Gambling Insider Sep/Oct 2020

Sep/Oct 2020 Mar/Apr 2019

US CEO SPECIAL

JORDAN LEVIN RENATO ASCOLI ELAINE HODGSON MITCHELL BOWEN DAVID LOPEZ

Deep-dive interviews with top leaders in the industry BIG QUESTION Will the online push increase the need for ETGs? MARKET FOCUS Analysing Germany’s proposed gambling treaty VIRTUAL EVENTS Today’s solution but is digitalisation here to stay?

EDITOR’S LETTER

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

W

Julian Perry, COO, Editor in Chief

Carl Friedmann, Editor

hat a difference a year makes. Without overstating the obvious, the state of the world 12 months ago couldn’t have envisioned where we are right now: unkempt, working at home, trying to make order out of chaos. But out of adversity comes opportunity as the saying goes, and as an example of the resilience of the gaming industry, we played our part in forging ahead with an amended Global Gaming Awards, now in its seventh year.

If major league sports can play in front of no one, we can certainly come through virtually to deliver one of the most anticipated events of the year. After all, using a pandemic as an excuse to sit on our hands was never an option. For more on the event and the process involved to move it online, go to page 48.

Of course, this is also the issue where we shine a spotlight on the always unpredictable US market with a series of CEO interviews, starting on page 28. We get a dynamic cross-section of leaders in the field, from SG Digital, IGT and Aristocrat to Incredible Technologies and AGS, but you would have seen their portraits illustrated on the front cover before reading this anyway.

It’s a great tradition at Gambling Insider to not just acknowledge the best of the best, but impart best practices that can be applied in your own business. So we’re equal parts entertainment and utility. Utilitainment, if I may.

Common themes you’ll pick up on are how these companies were able to take a proactive rather than a reactive approach when COVID-19 began to spread, and put strategies in order long before any hint of lockdowns was raised. “We had been putting in place responses to the virus since late in the 2019 calendar year, particularly with respect to our operations in Macau and the Asia Pacific region, so we were monitoring it for some months before venue closures in western markets started,” says Aristocrat’s CEO of global land-based (gaming) business Mitchell Bowen. “We were able to pivot virtually all of our land operations to working from home in a safe, supported manner within a couple of weeks of the first closure.”

Another principal theme is industry cohesion and optimism, and that the work we do now will result in stronger markets, whether online or land-based, when the masks can eventually come off with certainty that we pose no threat by merely being within two metres of each other. That can’t come soon enough but meanwhile, we all must continue to do our part to ensure that time comes sooner rather than later.

CF Editor CF,

CONTRIBUTING THIS ISSUE

LEAD DESIGNER Laura Fogar DESIGNERS Rebecca Lydamore, Olesya Adamska DESIGN ASSISTANTS Radostina Mihaylova, Aimee Matthews MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite DIGITAL ASSETS Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 EVENTS SALES MANAGER Ryan Horwood Ryan@globalgamingawards.com +44 (0) 208 638 7610 SENIOR ACCOUNT MANAGER William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Richard Carr Richard.Carr@gamblinginsider.com Tel: +44 (0) 203 435 5624 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 Sarah Croft Sarah.Croft@gamblinginsider.com Tel: +44 (0) 203 435 5628 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 US ACCOUNT MANAGER Erica Clark Erica.Clark@playerspublishing.com Tel: +1 702 430 1912 CREDIT MANAGER Rachel Voit WITH THANKS TO: Jordan Levin, Mitchell Bowen, Elaine Hodgson, David Lopez, Renato Ascoli, Paul Sculpher, Andrey Astapov, Dominik Beier, Terry Glebocki, Jason Chess, Mikael Lijtenstein, Oleg Profatylo, Adam Rowley, Peter Nolan Gambling Insider magazine ISSN 2043-9466 Produced and published

by Players Publishing Ltd

RENATO ASCOLI

CEO, IGT Global Gaming

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ELAINE HODGSON

CEO, Incredible Technologies

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 31ďšş50

COVER FEATURES 32 CEO Special - SG Digital Jordan Levin, SG Digital CEO, speaks with Owain Flanders about his Midwestern roots and role in the development of Scientific Games' digital arm 36 CEO Special - IGT Renato Ascoli, IGT CEO Global Gaming, speaks about the current state of business and decisions to ensure its competitive edge, including reorganising the company into two global business units

ISSUES

26

12 Comment Tim Poole, Owain Flanders, Iqbal Johal and Ezra Amacher discuss current industry issues

44 CEO Special - Incredible Technologies From humble beginnings to becoming a major player in the gabling industry, Incredible Technologies CEO Elaine Hodgson talks to Iqbal Johal about her intriguing journey with the amusement and casino games supplier

20 Facing facts The latest industry data 22 Taking stock Tracking operator and supplier stock prices across a six-month period 24 In Numbers A gaming snapshot by Fantini Research

BIG QUESTION 26 Big question In this issue we ask if electronic table games (ETGs) are the future of table games, and has this period of online advancement accelerated the process for the need of ETGs

40 CEO Special - Aristocrat Mitchell Bowen, CEO, global landbased (gaming) business at Aristocract, describres the company's culture of resilience and how it's been the source of efforts to remain felxible and vital, as well as a reminder of the need to control what you can

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48 CEO Special - AGS From dealing with customers stuck in a lift for hours to approaching seven years as AGS president and CEO, David Lopez reflects with Tim Poole on the career lessons he's learned, the mentors he's had and the dreams he still harbours

FEATURES

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INSIDERS

52 GGA Las Vegas 2020 Gambling Insider editor-in-chief and COO Julian Perry talks through the ins and outs of this year's virtual ceremony for the Global Gaming Awards Las Vegas 2020

79 Astropay Mikael Lijtenstein

54 Recruitment Paul Sculpher, co-director of GRS Recruitment, looks into the role of offine casinos in a rapidly evolving gaming landscape towards digital solutions

81 Raven Track Adam Rowley

80 Digital Chain Oleg Profatylo

82 Digitain Peter Nolan

56 The rebirth of sports betting Iqbal Johal provides an update on the sports betting scene since the return of major sport in May 58 Legal: Ukraine Andrey Astapov, managing partner at Eterna Law, cuts through the legal jargon and explains what Ukraine's new legislation means for the domestic market and beyond

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84 UK casino status Iqbal Johal takes an in-depth look at the UK casino sector

62 Market Focus: Germany With delays casting doubts over the German online market being regulated in July 2021, Iqbal Johal explores the key issues of the proposed gambling treaty

PRODUCT REVIEW

64 Future of online gambling Ezra Amacher analyses how timing is everything when it comes to opportunity and risk, especially when online and land-based demand battle for market share 68 A Question of innovation Gambling Insider assesses whether online casino innovation may be slowing down after more than two decades of sector development 72 Transition of events Gambling Insider looks into the role of virtual events during the COVID-19pandemic 74 A legal bind Jason Chess, partner at London-based Wiggin, reviews the The Social Market Foundation report and outlines some of the recommendations made that might do more harm than good

UK CASINOS

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88 Product reviews Product output is at an impressive level now and Gambling Insider previews some of the newest gems available in online gaming

FINAL WORD 98 Appetite for success Justin Chamberlain, CEO and founder at HungryBear Gaming, has big plans in his sights

COMMENT

IQBAL JOHAL

A REASON FOR OPTIMISM As the industry comes to terms with the new normal, Iqbal Johal explores if the pandemic has forced gambling businesses to improve, and why the market could come back even stronger than before the outbreak

More than five months since the coronavirus pandemic caused chaos worldwide, we’re beginning to see businesses gradually seeing signs of normality, with the gambling industry no different.

Land-based venues began reopening in June, with casinos resuming operations in the majority of countries including the US, and retail betting shops reopening its doors in the UK from 15 June.

Obviously, all venues weren’t allowed to reopen without certain health and safety measures being met. For example, GVC provided a glimpse into what its Ladbrokes and Coral betting shops looked like before the reopening. The shops contain new protective barriers between gaming machines, floor markings promoting social distancing, and the increased monitoring of customer behaviour.

While for UK casinos, which were unable to reopen until mid August, Rank Group CEO John O’Reilly revealed to Gambling Insider the group’s heavy investment in safety measures, including Perspex screens, ID scans, one-way systems and providing an ultra-safe environment.

The same goes for Hippodrome CEO Simon Thomas, who told Gambling Insider the casino went ahead with a major £3m ($3.94m) infrastructure to triple the size of its outdoor terrace, as well as spent

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time reconfiguring key areas. That included replacing a show bar with a 12-metre electronic screen in a downstairs area, that Thomas says is unique to the UK. While there’s obviously restrictions in place, such as a reduced capacity, Thomas was adamant the key to the reopening is showing customers what they can do, instead of being too reductionist, and using it as an opportunity to improve on making some of the spaces better.

That second part is key. The land-based industry has a great opportunity to use the resumption of operations to improve aspects of its business, and improve the customer experience, so the industry can come back bigger and better from the crisis.

A key trend to land-based casinos and retail shops around the world has been the addition of more electronic table games and betting machines, which Thomas alluded to in the Hippodrome. The additional screens will promote safer play by limiting interaction with others, but has also given the land-based sector an opportunity to move forward, providing a glimpse to what the future might look like.

In terms of online, it’s no secret how the industry has benefited from being able to shift seamlessly from a more land-based focused market to a digital one.

During the lockdown period when sport was suspended between March and June, verticals such as online casino, poker, virtuals sports and esports boomed as consumers turned to online play.

While some of those verticals may see activity slightly decrease now live sport is back, online betting certainly won’t be diminishing now that sports betting is thriving again.

Adapting to the new normal is something sports betting operators and affiliates will need to come to grips with too. With matches across the majority of sports leagues around the world still being played behind closed doors and with no sign of that changing anytime soon, until at least October in the UK, trends are starting to emerge that could change the landscape.

For example, there’s been plenty of discussion in the sports betting sector about how home advantage has diminished significantly, affecting the way players bet, making the away wins market much more popular. Statistics back it up, with a Betway spokesman telling Gambling Insider in June that the home win percentage stats in the German Bundesliga “nosedived”.

The lack of fans and short turnaround between matches has produced a volatile betting market, with form and match outcomes becoming more unpredictable.

However, all these examples are factors that the industry needs to adapt to as we start to settle on what the “new normal” will look like.

But with an extra emphasis on player safety providing the opportunity for technological improvements, who’s to say the industry won’t come back bigger and better from the pandemic than it was scheduled to pre-COVID-19?

COMMENT

OWAIN FLANDERS

THE LONGER HAUL Owain Flanders discusses the US Government’s response to the COVID-19 crisis and how this may have lengthened the casino industry’s road to recovery

For the US casino industry, the effects of the pandemic have been felt stronger than most. MGM Resorts reported an operating loss of $1bn for Q2 2020 in comparison to profit of $371m in 2019. Penn National Gaming has announced plans to lay off nearly 1,150 employees at its four Louisiana casinos as they remain dormant, while Caesars Entertainment estimated its daily cash loss at $9.3m as properties first closed.

These effects are both the result of casino closures and strict health and safety measures. Unfortunately, in an unprecedented pandemic, measures such as these are unavoidable. After all, we’re dealing with a serious risk to human life. But it could be argued that in inefficiently managing the COVID-19 crisis, the US Government has increased the detrimental impact on the nation’s casino industry.

As cases of COVID-19 surge again in large portions of the US, the Trump administration’s handling of the pandemic has been criticised near and far. In July, an ABC News/Washington Post survey found that 64% of Americans didn’t approve of Trump’s response to the crisis. With approval levels down 13% from March, it’s clear that a number of Americans are unhappy with the US Government’s COVID-19 policy.

Ultimately, Trump’s handling of the crisis boils down to a distribution of power. Instead of designating a national strategy at the beginning of the crisis, he delegated authority to the separate states. As a result, we’ve seen varied levels of success in combating the virus across the nation, as well as completely contrasting positions on the safety of casino reopenings.

This is a strategy ex-Nevada governor Bob Miller has publicly opposed. Speaking on a panel during ICE North America Digital, Miller argued that the lack of national policy had created “a

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disproportionate number of COVID-19 cases in the US”. He insisted that a national policy would assist in the aim of keeping the casinos open as much as possible while protecting the safety of citizens.

Miller gave Europe as an example of how national policies can work in a crisis. If we take a look at the UK for comparison however, it isn’t immediately clear how much a national policy has helped.

Casinos have been closed since March and reopening plans were further delayed from 1 August to 15 August as COVID-19 cases rose. As a result, Genting UK plans to cut 1,642 jobs at its clubs and hotels, with some casinos facing permanent closures.

Indeed, the UK is hardly a shining beacon of success. But if the UK Government had more faith in its casino industry to implement COVID-19 measures, then it certainly could have been. The decision to enter a full national lockdown at the height of the crisis has no doubt saved many lives in the UK, and has now seen cases drop significantly in most areas. In contrast, the US Government’s confusing state-delegated policy has seen the nation endure more cases and deaths than any other.

For that reason, it seems this crisis could be far from over for the US casino industry. In June, Las Vegas’ reopening was hailed as the light at the end of the tunnel, but revenue figures have not provided the required relief. Nevada revenue for Caesars Entertainment fell between 43% and 45% year-on-year for the first month of reopening, with Eldorado seeing a similar trend.

Now the COVID-19 situation in Nevada is worsening. The state has also reclosed its bars and there are concerns that casinos could follow.

Ultimately, the casino market can only recover once the pandemic is completely under control. Temporary periods of activity and repeated closures will not help operators towards a return to growth. Although I’m certain the situation will eventually improve for the US casino industry, now is the time for the Government to take control of a crisis that has the potential to spiral out of control. Perhaps Miller’s suggestion of a national policy is one way to do just that.

“IN JULY, AN ABC NEWS/WASHINGTON POST SURVEY FOUND THAT 64% OF AMERICANS DIDN’T APPROVE OF TRUMP’S RESPONSE TO THE CRISIS. WITH APPROVAL LEVELS DOWN 13% FROM MARCH, IT’S CLEAR THAT A NUMBER OF AMERICANS ARE UNHAPPY WITH THE US GOVERNMENT’S COVID-19 POLICY”

COMMENT

TIM POOLE

GVC: THE NEXT CHAPTER After appointing a new CEO, GVC Holdings’ new dawn was welcomed with a sharp fall in share value. Tim Poole assesses what’s next for the industry giant

There’s still time for GVC Holdings’ share price to reach £20 ($26.27) by 2023. That’s the goal Kenny Alexander outlined during his CEO Special interview in the January/February 2019 edition of Gambling Insider. But when you consider GVC stocks were priced around £9.50 at the time of the interview, a current share value of circa £7 pits the odds against that £20 target being met any time soon.

Naturally, GVC has been hit by the coronavirus pandemic.

A firm with such a large retail presence can hardly report the same financial results as Evolution Gaming or Betsson Group, who posted record quarters as more players turned to the online sphere. GVC’s online revenue itself grew for H1, although there was disappointment when its overall revenue dropped 11% year-on-year.

And yet GVC’s stocks were on the way down well before the pandemic. In August 2018, shares peaked at £11.32, a price well on track for Alexander’s ambitious five-year target. But then began a decline: by March 2019, shares had more than halved to £5.19. Retail struggles were already a prominent theme, due to restrictions on fixed-odds betting terminal stakes. Although GVC stocks showed a steady subsequent recovery, shares were as low as £3.23 in March, its low point during the pandemic.

So it follows that shareholders at this behemoth operator, a procurer of several huge M&A deals, would seek change at the company. In July, Alexander promptly left after 13 years as CEO, having sold just under £20m worth of GVC shares himself in March 2019. We may never be privy to whether the decision was mutual, Alexander’s own or the demands of the GVC board. But it’s likely a change in direction was sought by more than one party.

That’s not to detract from Alexander’s legacy, of course. Guiding a company barely registering at the top end of the gaming industry towards a place in the FTSE 100 shows Alexander for what he truly

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is: a shrewd operator. He cares little for what detractors will make of his comments. He is confident and outspoken, and, in plain English, he’s a success. But even under Alexander’s stewardship, GVC had plateaued over the last couple of years. So where next for the business?

That’s certainly a question for new CEO Shay Segev, a well-respected executive who previously served as Alexander’s COO. His focus on technology, and the digital side of the business, was instantly obvious as he appointed Sandeep Tiku in his old COO role. (Tiku started as IT director and moved up to CTO.) As well as a stagnant share price – stocks fell sharply on the morning of Alexander’s departure – Segev will have to acclimatise to things being a little different at GVC in the coming months.

On a smaller scale, the operator has terminated its partnership with affiliate Oddschecker across all brands. No details were given on the decision except that terms could not be agreed; it will be strange not to see the likes of Ladbrokes and Coral’s odds listed with one of the UK’s biggest affiliates. But on a larger scale, a more pressing matter for Segev will be increased public scrutiny on GVC’s past dealings in Turkey.

HMRC recently confirmed it will investigate the operator’s former Turkish-facing business. Indeed, in July, HMRC said it will examine “potential corporate offending” following the launch of an enquiry in November, which related to the processing of payments for online gambling in Turkey. This news broke shortly after Alexander’s departure and prompted a further fall in GVC shares.

Speculation about a link between all these events is not for these pages, but already, GVC has itself felt it necessary to officially comment on reports in the Times linking the HMRC investigation to the ongoing Wirecard saga. The German payments processor, Wirecard this year collapsed after being caught up in an international financial scandal, owing creditors no less than £3.2bn. In response, a GVC statement said: “The board can confirm it has no evidence of any link between the HMRC investigation and the payment service providers mentioned in the newspaper report.”

But whatever transpires, an eventful next chapter awaits for both GVC and Segev.

“EVEN UNDER ALEXANDER’S STEWARDSHIP, GVC HAD PLATEAUED OVER THE LAST COUPLE OF YEARS. SO WHERE NEXT FOR THE BUSINESS?”

COMMENT

EZRA AMACHER

MIDDLE MANAGEMENT Whether online or on the ground, the Midwest is gaining on the sports betting glory. Ezra Amacher looks into what this means as the US builds momentum

A Midwestern rivalry is brewing that may be just as fascinating as Las Vegas vs. Atlantic City. Indiana, Iowa, Illinois and Michigan have all entered the sports betting ring in the last 12 months, all seeking to win over crazed sports fans from America’s heartland. So far, Indiana has raced out to an early lead with help from some fortuitous bounces and an unforced error by its eastern neighbor.

When Indiana launched regulated mobile sports betting in October 2019, it joined New Jersey as the only states to allow bettors to register accounts remotely without needing to step into a brick-and-mortar sports book. That decision turned out to be a brilliant one, especially in light of the coronavirus outbreak that closed all American casinos from mid-March to early June.

Indiana, like the rest of states with legalised sports betting, suffered through the early months of the pandemic but by July had recovered to near pre-coronavirus levels, taking in $71m of handle for the month.

In less than a year, Indiana sports wagers hit the $1bn mark despite the basketball-obsessed state missing out on March Madness.

During the first five months of Indiana’s venture into mobile sports betting, the state faced little regional competition. Iowa, which launched mobile sports betting in August 2019, struggled to carry its momentum from last fall into 2020, then saw sports wagering plummet amid the pandemic. In July the Hawkeye State generated $23m of sports betting handle and $2.2m in revenue.

Meanwhile, Michigan and Illinois planned to roll out sports betting just in time for March Madness, but the coronavirus put an abrupt hold on those plans. Michigan’s launch was strictly brick-and-mortar, and the state is still working towards giving the green light to mobile wagering. Ideally, Michigan’s mobile product will be up and running by the first month of the NFL season.

Then there’s Illinois, where Governor J.B. Pritzker made what might be one of the biggest mistakes of the post-PASPA era. In June, Pritzker issued an executive order allowing for remote sports betting

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registration but a month later allowed that order to expire. As of mid-August, bettors in Illinois must register an account at a brick-and-mortar sports book, which is no easy feat; the DraftKings sportsbook at Casino Queen in East St. Louis, for example, is on the opposite end of the state from Chicago.

For a Chicago resident looking to lay down a wager, driving across the state line to Indiana is quicker and safer than trekking down I-55 to register an account at a land-based casino. Until Chicago has its own casino, sports fans of the country’s third largest metro are stuck in a pickle made worse by the ongoing pandemic.

None of this had to be so complicated. Indiana laid down a perfect template for states like Illinois and Michigan to replicate, where customers could register sports betting accounts from their mobile devices. Michigan lacked the proper infrastructure to launch mobile sports betting back in the spring, but still has time to authorize remote registration. As for Illinois, it appears bettors already lost their chance from registering at home.

“Now that the state has entered phase 4 and casinos have resumed in person business, there is no longer a need to suspend provisions of the law that require in person registration,” said Pritzker’s press secretary, Jordan Abudayyeh.

Indiana will continue to reap the rewards of being the only Midwestern state with remote registration. The Hoosier State also benefits from the success of the Indiana Pacers, who are competing in the NBA Playoffs. There’s been pent up demand for basketball wagering since March, and if the Pacers make it out of the first round, expect strong August numbers.

The fall months looks less certain for the entire Midwestern region given the news of the Big Ten opting out of a college football season.

Indiana, Iowa, Illinois and Michigan may be rivals on and off the field, but they all share a strong attachment to the gridiron. The NFL season must be played for any chance at a profitable closing stretch to 2020.

ISSUES

NUMBER CRUNCHING

Facing facts As the pandemic looks to be easing in some areas of the world, Gambling Insider assesses the damage by looking into company revenues, market performances and player behaviour across the globe

Scientific Games and IGT, two of the largest gaming suppliers in the US, have seen revenue drop for the past two quarters as the pandemic impacted customer demand (US$ million) Source: Company reports

Betsson’s sportsbook and casino revenue demonstrates

a shift towards online GRAPH 1GRAPH 3 casino in the past two quarters GRAPH 2 with the cancellation of live sports (SEK million)

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e 20 4 6/ 02 /0 0 2 11 /2 6 /0 0 04 5/2 e /0 0 23 28 5/2 20 /0 0 21 5/2 /0 0 14 5/2 2e /0 0 02 07 4/2 2 /0 0 30 4/2 /0 0 e 23 4/2 021 /0 02 16 4/2 /0 0 09 4/2 e /0 0 20 02 3/2 20 /0 0 26 3/2 /0 0 19 3/2 9 /0 0 01 12 3/2 2 /0 0 05 2/2 /0 0 27 2/2 /0 0 20 2/2 /0 0 13 2/2 /0 0 06 1/2 /0 0 30 1/2 /0 0 23 1/2 /0

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GAMBLINGINSIDER.COM

21

ISSUES

TAKING STOCK

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

Tabcorp (Currency AUD)

(Currency USD)

5

12.00

4.5 10.00

4 3.5

8.00

3 2.5

6.00

2 4.00

1.5 1

2.00

0.5 0

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ly

Au

Ju

ne Ju

ay

ril

Six-month high – 3.65 (10 June) Six-month low – 2.18 (22 Mar)

Six-month high – 9.74 (2 Mar) Six-month low – 1.65 (18 Mar)

Newgioco Group

Penn National Gaming (Currency USD)

Currency (USD) 5

60 55

4.5

50

4

45

3.5

40

3

35

2.5

30

2

25 20

1.5

15

1

10

0.5

5

0

GAMBLINGINSIDER.COM

Six-month high – 56.58 (20 Aug) Six-month low – 4.52 (18 Mar)

st gu Au

ly Ju

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ay M

ril Ap

ch ar M

st gu Au

ly Ju

ne Ju

ay M

ril Ap

M

ar

ch

0

Six-month high – 4.04 (30 April) Six-month low – 1.15 (23 Mar)

22

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ar M

Au

Ap

ch

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M

ar

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0.00

ISSUES

TAKING STOCK

IGT

Melco Resorts Currency (USD)

Currency (USD) 20

12

18

10

16 14

8

12 10

6

8

4

6 4

2

2

st

Ju

gu

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ay

Au

ril

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Au

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ch

0

0

Six-month high – 11.62 (08 June) Six-month low – 3.79 (18 Mar)

Six-month high – 19.98 (11 Aug) Six-month low – 11.00 (3 April)

Sands China

SkyCity Entertainment Group (Currency AUD)

(Currency HKD) 40

3.5

35

3

30

2.5

25

2

20

1.5

15 1

10

0.5

5

st gu Au

ly Ju

ne Ju

ay M

ril Ap

ar M

st gu Au

ly Ju

ne Ju

ay M

ril

ch ar M

Ap

Six-month high – 34.35 (25 Aug) Six-month low – 26.15 (19 Mar)

ch

0

0

Six-month high – 3.08 (04 Mar) Six-month low – 1.23 (22 Mar)

GAMBLINGINSIDER.COM

23

ISSUES

FANTINI RESEARCH

EARNINGS IMPACTED BY COVID

US gaming companies were hit hard by COVID-19 in the second quarter, with earnings down near or more than 100% for most companies.

