “Like all the gaming industry we were affected by the pandemic, but we used the slow down to our advantage and developed new products like Craps game and the new Grand Crystal 2 machine hardware,” says Mitja Kolman, President of ZUUM. He also adds: “Our vision is to offer our clients products, which are competitive and exclusive both in quality and technology. Customers praise the reliability of our machines, and we are really proud of that.”

a TV show (Who Wants to Be a Millionaire), or a celebrity, athlete or music band (Ozzy Osbourne, Guns N’ Roses or Britney Spears). Yet, such super-productions are not only popular overseas; the Polish company Promatic Group premiered its first branded game with Mariusz Pudzianowski – multiple World Strongman Champion and MMA

fighter back in 2018. “Pudzianator” was presented for the first time at the ICE London 2019, and a year later another branded title was presented - Disco King featuring Polish superstar Zenon Martyniuk. The great success of both slots in Poland opened the door for Promatic to expand production to other European markets. The company has already released a number of titles, including Kmeto King for the Slovak market with popular Igor Kmeto, Uraganul King featuring Romanian Tzanca Uraganul, or Zibrov King with Pavlo Zibrov in Ukraine. All Promatic branded games are available for the retail and online market, and focus around popular symbols related to a given celebrity, making the game more related to the players. The popularity of Promatic’s branded games created an opportunity to develop an exclusive feature of delivering dedicated slots for any given region. The company is already working on new titles, including one for Africa. Branded slots are unique products that allow us to increase the reach of slot games. The number of globally available branded slots proves that by engaging celebrities, game providers increase their earnings and set industry trends. Predicting the next successes of slots featuring a famous local or international superstar, we look forward to the next Promatic Group super-productions.

GAMBLINGINSIDER.COM

CONNECTIONS

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

BetConstruct

www.betconstruct.com T: +44 20 3709 9010 E: sales@betconstruct.com

ActiveWins

BetGames.TV

www.activewins.com T: +4416 1359 3593 E: hi@activewins.com

www.betgames.tv T: +370 6555 0015 E: sales@betgames.tv

AGS

Betradar

www.playAGS.com T: +1 86 6720 6105 E: marketing@PlayAGS.com

www.betradar.com T: +41 7 1517 7200 E: sales@betradar.com

Ainsworth Game Technology

Betsoft Gaming

www.agtslots.com T: +1 70 2954 3000 E: sales@agtslots.com

www.betsoft.com T: +356 2122 4481 E: sales@betsoft.com

Aristocrat

www.aristocrat-us.com T: +1 70 2270 1000 E: contact@aristocrat-inc.com

Big Time Gaming

Aruze Gaming

BtoBet

www.aruzegaming.com T: +1 70 2361 3166 E: sales@aruze-gaming.com

AstroPay

www.astropay.com

www.btobet.com E: sales@btobet.com

Connective Games

www.connectivegames.com T: +7 38 2233 0775 E: info@connectivegames.com

BBIN

www.bb-in.com E: service@mail.bb-in.com

bet365

www.bet365.com T: +44 80 0028 8365 E: support-eng@customerservices365.com

www.bigtimegaming.com E: sales@bigtimegaming.com

GAMBLINGINSIDER.COM

Continent 8

www.continent8.com T: +44 16 2467 8888 E: sales@continent8.com

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

DataSpade Inc.

www.dataspade.com T: +1 23 1384 6177 E: info@dataspade.com

Digitain LLC

www.digitain.com T: +3 74 6070 0400 E: info@digitain.com

CONNECTIONS

FastTrack

T: +44 113 320 2245 E: letsgo@fasttrack-solutions.com

Gaming Arts

www.gamingarts.com T: +1 702 818 8943

Global Payments Gaming Solutions

EvenBet Gaming

www.globalpaymentsgaming.com T: 702-822-7000 E: tiona.petty@globalpay.com

www.evenbetgaming.com T: +3 56 2776 1655 E: sales@evenbetgaming.com

Greenberg Traurig

Everi Holdings Inc. www.everi.com T: +1 70 2855 3000 E: info@everi.com

EveryMatrix

www.everymatrix.com T: +40 3 7104 2222 E: info@everymatrix.com

Evolution

www.evolution.com E: asrealasitgets@evolution.com

Elys Game Technology www.elysgame.com T: +1 62 8258 5148

Exacta Solutions

www.exactasolutions.com T: +356 2134 4249 E: info@exactasolutions.com

www.gtlaw.com

Habanero

www.habanerosystems.com E: sales@habanerosystems.com

IGT

www.igt.com T: + 1 702 669 7777 E: info@igt.com

Interblock

www.interblockgaming.com E: info@interblockgaming.com

GAMBLINGINSIDER.COM

CONNECTIONS

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

Intertops

www.Intertops.eu E: affiliate@intertops.eu

INTRALOT

www.intralot.com T: +30 21 0615 6000 E: info@intralot.com

JCM Global

M N

www.jcmglobal.com T: +1 70 2651 0000 E: jason.cribbs@jcmglobal.com

Kambi

www.kambi.com T: +356 21315514 E: sales@kambi.com

Konami Gaming Inc.