REITs and online companies showed resilience, as casino operators continued to pay rent and more gamblers bet money online.

The general consensus in the second quarter among casino operators was that demand and results were better than expected, with those in regional gaming markets having stronger results than those in destination markets.

Below are some highlights following first quarter earnings by company: • AGS is focusing on turning slots back on while working with customers to emerge from COVID-19 stronger in the long term.

The company expects EBITDA to be break even in Q3 after it was break even in June.

• Boyd highlighted stable results continuing into July from June despite a second wave of virus cases popping up in some states. EBITDAR and EBITDAR margins continue to be strong despite capacity constraints.

• Caesars Entertainment, formerly Eldorado Resorts, noted current operating trends and environment is stable and the company will continue to benefit from those trends. Mid-week occupancy at properties has been running at 50% while weekend occupancy has been 70%.

• Everi expects to be back at full strength in no time based on strong demand from players, casinos continuing to reopen across the US, and the continued strength of fintech. The company expects positive free cash flow and improved EBITDA in the third and fourth quarters.

24

SECOND QUARTER HIGHLIGHTS REVENUE

YEAR-OVER-YEAR % CHANGE

EBITDA

YEAR-OVER-YEAR % CHANGE

Accel

$379,000

-99.63

($8.745m)

-141.92

AGS

$16.788m

-77.46

($1.153m)

-103.22

Boyd

$209.859m

-75.19

$16.122m

-93.06

Caesars

$126.470m

-80.14

($10.383m)

-106.29

Churchill Downs

$185.100m

-61.22

$30.100m

-86

Everi

$38.715m

-70.15

$3.303m

-94.84

Full House

$14.511m

-65.17

($1.385m)

-132.58

GLPI

$261.968m

-9.35

$246.860m

-5.37

GAN

$8.323m

+99.4

$1.881m

N/A

$75.974m

-69.37

($5.661m)

-111.36

$637.484m

-48.34

$168.406m

-62.88

$98m

-99.99

($547m)

-143.21

Melco Resorts

$175.850m

-87.98

($179.636m)

-143.09

MGM

$289.809m

-91.01

($492.162m)

-164.39

MGM Growth

$194.342m

-13.92

$240.348m

+3.00

$15.156m

-75.85

$490,000

-97.03

Penn National

$305.500m

-76.91

$24.5m

-93.97

Red Rock Resorts

$108.470m

-77.54

($17.251m)

-114.97

$539m

-36.21

$121m

-63.88

$165.6m

+40.22

$59.6m

+79.52

$28.924m

-79.80

($10.723m)

-122.60

$257.902m

+16.83

$248.413m

+20.45

$85.698m

-94.83

($332.897m)

-169.27

REVENUE

YEAR-OVER-YEAR % CHANGE

EBITDA

YEAR-OVER-YEAR % CHANGE

COMPANY

Golden Ent IGT Las Vegas Sands

Monarch Casino

Scientific Games SciPlay Twin River VICI Properties Wynn

GAMBLINGINSIDER.COM

COMPANY

Scientific Games SciPlay Twin River VICI Properties Wynn

• Gaming and Leisure Properties noted the importance of gaming, saying strong regional tenants and operations have resulted in continued rent payments despite capacity constraints and impacts related to COVID-19.

• IGT noted that cash flow and liquidity remain top financial priorities and highlighted $200m in cost savings, which helped the company mitigate the effects of the virus in the quarter.

• Las Vegas Sands said that a recovery will depend on the lifting of travel restrictions in Macau and Singapore and the return of convention business in Las Vegas.

$539m

-36.21

$121m

-63.88

$165.6m

+40.22

$59.6m

+79.52

$28.924m

-79.80

($10.723m)

-122.60

$257.902m

+16.83

$248.413m

+20.45

$85.698m

-94.83 ($332.897m) FANTINI RESEARCH

-169.27 ISSUES

YEAR-TO-DATE HIGHLIGHTS COMPANY

REVENUE

YEAR-OVER-YEAR % CHANGE

EBITDA

YEAR-OVER-YEAR % CHANGE

Accel

$105.607m

-47.63

$6.095m

-85.01

AGS

$71.101m

-51.81

$23.348m

-67.57

Boyd

$890.384m

-46.77

$190.840m

-61.68

Caesars

$599.539m

-52.9

$92.164m

-71.01

Churchill Downs

$438.000m

-41.03

$85.400m

-70.51

Everi

$152.024m

-40.02

$55.580m

-55.67

$45.364m

-45.44

($2.634m)

-133.64

Full House

• Melco Resorts is seeing a return to normal operations with the easing of travel restrictions in Macau, the reissuance of visas in China and the resumption of operations at satellite casinos in Cyprus.

GLPI

$545.450m

-5.44

$505.673m

-2.62

GAN

$15.995m

+16.2

$4.544m

+25.8

$283.131m

-41.97

$24.633m

-74.93

IGT

$1.578bn

-33.66

$476.919m

-45.2

• MGM Resorts plans to be the most geographically balanced company with half of its revenue from Asia, 35% from Las Vegas and the remaining from regional markets. iGaming and sports betting will be the big push in the near term.

Las Vegas Sands

$1.880bn

-73.07

($110m)

-104.04

$987.025m

-65.34

($124.709m)

-115.49

$2.543bn

-60.26

($197.070m)

-113.03

$403.912m

-5.89

$474.438m

+3.75

Monarch Casino

$66.167m

-45.5

$61.687m

+1.82

• Scientific Games highlighted strong liquidity of more than $1.1bn and cost reductions of more than $150m in the second quarter, which should result in permanent savings as operations ramp back up.

Penn National

$1.422bn

-45.43

$276.800m

-65.31

Red Rock Resorts

$485.858m

-47.75

$57.049m

-78.08

Scientific Games

$1.264bn

-24.85

$321m

-51.58

SciPlay

$283.900m

+20.04

$94.400m

+62.19

Twin River

$138.072m

-47.67

$11.338m

-87.58

VICI Properties

$512.903m

+17.97

$493.117m

+21.67

$1.039bn

-68.61

($328.226m)

-133.65

• Wynn said it can break even on EBITDA in all markets despite limitations on capacity and amenities, coming on operating cost cuts and improved results during the reopening period.

Golden Ent

Melco Resorts MGM MGM Growth

Wynn

fantiniresearch.com

GAMBLINGINSIDER.COM

25

FEATURES

BIG QUESTION

BIG

Are Electronic Table Games (ETGs) the future of table games and has this period of online advancement accelerated the process for the need of ETGs?

question ARUZE GAMING

Fred Nunez, global product management director at Aruze Gaming, discusses why the coronavirus pandemic has led to an increase in appetite for ETGs, with both casino operators and customers

Fred Nunez

26

GAMBLINGINSIDER.COM

Our investment in electronic table games (ETGs) makes it clear we believe they are the future of table games, and this moment makes that clearer than ever.

As the current situation forces businesses and families to shift to remote work and online classrooms, we find ourselves in the middle of a rapid acceleration in the adoption of various technologies. More than ever, the average person, and therefore the average player, has become accustomed to integrating advancements in technology into their everyday lives.

At the same time, this moment has shown us technology can’t fully replace in-person interactions as we continue to seek safe ways to engage. All of this leads to a desire to find entertainment that really stands out, but also maintains a sense of familiarity.

A primary argument against ETGs has always been player acceptance. When Aruze launched Shoot to Win Craps some 10 years ago, this was a primary customer concern. However, players took to the game quickly and fiercely. Its continued

success is due in large part to the player interactions, both between players and with the machine. We have heard from players for years that hitting the big red button and the calls to “shoot the dice” and “press the button” are some of their favourite parts of the game.

Technology has also allowed more physical elements to be added back to ETGs, such as the live dice in Roll to Win Craps, and the physical wheel and ball in Lucky Roulette. The ability to interact with these physical elements and to share that experience is part of what makes all table games so perennially popular. In some cases, ETGs provide an opportunity to enhance that interaction, where the technology allows dealers to focus exclusively on the player experience.

One of the timeliest advantages ETGs display over traditional table games are the safety aspects. TITO has always provided a sense of security around money; no more rail thieves in craps, for example.

But removing the chips and removing those touch points between casino staff

BIG QUESTION

and guests now provide a new level of security. Many machines already have social distance built in to their spacing as well, and most are easily modified for barriers or other methods to minimise disease spread. Just as some advancements towards online gaming come from players trying new ways to experience their favourite games, so does a push for ETGs. As players are ready to seek out familiar entertainment but are more receptive to experiencing that in new ways, ETGs are able to really shine. ETGs provide opportunities for unique merchandising on a casino floor. It may not be practical or fit with the aesthetics of a traditional pit to include a large overhead sign, but around an ETG, it’s natural. Sign packages alert players to new options, and their design adds a visual element of excitement.

We’ve heard from players over the years that they love being able to find Shoot to Win Craps by searching for its iconic sign. Even ETGs without signs incorporate lighting and video that isn’t possible with a

traditional table. From comet trails behind roulette balls to flames surrounding the table of a hot shooter, these elements increase excitement and enhance the player experience.

And all those bells and whistles are before the true innovation in game play afforded by ETGs. New side bets that reinforce the best parts of game play can be introduced. In Lucky Roulette, we added a side bet that’s triggered by a mystery revealed pointer on a single number spot on the wheel, building off of the wheel and number betting players already love. In Roll to Win Craps, we added the Hot Shooter bet, rewarding players after a long series of rolls, keeping that energy going.

Players have shown for years that they are increasingly comfortable with ETGs and as so much of the world shifts online and leaps forward technologically, they also begin to expect advances everywhere.

The casino floor should be no exception.

Fortunately, we’re ready to wow them.

FEATURES

“AS PLAYERS ARE READY TO SEEK OUT FAMILIAR ENTERTAINMENT BUT ARE MORE RECEPTIVE TO EXPERIENCING THAT IN NEW WAYS, ETGS ARE ABLE TO REALLY SHINE”

INTERBLOCK Interblock CEO John Connelly speaks on why he thinks the evolution of traditional table games to ETGs is sustainable and necessary for operators going forward

John Connelly

The context by which we find ourselves writing such articles today has become extremely challenging with such a diverse and unique set of circumstances within our industry.

Without question, we are seeing a transformation within the gaming sector for both players and casinos alike, due to the unforeseen state of affairs we now find ourselves in.

The demand for alternative forms of entertainment and the distribution methods by which society is embracing has become a daily discussion among executives globally. The impact of this situation has also found its way into the electronic table gaming (ETG) sector, thus causing a demand to modify existing technology and provide new methods of distribution. Social distancing in some format is quickly becoming a necessity to provide a perceived level of safety casino employees, players, regulators and operators are now requiring.

The real question will quickly become if this trend is a momentary lapse in the

psychology of the player base or a sustainable trajectory we should be investing more aggressively into.

When studying the current data, it does appear the demand from players is rapidly evolving as well as their willingness to try new forms of distributed gaming to be increasing by the month. This is not only evident in the online wagering numbers we are seeing in virtually every market around the world, but also in the propensity of players to try new technology.

This is where we are seeing a tangible shift in the willingness for players to engage in ETGs and fulfil their need to feel safe. Specifically, we are investing heavily in trying to address a cultural shift from traditional live tables, to now having to adapt quickly to something only a pandemic could have proliferated.

The evolution from traditional table games appears to be sustainable and logical on so many levels. The ability

GAMBLINGINSIDER.COM

27

FEATURES

BIG QUESTION

to reduce costs for operators who are facing one of the most challenging financial periods in history is a perfect marriage between ETG capabilities and operator demands. This combined with the social requirements players are insisting upon versus just a year ago also lends itself to a more automated and dynamic environment by which players can be entertained.

In reality, the abilities of ETGs are very similar to those a player is able to experience online. Players can enjoy multiple games simultaneously from a single play station but still have the ability to play in a solitary environment or socialise with others, when desired.

The evolution of gaming technology, whether at home or in a casino, has been and needs to evolve more quickly if we are to remain relevant as an industry.

The world is moving at a much faster pace and unforeseen catalysts, such as a pandemic, will only accelerate this trend more rapidly.

ETGs have coincided appropriately with this growing demand. Interblock’s product offering allows us to create a flexible alternative to traditional table

28

GAMBLINGINSIDER.COM

games in a socially responsible manner, while enabling operators to enhance theirbusiness with significantly reduced operating expenses. We have seen several major North American casino groups yield-up the minimum bets on their traditional live table games to $25, and push all lower denominations to a more automated format, such as a stadium or ETG Pit. Lower labour costs and the ability to drive more handle per hour have accelerated the momentum to create dedicated ETG sections across casinos floors as well. Interblock’s Stadium technology has seen double-digit growth in virtually all markets because of the operational flexibility this product offers, where fewer dealers can service dozens of players in a safe and social environment.

2020 is very likely to be a transformational year and those that have the vision, liquidity and ability to evolve quickly may see this year as an opportunity rather than a risk. For us, we’re working hard each day to support our customers and remain relevant as the world around us evolves.

“THE ABILITY TO REDUCE COSTS FOR OPERATORS WHO ARE FACING ONE OF THE MOST CHALLENGING FINANCIAL PERIODS IN HISTORY IS A PERFECT MARRIAGE BETWEEN ETG CAPABILITIES AND OPERATOR DEMANDS. THIS COMBINED WITH THE SOCIAL REQUIREMENTS PLAYERS ARE INSISTING UPON VERSUS JUST A YEAR AGO ALSO LENDS ITSELF TO A MORE AUTOMATED AND DYNAMIC ENVIRONMENT

BY WHICH PLAYERS CAN BE ENTERTAINED”

BIG QUESTION

FEATURES

SPINTEC GAMING TECHNOLOGY Renato Bicic, sales director at ETG supplier Spintec, on how electronic terminals offered a suitable solution for casino operators to adhere to new health and safety measures

Renato Bicic During the pandemic, Spintec as an ETG manufacturer experienced dramatic changes that are felt by both operators and consequently manufacturers. So, safety is the number-one priority for both. Depending on safety protocols, operators are doing everything in their power to ensure consumers can play safe without impacting on a great casino experience. Operators manage the floor space by putting Plexiglas barriers, hand disinfectant, and instructions for guests to social distance.

We currently see demand increasing with our gaming solution Aura as it’s a standalone terminal which is ensuring distance between people. It also provides a solution to live table games by connecting live tables to our terminals. Besides that, we are offering transparent Plexiglas barriers, which give protection and makes players feel safe.

We see standalone terminals connected to live games as a trend, which has grown in strength due to the COVID-19 pandemic.

To keep live games in operation is very challenging for operators because of social distance measures, disinfecting chips and playing surfaces, so a solution with a dealerassisted table and connection to standalone terminals has proven to be a great solution

for both players and staff. This also applies in the case of automatic and virtual games.

Additional value of our products is side bets, which are already part of our offering and provide increased attention to the game itself.

An example of this is our latest installation in Monte Carlo where the system is configured as eight Aura terminals connected to one standalone automated roulette wheel, and to French and American live roulette tables. We started this project to attract a wider audience to live roulette as it can be quite intimidating for new or less experienced players. When re-opening after casino closures due to the pandemic, it offered additional value as the number of people allowed on a live table was limited and our terminals offered a perfect solution continuing live games in line with social distancing protocols.

Generally speaking, the standalone, amphitheatre or stadium setup gives the operator lots of freedom in terms of setup with the number of machines and games. Our customers can choose out of a full package of table games like roulette, baccarat, blackjack, sicbo and craps.

We are unique in customising our products to any casino floor, which can be done fully in the style of the casino including customer branding. This was an important element for the classical and luxurious Grand Casino Monte Carlo. We like to continue to emphasise customising our products to our customers as we believe it gives great added value.

As we have installations across the globe, we do every project with excitement. The most exciting market in terms of potential is definitely the US. Even though we are going through challenging times, we are thankful to have concluded exciting projects in Monte Carlo and Switzerland, which are demanding markets and prove we have been recognised as one of the most dependable and innovative solution providers in the ETG segment. Our next step will be entering the French market through one of the SFMs. At the beginning of this year we have established our regional sales office in the Netherlands to increase our market presence in Western Europe, which was a great success despite the unprecedented times.

In the future, we see a development trend in terms of connecting ETG products to online games so that the same player can experience the same on the terminals in the casino as

well as anywhere else. We believe that making inroads into online gaming will further advance our land-based product.

The last point to address is that local market orientation is very important in the development of new games. We are currently working on specific games for the Asian market too, which is quite specialised and requires an in-depth approach.

“TO KEEP LIVE GAMES IN OPERATION IS VERY CHALLENGING FOR OPERATORS BECAUSE OF SOCIAL DISTANCE MEASURES, DISINFECTING CHIPS AND PLAYING SURFACES, SO A SOLUTION WITH A DEALERASSISTED TABLE AND CONNECTION TO STANDALONE TERMINALS HAS PROVEN TO BE A GREAT SOLUTION FOR BOTH PLAYERS AND STAFF”

GAMBLINGINSIDER.COM

29

Gambling Insider dedicates this section to in-depth interviews with some of the most influential CEOs in the industry.

We hear from SG Digital, IGT, Aristocrat, Incredible Technologies and AGS about how their US-facing strategies are top priority

COVER FEATURE

JORDAN LEVIN

MAKING YOUR OWN LUCK Jordan Levin, SG Digital CEO, speaks with Owain Flanders about his Midwestern roots and role in the development of Scientific Games’ digital arm “A lot of people always talk about luck,” explains straight-talking SG Digital CEO Jordan Levin. “But I am a big believer that luck is a fallacy. You make your own luck. It’s at that intersection between preparation and hard work.”

Throughout my discussion with him, it’s clear that it’s his unrelenting work ethic that sets him apart from others in the industry. It’s this dedication that’s seen him construct Scientific Games’ digital arm from the ground up over the past 14 years.

Levin has dedicated his entire career towards the growth of Scientific Games in one form or another, from joining WMS Gaming in 2006 to becoming SG Digital CEO in 2018. Within that time, he’s always held onto one aim – to get the absolute best out of himself and his team in whatever role he takes on.

It’s with this leadership that SG Digital has gone from strength to strength over the past few years. The supplier has taken significant market share in regions all over the globe, most notably the US, Canada and Europe. With its OpenSports and OpenGaming solutions, the company has rapidly built one of the most respected brands in the industry, both in sports betting and gaming. As we look forward towards the rest of 2020 and into 2021, it seems that

32 GAMBLINGINSIDER.COM

growth is far from slowing down, despite the significant obstacles that may have been thrown in its way.

So where did Levin’s penchant for hard work take root? Well, according to him, it’s something inherent in the populace of the Midwest. In his formative years, he grew up in the suburbs of Chicago. There, on the Southwestern shores of Lake Michigan, Levin says you won’t find the “flashy people” that you might find on the east or west coast of the country. “We’re heads down serious workers. Those are the values that I was brought up on and still hold true to today,” he says.

Levin admits that he may have “tripped into the gaming industry” by chance, but he developed a love for the business world from an early age. This passion saw him pursue an undergraduate business degree at the University of Texas in Austin, and as he lists off its many benefits (food, weather, business, culture), it’s clear that the Texan city still holds a special place in the executive’s heart today.

It was during this education that Levin also developed a love for history. He describes himself as a “history buff,” seeing its priceless value as a method for learning about the world in different contexts. As our conversation continues, it becomes apparent that this ability to learn from the past is something Levin has carried with him throughout his career. From the development of WMS Gaming to facing the current pandemic with SG Digital, the CEO has never been afraid to admit where he’s made mistakes.

This way, he believes he can take the best course forward while ensuring the trust of team members, employees and customers.

Although ultimately spending the majority of his career within the gambling industry, Levin didn’t actually join the sector until 2006, almost eight years after receiving his undergraduate degree.

Instead, he began his professional career in the world of corporate finance and investment banking. It was here in his early twenties that Levin learned the ropes of professional working life.

As he recalls this time, the executive describes one colleague who became a personal mentor, shaping his ideas on diligence and professionalism for years to come. Levin says: “In the early years it was the people that I worked with who inspired me. I can recall one individual in particular who wasn’t that much older than me, but who had achieved a very senior position in one of the investment banks I worked at. They really led by example in terms

JORDAN LEVIN

of how to work hard, pay attention to detail and show your clients the utmost professionalism.”

Although he hadn’t spent any time in the gambling or technology sector prior, Levin joined WMS Gaming as Business Development Associate in 2006 working his way up to Vice President of Business Development by around 2011– a company which would subsequently be bought by Scientific Games in 2012. The role allowed him to move from the world of banks and advisory firms into a gaming company environment. Although a mid-size gaming supplier at the time, WMS Gaming was growing, and Levin’s brief was to help the company secure deals to aid this growth, be it entering new markets or sealing new partnerships and business opportunities.

Through WMS, Levin had officially dipped his toe into the world of gaming, but he certainly wasn’t enamoured with the industry at the start. In fact, he thought it might be an interesting industry to spend a couple of years before returning to banking and private equity. “Now here I am 14 years later,” he laughs.

Throughout this period of his career, Levin worked for WMS Gaming and Williams Interactive in various roles before SG Digital. Although these companies are all now part of Scientifc Games, he explains how his career path has suited his restless personality. “I like change,” he says.

“People always ask me ‘how is it getting stuck inside a company for so long?’ It’s really such an evolving company.

COVER FEATURE

There are no similarities between the Scientific Games of today versus the WMS of 2007.”

As we discuss the challenges Levin has faced during his time in the industry, it’s clear that his career has been defined by two main company transitions: Williams Interactive and now SG Digital.

In 2012, Levin was tasked with forming Williams Interactive as a digital arm to WMS Gaming. There were a string of challenges inherent in such a significant business development. Prior to this point, WMS had 100% of its revenue in brick-and-mortar gaming, along with what Levin describes as an “old school” way of thinking.

Eventually, under Levin’s leadership, Williams Interactive was formed from scratch as part of WMS – a development he believes offered the best of both worlds. It allowed Williams to benefit from the existing brand, access to IP and channel, as well as the already solidified corporate structure while making a new name for itself.

Levin rates the excitement of this challenge as second only to his current experiences as SG Digital CEO, a journey that began with a period in charge of a much smaller team. After growing Scientific Games’ social business SciPlay for three to four years, Levin was asked to oversee an M&A team. This saw him transition from managing around 400 people to a team of just two others, a truly humbling experience.

Levin had just overseen the hyper-growth of SciPlay from a small start-up with up to 30 staff members to a large-scale company with hundreds of employees and multiple facilities.

“People should be who they are, whether they are presenting to a board, leading 8,000 people or meeting with the marketing team.

Authenticity, openness, passion and accountability measure up regardless of the team”

GAMBLINGINSIDER.COM 33

COVER FEATURE

JORDAN LEVIN

However, Scientific Games’ faith in Levin was not misplaced. The M&A team achieved quick results, completing eight acquisitions in just two-and-a-half years. Among this list of acquisitions was one company that would prove integral SG Digital’s technology in the future – NYX, owner of OpenBet. One year after the acquisition of NYX, Levin was appointed to the role of SG Digital CEO. His mission was clear: to oversee the integration of NYX and its OpenBet system. Levin describes this as the most exciting but challenging experience of his career to date.

“If you imagine driving a bus down the motorway and having to change the tyres at the same time, that was the situation when I came into the business,” he explains. “Initially we had to do a fair amount of realignments to make sure everyone was on the same page. We had to build a common culture and branding. We also had quite a lot of technology work to do, because at the time our platform was not known as the most dynamic, cheapest or fastest; those things needed to change.”

Despite the clear challenges this integration posed, you just have to look at the contrast between the SG Digital of 2018 and its current standing to recognise the successful work of Levin and his team. There has been significant development, not only in the technology behind the company’s products, but also in its ability to deploy those products. In 2018, SG Digital was able to launch around two new sportsbooks for customers each year. And now, the supplier is able to launch four times that amount per quarter.

In June this year, the company also launched a total of four sportsbooks, two of which were for European customers.

Whether managing a team of just two others or a whole business, Levin has undoubtedly developed an ability to lead throughout his career. So what is it that he thinks makes a good leader? One word – authenticity. “People should be who they are, whether they are presenting to a board, leading 8,000 people or meeting with the marketing team,” he explains. “Authenticity, openness, passion and accountability measure up regardless of the team.”

Levin admits his leadership style is often “tweaked” depending on the situation. In his current role, he oversees a team of 1600 employees with different cultures, ethnicities, attitudes and work styles. He believes that empathy is important when leading so many people, and to that end he fosters a culture of open debate, allowing each individual to have a voice regardless of their standing in the company. That being said, he expects his team to fall in line once an ultimate decision is made. “When the leader makes the decision that’s it,” Levin says. “Line up, support and deliver.”

This leadership style has generated solid results for SG Digital.

While the COVID-19 pandemic may have applied the brakes to sports betting, SG Digital’s growth has increased this year.

The supplier saw revenue of $73m for Q2 2020, a rise of 6% year-on-year, while AEBITDA increased by 67% to $20m. In fact, Scientifc Games’ digital and social sectors were the only ones to see continued growth during this period. According to Levin, this stemmed from very high growth in online gaming.

Instead of seeing the pandemic as limiting, Levin believes it made the perfect opportunity for further product innovation. In July, SG Digital launched OpenMarket, its sportsbook content

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market place. In a similar trend to the group’s OpenGaming platform, OpenMarket allows sportsbook suppliers to sell their content on one side, while operators are able to choose content on the other side, forming multiple supply deals with one point of integration. “That was an idea that we had always put on the back-burner,” explains Levin. “Then, as the pandemic was kicking off, we said it was the right time to push something like this forwards. And it’s working beautifully.”

As we look towards the future for SG Digital, it’s evident that the CEO’s ambition is far from being quelled. For online gaming, the supplier is aiming to build on its New Jersey success, where it currently holds more than a significant share of the casino market.

According to Levin, the company is on-track towards that same position in Pennsylvania and is poised to enter Michigan once the market is active, which is expected to be towards the back-end of 2021. This online gaming expansion also continues in regulated markets outside the US, particularly Canada, where the company holds an even greater market share than in New Jersey.

Despite the pandemic’s impact on sports betting, interest in SG Digital’s sportsbook content has also remained high across the globe. This demand has seen the company’s sportsbook delivery timeline stretch out comfortably into Q2 of next year. With the help of its government relations team, the supplier is also keeping a close eye on the further spread of regulated sports betting in the US. “If there is noise or activity, then we’re all over it,” insists Levin.

After 14 years working in leadership roles for the benefit of Scientific Games, Levin has accumulated a long list of achievements. But whether developing a start-up or securing acquisitions, he’s most proud of empowering team members to believe in themselves and get the job done. He says: “Don’t underestimate the role of culture in success. People have to believe that they can do something before they actually do it. That is part of leadership and vision. I have absolutely had the right team here, and I look forward to continuing to lead SG Digital on the journey we are on.”

“I like change. People always ask me, ‘How is it getting stuck inside a company for so long?’ It’s really such an evolving company. There are no similarities between the Scientific Games of today versus the WMS of 2007”

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RENATO ASCOLI

TOGETHER AS ONE Renato Ascoli, IGT CEO Global Gaming, speaks about the current state of business and decisions to ensure its competitive edge, including reorganising the company into two global business units.

WHAT WAS IGT’S TRAJECTORY GOING INTO 2020 BASED ON THE RESULTS OF 2019?

IGT started 2020 with notable business momentum. We had strong performance throughout 2019 and a solid Q1 2020 prior to the worldwide closure of casinos and gaming halls that commenced in March. In gaming, the strength of our core video portfolio, video poker sales, specialty market opportunities and the expansion of our PlaySports footprint in the US were among the many factors that fueled IGT’s 2019 performance. Also, IGT’s Lottery performance was driven by solid same-store sales growth, winning new lottery contracts, significant contract extensions, and the global expansion of digital lottery.

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HOW SOON DID YOU RECOGNISE THE SERIOUSNESS OF THE PANDEMIC? IGT recognised the gravity of the COVID-19 pandemic very early on. Given IGT’s global footprint, we had employees, customers and operations, particularly in Italy, experiencing the intensely negative impact of the pandemic well before the seriousness of the situation was fully understood and accepted by many. As a company, IGT took quick and decisive action and created six crisis management workstreams to address the following: employee protection, business continuity, customer engagement, cost-savings initiatives, scenario planning and liquidity/cash preservation. These proactive actions continue to protect the safety and well-being of our internal and external stakeholders and are fundamental to IGT’s solid balance sheets and positive free cash flow.

HOW HAS IGT BEEN ABLE TO ADAPT OVER THE LAST FEW MONTHS, ESPECIALLY IN Q2, IN TERMS OF INTERIM COST SAVING INITIATIVES? Over the last several months, IGT took decisive cost savings and capital avoidance actions, which are expected to drive more than $500 million in fixed and discretionary cost savings in 2020. In addition, we have identified over $200 million in structural cost savings, primarily related to certain strategic initiatives including eliminating duplicative functions and streamlining back offices; optimising global technology to re-focus on the value of accretive know-how; rationalising R&D investment based on risk versus reward priorities; and optimising our supply chain with a focus on design-to-cost efficiency.

The combination of disciplined, proactive business management and IGT’s diverse product portfolio and geographic reach contribute to our ability to successfully navigate the new normal. Despite all the change, uncertainty and unprecedented business conditions, IGT has maintained its focus on creating growth-driving solutions and services that return customer and shareholder value.

RENATO ASCOLI

CAN YOU DETAIL THE REASONING BEHIND IGT’S LONG-TERM STRATEGY ADJUSTMENTS TO REORGANISE THE COMPANY INTO TWO GLOBAL BUSINESS UNITS? There are several key reasons why IGT elected to reorganise into two distinct business units, Global Gaming and Global Lottery. First, this new structure positions IGT to provide greater responsiveness to customers and players. Second, we can increase IGT's effectiveness and competitiveness in providing products and solutions that address the opportunities of each market segment. The new structure also harmonises best practices across both B2B and B2C channels in each product category. And our new, more simplified structure reduces complexity and increases organisational efficiency to support IGT's intrinsic value.

CAN YOU DESCRIBE HOW LOTTERY AND GAMING WILL COEXIST? There is an inherent relationship that will forever exist between gaming and lottery not just within IGT, but also among operators and players. There are countless markets around the world where lottery and gaming operators coexist and they seamlessly collaborate to elevate the player experience, drive policy and innovation and maximise contributions to good causes.

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We strongly believe that among IGT’s most valuable assets are our relationships with customers and regulators.

This belief was the key driver of our decision to maintain the existing “IGT single points of contact” for these important audiences, despite our internal separation into two business units. Given the success and longevity of these highly productive and effective partnerships, we are confident that our accessibility and our conversations will continue to be as fluid as they were before IGT’s reorganisation.

Operationally, IGT will continue to benefit from operational synergies derived from our global scale and leadership in both gaming and lottery. For example, we’ll continue to manufacture gaming and lottery equipment in our Reno facility, and our creative teams will continue to draw upon IGT’s industry-leading IP portfolio that is backed by decades of innovation expertise across both segments. Even with the new business unit assignments, we are still One IGT. Our employees around the world are unified by the common goals of driving growth through unrivaled gaming experiences and returning value to our customers and shareholders.

WHERE ARE YOU SEEING EXCITING NEW OPPORTUNITIES IN EACH SEGMENT, ESPECIALLY GAMING WHERE YOU ARE LEADING?

“Operating with agility and having the ability to quickly meet the needs of our customers is a top priority and among the key motivations for our recent, company-wide reorganization”

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RENATO ASCOLI

We are in a unique moment where people are open to change and are readily accepting new technologies. This is evident by the volumes of people who rapidly turned to a variety of web-based services such as grocery delivery over the last several months. For a technology company such as IGT, this paradigm shift is exciting as it creates growth opportunities and an environment where technology adoption is primed to occur at an accelerated rate. Take for example cashless gaming and our Resort Wallet product. Pre-COVID-19, Resort Wallet was still viewed by some operators as a “nice to have” or a tech-advanced option for casinos looking to differentiate their offering. Today, cashless gaming technology is highly desired by operators for its ability to reduce the need for cash handling and to lower patron and staff dependency on in-person interactions.

I am equally excited about the tremendous work of our PlaySports team and the market opportunities in the sports betting segment. In the US, IGT has firmly established its leadership as a B2B sports betting technology provider, and with pending sports betting legislation in multiple states across the country, IGT is favorably positioned for continued sports betting growth. Similarly, our PlayDigital business is growing at a remarkable rate and we expect our customers and their players to harness that momentum to create new opportunities.

HAS THE PANDEMIC BEEN A SORT OF CATALYST TO FOCUS MORE ON DIGITAL?

implications that those conditions could prompt, we made a strategic decision to increase and prioritise employee communication during that time. While furloughed employees were away from IGT, we were diligent about offering opt-in communications from every level of the organization, whether in the form of executive emails, “Bright Spots” emails that outlined recent business achievements or Zoom-based, optional social gatherings.

Today, with employees back from furlough and approximately 75% of our global workforce working remotely, we continue to refine and expand our employee engagement programs. Our People & Transformation and Diversity & Inclusion teams are working hard to deliver a range of web-based engagement activities, trainings and professional growth opportunities.

I am immensely proud of the resiliency, passion, resourcefulness and adaptability of the entire IGT workforce around the world.

The pandemic has undoubtedly elevated the global relevance of and demand for digital gaming across gaming and lottery.

In Q2, IGT’s global B2B iGaming wagers were up 75% worldwide and they more than doubled in North America.

Our Italy operations saw a 33% increase in digital wagering despite the absence of sports betting. In addition, we saw 72% growth in iLottery in Q2. I anticipate the upward trajectory in digital gaming performance will continue, especially as players become increasingly more comfortable with digital forms of entertainment and as local governments identify new ways to expand and diversify revenue models. Similarly, with many US states actively defining their sports betting regulations and strategies, I believe the pandemic and the public’s comfort with mobile entertainment will help accelerate the rate at which states introduce digital sports wagering.

HOW ARE YOU PRIORITISING YOUR ABILITY TO STAY NIMBLE THROUGH ONGOING INDUSTRY AND GLOBAL UNPREDICTABILITY?

CAN YOU DETAIL IGT’S MANAGEMENT COHESION DURING THIS UNPRECEDENTED TIME TO ENSURE EMPLOYEE RETENTION AND PEACE OF MIND?

BASED ON THE SEVERE IMPACT OF THIS YEAR AND THE NECESSARY RESPONSES TO IT, HOW IS 2021 SHAPING UP AND WHAT OPTIMISM CAN YOU IMPART?

Employees are the heart of IGT. Protecting the safety and well-being of our employees has been and continues to be our top priority. We made some tough decisions early in the year to ensure the long-term financial health of the company and that included temporary salary reductions, the short-term furloughing of some employees and significant workload realignment. Realising the potentially negative engagement

We will continue to provide our company performance updates through our quarterly earnings reports and calls.

IGT’s future is bright. With a strong balance sheet, a diversified product portfolio, a resilient lottery business and the most passionate, experienced and skilled team in Gaming and Lottery, I am confident we’ll continue to execute on our plans and drive growth for our customers.

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Operating with agility and having the ability to quickly meet the needs of our customers is a top priority and among the key motivations for our recent company-wide reorganisation.

Additionally, IGT highly values ongoing, unfiltered communication with internal and external stakeholders.

We welcome the tough conversations from our employees, customers and vendors, as we believe those exchanges are essential for true alignment, collaboration and problem solving. Raising concerns, opportunities and success stories in real time enables the leadership team to address these topics with urgency, and to ensure that we are acting as swiftly as possible to address our customers’ unique needs.

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MITCHELL BOWEN

TESTING TIMES Mitchell Bowen, CEO, global landbased (gaming) business at Aristocrat describes the company’s culture of resilience and how it’s been the source of efforts to remain flexible and vital, as well as a reminder of the need to control what you can CAN YOU GIVE US A LITTLE BIT OF YOUR BACKGROUND: HOW YOU GOT INVOLVED IN THE GAMING INDUSTRY, WHEN YOU STARTED AT ARISTOCRAT AND YOUR GROWTH WITHIN THE COMPANY. I joined Aristocrat as a graduate recruit, after a short stint in the pharmaceutical industry. Aristocrat is the sort of business that can offer a career and not just a job because of our size, growth and our culture. We tend to take a long-term view and

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we invest in people’s development. I’ve worked in the US and in Australia, and held a range of roles including in product management, marketing, sales and general management.

Today, I’m the CEO of our global land-based or regulated business, and I also lead the transformation function for the Group.

CAN YOU GIVE AN INDICATION OF ARISTOCRAT’S TRAJECTORY GOING INTO 2020 BASED ON STRATEGIES IMPLEMENTED AND 2019 RESULTS? Clearly we’re in uncertain times, but we are seeing some encouraging signs coming through where customers have re-opened and visitation and sentiment is probably better than we would have expected it to be at this point. We came into this period operationally and financially in great shape to best serve our customers. We know that recovery will take some time, and there will be bumps along the road, but we have a lot of confidence in the resilience of the industry. We also believe strongly in our people and ability to help customers adapt and rebound.

HOW SOON DID YOU RECOGNISE THE SERIOUSNESS OF THE PANDEMIC, ESPECIALLY IN TERMS OF HOW IT WOULD AFFECT LAND-BASED OPERATIONS? We had been putting in place responses to the virus since late in the 2019 calendar year, particularly with respect to our operations in Macau and the Asia Pacific region, so we were monitoring it for some months before venue closures in western markets started. We were able to pivot virtually all of our land operations to working from home in a safe, supported manner within a couple of weeks of the first closure.

HOW HAS ARISTOCRAT BEEN ABLE TO ADAPT THROUGH MONTHS OF UNPREDICTABILITY AND PROPERTY CLOSURES, ESPECIALLY IN Q2?

From the beginning of the crisis, we’ve been very clear on our priorities and these have remained consistent throughout. Our

MITCHELL BOWEN

top priority, which we summarise as ‘people first’, is protecting the health and wellbeing of our people, customers and suppliers. This isn’t only physical wellbeing, but also mental, emotional, financial and all the other facets of wellness. We’ve brought forward a whole suite of initiatives on a global level, but we’re also seeing fantastic local and regional initiatives that add to this and also reinforce our culture. There have been so many impressive and moving examples of ‘people first’ in action across our business, which have been a silver lining to a very tough time.

We’ve also been very clear that we are protecting our strategic advantages in product, partnering customers in new and innovative ways and doing whatever is needed to ensure the land business is fit to fight as demand returns. This means we’ve chosen not to cut product development investment, and to ramp up our customer focus. While we’ve reduced cost and maximised liquidity and flexibility, we’ve done it in a very deliberate way that protects what differentiates our business and really positions us for a bright future.

IN TERMS OF YOUR OPERATIONS, WHAT THEMES OF FLOOR CONFIGURATION AND

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MODIFICATION ARE YOU SEEING NOW THAT CASINOS ARE OPENING UP AGAIN, AND WHAT IS ARISTOCRAT’S RESPONSE TO THOSE NEEDS? HOW ARE YOU ENGAGING WITH CUSTOMERS AND CLIENTS? We developed a customer program specifically in response to COVID-19 impacts called Aristocrat Assist, which we launched in key markets. It contains a variety of offerings to support our customers’ recovery, from marketing to exceptional service support and innovative commercial options. Every customer is different in terms of their needs and vision. Our takeaway is that we have to remain laser-focused on building strategic partnerships with our customers, and continue to be flexible and responsive.

CAN YOU DETAIL ARISTOCRAT’S MANAGEMENT COHESION DURING THIS UNPRECEDENTED TIME TO ENSURE EMPLOYEE RETENTION, HRM AND PEACE OF MIND? We’ve been very clear on our priorities and these have remained consistent. Taking a holistic approach to ‘people first’ and doing all we can to protect people’s jobs and

“We’ve been very clear that we are protecting our strategic advantages in product, partnering customers in new and innovative ways and doing whatever is needed to ensure the land business is fit to fight as demand returns”

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MITCHELL BOWEN

“It's been encouraging to see the resilience of our people throughout. They’ve done an exceptional job maintaining productivity while navigating a lot of changes to the way we do things.

We understand what we’re collectively capable of. It’s making us think more about the ways we can improve what we do going forward” wellbeing has been key. Being the only major supplier to emphatically say that we’re not going to cut investment in product, customer engagement, key talent and core capabilities has also helped. We have strived to be transparent about the challenges and the choices we’re making, and we’ve empowered local leadership teams to make decisions as close to our teams as possible.

We’ve also increased the cadence of communication and are frequently asking staff for their feedback. We’ve brought forward a number of global and local initiatives based on that feedback, so it’s very much a dynamic dialogue and we’re all learning and responding together in real time to these unique challenges.

DESPITE THE NEGATIVE IMPACT OF THE PANDEMIC, WHERE ARE YOU SEEING EXCITING NEW OPPORTUNITIES? We’re seeing some pretty encouraging early signs in terms of visitation and sentiment where customers have re-opened. From an Aristocrat perspective, we have a lot of confidence in the industry, and in our ability to invest and play a strong role in the recovery. Even without COVID-19, our land customers have been looking for ways to provide more unique and differentiating player experiences. As an example, we’re seeing growing enthusiasm for themed areas within venues that create exciting destinations.

Our Lightning Link Lounges and Buffalo Bars are great demonstrations of this, and we think there will be more demand and opportunities for innovations like this in future.

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It has also been encouraging to see the resilience of our people throughout. They’ve done an exceptional job in maintaining productivity while navigating a lot of changes to the way we do things. In more normal operating circumstances, some of the changes may have taken months or years to introduce, and I think another opportunity that’s come to light through the pandemic is understanding what we’re collectively capable of. It’s certainly making us think more expansively about the ways we can improve what we do going forward.

BASED ON THE SEVERE IMPACT OF THIS YEAR AND THE NECESSARY RESPONSES TO IT, HOW IS 2021 SHAPING UP AND WHAT OPTIMISM CAN YOU IMPART? We will continue to focus on what we can control, and do all we can to keep our people safe and highly engaged. We will keep investing in outstanding product portfolios, adapted to the emerging needs of customers, and we will partner with customers more closely and strategically than ever. While the path forward may be unpredictable, we have a lot of optimism about the future and that shows in the choices and commitments we’re making at this time. Aristocrat came into this period operationally and financially in great shape.

We have every intention of coming out of this period the same way; focused on our customers, and furthering our mission to “bring joy to life through the power of play”.

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ELAINE HODGSON

RECOGNISED ON MERIT From humble beginnings to a major player in the gambling industry, Incredible Technologies CEO Elaine Hodgson talks to Iqbal Johal about her intriguing journey with the amusement and casino games supplier “I got here in a very odd way,” admits Elaine Hodgson, CEO of Incredible Technologies. “I started the company 35 years ago with nothing and grew it, and now I’m the CEO of a major slot machine company because I hung on for 35 years.”

But Elaine Hodgson has done so much more than just hang on. To take a fledging software design company from her basement, to a leading coin-op and casino games manufacturer deserves enhanced credit. Although she wasn’t wrong that her route to the top of the gaming industry was unusual. So how did a university degree in biochemistry lead her to build a well-established casino and slots supplier from scratch?

“My degree led me to computer programming and I was doing programming at a chemistry job which I didn’t like, so I got an opportunity to work with a company that made amusement video games,” Hodgson tells Gambling Insider.

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“My thought was I would take that opportunity to learn more about programming then somehow go back to chemistry. But I liked the games industry so I never looked back.”

The forward-looking trajectory took Hodgson to an amusement games company that had to close its doors during the US economic hardship in the early 80s. But out of difficulty comes opportunity.

Hodgson and her partner Richard Ditton then decided to start their own company in 1985 and the Incredible Technologies you see today is a result of that.

1985 was a very different world than 2020. Long before the world of social media and Zoom calls, where a Commodore 64 was all the rage in the technology world, Incredible Technologies started out in game programming, specifically in the amusement industry, with its big break coming from producing pinball hardware for now defunct Japanese video game company Data East. However, it wasn’t until the creation of arcade game Golden Tee Golf that the company really started on the path to becoming a major player in the amusement game business.

“Once Golden Tee was successful, it cast our future for a while so we produced other games for the arcade world, then we developed a tournament system for Golden Tee, and that was innovative and propelled us forward also,” Hodgson explains.

And Golden Tee, with the use of trackball being its signature feature, has evolved from an arcade game now available as home units, as well as being an online game to play from the ease of your mobile phone.

In terms of building such a successful business from scratch, the Incredible Technologies CEO is adamant it would be a much tougher proposition in this day and age, compared to a less regulated era of the 1980s.

“Starting the business back in 1985 was a lot easier than it would be today,” Hodgson says. “There was a lot less regulation, HR rules, fewer taxes and the need for support to keep people going. So we were able to do a lot on our own before we got established. I think it’s a lot harder to start a new business today than it was then.

Obviously technology wise, it’s evolved a great deal over the years.

Back then, it was so new and very primitive; everyone’s seen videos of old games and that was the stuff we were doing. A company like mine could bootstrap itself up in that industry. There were also not many big name players in the video game industry back then, meaning there were avenues to the customers and the market that were easier. Now if you wanted to get established in the video game industry, you have to go through very major distribution aspects, which is a lot more political and harder. Back then, it was the Wild West and it was easy to get your stuff out, because it was growing rapidly and there was a lot of opportunity.”