www.konamigaming.com E: sales@konamigaming.com

LeoVegas Affiliates

leovegasaffiliates.com T: +356 27780258 E: affiliate@leovegas.com

Lightning Box

www.lightningboxgames.com E: info@lightningboxgames.com

MERKUR GAMING

www.merkur-gaming.com T: +49 5741 2736 9301 E: sales@merkur-gaming.com

NOVOMATIC

www.novomatic.com T: +43 2252 606 0 E: communications@novomatic.com

OMEGA SYSTEMS

www.omegasys.eu T: +35 3872 746 923 E: info@omegasys.eu

Play Attack

www.playattack.com T: +3 56 7942 0556 E: affiliates@playattack.com

Play'n GO

www.playngo.com T: +4 64 7078 8851 E: info@playngo.com

Playtech

www.playtech.com T: +4 42 0753 4965 E: sales@playtech.com

GAMBLINGINSIDER.COM

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Pragmatic Play

www.pragmaticplay.com E: sales@pragmaticplay.com

Pronet Gaming

Tal Ron, Drihem & Co. www.rd-law.co.il T: +972 522437484 E: tal@rd-law.co.il

www.pronetgaming.com T: +44 (0)20 3814 8084 E: sales@pronetgaming.com

The Innovation Group

www.theinnovationgroup.com T: +1 407 702 6648 E: info@theinnovationgroup.com

Trustly Group AB

Raven Track

www.raventrack.com T: 07799 898 175 E: adam@raventrack.com

Relax Gaming

www.relax-gaming.com E: sales@relax-gaming.com

CONNECTIONS

www.trustly.com E: sales@trustly.com

World Match

www.worldmatch.eu E: sales@worldmatch.eu

Scientific Games www.scientificgames.com T: +1 (702) 897 7150

www.yggdrasilgaming.com E: sales@yggdrasilgaming.com

Spotlight Sports Group www.spotlightsportsgroup.com T: +44 20 7748 3771 E: info@spotlightsportsgroup.com

Suzo Happ

www.na.suzohapp.com T: 888-289-4277 E: sales@suzohapp.com

Yggdrasil Gaming

Zitro

www.zitrogames.com T: +352 266 33 E: info@zitrogames.com

Synergy Blue

www.synergyblue.us T: 702-405-0299 E: bdolan@synergyblue.us

GAMBLINGINSIDER.COM

FINAL 2021: Closing WORD remarks RavenTrack Managing Director Adam Rowley reflects on 2021 within iGaming, and looks ahead to 2022 for both operators and affiliates

it has been more challenging than 2020 with the industry now beginning to move from being reactive to proactive. When working in survival mode (as a lot of businesses had to do) in the early stages of the pandemic, a lot of plans were diverted to quick wins and ensuring revenues continued to be created. As we now begin to move out of the pandemic, it’s a time to reflect and re-engage with existing pipelines to ensure the industry remains intuitive. Although there have been difficult periods, I do believe the pandemic has shown how entrepreneurial the iGaming industry is. Despite increased scrutiny and regulations,

How does RavenTrack reflect on the past year? After such a challenging year through 2020 when the Covid-19 pandemic was in full swing, it would have been easy to have assumed 2021 was a time for recovery and taking a breather. As a lot of businesses can probably testify – that has certainly not been the case! It was important for us to build on the success we had in 2020 and I believe we have done that. The past year has been focused on gaining client feedback on our product/features and working together to not only improve, but also build new initiatives to provide further tools to increase the success of our clients. We are lucky to have the infrastructure and technology in place to be flexible and work in multiple areas and industries, so another reflection of the past year is to always engage in new opportunities and potential new markets. Through this additional development, we also had the opportunity to grow our business further. Our team has increased by 40%, and we’re delighted with the talent and knowledge we have available to us. How should the wider iGaming industry remember 2021? I think the industry will remember 2021 as a tough but evolutionary year. In some ways,

GAMBLINGINSIDER.COM

operators to reach out to any partner technology they are using and discuss additional features or ways to improve the technology being used. We as a company continue to engage with our clients into recommending new features, improvements or general discussions about our platform as it is beneficial to both ourselves and the clients we have on board. What do operators and affiliates both have to look ahead to in 2022? As much as video calling has been a welcome addition to the day-to-day running of the business, it will be a nice change to not have your own face staring back at you throughout

“ALTHOUGH THERE HAVE BEEN DIFFICULT PERIODS, I BELIEVE THE PANDEMIC HAS SHOWN HOW ENTREPRENEURIAL THE IGAMING INDUSTRY IS” - Adam Rowley we can see across the brands running on our platform that they are continuing to see success even with the increased legislations in place; and that’s down to all areas of the industry continuing to adapt and be forward-thinkers. If there was one thing 2021 provided that the gambling industry could avoid in 2022, what would it be? Again, I wouldn’t say this is specific to our industry; however, the necessity to continue developing your products has never been more appropriate than after this last 18 months. I would also encourage affiliates, providers and

every call. With the advancements made in technology from both affiliates and providers, it’s also the ideal time to see these new products in the flesh. Next year will be our first real opportunity to showcase our platform to the wider iGaming space and we have some big plans, so watch this space. So the one element myself and the team are really looking forward to in 2022 is getting back to face-to-face meetings, conferences and general networking events. It’s something that our industry thrives on and I am certain it is going to be a pivotal part of the industry continuing to grow.

Gambling Insider Nov/Dec 2021

Articles inside

A white paper, not a white flag

John Connelly

A messy start

The Premium

Roundtable

CellPoint Digital

Alex Czajkowski

Operating at scale

Regulation; innovation

Helicopter view

The M&A in Spain

Exclusive Q&A: Brigid Simmonds

Big question: Esports

Remote revolution?

Payments in kind

Taking stock

GI Huddle

Global Gaming Awards

The year in review

Facing facts