ELAINE HODGSON

Hodgson comes across as very modest, and keeping grounded has been one of the key elements to her successes. As she says, starting slow and building trust, as she says, certainly reinforces that point, especially in terms of entry into the casino industry around 15 years ago.

While the company’s amusement business was, and still is, going strong, the cash flow from the arcade side allowed for entry into the gambling space, something that wasn’t possible in the early days. The supplier’s Magic Touch collection of Class III video slot poker and keno games helped propel it as a major player within the industry, but that wasn’t before mistakes were made in the early days. From speaking to Hodgson, it’s obvious those mistakes helped her and the company grow stronger, not to mention the opportunity of being a small fish in a big pond.

“We first started with poker which was really naïve, thinking we could take this really big market with one really big player in it, IGT, and make one that is better, faster, prettier,” Hodgson confesses. “When we tried to do something different, the players didn’t want that, which was a mistake we reeled back on. We studied the market a lot more and hired some sales people from the industry and studied the math a lot and emulated the games that were successful, instead of trying to make wild and crazy arcade-style games, which allowed us to make some

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headway. Ultimately I think customers gave us a try because they wanted to have some leverage against the big boys. They used us as leverage but ultimately, we earned them money and we had some innovations that they liked, and at this point in 2020, we’re definitely one of the small companies that they go to. Relying on new technology and not legacy hardware was an advantage to us.”

In a time where society strives for equality, it would be remiss not to acknowledge the lack of women in leadership roles in the gambling industry where there is still a disproportionate representation of women at the very top of the majority of technology or business companies.

But as one of the few women in a CEO position at a supplier or operator, Hodgson believes she benefited from starting the company with just herself and her partner, rather than dealing with the politics or competing with another person for the position.

While it’s a topic that deserves and needs attention, the Incredible Technologies CEO is more in favour of the right person for the required role, rather than a box-ticking exercise.

She is, however, certain that a change in attitudes to womens’ roles in society over the years means we will be in a position in the near feature where more women will be appointed in CEO roles, across multiple industries.

“Ultimately I think customers gave us a try because they wanted to have some leverage against the big boys. They used us as leverage but ultimately, we earned them money and we had some innovations that they liked and at this point in 2020, we’re definitely one of the small companies that they go to. Relying on new technology and not legacy hardware was an advantage to us”

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ELAINE HODGSON

Hodgson elaborates, saying: “I would love to see more women in the industry very much and I think you’ll see more of that because over the years, women have become more emboldened to have more high powered careers and have their own partners helping with daycare and such. There’s more drive to move that ball forward among women. There willbe more women in the next 10 years in high positions, including as CEO in all kinds of industries because right now there’s more women getting MDs and lawyer degrees than men. We just previously hadn't gone in that direction. I’m very much in favour of the right person in the right job. I don’t necessarily want to be given favoured treatment; I want to be here because my company has earned it and we are worth looking at as a competitor in this industry, and as a supplier, and as a very important part of the gaming community.”

It's obvious that Hodgson has very much earned the right to feature prominently among the very best CEOs the industry has to offer. And Incredible Technologies will need all her experience and expertise to navigate through arguably the biggest challenge to date, the coronavirus pandemic.

Even before the pandemic, manufacturers such as Incredible Technologies were finding the lead time of parts from Asia getting more arduous. “Monitors would have 16 to 20 weeks of lead time,” Hodgson says. “For a company like us, that’s a big deal as we’re smaller so having money out there while we’re waiting to get the monitors is a long time to have money at risk.”

That risk has been exacerbated by the pandemic, which has led to a longer production process, considering the added impact the coronavirus has had in Asia, which first broke out at the start of the year. Hodgson also believes the ongoing disputes between the US and China governments adds to the issues, making tariffs “onerous for all of us” but is adamant we’ll all get through these tough times.

While we all believe and hope that’s true, there’s no denying the current period is a serious challenge. With a prolonged period of casino closures leaving many of them struggling and decreasing the demand for products, selling land-based products has become even more competitive than ever. But of course, there are positives to which Hodgson never fails to allude. “What I would say about Incredible Technologies, is we are relatively small so we don’t have the same overheads or large staff that our competitors have, and didn’t put a lot of our staff on furlough layoffs, and kept everyone employed.”

Then there’s the accelerated shift to online, which is a trend Incredible Technologies has already made provisions for. Its Golden Tee golf staple games have migrated to the online world, with a mobile version, and the supplier also putting its best IP of slot machines online too. “We’re really trying to develop more online games now as well, as everyone else I’m sure is, which is the future in any case but the pandemic has really ramped that up,” Hodgson reiterates. “I think that online is inevitable. I’ve been through a couple of industries now which has seen a shift, just like when people used to go to the movie

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theatre en mass, but it became less so as they bought more DVDs and now online streaming. People are learning to get their entertainment at home.”

Aside from an increased focus to online games, what else does the future hold for Incredible Technologies?

The supplier is sticking with a space it has flourished in previously, the tribal market. A lot of its success in the early venture into the gaming industry stemmed from the tribal market and now the supplier has started to release Class II games to the tribes, with games on

“I’m very much in favour of the right person in the right job. I don’t necessarily want to be given favoured treatment; I want to be here because my company has earned it and we are worth looking at as a competitor in this industry, and as a supplier, and as a very important part of the gaming community” test in Indiana and Wisconsin. ”We’re going to move aggressively to the Class II market, which is going to take several years to maximise that potential,” Hodgson explains.

“I think the tribes are a very important part of this. They are on a different rule set in some cases than the States and they need this revenue very badly. Class II is good for them as they get different tax breaks because of that.”

Additionally, Hodgson adds that the supplier will continue to develop new products for Class III, and of course, more online games. After entering Canada and Mexico in recent times, Hodgson is keen to “explore some avenues into Europe and beyond” and increase Incredible Technologies worldwide expansion and recognition.

And recognition is all Hodgson seeks. From the humble beginnings to where Incredible Technologies stands now, that is fully deserved. As she says “I want people to say that’s the company that started at a place where there was large competition and they got through because they had really great products, really robust hardware and were really careful to do the right things.”

There’s no doubt that many are.

COVER FEATURE

DAVID LOPEZ

SINK OR SWIM From dealing with customers stuck in a lift, to approaching seven years as AGS president and CEO, David Lopez reflects with Tim Poole on the career lessons he’s learned, the mentors he’s had and the dreams he still harbours Even though AGS President and CEO David Lopez graduated from the University of Nevada, Las Vegas (UNLV), there is no question in his eyes where he learned the most during his formative years. “Honestly, the most education I got was from my mother and her business,” he tells Gambling Insider. “I learned a lot more from the family catering business than I did in any of my years of education. Working for my mom and the things she instilled, and for sure my military time, are what shaped me as the person I am today.”

This opening answer from Lopez, AGS President and CEO since February 2014, speaks to the exec’s down-to-earth character.

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It’s a quality he has always displayed speaking to Gambling Insider and one that no doubt helped win him the American Executive of the Year Award at the Global Gaming Awards Las Vegas 2019. It will have served Lopez equally well during the most challenging period land-based gaming companies have ever endured: the COVID-19 pandemic.

As Lopez speaks to us via video call from his home office, he discusses how he and others have taken paycuts to help reduce costs at AGS. He also speaks of helping the communities AGS is a part of and his dream of becoming a teacher before he retires. Notably, he laughs when recalling how small the issues discussed in his email inbox were on his first day as AGS President and CEO, representing just how far he has come.

Lopez’s career journey took an “indirect path” before leading him to gaming. Returning to New York after completing his basic military training in Fort Benning, Georgia, Lopez sought change – and a move to Las Vegas. Through his sister, one of the first 20 employees at MGM Grand, he was able to secure an interview at the casino hotel. Lopez jokes he was “basically sweeping floors in the warehouse” once accepted, before this evolved into an accounting position.

He duly realised he didn’t want any part of accounting.

Seeking a more customer-facing role, Lopez couldn’t initially get one in a casino, though he was hired at the Stratosphere.

Here, he learned the subtleties of customer service – with a side order of crisis management. “I got to work with customers every day, problem solving with angry customers who might have got stuck in the elevator shaft in the Stratosphere Tower for one or two hours,” he explains. “That made me a really popular person as I’m the one standing there waiting for them as the door opens, they’re dripping with sweat, angry, hungry and needing to use the restroom. And I’m like, ‘We know it was bad! I’m gonna escort you all to the restroom and wait for you outside.’”

In case you’re wondering, yes, Lopez confirms the rollercoaster would get stuck too. But it’s not as though these engineering malfunctions detracted from the first major experience of Lopez’s career. After all, the AGS President and CEO met his wife at the Stratosphere, marrying her in 1998, and learned plenty about face-to-face customer interaction. It was also through the Stratosphere that Lopez’s gaming-specific

DAVID LOPEZ

career truly began. The now-executive was encouraged by Tom Miller, the Stratosphere’s VP of marketing, to apply for a job at Shuffle Master, where he landed the role of marketing specialist.

Lopez would spend the next 13 years with the company, holding “at least” 14 different job titles. “Shuffle Master was a great place because they were growing extremely rapidly,” he reflects. “When I got there, Shuffle was doing well under $20m in EBITDA, maybe $16 to 18m. Under the leadership of Joe Lahti and Mark Yoseloff, that EBITDA number approached $100m or so by the time I left.” As Lopez describes, the Shuffle Master leadership didn’t prioritise external hires, instead being huge believers in “working you really hard, training you up and dropping you into a position.”

This policy was further embodied by Roger Snow, a journalist-turned-gaming developer who joined Shuffle Master in 2000 and – not unlike Lopez – held numerous subsequent roles. Lopez remarks: “I think as Roger Snow would say, the way we trained executives was we essentially put a weighted vest on them, put weights on their ankles, threw them at the bottom of a 10-foot pool and if they came up, they’re good.”

Lopez worked his way through to roles such as product specialist, product manager, director of product management, followed by VP and then senior VP of the same area. It was then that he was most impacted by Shuffle Master’s culture of promoting from within. “One day Mark decided he was going to get rid of the head of sales and said ‘hey David’s going to handle

COVER FEATURE

sales for a few months,’” he recalls. “How that evolved was Mark would never replace that position and say ‘we’ll just do this for a few years.’ I ran sales until we decided to hire a VP of sales, so the jobs just kept coming and coming.” By the time he left the company, Lopez had, by his count, run every operational department except accounting and legal. This included roles as COO, member of the board and interim CEO. About halfway through his career at Shuffle, the executive reached a crossroads, recounting a particular conversation with Yoseloff about getting his MBA. “I told Mark I’d like to be a president or COO one day. He said the best place for you to get your MBA is the university of Shuffle Master. You don’t need to go to UNLV to get an MBA, where they can’t teach you a fraction of what you learn from us on a daily basis. Foolishly, or wisely, I listened to him. Mark has yet to give me a piece of paper for that, by the way.”

Despite his quip, however, Lopez acknowledges this was the right decision. And when we pose him the hypothetical question of how different his career would have been had he pursued that MBA, he is unequivocal: “I think it would have been very similar. I would have just seen less of my family; my time with my kids and my wife would have been less than it was.”

There was one more significant pit stop for Lopez before joining AGS. Around a year after Gavin Isaacs’ appointment as Shuffle Master CEO, Lopez felt it was time to step aside. “I felt like at some point I was in his way. I’m like the old dude there,

“When you look at executives and CEOs, it's still far shy of where it should be for women participating in those roles and it’s a long way away for people of colour. We just don’t have enough; it’s far skewed from the population of the US. There can be a whole lot more outreach – and outreach doesn’t have to cost money”

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COVER FEATURE

DAVID LOPEZ

14, 15 years in the company,” says Lopez. “I thought things would be done a certain way and he was trying to put them on a rocket ship and send them forward (Shuffle Master ended up as part of Scientific Games in 2014).”

As luck would have it, the same day Lopez decided to pursue a new challenge, he received a call from a head hunter seeking the replacement CEO position at Global Cash Access (now Everi Holdings). Becoming company president, Lopez cherishes his experience at Global Cash Access because it meant he had “left the nest.” “It’s easy to look good when you work for a company that has a dominant position in the marketplace, the only shuffler provider in the US,” he comments. “Going to Global Cash Access, it was a good company and they had a great position, but it was a very competitive space and I learned a lot.”

It was here Lopez also developed “one of the greatest relationships” of his life, with Mary Beth Higgins – then CFO of Global Cash Access and now CEO of Affinity Gaming.

Alongside Lahti, Yoseloff, the late Tim Parrott (former CEO at Shuffle Master) and current AGS chairman David Sambur, these connections have stayed with Lopez. “The reality is we meet all these people in our career and those people start to become part of you as you move on in life,” he explains.

“In many of the decisions I make, I hear Mary Beth’s voice in my head. At times I hear Joe Lahti’s voice – Mary Beth’s voice is much louder; she’s yelling at me. Joe is talking to me calmly and firmly. Mark Yoseloff is yelling at me too and Tim Parrott is talking to me calmly. Tim Parrott is one of the greatest influences I ever had. Now at AGS, I have the benefit of working with David Sambur, who’s co-head of private equity at Apollo – so sometimes you’re just lucky.”

In February 2014, the executive was appointed AGS President and CEO. “[Almost] Seven years, boom, just like that,” he reflects. Instantly, he recounts the first company AGS acquired during his tenure, Colossal Gaming, “a very small purchase.”

Much larger in nature was the purchase of Cadillac Jack in July 2015 (for $370m in cash). In January 2018, AGS’ IPO was “obviously a heavy lift and a big achievement.”

But 2020 has brought a different type of challenge. In Lopez’s own words, “What do I get to add to the resume now, coronavirus CEO, right?” In March, an incorrect prediction of Lopez’s still sits front of mind for the executive. Upon hearing rumours some casinos on the Las Vegas Strip would close, he projected the entire Strip would shut down within two weeks.

“I was dead wrong: the Strip shut down within three days of me making that comment.”

Naturally, an immediate response was required. For the exec, maintaining R&D was one of the biggest priorities as, if AGS shut down R&D, Lopez feared falling “very far behind as a small vendor”. Despite examples of some new hires, there were paycuts across the organisation. Furloughs and redundancies became an inevitability, although AGS’ goal throughout was to “maintain our culture and caring about people.”

Along the way, some have left the supplier, with Lopez chuckling at a specific example of an AGS employee joining Disneyland. But Lopez is intent on “building a fence” around

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his team, keeping them employed, well-treated and as well-remunerated as circumstances will allow. “Everything’s an unknown,” he adds. “Ask me when we think we’ll be back to full pay, or something of the like, and you’re trying to use a crystal ball. People don’t normally use crystal balls.”

From a diversity standpoint, Lopez says the demographics at AGS are “very close” to those of the US, “almost precisely” reflecting the makeup of the American public. AGS also adopts an at-risk school, while it works with the Young Executive Scholar programme at UNLV. Here, Lopez is equally intent on protecting the communities AGS is part of as he is his with own employees.

But acknowledging he’s one of the more diverse candidates within gaming boardrooms, Lopez says the industry as a whole must do more. “I don’t think that’s a soft comment,” he affirms.

“When you look at executives and CEOs, it is still far shy of where it should be for women participating in those roles and it’s a long way away for people of colour. We just don’t have enough; it’s far skewed from the population of the US. There can be a whole lot more outreach – and outreach doesn’t have to cost money.”

But to maintain such efforts, and to fund the company more generally, Lopez admits AGS’ short-term goals have changed post-pandemic. First, the supplier needs to become EBITDA positive and then cash-flow positive again. For Q2, revenue fell 78% year-on-year to $16.8m, while adjusted EBITDA fell 103% to negative $1.2m. Lopez, though, maintains AGS could have achieved positive EBITDA had the company made more aggressive changes, not caring what the results of these changes would be on its team.

“Most people know 2021 is still going to be some haircut version of 2019,” he ponders. “That’s always the big question: when will we get back to 2019 levels? 2021 should be better for everyone than 2020. When we get into 2022 we’re back to normal levels.” Elsewhere, Lopez does see a “very small silver lining” in the form of a younger generation “increasingly visiting” US casinos: millennials who previously weren’t visiting.

“There’s nothing else to do – you can’t go bowling, you can’t go to the movies,” says Lopez. “One of the entertainment options is casino gaming. So some operators are seeing maybe a rise in millennials.”

Given global events in 2020, it’s understandable the coronavirus dominates Lopez’s short-term thinking. But how much has the uncertainty of 2020 affected the executive’s long-term goals?

Traditionally, it’s fitting to end a CEO Special interview by asking what the five-year plan is. Considering how different this year has been, however, that no longer seems appropriate.

But his personal goals remain unchanged. Indeed, there is no corporate jargon as Lopez describes his career-long ambition; it has nothing to do with share prices, earnings or quarterly investor calls. “I want to teach before I retire,” he declares. “That’s been what I wanted to do since high school.

It’s a great way to influence and mentor students. There comes a point where I’d like to be at a university somewhere, teaching business, having the opportunity to do things for other students that my teachers did for me. That’s my dream.”

GLOBAL GAMING AWARD LAS VEGAS 2020

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GLOBAL GAMING AWARDS LAS VEGAS 2020: THE VIRTUAL GUIDE CATEGORY SPONSORS

Save the date - October 27th Gambling Insider editor-in-chief and COO Julian Perry talks through the ins and outs of this year’s virtual ceremony for the Global Gaming Awards Las Vegas 2020

How will the first ever virtual Global Gaming Awards Las Vegas take place?

The good thing about virtual events is that the possibilities are endless.

There are so many platforms one can use to host an online event, so we’ve decided to stream the event via several of them. People will be able to watch the event for free on Gambling Insider’s LinkedIn page and on YouTube. The live stream will also be embedded on the GamblingInsider.com and GlobalGamingAwards.com homepages.

And if that’s not enough, delegates who have registered for the virtual G2E will be able to watch the Awards on G2E’s platform. The Awards will not clash with any of the keynotes G2E has planned to allow more people to tune in.

What can viewers expect from the ceremony?

We are keeping the virtual ceremony similar to the previous years’ events that everyone is familiar with. It will be a short 30-45-minute presentation, with Micky Swindale, CEO of KPMG Islands Group, announcing all winners.

We’ll also play a few video messages, which leading executives from the industry recorded specially for us. I won’t reveal more – to see who they are and what they said, you will have to watch the event in October. We are truly sad that we won’t be able to see

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the winners’ happy faces as we announce they have won an Award or take a group photo of all our proud winners. However, I can reveal that to compensate we’ll host an Awards after-party. As soon as the presentation ceremony finishes, we will try and connect with as many of the winners as we can live on Skype and give them the chance to say a few words, and celebrate their success with the rest of the industry. So make sure you stay tuned until the end.

How much planning have you had to do for this event?

We thought it wouldn’t be hard to plan the virtual Awards ceremony, as we don’t have to worry about setting up a room for 500 people, but it turns out there’s so much more one has to consider when hosting a virtual event. First we had to decide on which platforms we’ll use, then we had to find a nice venue Micky and myself can use for the presentation, before thinking of what cameras, lighting and other tech we need.

How different has preparing for a virtual event been?

I wouldn’t say it’s been very different as the event process is the same. We gather self-nominations and recommendations from our fantastic Nomination Panel.

Then after the Shortlist is finalised, we gather supporting statements from each

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nominated company so that our 100 Judges can vote. As soon as we open the voting, it’s all in the hands of KPMG to ensure fairness and transparency. What was different for us this year was we had to make a difficult decision back in March.

The COVID-19 pandemic hit just as we had started gathering self-nominations from companies, and all of a sudden the entire land-based industry just shut.

Governments ordered casinos everywhere to close, and naturally, suppliers also had to pause everything. No one knew how long this would continue so at one point we were debating whether we can even do the Awards. But then the situation started to improve and we noticed how innovative both operators and suppliers are, adapting so quickly to the new normal. In addition, we shouldn’t forget there’s a lot that the industry did between our last event in Las Vegas and the beginning of the pandemic, so we thought to ourselves we have got to reward all this hard work.

Plus, this year had been all about negative news, so with the Global Gaming Awards we wanted to change that, make the industry talk about something positive and feel proud of its achievements. We actually already did that – we ended up receiving thousands of nominations and as soon as we contacted shortlisted companies, they were all ecstatic and immediately started sharing the news on their social channels, and sending out press releases to announce their nominations, creating more buzz than we have seen in previous editions of the event.

GLOBAL GAMING AWARDS LAS VEGAS 2020

partners since the very first Global Gaming Awards, welcomed the idea of hosting a virtual presentation ceremony and did everything they usually do to ensure we can deliver another fantastic event.

What advice would you give the rest of the industry for producing a virtual event?

It’s hard to say as it all depends on the nature of the event. In our industry we have everything: awards events, educational events, exhibitions and larger events that combine all three.

As long as you know your audience and their expectations you should be good to move your event online. My only piece of advice would be to take your time planning it. When you run an in-person event for years it becomes easier and quicker to organise every year, because you know the routine and what you’ve done right and wrong in the past.

This year a lot of event organisers are running virtual events for the very first time. They might have the same concept and content as the physical ones, but the logistics are very different.

Virtual events don’t equal easier to organise events. The good thing is that people are very understanding of the fact we’re all learning how to replicate the real events in a virtual format, so if anything goes wrong it’s not the end of the world. We learn and make sure we are better prepared next time.

“WE THOUGHT IT WOULDN’T BE HARD TO PLAN THE VIRTUAL AWARDS CEREMONY, AS WE DON’T HAVE TO WORRY ABOUT SETTING UP A ROOM FOR 500 PEOPLE, BUT IT TURNS OUT THERE’S SO MUCH MORE ONE HAS TO CONSIDER WHEN HOSTING A VIRTUAL EVENT”

How supportive have the event's partners been through this process?

I can’t even begin to explain how supportive everyone has been – starting with our lead partner, BetConstruct, and all 12 category sponsors. They were extremely understanding when we told them that event will be virtual this year. Not only did they take the news well, they were actually excited about it, as more people from their companies and the rest of the industry will be able to watch the event. A lot of our sponsors have been supporting the event for many years now, without any guarantee of winning an Award; they support us simply because they see a fair and prestigious event and want their brand to be associated with it.

The same goes to our 100 Judges, all senior executives who are now busier than ever after everything that’s happened this year, but they still supported us and found time to vote. Without their contribution the event wouldn’t be possible. Last but not least, KPMG and G2E, who have been our

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OFFLINE CASINOS

THE OFF CHANCE

Paul Sculpher, co-director of Gaming Recruitment Solutions, looks into the role of offline casinos in a rapidly evolving gaming landscape towards digital solutions, and how it’s affecting employment trends If we go back roughly a million years to January 2020, you’d be hard pressed to find anyone with a positive outlook for offline casinos as an industry sector. Sure, there are exciting opportunities in places like Japan (which also seems to have beengoing on for aeons) and Korea, but in most other markets, there’s very little reason for optimism. The combination of increasingly exacting AML standards, a more progressive Responsible Gambling regime and the rise of online gambling combined to make offline casinos very much the old hat of the industry, compared to the shiny new toys of online in all its forms.

Fast forward to today, and there’s obviously another giant spanner in the offline works in the form of COVID-19 damage, which, apart from the global misery it has caused, has laid low virtually every offline casino operation in the world. In some jurisdictions, casinos

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have re-opened, with trade generally reported as various degrees of “not as good as it was before”, but plenty are still closed. There’s some cause for optimism once sites do re-open though. One of the earlier operations to restart was in the Czech republic, and I spoke with Colin Stewart, the director of gaming (Europe) for FEC, the owners of casinos in that country.

He was cautiously optimistic, saying “we lost out on three months of revenue but we are now back to last year’s numbers or better”.

He is aware that they’re not out of the woods though, adding, “We’re on a bit of a tightrope.

If any of the Czech, German or Austrian borders close, we will struggle as we depend on cross border trade.”

Plenty more operators are on tenterhooks with regard to the eventual re-opening – or in some cases, fearing a second closure of their facilities. In the UK, as many of you will know, we were all set for a re-opening

on 1 August (having previously hoped to be included in the raft of re-openings on 4 July) but an 11th hour U-turn put them back in limbo until 15 August.

The industry trade body is quite rightly infuriated over both the blatant unfairness of the situation (given the hard work and investment operators have put in to make their sites as safe as possible, and you could argue safer than pubs and restaurants) as well as the paralyzing unpredictability. Comments such as those from the Welsh first minister – laughably likening casinos to nightclubs and simultaneously demonstrating that he hasn’t been in a casino for 15 years or more – aren’t helpful either, and further underline how the casino trade, for all its employment and tax revenues, isn’t really on the political radar.

Huge sums will have been wasted on food and drink stocks, which will spoil, and bringing staff off the government funded furlough

OFFLINE CASINOS

scheme only to plop them back on it. The operators’ and BGC’s cries of how much furlough money is being wasted, as well as how much gaming duty is being foregone by the government, don’t seem to have made much difference as yet, but the casino industry isn’t one that’s high on the list of public perception to protect. What about the croupiers?

The threat of mass job losses is hardly an empty one, however, with at least six casinos already closed permanently, and job losses across the business reportedly already into four figures, with the major operators taking pre-emptive action both with site closures and with stripping out staff numbers from sites they’re hoping will re-open. More delays will mean more closures, and it’s hard to imagine that many countries will get away without some job losses in their offline business.

It’s not the traditional target for many people at gaming staff level, (including me when I was dealer) but cruise ship casinos aren’t a re-assuring backup option any more either.

While there are some gentle stirrings in the industry – I note that MSC cruises are re-starting on a very limited basis in mid-August – there have of course been mass redundancies and contract cancellations, and no doubt the first wave back will both involve sharply fewer staff than before, and be focussed on team members who have been regular employees for years.

CHANGING ROLES So how does this affect recruitment? Well, while GRS Recruitment had moved into sourcing staff as well and management and exec roles, the staff side is currently pretty well doornailed, and we don’t expect that to change any time soon (except in new jurisdictional opportunities like Ukraine for example). As far as the rest of the industry goes from a recruitment point of view, while it isn’t quite business as usual, there is always churn at management levels, and whenever there is change there will be recruitment needs.

With other imminent COVID-19 related changes in mind, we know of at least one large casino company planning to do away with the concept of a head office at all, which, given the surge in take-up and effectiveness of working from home, makes complete sense. Office manager might not be a job to be training for in the future if there aren’t going to be any offices, but having just filled one MD role last week for a major UK operator and with another in process, it’s clear the wheels keep on turning. A change in environment brings a change in management priorities, and often a change in personnel.

We’ve certainly noticed a shift in the middle management roles within casinos – shift managers and site GMs – leaving the industry.

Obviously right now that’s a tough road to

travel, with the rest of the hospitality sector in barely better shape and re-training required to switch sectors. It’s not quite a carrot and stick situation, with the perceived throttling of the gambling industry and devaluing of the job by those legislative measures to reduce the role to constant interactions as the stick, and redundancies and lack of future opportunities the bigger, scarier stick. But it’s a clear trend, with some very talented people being part of it. I’ve written previously about the quality of many casino operational managers and their value in other industries, but I guess if you’re in that cohort and looking for a change, now’s the toughest time of all to be looking to break into a new sector, whether online gaming or something totally different.

PLAYER TRENDS Speaking of online, while migration of employees from offline to online has historically been limited, there’s the question of migration of players, given there haven’t been any offline options in which to bet. I spoke with Alun Bowden, senior consultant at Eilers and Krejcik Gaming, about how this has impacted the online sector. “There’s been a high volume of new player acquisitions post-lockdown, which is now tailing off as we head into August, and the age profile of these has been trending older than you’d typically see at many of the brands,” he said. “The implication from this is some land-based migration, and that has undoubtedly been the case to an extent as shops and casinos were shut and there was no other option.

In that context revenue growth hasn’t really been that high. How sticky those players are remains to be seen, although there is some early evidence of relatively low churn. What I would caution against is assuming short-term trends driven by truly exceptional conditions are the new normal, or even that there’s been a step-change in land-based migration at all as opposed to an understandable shift of spend in a period where most leisure spend options and all land-based options were massively restricted.

And let’s not forget the looming recession.”

Poker is an interesting case too, with a steep increase in action delighting many of the old hands and semi-professional grinders. But as Alun points out, that action has tailed off sharply, suggesting a lot of it was replacement sports betting spend. Perhaps it was largely long-term losing players looking for entertainment, and with very limited sport to bet on, then poker was the next most exciting accessible option.

Returning to the offline vs online casino line of thought, Alun adds, “[Online] casino does feel most ripe to capitalise on all this momentum not least around live casino, but there should be some caution around assuming player motivations and UX is sufficiently similar to see a mass migration here. Also it’s

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worth remembering how relatively small the UK casino sector is. Even capturing 100% of that spend would only increase the online casino market by around a third.”

That last stat is a sobering one for offline casino old hands, especially when considering a third of the UK industry is or was the top end of Mayfair trade, which is relatively fickle with their gambling choices. If it wasn’t clear enough that the offline industry is in a tenuous position, the concept of a hundred years of progress has been overtaken by a factor of 300% by online casinos in a couple of decades should cement it in many minds. That’s not to say there aren’t offline opportunities both for ambitious people and for canny potential operators, but it feels like the talk we’ve heard for many years of opening up the UK casino industry to bring casino participation into a double digit percentage number won’t be heard again for a while. The preponderance of other gambling options and difficulties with legislation are going to mean opportunities are local, not national.

“OFFICE MANAGER MIGHT NOT BE A JOB TO BE TRAINING FOR IN THE FUTURE IF THERE AREN’T GOING TO BE ANY OFFICES, BUT HAVING JUST FILLED ONE MD ROLE LAST WEEK FOR A MAJOR UK OPERATOR AND WITH ANOTHER IN PROCESS, IT’S CLEAR THE WHEELS KEEP ON TURNING. A CHANGE IN ENVIRONMENT BRINGS A CHANGE IN MANAGEMENT PRIORITIES, AND OFTEN A CHANGE IN PERSONNEL”

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RETURN OF SPORTS

A PENT-UP DEMAND

Iqbal Johal provides an update on the sports betting scene since the return of major sport in May, and how the industry is now making up for months of inactivity in the vertical

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What had begun as a thriving start of the year for sports betting industry, with a summer sporting festival including the UEFA European Championships and the Olympics to look forward to, excitement soon turned to panic when all major live sport was suspended in mid-March due to the coronavirus pandemic.

Soon after, it was announced that Euro 2020 and the summer Olympics were both postponed for a year, causing operators worldwide to rethink their strategies and focus on the more minor offerings. Luckily for them though, the industry is an adaptable and digital sphere, and turning to other verticals such as esports, virtual sports and minor football leagues managed to negate major losses on the whole. For example, operator GVC Holdings saw online revenue increasing by 19% year-on-year for H1 2020 up to £1.21bn ($1.58bn), with online sports net gaming revenue (NGR) growing by 5% to £484.5m, despite the suspension.

While the move to alternative offerings such as esports betting, which saw a 40-times growth in activity in the two months from mid-March according to OddsMatrix statistics, provided some relief, there’s no denying that several months of live sport inactivity was going to be unsustainable. The sporting suspension, which caused betting shops to temporarily shut, saw data specialists H2 Gambling Capital reassess its betting GGR 2020 forecasts. With GGR for the betting industry, which includes horse and

dog racing, and sports betting among others, forecasted at $75bn for 2020 at the start of the year, the new figure is now $60bn, a 21% downgrade as a result of suspensions and cancelations of the big leagues.

That reinforced the need for operators to offer major sport again, and prayers were answered when the German Bundesliga became the first major football league to return on 16 May, followed by the English Premier League on 17 June.

Virtually all the other leagues got back to action soon after, as well as a lot of the bookmakers most reliable sports, such as horse racing, golf, tennis, cricket and sports in the US. As a result, Gambling Commission figures from the largest online operators showed a 115% increase in gross gambling yield (GGY) for online real event betting between May and June rising to £217.5m, higher than at average pre-lockdown levels.

That demonstrates the pent-up demand of punters betting on their favourite leagues with familiar teams and players, as well as the online shift pattern where consumers are less willing to visit retail locations. The frequency of fixtures, plenty of free-to-air coverage and a spread of games in the day and evening over the weekends certainly helped figures recover from a 62% drop from March to April. The fact that GGR for virtual betting, esports and poker fell by 15%, 25% and 36% respectively from

RETURN OF SPORTS

May to June suggests that other verticals can only replace live sports betting for a temporary period of time.

An operator that relies on sports betting perhaps more than most is Interwetten. Sports betting has been at the heart of its business since it was founded in Austria back in 1990.

It’s not a surprise then that its revenues and stakes were reduced by two thirds, compared to pre-lockdown numbers.

“Remaining a third of your revenues despite no major sport going on is still ok, and it was mainly on the more minor leagues such as the Belarus or Nicaraguan Premier League, or some exotic sports and other sports such as table tennis, that kept us going,” said Interwetten speaker of the board Dominic Beier. “The good thing is we’re very flexible and we have different data and service providers integrated that made it possible for us to still deliver a very good offering for our customers.”

Putting a positive spin on such a decline in revenues is expected of Beier, who, after becoming the youngest speaker of the board (or CEO equivalent) in the operator’s history in 2019, oversaw Interwetten’s most successful financial year, with GGR rising by 25% from 2018, up to €99.5m ($117.4m).

The German Bundesliga is the most important league for the German speaking and focused operator and its return in May had a “very big boost for business”, albeit as a slightly different offering.

Beier adds: “When Bundesliga returned, in terms of numbers, luckily we’re at a stage where we’re either on or a little above our previous revenue numbers for sports betting, which is good. What we also see is the risk for us as a bookmaker is higher, because you have fewer matches so the offering is not as big. That means people usually bet on the main football matches per day, and anyone following the recent Champions League and Europa League matches, would have noticed the majority of favourites have won their games, which is a very big risk for us. We’re also missing out on the big volumes of matches, and missing out on tennis and basketball, although the NBA has now returned. It’s definitely different from the offering we’ve had before but it’s good to see that the interest is firmly back from the customers.”

The pent-up demand mentioned earlier helped Interwetten post a higher turnover in June and July than pre-coronavirus levels.

Three months without betting on major leagues helped, but more so was the operator’s marketing strategy, focused on new and existing customers.

“I think the reason for that is because we were probably the first operator to go out and market to new and existing customers with a lot of campaigns and reactivation messages,”

Beier explains. “We took a little risk by being very active with campaigns and advertising when the Bundesliga restarted, and it definitely helped us to be ahead of the competition, with the comeback of major sport.”

Sport might have returned, but in a very different way. Matches are still played behind closed doors, though some European leagues, such as French Ligue 1, are starting to trial the return of fans at a reduced capacity. That has led to some thought of an enhancement in activity levels for the away win market, with home advantage heavily negated by a lack of home support. However, the Interwetten speaker of the board hasn’t witnessed any changes in behaviour, with betting on football more popular than ever.

He said: “Football probably makes up around 85-90% of our revenue at the moment, whereas before the pandemic, it was more like 75%, but that gap definitely comes from tennis.

“We still see a very similar betting behaviour to what we saw before the pandemic, and to be honest, we don’t see a big impact with no fans being allowed in stadiums, or if they are betting on different markets.”

In terms of 2021, it now promises to be the year 2020 was meant to be, providing the Euros and Summer Games take place as scheduled, on top of the normal offering of sport.

It’s hard to look too far into the future during the current climate, which is why Beier is more

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cautious than you’d expect the CEO of a major operator to be.

“Purely from a sports point of view, it’s going to be a very interesting year,” he says.

“I’m really curious to see how the whole economies of each country will develop, because obviously there’s less money to spend on entertainment with more people out of work. We don’t just rely on sports events to take place, we rely on if people feel well and have work and money to spend on consumption and entertainment products such as ourselves. We don’t know what will happen on the customer side, and people having less money to spend on entertainment products might be a potential threat to our industry.”

Those comments reinforce the uncertain times we still live in, despite on the face of it, the worst of the pandemic is behind us. It’s great that major live sport is back and the immediate interest levels are there, but just like fans at sports matches, paying betting customers are the most important part to any operator’s business, and how the financial landscape shapes up next year will be crucial to the industry.

“It has showed everyone that with entrepreneurship, innovation and a good approach to the business that even the worst case scenario can bring opportunities and make you better,” says Beier with resounding optimism.

“WHAT WE ALSO SEE IS THE RISK FOR US AS A BOOKMAKER IS ALSO HIGHER BECAUSE YOU HAVE FEWER GAMES SO THE OFFERING IS NOT AS BIG. THAT MEANS PEOPLE USUALLY BET ON THE MAIN FOOTBALL GAMES PER DAY AND ANYONE FOLLOWING THE RECENT CHAMPIONS LEAGUE AND EUROPA LEAGUE MATCHES WOULD HAVE NOTICED THE MAJORITY OF FAVOURITES HAVE WON THEIR GAMES, WHICH IS A VERY BIG RISK FOR US” - Dominik Beier

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UKRAINIAN LAW

LAW AND ORDERLY

On 11 August 2020, the President of Ukraine signed into law the State Regulation of the Activities Related to the Organisation and Conduct of Gambling Games. Here, Andrey Astapov, managing partner at Eterna Law cuts through the legal jargon and explains what it means for the domestic market and beyond

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The legalisation of gambling in Ukraine is a hot topic among foreign investors and politicians. To understand all the buzz about it, I’ll explore the origins of Ukrainian gambling history touching upon the reasons for prohibition and its failure to achieve the desired results.

I’ll also analyse how the legal regime introduced by the current law differs from the one that was in force until 2009, and why this time the law has more chances to succeed and provide adequate conditions for the creation of the market, which is, simultaneously, profitable and reliable.

The history of gambling in Ukraine dates back to Soviet times when the communist government allowed the operation of state lotteries and betting.

At the same time, gambling also existed illegally in private underground casinos, hidden from any state control.

The first attempts to legalise gambling were made soon after the collapse of the Soviet Union when Ukraine gained its independence. In the early 90s, gaming machines became a new form of social entertainment, and its popularity increased to unbelievable and very unfortunate levels. No restrictions as to the location of gambling premises resulted in the ubiquity of gaming machines not just in specially created venues but also in cafes, cinemas, and other public places.

The regulation of gambling was fundamentally weak and did not correspond with the needs of the market. Such inability of the government to control the market led to total chaos when gambling was officially legalised but most operators existed in the shadows.

Any official and reliable statistics, which may demonstrate the popularity of the industry at that time, are absent.

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However, relying on data from social surveys, almost 20% of the adult population participated in gambling and spent around one billion hryvnias per year. Unfortunately, only 40% of gambling operators were legal.

As numbers show, the Ukrainian gambling market rapidly developed. In the meantime, the inability of the government to establish and enforce the systemic and comprehensive regulatory mechanisms contributed to the exponential growth of a black market. This all resulted in the full absence of control over the industry.

As a response, the Ukrainian government came up with just banning gambling in total and annul all operating gambling licenses. On 15 May, 2009, the Verkhovna Rada of Ukraine, the Supreme Court adopted the respective law and at once criminalised all gambling activities.

But was the prohibition really successful?

History and related facts suggest exactly the opposite. The official ban did not only fail to eliminate or at least decrease levels of gambling in Ukraine, it generously contributed to further expansion of illegal gambling.

Any official data in relation to the number of illegal casinos and gaming machine venues cannot be found due to obvious reasons. However, the large amount of criminal cases concerning illegal gambling demonstrates that, for sure, the black market is present, thriving, and needs a better response than a ban on gambling.

On 20 December, 2019, the Cabinet of Ministers of Ukraine made a very decisive step to combat illegal gambling and passed a resolution to close all illegal casinos, which hid their true activity under the guise of state lotteries. Just the night before, law enforcement agencies closed around 152 venues of such "state lotteries" and seized equipment in the amount of 46 million hryvnias.

So, is excessive gambling going to emerge with the introduction of the new law in Ukraine? Probably not.

According to all the above-mentioned facts, gambling has been operating in Ukraine for decades and continues to do so, but only in the shadows, unregulated and uncontrolled.

WHY PROHIBITIONS NEVER WORK If demand is too excessive, prohibitions prove to be not the best solution. It puts an excessive burden on the law enforcement and judicial systems, which, in most cases, may not adequately combat the illegal sector that arises. It also fosters corruption

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“ONLINE GAMBLING, WHOSE POPULARITY IS LATELY AT AN ALL-TIME HIGH DURING THE CORONAVIRUS LOCKDOWN, IS SUBJECT TO A SPECIAL REGULATION UNDER THE LAW. UNLIKE SOME OTHER UNSUCCESSFUL DRAFTS THAT PROPOSED TO TREAT ALL ONLINE AND OFFLINE OPERATORS EQUALLY, THE ADOPTED LEGISLATION OFFERS A DIFFERENTIATED APPROACH TO BOTH FORMS OF GAMBLING AND ADEQUATELY ADDRESSES ITS NEEDS” on all levels and, unfortunately, leads to the scenario when some illegal operators work undercover.

Ban on gambling is also not the best solution when it comes to the battle with ludomania. Despite some popular speculations of politicians, it may not raise the moral level of the society, which is more of a task for educational and cultural institutions in the country. By

Andrey Astapov

analogy, the ban on alcohol in the USA and the Soviet Union, or the ban on light drugs, such as marijuana, never stopped the functioning of the markets.

The recent loud cases about illegal casinos and gaming machine venues illustrate how hard it is to eliminate illegal gambling, especially in the decade when online gambling is on the rise. Hence, isn’t it better to respect the freedoms of the citizens and control the market than to absolutely prohibit it and ignore its existence in the shadows?

WHAT’S NEXT ON UKRAINE’S GAMBLING HISTORY In the near future, the Ukrainian gambling market is going to be back in business. This time, the government promises to take all the necessary steps to prevent excessive ludomania and the emergence of hundreds of shady casinos in each city.

The goal of the law is by far not to popularise gambling among the masses.

Just the opposite, it aims to establish state control over gambling in Ukraine and bring it to the legal landscape. And how that’s going to happen is through a range of preventive methods prescribed in the law.

First of all, it’s worth noting that with the help of the legalisation of gambling, the government aims to attract considerable investments to Ukraine and receive additional budget

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UKRAINIAN LAW

revenues respectively. For this, the law prescribes a range of incentives to investors.

For example, the law introduced the notion of an investment license that is provided to an operator free of charge and is valid for 10 years in case an operator satisfies the requirements of the law. Specifically, it shall build a new five-star hotel with the room capacity of at least 150 rooms for Kyiv and at least 100 rooms for other populated areas or another infrastructure project agreed by the Cabinet of Ministers of Ukraine. In such a way, it provides favourable conditions for operators who may want to enter the market in Ukraine, as well as stimulates the building of new infrastructure increasing the nation’s attractiveness for tourists.

Also, the law offers proportionate fees for the licenses. For instance, for casinos, an operator shall pay $2,000,000 annually in Kyiv, and $1,000,000 annually in other populated areas. Each roulette table costs $30,000 annually, each card table is $15,000 annually, and each gaming machine is $1,200 annually. As to betting, the license fee is $1,000,000 annually and $6,000 per each betting point. A gaming machine license amounts to $250,000 annually for 250 gaming machines and $1,200 annually per gaming machine.

For online gambling licenses, the price is quite lower, in particular, $230,000 annually for online casinos and $170,000 for online poker.

Additional safeguards are prescribed for the protection of vulnerable and underaged categories of the population as well. Here are outlined many restrictions for gambling advertising and the creation of the special register of individuals who may not access the premises.

The location of gambling premises is strictly restricted. Casinos are to be located only on the territory of hotels and special gambling zones, and online betting is allowed only at betting outlets. Together with the thorough identification procedure of each player, such requirements ensure that only individuals who are legally capable of gambling may participate in such activities.

Additionally, online gambling, whose popularity is lately at an all-time high during the coronavirus lockdown, is subject to a special regulation under the law. Unlike some other unsuccessful drafts that proposed to treat all online and offline operators equally, the adopted legislation offers a differentiated approach to both forms of gambling and adequately addresses its needs.

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A registered website with an UA. domain, a connection to an online system, and two years being connected to the State online monitoring system are the requirements that guarantee the security of financial transactions online as well as fair and transparent treatment of each player.

Due to all the above-mentioned provisions, the law pursues an ultimate goal to make gambling in Ukraine not just profitable for the economy and state budget specifically but also to ensure the security and reliability of the market. It’s clear that it’s better to have a regulated gambling market that guarantees each player protection from fraud and proper conditions than a market in the shadows that is subject to no rules and is often used with fraudulent motives.

On 14 July, 2020, the Ukrainian Parliament chose the first path and legalised a range of gambling activities in Ukraine. Soon, there will also be the Authorized Body and the adoption of a number of relevant

legislative acts, such as amendments to the Tax Code of Ukraine and bylaws providing some detailed specification of procedures provided in the law.

After so many parliamentary debates and struggles, Ukraine is finally poised to legalise gambling and bring its illegal part back into the light. As expected, the comprehensive approach represented by the law will manage to respect and satisfy the needs of all stakeholders, including those of operators, the government and players.

Notably, the attraction of foreign investments is one of the key priorities, and for that, the law provides highly favorable conditions for investors, including clear and transparent application procedures, equal rules for all operators, and a special bonus: an investment license for casinos, which is free and valid for 10 years if an operator builds a new hotel or another infrastructure object agreed by the Cabinet of Ministers of Ukraine that corresponds to the conditions set out by the law.

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MARKET FOCUS: GERMANY

AN UNCERTAIN FUTURE With delays casting doubts over the German online market being regulated in July 2020, Iqbal Johal explores the key issues of the proposed gambling treaty The regulation of the German online gambling market has been a long time coming. Back in 2012, the 16 federal states passed an Interstate Treaty on Gambling, with the intention to open up sports betting in the regulated market for the first time.

However, years of legal uncertainty followed with no legally valid sports betting license issued since the treaty was passed.

But earlier this year, a breakthrough was made between the states over a new gambling treaty, with the consensus being that it’s better to have a regulated market than a large black market.

The new regulation is expected to come into force from July 2021 that will lift the prohibition on online casino, and online slots and poker games. It will also allow for the registration of an unlimited number of sports betting providers, as well as a limited number of online casino providers.

However, the state lottery monopoly will remain in operation in the new model.

Dominik Beier

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But if you thought that put an end to the uncertainty, you’d be mistaken. In April, the Darmstadt Administrative Court halted the process of awarding sports betting licences.

The licensing process was challenged by Austrian sportsbook operator Vierklee, which was upheld by the court.

The decision came just weeks after the Hessian court revealed 30 operators had filed applications for a licence, with a further 20 expressing serious intent to apply.

That would have resulted in 99% of sports betting activity in Germany moving to the legal market.

At the time, German sports betting association DSWV expressed its dismay at the decision, describing it as a big blow to its members. The association, which advocates a modern and competitive regulation of sports betting in Germany, has previously slated the current sports betting policy in the country. It claims that German sports leagues, such as the Bundesliga, miss out on significant amounts of lost sponsorship and advertising income compared to other top European leagues, such as the Premier League.

DSWV managing director Luka Andric spoke to Gambling Insider about the current delays in regulating the market, and just exactly what it would mean to the country.

“Traditionally there has been strong disagreement between the states governed

by Social Democrats who favour banning entire product categories and more restrictive regulations versus states governed

by Conservatives, who are often more open towards regulatory models that attempt to work with licenced, responsible operators,” Andric explains. “It seems, however, that the major conflicts have been settled, at least for now, and that there is broad agreement to implement the rules of the 2021 Interstate Treaty as soon as possible. The ordering of the awarding of licences to be stopped, of course, is a matter of frustration for

our members who spent considerable amounts of time and effort in preparing licence applications. At the same time we have always argued that opening up the sports betting market should go hand in hand with licensing online casino games.

It looks as though the court order makes it more likely that the two types of licences will be awarded at the same time or at least within a short time frame. Considering Germany’s population size and its economic standing sports betting will always be an important market and it is positive that this market is finally regulated. Whether the market can thrive will depend to a large extent on whether the authorities will be able to effectively block non licence holders from offering their products to German customers. We are not fully convinced that this will work well and some regulatory amendments may be necessary fairly quickly in order to channel consumers towards licensed operators.”

And that brings us to what has been a key topic of debate in a number of soon to be or already regulated jurisdictions: the black market.

In our last Market Focus feature on Sweden, concerns were raised about how on-going restrictive regulation will have the opposite effect on a 90% channelisation target proposed by the Swedish Gaming Authority (SGA). The Netherlands gambling regulator KSA, have also put forward strict regulatory proposals ahead of the expected legalising of online gambling in the country from next July.

The regulation of the German market would also include such strict measures or restrictions. These include a €1 ($1.18) stake limit on virtual slot machines, a limited in-play sports betting market, a live

MARKET FOCUS: GERMANY

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I’m seeing is the main goal is channelisation, but they’ll absolutely achieve the opposite with the regulation and definitely not channelling into the legal market. That is what I fear the most.”

The need to regulate the online market is important. As things stand, from July 2021 many online verticals will become legal in Germany. That’s not to say uncertainty doesn’t remain, with the dishing out of sports betting licences up in the air, and the long, raging debate rumbling on about if the proposed regulations will do nothing but encourage illegal play. Here’s hoping to a more certain future come July 2021.

streaming ban on betting sites, a five-minute delay when switching between different gambling sites, and commercial advertising for virtual slots, online poker and casino games on radio and the internet prohibited between 6am and 9pm.

These measures have provoked a critical response in the industry, with claims the requirements won’t be effective in terms of player protection, and will create an unfulfilling experience for customers.

Speaking on a regulatory blog on GVC’s website, the operator’s director of regulatory affairs Martin Lycka believes the restrictions will be “much less attractive and less competitive” than the unlicensed market, encouraging black market play.

While Andric agrees the German regulation will be restrictive, the DSWV MD thinks some of the regulation is in line with European counterparts and is hopeful it can evolve as time goes on. “Having said that, many European jurisdictions, which have had liberal regimes for many years, are increasingly introducing stricter rules and limitations,” he says. “Some of the German regulations are mild in comparison.

It also needs to be taken into account that this will be version 1.0 of the new regulations and that as a trade association we will be talking to politicians and regulators to facilitate necessary and sensible amendments as soon as possible.”

Despite all the dither and delay – we’ve heard that before – surrounding the regulation of the German market, Andric is still confident the rules will come into play by the scheduled time frame of July 2021, but warned that “any potential delay

caused by political disagreement, must not affect the rights of operators to offer their services in Germany under EU law.”

And in reiterating the importance of having sports betting operating in a regulated online market, Andric concludes saying: “The German sports betting market has grown in double digit figures for the past decade. Sports betting has become ever more visible in the media and in advertising.

Without accounting for the COVID-19 related drop in the last year, we expect this trend to continue once normal sports tournaments resume fully.”

From an operator point of view, former Interwetten speaker of the board (CEO) Dominik Beier, isn’t as hopeful that the regulated German market will encourage channelisation, not at least in its proposed form. Bear in mind that’s coming from the CEO of a German speaking and focused operator who, on the face of it, would benefit tremendously from operating in a regulated space.

Beier is unconvinced however, telling Gambling Insider: “Let’s say in theory we definitely all want a regulated market. We all want planning security and sustainability to happen. But the regulation as it stands in Germany, and as they plan it to be, is regulation that only accelerates black market play, because so many things are not included in the regulation. We are talking about very strict limits which I don’t think are anywhere else in Europe. In theory, regulation is something everyone was wishing for in Germany for a long time.

But the way it’s set up now is probably much worse than we have at the moment. What

“CONSIDERING GERMANY’S POPULATION SIZE AND ITS ECONOMIC STANDING, SPORTS BETTING WILL ALWAYS BE AN IMPORTANT MARKET AND IT IS POSITIVE THAT THIS MARKET IS FINALLY REGULATED. WHETHER IT CAN THRIVE WILL DEPEND TO A LARGE EXTENT ON WHETHER THE AUTHORITIES WILL BE ABLE TO EFFECTIVELY BLOCK NON LICENCE HOLDERS FROM OFFERING THEIR PRODUCTS TO GERMAN CUSTOMERS”

- Luka Andric

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ONLINE VS LAND-BASED

SEIZE THE PAY DAY

Ezra Amacher analyses, as Gambling Insider speaks with Ocean Casino Resort CEO Terry Glebocki and AGS CEO David Lopez about how timing is everything when it comes to opportunity and risk; especially when online and land-based demand battle for market share If it’s too good to be true, the saying goes, it probably is. Online gaming has surged in the last few months amidst the coronavirus, leaving some in the industry to wonder whether online products can provide long-term cash flow or if digital games will fizzle out once brick-and-mortars return to pre-pandemic levels. The debate generates divergent viewpoints with plenty of overlap in between.

Almost all major US casino operators have enhanced their online gaming portfolios this summer, giving a boost to many manufacturers and suppliers. Just how much operators are willing to invest in online depends on how confident they are that customers will flock back to

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land-based casinos until a vaccine is ready.

Predictably, online revenue shot up this summer in states with legalised mobile sports betting or online poker and casino games. In May, when casinos were shut down across the country, New Jersey gambling sites recorded a then-record $86m. As Garden State casinos remained closed for the month of June, revenue stayed steady at $85m.

Then came a bit of shocker. After New Jersey casinos reopened in early July, it was reasonable to expect online revenue to drop a bit. Instead, July produced a record $88m for gambling sites, suggesting that online can thrive even with brick-andmortars returning.

“Online has certainly taken off in New Jersey,” Ocean Casino Resort CEO Terry Glebocki tells Gambling Insider. “We did see a pick up when it was first shut down.

But we were actually surprised to see more people playing after we reopened than we did when we were closed.”

Pennsylvania has seen a similar story play out. In May, the state reported record online revenue of $56m, followed by $50m in June and $54m in July. For the month of July, slots accounted for 72% of all the state’s online revenue. The $39m in slot win amounted to a year-on-year increase of more than 7,500%.

The recent success of online has helped turn traditionalists into believers and has

ONLINE VS LAND-BASED

vindicated those who were early to the party. American Gaming Systems, a Las Vegas-based developer, manufacturer and supplier, aggressively sought online products before the coronavirus. At the time, PlayAGS CEO David Lopez felt plenty of pressure from investors.

“When we made our investment in online, it brought much criticism because we were burning EBITDA for a while,” says Lopez.

“I certainly didn’t predict a pandemic but I always said, at some point, online will just be huge. And we’re not even to the huge part.

Online sports and online wagering, like real money gaming, will just keep growing.”

These days, Lopez is grateful that he and his company possessed the foresight that online would eventually take off. Though PlayAGS stock is a fraction of what it was before the pandemic, it has risen more than three points since the casino shutdowns of mid-March.

“I had to tell investors, although you see a negative EBITDA impact on the organisation, the day will come that if we hadn’t made this commitment, our investors and stakeholders would look at us and say that bus kept coming by. You kept sitting at the bus stop and it kept driving by – every time it stopped you didn’t get on. Why would you not participate in the online space? Clearly, we’re big believers in the online space.”

Online and mobile products that were previously dismissed by the industry are suddenly receiving a second look. ZenSports, a San Francisco-based peer-to-peer mobile sportsbook, built up an international consumer base as US operators initially shrugged them off. Then this April, the company struck a partnership with Strategic Gaming Management for Nevada market access. ZenSports will acquire Big Wheel Casino in Lovelock, Nevada, as part of the requisite to launch a mobile product in the state. Though the company will brand Big Wheel and Baldini’s Sports Casino in Reno, its product is exclusively mobile.

“We’re very bullish that people will go to in-person places again,” ZenSports CEO Mark Thomas says. “If you take it a step further and think about the beauty of our product being mobile only, yes, you have to come in person to register at the casino sportsbook, but once you do that you’re home free on the mobile side. So our product lends itself perfectly to a post-Covid world where someone doesn’t want to go in person.”

In Nevada, however, there is already a proven demand that people do want to bet again in person. McCarran Airport in Las Vegas reported 1.6m arriving visitors for the month of July, up 56% from June.

Highway travel, meanwhile, nearly returned to normal levels by reaching 90% of July 2019 traffic. Though Las Vegas visitation was down more than 60% from a year ago, thanks in part to no conventions, regional demand is on the rise.

Those California travelers aren’t heading to Las Vegas to wager on their iPhone.

They want to be back on a casino floor or watch games from a sports book. The novelty and unpredictability of entering a casino is something that can’t be replicated on online sites.

“The majority of times you go to a casino, you’re going to eat, have drinks with friends, hang out, have fun,” Lopez says. “You go for your own entertainment, for your own fashion – this is what casinos have become.

The point of that is to go to have fun and enjoy yourself – and that includes those who are not even making a bet. That’s what the experiential end of it is what the online space is missing.”

For casinos that have embraced online in recent months, they must weigh the risk of making potentially long-term decisions using limited data. Since most states with legalised online gaming launched sometime in the last year, there’s no historical precedent to turn to.

Independent casinos are also up against a swarm of competition. Online gaming is far from egalitarian; established brands possess the upper hand and the gap seems to be widening.

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Golden Nugget accounted for $31m of New Jersey’s July online revenue, while Atlantic City-based Resorts International used its home field advantage for a $18m share.

In Pennsylvania, Penn National’s Hollywood and DraftKings brands placed second in July, trailing only Rivers Philly (SugarHouse and BetRivers). And Valley Forge’s online partnership with FanDuel helped the casino to a third place finish.

“Our online presence is very small,” Glebocki says. “When I got here, there was so much to do, I thought it was best to focus on the brick-and-mortar. This year, we started looking at the online gaming side.

We had over 200% growth year-on-year in July, but it’s off such a small base. We only did $1.2m in online gaming win and the industry was $87.5m, so lots of opportunity for growth there.”

Smaller operators with tighter budgets will naturally have a tougher time building up their online presence and marketing their sites to consumers. Those operators must balance the potential reward of greater online win versus doubling down on their brick and mortar locations for when the coronavirus does inevitably end.

Land-based casinos have the strongest advantage when it comes to attracting bettors who prefer slots, card and table games. One reason for this is that players tend to have less trust in the outcomes of online variations of the same game. This

Terry Glebocki

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ONLINE VS LAND-BASED

David Lopez is divergent from sports betting, where mobile wagering is often the preferred route.

When Gambling Insider asked Lopez if there will be a time when online gaming holistically challenges land-based, he shook off that notion. “Not in a few years. I think where you might see a challenge is online sports betting could potentially get to the point where it dwarfs land-based sports betting. I think for real money casino gaming, though, not likely in my lifetime will online exceed land-based – but that doesn’t mean that I’m right!”

In July, New Jersey mobile sports betting apps outpaced brick and mortar by a 9-1 margin, but that doesn’t mean that trend is here to stay. No local sports teams were competing that month (unless you count the New York Mets), and special events tend to bring more bettors into physical sports books than daily basketball or baseball games.

The fall months will give a better idea if brick and mortars in football-enthused states like Pennsylvania, Michigan or Indiana can attract huge numbers, or if sports bettors will ride out the coronavirus in their living rooms.

Sports books are at their zenith during March Madness, but the coronavirus scratched out any of those plans for 2020.

Assuming the pandemic has subsided by next spring, those early weeks of March 2021 will be the best litmus test of whether online sports betting sites have truly pulled of brick and mortar or if American sports fans are willing to head back into casinos en masse.

The longer the pandemic lasts, the better it looks for operators who made the decision this spring to ramp up online offerings.

The lucky operators who partnered with DraftKings before or during the pandemic

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must be feeling especially good right now given DK’s success at expanding its online portfolio.

However, as the country heads into the tail end of 2020, operators must be careful not to get overly zealous for online gaming.

The worst mistake would be to invest heavily in online in September or October, only to see a vaccine appear by this winter that sends Americans storming back into casinos. Operators who missed out on the summer-time online windfall may be kicking themselves, but as baseball coaches will say, don’t let one error turn into two.

Brick and mortars hold staying power that online sites can’t compete with and most of it comes through the inherently social nature of casinos: bettors won’t develop loyalty with a desktop the way they do with person-toperson interactions. Though online social casinos are growing in popularity, they don’t offer the spontaneity of winning a slot to the sound of sirens or the joy of cashing in a stack of chips.

America’s premier gaming and entertainment hubs, Las Vegas and Atlantic City, are especially hard to replicate. When the pandemic is over, expect those places to reap the greatest benefits over online play.

Gaming has always been about a lot more than gaming. Online will continue to play a vital function in the coming years as more states legalise digital casinos and sports betting. However, just because a new avenue is available doesn’t mean it should be the preferred way of movement.

“People won’t hang out on Zoom after the pandemic is over, having drinks over virtual calls,” Lopez says. “People want to hang out, laugh together, tell jokes and stories. I think that’ll be the hang-up and the hold-up for online to exceed land-based.”

“ONLINE SPORTS BETTING COULD POTENTIALLY GET TO THE POINT WHERE IT DWARFS LAND-BASED SPORTS BETTING. I THINK FOR REAL MONEY CASINO GAMING, THOUGH, NOT LIKELY IN MY LIFETIME WILL ONLINE EXCEED LAND-BASED – BUT THAT DOESN’T MEAN THAT I’M RIGHT!”

- David Lopez

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INNOVATION

THE PRICE OF PROGRESS Gambling Insider assesses whether online casino innovation may be slowing down after more than two decades of sector development

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INNOVATION

Every industry is defined by moments of creativity. For the automobile industry, it was the first production of a Model T Ford in 1908; for the computer tech industry, it was the moment Steve Jobs presented the Macintosh computer in 1984. And for the TV industry, it was the launch of a little streaming service called Netflix in 2007.

All of these products are not only innovative, but they have shaped the way their industries have developed. After first breaking the mould, they became the mould for years to come.

The notion of gambling has been around since society began, but the sector has seen its own fair share of game-changing ideas.

This was particularly true following the advent of the internet. The first real money hand in online poker was dealt in 1998 on Planet Poker, and since then the vertical has seen countless companies attempt to capitalise on this virtual world with new tournaments and social features. The same can be said for online sports betting since its first development in the early 2000s.

The vertical has seen a long list of innovative additions to improve the customer’s journey, including cash out and bet builders.

Of course, online casino isn’t exempt from the necessity of creativity. In fact, for an industry which relies on its customers’ continued excitement for profitability, developing new and interesting products is an absolute must for acquisition and retention. As a result of this need for invention, the sector has come a long way since the first real-money wager was placed in an online casino in 1996. Countless companies now aim to gain market share in what’s a booming industry in regulated markets across the globe.

Up until now, this creativity has been clear to see. The sector first emerged with the ingenuity of companies such as Microgaming and CryptoLogic.

Demonstrating the clear progress of the industry, early online casino websites were simplistic in contrast to the online casino sites we encounter today. The pioneers of this online casino space played a key role in developing software for games and powering customer transactions. Shortly, that technology was commonplace in websites across the world.

Since then, there have been a number of bursts of creativity in the industry.

Progressive jackpots, themed slots and multiplayer games have all made their way onto the scene. In addition, live casino now offers players a human aspect to their online play, with players able to place bets in the comfort of their own home through live streams.

Despite the significant development of the space up to this point, as online casino markets begin to mature in certain areas of the world, is it possible that creativity could be drying up?

This is something argued by Cristiano Blanco, head of gaming at Kindred, owner of 32Red, Unibet and a number of online casino brands in various markets. Speaking on an ‘Operators and Innovation’ panel during the CasinoBeats Malta Digital summit in late June, Blanco passionately voiced his concerns about decreasing levels of innovation in his industry.

“We are reducing the line of innovation to fulfil our need to innovate, even if we’re not being innovative,” he said. “In my opinion, taking a concept and refreshing it can be a different thing, or a unique thing, but the industry needs a wake-up call because we need to raise the bar of innovation a bit more. What I'm seeing in B2C at the moment is not a good picture.”

The Kindred executive’s argument is not a new one. In fact, it’s one you’ll often hear confronted at industry events, both in pre-arranged panels and on the tradeshow floor. Although online casino has seen a significant level of development since its simplistic beginnings, that development seems to be slowing down in terms of creativity. There are a number of reasons that could be to blame for this, including both the saturation of gaming content and the industry’s consolidation as larger companies take a stronger grip of markets.

Blanco’s argument stems around a B2C reliance on gaming suppliers. Of course, when the online casino space first emerged, B2C companies would often employ in-house design teams to create their content. This allowed operators to create content directly catered to their own customers. While this might have been a more immediate source of innovation, in-house design is considerably more expensive than outsourcing games from suppliers. As a result, partnerships with suppliers soon became the norm.

Now, suppliers regularly form content deals with operators to save them the trouble and cost of designing and producing their own games. Just this year, Red Tiger went live with 888 Casino in Spain and partnered with 32Red in the UK. Evolution Gaming recently sealed an agreement with operator Intralot to provide its live casino services across the globe. In the US, Scientific Games has signed countless supply deals with state lotteries and gaming operators, including Caesars Entertainment and the Montana Lottery in the past few months.

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Cristiano Blanco A reliance on gaming suppliers may have reduced the costs inherent in the design of games, but has this come at a greater cost to creativity? Blanco argues that B2C companies are reducing their expectations for innovation. In turn, this is allowing suppliers to label products as innovative when they are not so. He gives the example of a slot offering 23 pay-lines in contrast to the traditional 20 pay-lines offered by other slots.

“That is not innovation,” Blanco said.

“It might work better or not but it is just something different.”

So what can the online gaming industry do to counter this apparent drop in innovation?

For the larger operators who can afford to return to in-house design, B2C innovation could still be another way to counter this creative slump. Contacted for comment after his CasinoBeats Malta Digital event, Blanco told Gambling Insider that “times have changed.” While outsourcing games might once have been considered necessary to increase the number of games, Blanco believes game lobbies are now overcrowded with similar games. For him, in-house creation is the best way to cater games towards specific audiences while being truly innovative.

Despite this, Simon Hammon, Relax Gaming chief product officer, is still

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very confident in the creativity of gaming suppliers. Speaking with Gambling Insider, he agreed that big suppliers may be contributing to market saturation by using tried-and-tested formulas for game design. However, he believes that plenty of smaller studios have the desire and ability to be innovative, they just need the opportunity. This requires financial backing and operator support.

Hammon believes aggregators can offer a great way for new studios to achieve this support, effectively providing a cost-effective foot in the door. “There are many new, passionate studios that are trying to break through with more creative concepts and aggregators that are committed to getting their games to market.” he explained. “The aggregation model provides an opportunity for independent studios to accelerate the rate at which they can launch content and reach critical mass. By leveraging existing commercial relationships and minimising the cost of trialling new concepts, it’s easier to test innovative ideas in a way that wouldn’t otherwise be cost-effective.”

As Hammon argued, aggregators can provide new studios an opportunity to launch original content effectively while expanding their customer base.

But whatever the strategy, it’s clear that assistance is needed for innovative studios to avoid falling in with the mainstream.

If they are not able to make ground with new designs, then suppliers will look

Simon Hammon

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towards game formats that have already proven to be successful, thus continuing the process of saturation. Hammon believes that for those daring to be creative, there are “massive returns for their investment in innovation”.

Red Tiger’s journey from small business to big industry player demonstrates an example of how investment in innovation can ultimately turn a large profit. The gaming supplier’s name is often associated with true innovation in the gambling industry. At last year’s Global Gaming Awards, the supplier won the Casino Product of the Year category with its Daily Drop Jackpots Network. With this in mind, Red Tiger could certainly be considered to adhere to Blanco’s high expectations for creativity.

It’s interesting to note that although Red Tiger is now a well-known and respected brand, it started out as a small studio in just 2014. The supplier has since climbed towards the top of the ladder. In 2019, games developer NetEnt agreed to acquire the company in a deal worth up to £220m ($288.2). Now, Evolution Gaming is looking to acquire NetEnt for a total of SEK 19.6bn ($2.1bn) after making an offer in June this year. It can be assumed that Red Tiger’s 2019 merger with NetEnt had a large role to play in such a lucrative deal, proving Hammon’s theory that true innovation is still a profitable tool in the sector.

Whatever the solution is to the industry’s innovation woes, now more than ever the creativity of the industry needs to shine as it moves forward from the debilitating effects of the pandemic. Undoubtedly, it will bring global financial consequences, but for a number of operators, the online casino space has provided a small semblance of hope amid global lockdowns. Rather than slow down, online casino has seen growth for the majority of companies over the first six months of 2020. Those who have been able to capitalise on this increase in activity have been able to mitigate the losses imposed on other verticals, such as sports betting.

Now that online casino has been able to generate an increased audience, retention has never been so important.

Operators are hoping to retain the growth in their online casino business as other verticals return, and there’s no better way to do that than by introducing innovative and exciting products into the online casino space, the likes of which will keep the interest of players who might not be traditional casino fans.

It may be an overused cliché, but now is the time for the industry to start thinking outside the box.

“THERE ARE MANY NEW, PASSIONATE STUDIOS THAT ARE TRYING TO BREAK THROUGH WITH MORE CREATIVE CONCEPTS AND AGGREGATORS THAT ARE COMMITTED TO GETTING THEIR GAMES TO MARKET. THE AGGREGATION MODEL PROVIDES AN OPPORTUNITY FOR INDEPENDENT STUDIOS TO ACCELERATE THE RATE AT WHICH THEY CAN LAUNCH CONTENT AND REACH CRITICAL MASS. BY LEVERAGING EXISTING COMMERCIAL RELATIONSHIPS AND MINIMISING THE COST OF TRIALLING NEW CONCEPTS, IT’S EASIER TO TEST INNOVATIVE IDEAS IN A WAY THAT WOULDN’T OTHERWISE BE COST-EFFECTIVE”

- Simon Hammon

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VIRTUAL EVENTS

A GLIMPSE INTO THE FUTURE

Gambling Insider looks into the role of virtual events during the COVID-19 pandemic and assesses whether or not digitalisation is here to stay

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Due to the need for social distancing and limitations on international travel, virtual events have played a vital role during the COVID-19 pandemic. Since March, industry events have been postponed or cancelled as large-scale meetings became logistically unfeasible. In the space of just a few months, we saw ICE London 2021 rescheduled for April 20-22, Clarion’s ICE North America event in May supplanted by a digital summit, the CasinoBeats Malta summit replaced by a virtual offering, and a number of other digital transitions.

Virtual gatherings have allowed the industry to remain connected when it has been otherwise impossible to do so. Through digital meetings, industry minds have been able to gather to discuss the future of a sector turned upside down by events of the past few months. Discussions have ranged from the implementation of health and safety measures in physical casinos, to the necessity of alternative verticals for online sportsbooks, and everything in between.

But now the pandemic and its resultant restrictions seem to be easing in some areas of the world. So how have these virtual events really performed as a substitute? Has this pandemic offered us a glimpse into the future of industry events, or will organisers ultimately return to traditional formats?

Event organisers certainly seem to be embracing the shift towards digitalisation.

Among the long list of events opting for a virtual version this year is iGB Live. Clarion cancelled both iGB Live and iGB Affiliate Amsterdam 2020 as a result of the COVID-19 pandemic. The events were originally scheduled for September 2020 at the RAI in Amsterdam, now the new dates will be 13-16 July 2021. Fans of these shows were not completely disappointed however as iGB Live Online took place on 14-16 July, offering attendees a long list of virtual conferences and networking opportunities.

Alex Hamilton-Tomlinson, senior marketing manager of iGB events, has been vocal about the many benefits virtual events

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can offer. Speaking with Gambling Insider, the she explains how comfort is one major positive to the shift online. “If you attend from home, you don’t need to dress up,” she says. “That’s a big win for some people I think. You don’t need to take an entire day or more out of your schedule to travel to a live event. You can drop in to attend specific sessions, book one-to-one meetings with potential clients and scout the attendee list for who you really want to speak to.”

It would certainly be difficult to disagree with Hamilton-Tomlinson. As many can attest it’s considerably more comfortable attending conferences from within your own home rather than in an auditorium.

Undoubtedly, the traditional event dress code is significantly less comfort-oriented than the one we adhere to at home, and with no need for travel, it’s not necessary to dedicate an entire day to an event. Events can be joined whenever convenient and left whenever required.

There is also an argument that the cost of attending physical events makes them more exclusive than they need to be. As HamiltonTomlinson points out, virtual events remove the necessity of travel or accommodation costs for international guests. With the use of only a laptop and wifi connection, the CEO of a casino operator in China would now be able to converse with delegates in the UK, US or LatAm through the click of a button.

If the meaning of these events is to connect the industry, then inclusivity should be the aim of any organiser. While the cost of international travel may not be an issue for the industry’s larger companies, it’s the entrepreneurs and self-starters who will truly benefit from such cost savings. Arguably, it’s also these attendees who will take full advantage of the networking opportunities and insight provided at such events. More than anyone, younger companies need to form partnerships to develop; events provide ample opportunities to do just that.

Alex Hamilton-Tomlinson

Another event forced to forego 2020 as a result of the COVID-19 pandemic is G2E Las Vegas. Reed Exhibitions has been hosting the Global Gaming Expo since 2001 in partnership with the American Gaming Association, and the event regularly sees an attendance upwards of 27,000 with more than 400 exhibitors. In July, it was announced the in-person event would be cancelled for the first time in its 20-year history. Despite this, however, event organisers are currently working around the clock to put together a virtual offering for its regular attendees on 27 and 28 October.

Gambling Insider contacted Korbi Carrison, G2E event director, to see what her team has planned. Carrison explains: “While it’s too early to know what’s in store for the future of physical events, as G2E’s organisers, we are focused on building virtual offerings for our community. G2E Las Vegas is moving quickly to build a platform for the gaming industry to connect, learn and conduct business via innovative, virtual events through 2020 and years to come.”

Evidently, Carrison believes virtual events may have a significant role in the future, perhaps keeping the industry more connected than ever before. Listing the many benefits of digitalisation, the event director confirms that G2E will be maintaining “virtual components” in future editions of the event.

“Moving to a virtual or hybrid event format allows for more diverse participation from the global gaming community, expands the universe of education content, and enables exhibitors to connect with potential buyers in a turnkey format,” she adds.

It seems that these many benefits have been recognised by those in the industry who would usually attend physical events. iGB Live Online saw a “fantastic response” according to its marketing manager, and organisers across the sector have seen thousands sign-up to attend virtual substitutes. But of course the virtual world also has its downside, and its role in the future of events without considering these wouldn’t be thorough.

The lack of a physical tradeshow floor is certainly a great leveller. Larger companies are now unable to impress potential clients with expensive displays and free drinks – great for smaller businesses looking to establish a presence, yet disappointing for lovers of free alcohol. In their absence, some event organisers are now offering businesses the opportunity to purchase virtual spaces, in which they are able to sell their products and conduct meetings. However, without the opportunity for attendees to physically wander through the rows of weird and wonderful company stands, events do lose a certain spark.

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“WHILE IT’S TOO EARLY TO KNOW WHAT’S IN STORE FOR THE FUTURE OF PHYSICAL EVENTS, AS G2E’S ORGANISERS, WE ARE FOCUSED ON BUILDING VIRTUAL OFFERINGS FOR OUR COMMUNITY. G2E LAS VEGAS IS MOVING QUICKLY TO BUILD A PLATFORM FOR THE GAMING INDUSTRY TO CONNECT, LEARN AND CONDUCT BUSINESS VIA INNOVATIVE, VIRTUAL EVENTS THROUGH 2020 AND YEARS TO COME”

- Korbi Carrison

The same can be said for meetings with potential clients or business partners. While virtual events offer the opportunity to chat on message boards or via video link, this pales in comparison to a conversation in the flesh. For now, the digital world is able to offer a temporary substitute, but no doubt executives will be itching to get back into the real world, shaking hands and handing out business cards. “People and organisations depend on face-to-face meetings for business success,” agrees Carrison. For this, the return of physical events is an absolute necessity.

Although the pandemic has been a difficult time for event organisers, they should be able to take a series of vital lessons from the past few months. The many benefits of digitalisation are plain to see, but there are certain aspects to a physical event which are irreplaceable. Rather than supplanting physical events entirely, it seems the future of events lies in an integration of virtual and physical. Perhaps as we move into 2021 and beyond, event attendees can look forward to the best of both worlds.

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REGULATION IN BRITAIN

FURTHER EXAMINATION

The Social Market Foundation has published a report that seeks to contribute to the current debate about gambling regulation in Britain. Here, Jason Chess, partner at London-based Wiggin, reviews the approach taken and outlines some of the recommendations made that might do more harm than good The SMF Report follows hard on the heels of the recent House of Lords report on the gambling industry and, like the House of Lords report, approaches the issue with no pretence to objectivity. At the outset, for example, the ‘Acknowledgements’ prominently

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omit any mention of any input from the gambling industry itself. Following shortly after, the first paragraph of the ‘Introduction’ hits the reader hard with the now-obligatory apocalyptic picture of ‘regulatory failure, public health, addiction, harm, crime’ caused

by the ‘normalisation of gambling in sport and the proliferation of gambling…on our high streets and in our homes’.

To their credit, the authors do mention in passing the latest NHS figure showing that problem gambling is stable at 0.6%

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but the figure carries no significance for them. They point out that the number of people for whom this statistic represents is larger than what can be cared for. In case a tone-deaf reader might be tempted into thinking that that might be a reflection upon the difficulty of obtaining NHS care, the authors quickly deploy public opinion to make clear where the blame should lie. A high percentage of people think that gambling is ‘dangerous for family life’ and only 29% of people ‘think that gambling is conducted fairly and can be trusted’. Moreover, there has been a significant increase in the number of people who ‘think that gambling is associated with crime’.

In objective terms it is of course possible to read these two broad condemnations in a variety of ways.

Without in any manner showing complacency towards the genuine tragedies suffered by individuals, one might reasonably take the view that significantly less than one per cent of people encountering material issues (and an apparently downward trend) might be seen as a positive statistic, albeit by no means a laurel wreath to rest upon. That 2016 figure appears to represent a reduction and the key to the debate is of course how best to ensure that the decline continues. In the second place, it should come as no surprise to anyone that public confidence in gambling is low. That is the inevitable consequence of the message that the present unremitting media crusade hammers home day after day and which has become the dominant public narrative. When only one side of an argument gets to set the public agenda unchallenged, that is what is bound to happen.

Whether and to what extent public opinion is correct, justified or has merit is not a question that the report asks itself. So the report’s statistics may mean that we are indeed living in the shadows of the Last Days. They may also mean that considerably fewer than 1% of people suffer material harm from gambling and that media campaigns influence public opinion.

Just like the House of Lords report, this SMF report is at its core political in the sense that it makes public opinion into the yardstick against which everything – including the success of both regulation and regulator – must be judged. Put colloquially, the success of the Gambling Act 2005 and the Gambling Commission is to be

judged against how faithfully they follow the morning’s headlines rather than by evidence. This principle is sometimes stretched to an alarming extent. In Chapter 1, the authors acknowledge (in so many words) that although the failed Gambling Act 2005 actually contains everything that it should and although the apparently toothless regulator actually possesses and exercises all the powers it needs, ‘a review of media stories over the past ten years’ shows that everything is in fact a failure. The reality is quite different. The British regulator has imposed far greater sanctions upon its various British licensees than any other gambling regulator in the world, bar none. The modern customer protection regime also specifically adopts as regulation the Gambling Commission’s historic public statements on its previous enforcement actions.

As for teeth, a major gambling operator who in 2020 commits a serious breach of customer protection regulation can expect a fine in the region of eight digits and see its senior executives risk the loss of their personal licences and their ability to work in the industry. That prospect is far more real, likely and dangerous under a British licence than under almost any other gambling licence available worldwide.

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It’s an unchallengeable fact that consumer protection standards are today vastly improved. The fact that so many sanctions have been imposed by the British regulator points to the exact opposite of the laxity and feebleness on the part of the Commission that this report assumes. The flurry of regulatory sanctions instead points to the regulator driving standards upwards from the entry-point of September 2007 when the 2005 Act took effect, a time when the problems of remote gambling were relatively new and unfamiliar. The regulator has raised the bar a long way and very rapidly, and the industry is working hard to follow suit. More mustunquestionably be done, but it is not Armageddon.

FAIR AND BALANCED The authors attach great weight to the poor public perception of the ‘fairness’ of gambling, complete with a graph. It’s worth drilling into the idea that gambling is somehow ‘unfair’ to see what substance lies beneath it. In reality, ‘fairness’ is addressed extensively and rigorously in British regulation on several levels. On the technical level, the manufacture and supply of gambling software used by British players can only be done under a Gambling Commission licence subject

Jason Chess

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to detailed technical and informationprovision standards, the so-called ‘RTS’. It is an offence – Section 41 of the 2005 Act – to manufacture or supply software for the British market without this licence. For important matters such as the essential statistical ‘fairness’ of the core ‘random number generator’, the certification of an independent test laboratory is required.

Self-certification will not do. Payout ratios must be carefully logged. On a contractual level, all persons who gamble with a British licensee have access to an independent dispute arbitration service entirely paid for by the gambling operator if they are unhappy with their treatment by a gambling operator. On the regulatory level, every British licence requires that the terms and conditions upon which British licensees offer their product must comply with British consumer laws and regulations. For promotions, incentives and the protection of customers’ rights to cashout their deposits, the Competition and Markets Authority has subjected the industry to a further, special suite of specific consumer-facing undertakings. So what does the ‘unfairness’ consist of, in concrete terms? What in reality do the 71% of people who consider gambling to be ‘unfair’ actually mean by ‘unfairness’?

More industry input into the SMF Report might have been helpful.

The authors show significantly more understanding of how gambling works than the House of Lords report, but some of the ideas might have benefitted from industry input. The authors want each operator to receive a ‘kite mark’ akin to the ‘red tractor’ symbol used by British farmers.

Condition no. 8 of each British licence already requires the licensee to display its British licensed status and number, as well as the Gambling Commission logo, to fulfil exactly that function. If the Commission has good reason to suspect that a licensee cannot comply with the licensing objectives, then the 2005 Act already provides for the licensee and its senior people to be punished, suspended or lose their licence.

At the most basic level of law, Section 22 of the Act only permits gambling (subsection b) where it's consistent with the licensing objectives (this bit comes first, in subsection a). A ‘kite mark’ doesn’t appear to add much to this: the idea is already in the legislation.

A recommended ‘total overhaul of the

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“ALTHOUGH SOME OF THE RECOMMENDATIONS OF THIS REPORT MAKE GOOD SENSE, IN MANY CASES THEY ARE ALREADY WORK-IN-PROGRESS IN AREAS IDENTIFIED FOR IMPROVEMENT. GOOD WORK IS ALREADY BEING DONE BY THE INDUSTRY AROUND RESPONSIBLE PRODUCT DESIGN AND THE DIALOGUE WITH THE REGULATOR IN THIS REGARD HAS BEEN ROBUST”

remote licensing system’ to scrap white label operators also misses the point.

There are many white label operators (such as major media brands) that are genuine, bona-fide brand (only) owners who wish to monetarise a valuable brand by subcontracting it to gambling operators. This is because licensed gambling operators are best positioned to comply with gambling regulation and hence protect both consumer and brand, which is a good thing. Robust official guidance already addresses abuse of the system, and the regulator has tightened its scrutiny in this area noticeably. In terms of harm, some might see this as a red herring.

The introduction of PFLs for remote gambling is also unnecessary as there is already an onerous system of PMLs (the whole of Part 6 of the 2005 Act), which in the case of major operators are invariably held by quite a large number of executives. The Commission can and frequently does point to managers within licensed businesses and order them to obtain PMLs if the Commission considers them to have appropriate responsibility.

The authors clearly don’t like low-tax jurisdictions and this appears to be unrelated to gambling. Chapter Four starts off with reference to the Panama Papers and works its way down through a Dantean spiral of ‘high net worth individuals… political leaders… large multinational corporations… the largest and richest US technology

companies… Amazon… Google’, all of whom deprive governments of money for public services and the rectification of income inequality.

It’s to the credit of the authors that they phrase the solution to all of this evil capitalism in terms of ‘incentives’ but they don’t contemplate the utter impossibility of any high-tax, high-spending, debt-burdened, low-growth EU state ever competing with smaller nations on tax. In any case, the issue for gambling is not British duty, which is relatively competitive as it is. It’s with corporation tax and irrecoverable VAT. Although some of the recommendations of this report make good sense, in many cases they are already workin-progress in areas identified for improvement. Good work is already being done by the industry around responsible product design (particularly for slot games) and the dialogue with the regulator in this regard has been robust. Affordability is a live issue but in the writer’s view, it’s actually not a gambling debate at all. It’s a question of the extent to which some people in society (Aldous Huxley’s ‘alphas’) should seek to prevent the rest of us from spending money (either at all, or too much) on a pastime which they find unpalatable. This isn’t a new debate: the preamble to Queen Anne’s Gaming Act of 1710 lamented that ‘the laws now in force for preventing the mischiefs which may happen by

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gaming have not been found sufficient for that purpose…’

As at many other junctures of the report, the authors here reveal something of their true colours and take a swipe at ‘libertarians’ and their ‘entirely artificial crusade… against the spectre of a nanny state’. Shortly afterwards and without any discernible irony, they propose a ‘public agency with statutory authority’, which will determine what ‘financial’ commitments each ‘household must fulfil in order to achieve a socially acceptable standard of living’. Nor is this aimed at avoiding ‘severe hardship’: it also concerns how gambling might affect ‘disposable income in an everyday sense’. One doesn’t need to be too radical a libertarian to find the North Korean flavour of such a state apparatus uncomfortable, particularly as in excess of 95% of people appear to be capable of making these decisions for themselves. The industry is well aware of the need to develop robust assessments of affordability but it also recognises that affordability for international poker players will need to be measured differently than for an

old lady who plays bingo once a week, or the writer who bets once a year on the Cheltenham Festival. The writer’s suspicion is that someone who enjoys following the form within their means on even a modest income doesn’t necessarily need to be ‘determined’ by the state.

MIXED MESSAGES Trying to establish some kind of objectivity and balance in the current gambling debate is a dangerous thing. Pointing out misconceptions and asking for a truthful and frank exchange of ideas based on facts, like Gradgrind, opens one to the charge of complacency, indifference or callousness to the terrible places in which too many gamblers end up.

Reports like this SMF Report, with little balance and page-after-page of ‘powerful’ statements such as ‘our happy, courageous, beautiful children were deliberately addicted to toxic products, deliberately given a life-threatening, life-long illness’ do nothing more than raise the temperature. That is fine if the aim

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is to generate sufficient public anger and political will to prohibit gambling entirely. But we now all live in a completely connected world which means that is no longer an option, even if it ever was; Queen Anne’s 1710 legislation itself refers to previous failed laws.

The only choice is between regulation or abandoning the vulnerable to the black market. If that duality is accepted then reports like this SMF Report become part of the problem because they refuse to take part in an evidentially founded dialogue with real potential to improve regulation. They instead waste time with pantomime caricatures of evil predatory gambling companies stalking innocent child victims. So, regrettably, this report makes very little contribution to what should be a wholly consensual, urgent and dispassionate round-table between an industry, its regulator and a public who all want exactly the same outcome: a safe, fun, entertaining adult product where the colossal possibilities of data and technology are harnessed to create world-leading protection for every single customer.

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INSIDERS

ALEX CZAJKOWSKI

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

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MIKAEL LIJTENSTEIN AstroPay

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OLEG PROFATYLO Digital Chain

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ADAM ROWLEY Raven Track

PETER NOLAN Digitain

MIKAEL LIJTENSTEIN

INSIDERS

COVID-19: a gateway for user experience Mikael Lijtenstein, CEO of AstroPay examines the changes we have to make and whether or not they’re here to stay

Human behaviour has been affected in different ways by COVID-19. The pandemic is causing modifications in our customs and uses, even the most natural ones. This phenomenon that represents a global health crisis has ushered in a new normal. According to Cambridge dictionary normal refers to “ordinary or usual; as would be expected”, but, can we expect things to be the same? Experts believe the need to align human behavior with the recommendations of epidemiologists will write a new chapter on social and cultural influences. The way we interact, the compulsory use of facial masks and the two-metre distance we have to keep are some of the habits that have to be modified until a vaccine is available. But even in this time of uncertainty and unsettled issues, opportunities are available for those who are encouraged to look for them.

One of the main changes we can observe in everyday life is the shift to digital. Many of the activities we used to perform in person now happen through our computers, mobiles or tablets: working, meetings, gatherings, doctor appointments, therapies and of course shopping. Therefore, cashless has taken centre stage like never before and it opens a world of options to be developed. Being asked to stay home, people all over the globe have had to find ways to pay without using cash, turning to tap-and-pay transactions.

Now that many shops have been re-opened and people have started purchasing in person, they prefer to use contactless payment methods because they got used to it, and also to avoid handling cash for sanitary reasons. Experts had predicted an increase on cashless culture, but the pandemic has accelerated its adoption and the shift may outstay the virus. According to some international surveys, small shop owners have stated that cashless is more hygienic and easier to account, and many reluctant users have turned to it and discovered a new array of possibilities.

Changing to a cashless culture requires the payment procedure to be as simple as possible, as well as turning it into a natural experience. Making things natural implies focusing on the user experience. Don Norman, who coined the term, said: “No product is an island. A product is more than the product. It is a cohesive, integrated set of experiences. Think through all of the stages of a product or service – from initial intentions through final reflections, from first usage to help, service and maintenance.

Make them all work together seamlessly.”

A good user experience is one that meets a particular user’s needs in the specific context where he or she uses the product. Knowing the specificities of

the market where you’re offering your product and service and keeping a user-centered vision throughout the whole process are key to develop user engagement and word-of-mouth.

To create products that provide meaningful and relevant experiences to users involves the design of the entire process of acquiring the product, including aspects of branding, design, usability and function. A key factor to improve it is to think like the customer and to bear in mind that the experience occurs at any moment the user is in contact with the payment procedure itself, customer support or any other interactions with the company. This experience should be as frictionless, fast and reliable as possible.

Even the most insignificant point where the user is in contact with the product has to be considered and evaluated.

Getting feedback from users is paramount to build a close relationship with them.

A/B testing is a recommended tool to test communications sent to users in order to know if they are understood and if they generate the aimed interaction. However simple or complex the solution may be, users should be listened to, considered and understood. Also, the information you can gather on a specific target will help you make informed decisions on whether to continue offering a certain product, feature or service.

In this ever-changing situation in which we are living, communication is a key point to interact with users and to deliver straight messages.

This is a good time to redefine the relationship with customers, build a strong link, and generate brand awareness and engagement services that have the user at the center.

We are facing times of change and uncertainty where flexibility, adaptability, listening to each other, empathy and good communication skills will be fundamental to survive in the broadest sense of the word.

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OLEG PROFATYLO

Offline sports betting during COVID-19: how the pandemic changed the industry Digital Chain chief strategy officer Oleg Profatylo speaks about how to maintain perspective yet recognise opportunities as sports betting steadily finds its feet again

The first half of 2020 was a rollercoaster for all business categories and betting was among the most affected ones. As all offline sports events were canceled without any clear dates for a comeback, the industry had to adapt by shifting everything online to esports and non-conventional bets. Overall, it succeeded, albeit with some missteps and global market shifts, but it got through.

Now, as global sports slowly come back, it’s interesting to think about their place in the industry that's changed. Let’s dive in and see what trends to expect and how betting companies can use them to their advantage.

The global quarantine and concomitant absence of TV broadcasting of traditional sports led to huge contractual debts of leagues and teams. Of course, no one

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could know about the pandemic and how hard it would hit, so generally, it all could be qualified as force majeure. Still, TV channels would want to make up for lost profits, while sports organisations would compete for reallocation of airtime and new beneficial agreements. In the unstable times to come, teams, leagues and others will welcome any chances to strengthen their positions, like with new potent sponsorships and collaborations.

For betting companies, it may be quite a valuable opportunity to strike a new profitable deal and increase media presence.

It’s even more promising considering the fact that most countries don’t yet allow people in sports stadiums, meaning that for

a while, the bulk of the audience will watch matches on TV and online. Despite the fact that the world is trying to gradually return to normal, it still makes sense to redirect marketing budgets in ‘quarantine ways’.

They will be relevant for quite some time.

Fans, though, are definitely warmly welcoming the comebacks of their favourite sports after an unusually long pause.

Audiences will be highly emotional, which can be used in a smart “emotional targeting” technique that we effectively tested out in the past. In the new context, it promises to be extremely efficient and bring great results. Reaching the audiences through an emotional approach, one can achieve a big and rapid income amplification.

During the pandemic, betting companies have gained invaluable experience of working in instantly changing circumstances. New ways and approaches may be useful in optimising work in normal, post-COVID conditions, bringing new perspectives and competitive advantages. Some tips and tricks used during the quarantine period may now be transformed and used to enhance people’s experience of interaction with offline sports betting. The main task here is to be able to see complexities and challenges as new opportunities and to use them accordingly.

As for traditional sports and sports betting, I am sure that despite a sharp increase in esports and the general adaptation to a purely online era, betting on offline sports events will return triumphantly. It would take a lot more than even this global disruption to take down or seriously impact an industry nearly as old as civilization itself.

ADAM ROWLEY

INSIDERS

Staying on track Adam Rowley, general manager at Raven Track, speaks about what affiliates and operators should look for in tracking systems is crucial to a relationship. Whether it’s in your personal life or dealing with business partners, the ability to address issues quickly is vital for a healthy partnership. It may sound simple, but open communication is a tremendous amount of hard work.

Having a one-to-one relationship with your account manager really does make all the difference. If there’s an issue with tracking or commission payments, webmasters and operators need to know their problem will be handled and that their tracking provider is just a phone call away.

There have been significant advances made in technology and AI over the past few years, so it makes sense that the gambling industry should have a tracking platform that utilises all of these wonderful new tools. In speaking with both affiliates and operators at affiliate conferences around the world over the past few years, the feedback has been consistent (although the pain points differ slightly between the two).

The tracking industry needs to apply the very latest technology coupled with a strong understanding of what the affiliate marketers and gambing brands need, and support it with an industry-trained customer support team. Using a culmination of online gambling affiliate experience, operator needs and incorporating intuitive UX make the next-generation of tracking platforms like Raven easier to use.

WHAT PAIN-POINTS ARE ASSOCIATED WITH TRACKING PLATFORMS? Like most things in life, communication

HOW DOES COMPLIANCE AND REGULATIONS FACTOR? To prevent affiliates and operators from receiving hefty fines from industry regulators, all marketing communications must not entice their users to gamble excessively. Compliance guidelines should be considered an integral factor within marketing plans, and every effort should be made to create a more responsible message. Most affiliates don’t have an internal compliance team, so they should partner with businesses who monitor products and messages to present a suitable and responsible tone of voice. It includes: • ensuring images do not appeal to children • enforcing self-exclusion policies • transparent terms and conditions on acquisition offers • messages that should have 18+ restrictions • steering clear of ads that glamourise gambling or encourage chasing losses • avoiding promotion offers with games that feature cartoon characters.

Alongside these industry regulations are the mandatory advertising codes when it comes to promoting gambling offers and products. Any ad for gambling services must act in accordance to the LCCP Code of practice, which prevents misleading adverts that promote gambling as a means of improving an individual’s quality of life, appealing to juveniles or chasing losses.

WHAT OTHER AREAS SHOULD AFFILIATES AND OPERATORS FOCUS ON? For affiliates and operators, channels like SEO, social, native ads and CRM are getting harder to conquer. Therefore, take the time to work with a tracking partner who will make things simple so you can focus on the variety of digital marketing disciplines to promote your brand. You may be overdue to take an objective look at your existing content.

Is it adding value or just repeating the same thing as every other iGaming site?

Is there a unique perspective you offer?

How much of it is quality, long-form content? While you’re at it, have a look at your tone of voice. Is your content dynamic and informative? It’s an issue for an online casino copy because the information is ‘static’ (as opposed to sportsbook, which enjoys a constant stream of new content fodder). To be successful, affiliates need to address this concern in a dynamic industry like gambling. An ongoing problem with most websites is page speed. Affiliate sites in particular host a multitude of banners and creative from operators.

Therefore, a site audit (ideally coupled with a technical SEO audit) can pinpoint the pages on the site that need attention.

It’s particularly important for affiliates who don’t invest in PPC ads; getting a keyword to rank at the top of the SERP organically will be near impossible if these areas aren’t addressed.

Google has already announced that UX will be a significant ranking factor in 2021, so webmasters have the time to prepare. I would advise running a third-party UX test to see where players may get ‘stuck’ and then work to improve the user journey. Despite the constantly changing algorithm changes on search engines like Google, the internet is an infinitely better place because of these ongoing updates. It forces webmasters to think about the content served to readers, which ultimately makes it a better experience for site visitors.

GAMBLINGINSIDER.COM

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PETER NOLAN

Innovate or Die? Digitain's Peter Nolan exalts the virtues of creative tension

“There is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to be a leader in the introduction of changes. For he who innovates will have for enemies all those who are well off under the old order of things, and only lukewarm supporters in those who might be better off under the new.”

Niccolò Machiavelli The Prince. circa 1513.

So, what relevance can the thoughts of a 16thcentury diplomat and political philosopher have on the product development strategies of betting and gaming businesses in 2020?

In truth, probably not a lot, but he raises a good point. Innovation is hard and there are many reasons why it seems an apparent problem in our industry.

There’s certainly a lot of me-too development, where companies are quick to copy seemingly successful innovations, often not realising why a particular new feature has worked. Lack of awareness of what’s in the “black box” in terms of rationale for the initiative, and not understanding the underthe-bonnet technical features or grasping what marketing activities are key to success, can lead to a waste of invested time and money.

However, to say there's no innovation is wrong. I think one problem is that there's often confusion in iGaming between invention and innovation.

For me, invention describes a significant step change in a product or a process, something that has the potential to change how we conduct our business. The microprocessor was an invention and the iPhone was an innovation, taking existing technology and completely changing how the simple mobile phone was used.

An innovation is not a step change. It’s making an improvement in how product,

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processes or service are delivered. Innovation doesn’t need to be radical to be successful but it does need to have utility and should deliver added value.

So I would argue that innovation is happening across the sports betting and gaming industry although it could be “under the bonnet” and invisible to outsiders.

It’s reasonable to expect that, due to Covid-19, innovation in iGaming development will shift from a focus on customer requirements (effectiveness) to a focus on cost optimisation (efficiency).

Another complication when discussing innovation is that it’s also often confused with continual improvement activities.

It could be argued that a continual process of delivering small improvements brings more value to a business than focusing on breakthrough innovations, or even inventions.

Continual improvements and innovations should belong to everyone in the business to identify and act on, although there needs to be supporting culture, systems and processes in place to recognise and reward the effort. A business needs to avoid the trap pointed out

by Machiavelli above, the fear of change and allowing inertia to rule.

Continual improvement and innovation are two sides of the same coin, their meanings overlapping and probably only different in terms of the scale of the change.

A good example of a continual improvement strategy was the British Cycling Team from the mid 2000s. Before the appointment of new performance coach Dave Brailsford, the British Cycling team had endured 100 years of mediocrity. From 2007 to 2017, British cyclists won 178 world championships, 66 Olympics and Paralympics gold medals and five Tour de France victories.

This most successful run in cycling history was achieved through the aggregation of “marginal gains” or continuous improvement.

This meant searching out a tiny margin of improvement in everything they did.

Brailsford and his team were relentless in searching for “1% improvements”. Even though the impact may not be noticed, the aggregation of these improvements made the difference as well as having an improvement on the psychology of the team.

Perhaps more businesses in iGaming would be better served to look internally for marginal gains instead of going for the win with an industry-leading Eureka moment.

As stated above, it can be hard to deliver

change to the status quo. There can be many internal barriers to overcome. One possible approach to enhancing iGaming innovation is to understand that not all the brains are in the business. Many companies in iGaming have set up relationships with other smaller businesses or start-ups with fewer barriers and greater appetite for risk in order to deliver innovative products or ideas.

At Digitain we see this to be a valid strategy, and via our Digitown initiative, a technology campus being developed in Yerevan and the future home for Digitain for practical, financial and mentoring support for start-ups, we will invest in the youth of Armenia in order to support innovation.

This initiative will benefit Digitain in terms of potential innovations generated by the relationship, as well as help develop the identity of Yerevan as a technology centre of excellence.

There was a study carried out by researchers who wanted to look at how the make-up of working groups could impact productivity and performance. They put together a large group of experienced managers and split them into 10 teams of five people. They then gave each group a series of identical tasks, which could have measurable but variable results. What the managers in the groups didn’t know was that in half the groups, one of the participants was a plant. Their job was to politely challenge every decision but to be relentless throughout the process.

When the tasks had been completed the results were striking. In every example the teams with the plant outperformed the other teams by a significant distance. The creative tension caused by the actions of the plant, questioning every decision, had resulted in a better overall performance for the team.

The other teams had formed, stormed, normed and performed, but to a lesser extent than the other groups, who had formed, stormed but out-performed. But when the groups were later asked if they wanted to change the make-up of their groups, those who under-performed wanted to keep the same individuals together. In the better performing groups, the decision was unanimous: they all wanted to get rid of the member who kept questioning everything they did.

So, remember that progress depends on the unreasonable person. Creative tension, not conflict, is a good thing as you’ll get better results.

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UK CASINOS

EXPECTATIONS MANAGEMENT

After waiting to reopen, finally being given the go-ahead before a Government U-turn, Iqbal Johal takes an in-depth look at the UK casino sector, examining what the past few months have been like, and what the future may hold

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There have been clear winners and losers from the coronavirus pandemic in the gambling industry. Since the outbreak forced worldwide land-based venues closed in March, online activity has spiked. The movement to online led to verticals such as esports thrive, with 2CV and ProdegeMR research suggesting esports betting revenue will double to $14bn in 2020.

H2 Gambling Capital figures into the impact of the pandemic on the industry estimates an accelerating of online gambling by 2024, which will see it have 50% of the market share in four years time.

However, one sector which is not thriving is the casino industry, particularly in the UK. Since properties were closed on 23 March as part of the UK government’s lockdown measures, casinos in Great Britain (England, Wales and Scotland) have lost total

revenues of $1.84bn as of mid-August.

That equates to a daily loss of just over $5m for the 150 casinos, according to a bestcasinosites.net study.

To say it’s been a testing and patient time for casinos in the UK would be an understatement as they were left off the list of hospitality and leisure businesses that could reopen on 4 July in England.

Considering betting ships were allowed to open in the country on 15 June, with bingo halls following suit on 4 July, Betting and Gaming Council (BGC) CEO Michael Dugher called the decision to keep casinos closed as “inconsistent and frankly nonsensical”.

After weeks of urging the government to change its mind, the BGC pointed to the contribution UK casinos make to the economy, contributing £5.7m ($7.4m)

UK CASINOS

each week in tax and duties last year, and more than £300m a year to the treasury.

The rollercoaster of emotions for the sector continued long into August. On 17 July, further lockdown restrictions were announced to be eased by the government from 1 August, allowing UK casinos to reopen. The delight around the sector was palpable, with Dugher outlining his delight at the decision, saying “it’s fantastic to see casinos will reopen safely for business again”.

However, that delight and hope was dashed a day before the 1 August reopening schedule when Prime Minister Boris Johnson announced the delaying of venues such as casinos by two weeks, adamant that it was time to “squeeze the brake pedal” on opening up the country.

Of four months of patiently waiting and fretting on when your business can reopen, being told you can finally do so, before those hopes are shattered days later, is understandably adding insult to injury.

The BGC described its “utter dismay” at the move, warning that the casino industry “may never recover” from any further delay.

The industry body said the cost of preparing for the reopening was around £6m, and that 6,000 jobs the casino sector supports in the UK, could be permanently lost.

Two leading casino operator CEOs spoke to Gambling Insider about their frustration and confusion.

John O’Reilly, CEO of Rank Group, which operates Grosvenor casinos, was adamant that casinos are not higher risk settings, especially after Public Health England (PHE) gave the sector a clean bill of health.

He said: “We have large venues, which makes social distancing easy to maintain.

Plus we've taken additional measures to ensure our colleagues and customers remain safe and secure at all times.

“The blanket approach taken to casinos is not based on science. The longer we're closed the bigger the risk to jobs as we are not in a position to benefit from the tapering furlough regime introduced by the Treasury to get everyone back to work by October.

“This has to be a two week delay, not a suspension, or the sector is in a heap of trouble.”

The strong words were echoed by London-based Hippodrome casino CEO Simon Thomas, who failed to understand the decision.

“This is an appalling, harmful, expensive, wasteful, illogical, last minute decision,” Thomas explained.

“The investment in re-opening a business like mine – the largest entertainment venue in the West End of London – is frankly enormous. And putting it on hold also costs significant amounts.

“There is no logic to this. Nothing has changed in London and this kind of decision should continue to be made on a case by case basis dependant on location, not sector. If there are problems in one area, close premises in that area, not a whole sector across the country.

“All in all I’m gutted and feeling very let down by the government.”

However, not everyone had the same passionate feelings towards the delay.

Gambling industry analyst and SpringOwl Asset Management CEO Jason Ader, took a slightly different approach as from someone more emotionally attached to the sector.

“Personally, I think the UK casinos not reopening as scheduled on 1 August is a blessing in disguise,” Ader admits to Gambling Insider.

“As a casino owner, what’s the rush to open just to lose money? I know everyone wants to get back to casinos but in perspective of the

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owners, they’re going to be writing cheques every month to cover losses.

“My general view is it’s like a physiological delay and all it’s doing is delaying operating losses for casinos. Given the constraints that have been put in place for casinos in the industry, what’s the rush?”

While it could be easy to dismiss the analyst’s view, there’s certainly some logic behind it. As casinos in Europe and the US have shown, resuming operations has only been allowed with a whole host of measures in place, including Perspex screens between gaming machines, social distancing restrictions and capacity limits.

That of course means casinos will continue to make losses until operations resume normality. The trouble is there’s no indication that will be any time soon, and any further reopening delays stops venues from recouping even a small amount of lost revenue, even if “casinos will be lucky to break even over the next 12 to 18 months”, according to Ader.

Explaining further the hindrance the limitations could have for casinos, Ader adds: “The casinos in a COVID world have been constrained to operate at 60% capacity versus where they had been historically.

“While demand might recover, the constraints have really limited operations, and what’s relevant is the casino industry operates at very high fixed costs. So when 60% of your revenue is high-fixed costs, that doesn’t leave a lot after tax for profitability.”

But for O’Reilly’s Rank Group, the losses have been damaging while dormant.

He said: “With the support of the Treasury, most notably in the form of the CJRS (Coronavirus Job Retention Scheme), we've been able to mitigate our cash burn rate during the period in which our venues have

“IT’S NOT JUST TELLING PEOPLE WHAT THEY CAN’T DO. WE ACTUALLY WANT PEOPLE TO COME IN, KNOW THEY’RE SAFE BUT FEEL LIKE THEY’RE IN AN INCREDIBLE AND EXCITING SPACE LIKE THE HIPPODROME HAS ALWAYS BEEN” - Simon Thomas GAMBLINGINSIDER.COM

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UK CASINOS

John O'Reilly been closed to circa £10m net outflow per month.

“The reopening of the majority of our Mecca (bingo) venues in England, Enracha venues in Spain and our casino in Belgium, has reduced our monthly cash burn rate to £7m a month. With the Grosvenor estate hopefully reopening for business in August, we can now look forward to getting back to generating revenues and becoming cash positive as a Group as quickly as possible.”

The closures cost the Hippodrome slightly less but still a substantial £1m per month, with Thomas citing the business was “fortunate to enter lockdown with a healthy balance sheet”.

Just how do the new-look casinos appear to customers when venues finally reopened on 15 August? O’Reilly spoke in detail of the measures Rank Group’s casinos have gone to in order to ensure health and safety protocols are fully satisfied.

“We’ve invested heavily in safety measures for all our venues,” O’Reilly explains. “From Perspex screens between all table game seating positions and gaming machines, to ID Scan at our entrances, one-way systems in our clubs and a relentless focus on cleaning and hand sanitising, we believe we have an ultra-safe, and still enjoyable, experience for customers.

“At Grosvenor we believe the safest casinos will be the ones that win and, as we prepare to reopen, our colleagues are keen to embrace the changes we’ve made.”

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Instead of looking at all the negatives from the pandemic, and there are a lot of them, perhaps the industry could use this period as an opportunity to make enhancements, that maybe wasn’t afforded to them pre-COVID. That’s certainly the view of Hippodrome CEO Thomas, who told the GI Huddle in July, that: “Ironically, the whole situation has made us think so carefully about how we manage our space, and we’ve come up with some ideas that actually work better before all of this happened.”

While Thomas knows the whole situation will have an impact on business operations, the casino operator has used this period to make improvements, including investing £3m in a new outdoor terrace, which will “triple the available external space for both gamers and those who want to eat, drink and smoke.” And that’s not all.

Electronic gaming is taking the place of a show bar area in the downstairs room Lola’s, including a 12-metre screen, which Thomas describes as “nothing like it anywhere else in the UK”.

“When people come in, they will hopefully feel safe, but also that it’s still fun and they will still have a great time, and additionally that there’s something new to look at,” Thomas explains.

“It’s not just telling people what they can’t do. We actually want people to come in, know they’re safe but feel like they’re in an incredible and exciting space like the Hippodrome has always been.

“And we’ve gone above and beyond with the introduction of safety and hygiene measures, with intensive staff training. People need to feel safe, and it’s our job to provide that security.”

Investing money to improve customer experience and make sure the casino sector comes back bigger and better than ever before is a refreshing, and certainly forward-thinking point of view that should put the Hippodrome in great stead moving forward.

Another positive to take from the pandemic, which Thomas describes as “heart-warming”, has been the coming together of the casino sector. Unfortunately it had to take a pandemic for such relationships to blossom.

Thomas says: “The UK casino sector has come together like it has never come together before, working together and through all the procedures we’ve had to include.

“Beyond that, with Europe and the US opening ahead of us, it gives us plenty to learn. Our relationships with those casinos are stronger than they’ve ever been, and I don’t think there’s been any information request that hasn’t been met positively

from everyone in the industry, which has been superb.”

However, just like the rest of the business world, we can’t forget that we live in extremely uncertain times, where the landscape can change at the drop of a hat. Considering the lack of empathy given to the casino sector from the UK government when it informed casinos a day before scheduled reopening that they can’t reopen, it does seem the sector is viewed as being disposable when tighter COVID measures are discussed.

Ader concurred with that point, saying: “Given the delays and timing of the latest decision, I think it’s fair to say that the casino sector in the UK has been treated as some what of an afterthought by its government.”

That uncertainty makes it even harder to predict a recovery timeline, but Ader is hopeful there will be one eventually.

“I definitely think they’ll be a recovery, it’s just going to take time which is the key,” he says.

“There’s not going to be a resurgence in 2020, and casinos will be lucky to break even in 2021, but 2022 has the potential to be a more normalised year.”

But regardless for how long, the UK casinos reopening should be welcomed as a massive relief and boost to the sector, and the industry in general. Nothing is certain for the industry in this COVID world, apart from the fact the long, winding road to recovery starts here.

Jason Ader

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PRODUCT REVIEW

WHAT’S NEW ON THE MARKET Product output is at an impressive level now and Gambling Insider previews some of the newest gems available in online gaming PLAYTECH: GEM SPLASH SERIES Falling gems lead to rising wins in Gem Splash, the sparkling new slots series from Playtech. Designed around engaging in-game features and jackpots, it combines classic themes and iconic brands with an innovative game mechanic.

In addition to the excitement of the Gem Drop feature, players have the chance to enter a special Jackpot Game on every spin. Three jackpots – the Mini, Major and Grand – are up for grabs, as well as the chance to win a multiple of between 10 and 100x the original bet.

Add some sparkle and Hollywood glamour with the first release in this series Gem Splash: Marilyn Monroe.

Gem Drops shift down the reels on every spin in this 30-line slot, awarding cash prizes of up to 100x when a Gem Splash symbol lands in them. Trigger free games for larger Gem Drops with increasing cash prize values

greentube-Seven Staxx

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Playtech-Gemsplash every time they shift, and win one of three Gem Splash jackpots on any spin.

With further games in the series planned and a distinctive feature in each title,

Gem Splash offers a great opportunity to build brand loyalty and create player excitement around new releases. Discover more in Playtech Games Marketplace today.

GREENTUBE: SEVENS STAXX greentube is offering massive jackpot wins in its bright and bold new slot Sevens Staxx, now available in its Home of Games for all B2B partners.

The juicy reels of Sevens Staxx have been upgraded with jeweled 7s, shining diamonds and mounds of cash in an online casino game that gives players 1,024 ways to win. Stacked symbols further increase winning chances while the Bonus Wheel feature adds even more excitement to the fun-filled slot, with three huge jackpots up for grabs.

The 7 symbol is the star of the show on these five reels. Landing four of either the white, red or blue 7 symbols on the correct reel triggers the Sevens Staxx feature, where players hunt for an additional seven symbols to win either the Mini, Minor or Grand jackpot. If luck is on their side, players who trigger the Bonus Wheel feature can win up to 20x their bet, or cash out one of the three jackpots.

PRODUCT REVIEW

NETENT: TWIN SPIN MEGAWAYS Twin Spin MegaWays is the first in a new generation of games coming out of NetEnt studios which reimagine iconic NetEnt slots in a new, exciting format. The slot is a six-reel video slot with up to 11,769 ways to win, and merges the explosive MegaWays mechanic with one of the best loved titles in NetEnt’s catalogue of hit slots, Twin Spin. It also features the Twin Reel feature, Free Spins, and the Avalanche feature.

MegaWays slots contain a random reel modifier which varies the symbol height on each reel with every spin. In this way, the number of ways to win changes each time the player hits spin, making the game experience unpredictable, giving players the chance to land spectacular wins.

Another exciting feature in the game is the Twin Reel feature, which is central to the Twin Spin franchise. In this feature, two or more adjacent reels are randomly chosen at the start of each spin to be identical twin reels that are linked together for the duration of the spin. Landing matching symbols on three or more adjacent reels, from left to right, will trigger a MegaWays win.

NetEnt’s much-loved Avalanche feature mechanic also makes a return. Symbols in

RUBYPLAY: SUN OF RA Malta-based slot studio RubyPlay recently launched its much anticipated new slot, Sun of Ra. Initially the game was launched to GVC exclusively and it’s now available to their partners.

Bask in the power and warmth of the Egyptian sun as Ra, the Sun god and king of the Egyptian gods, blesses you with great fortunes in this brilliant new game. Ra was revered as the creator of everything, and now it’s your opportunity to discover the mystical secrets and treasures of ancient Egypt as you spin the reels.

Spinning is just the beginning in the Sun of Ra slot, as it’s filled with loads of magical features. Any Wild may open the door to impressive payouts with the Jackpot Pick feature, where matching three coins awards a guaranteed jackpot. If you trigger the Jackpot Pick feature you get the opportunity to reveal one of the three jackpots available. These are the Midi (20-times total stake), the Minor (50-times total stake), the Major (200-times total stake), or the Grand jackpot (2,000-times total stake).

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NetEnt's Twin Spin Megaways winning combinations disappear, leaving space for a new Avalanche of symbols, which fall into position on the reels instead of spinning. The game also features wilds, scatters and free spins.

The look and sound of the game are

replicated from the original: smooth jazz, retro graphics, and an overall land-based casino feel that’s very simple and entertaining. Twin Spin MegaWays is released on 12th November 2020.

Rubyplay-Sun of Ra For some more heavenly wins, six-plus coins triggers the ‘Sunlight Spins’ hold and respin feature, while 3-plus scatters can activate Sunlight Spins or award free games with added wilds. When you trigger the spins, six, nine or 15 free spins are awarded with 50, 100 or 200 added Wilds, depending on the number of scatter

symbols that triggered the feature.

The bet range in the slot is between .50 and 100.00 and has a pretty high RTP of 96.9%. The variance is also medium to high, so more appropriate for those who prefer less frequent, bigger wins, with a maximum win of 4,200 times your stake.

GAMBLINGINSIDER.COM

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PRODUCT REVIEW

RELAX GAMING: MONEY TRAIN2 Following in the footsteps of one of Relax Gaming’s most popular titles, Money Train 2 takes players on a steam-punk slot adventure like no other, offering players an exhilarating gaming experience that has already received stand-out reviews from online gaming communities.

Money Train 2’s four main characters leave the Wild West behind and journey to a post-apocalyptic world filled with intense feature action, with new base game mechanics such as re-spins that build intensity throughout the gaming session.

The sequel’s impressive visual makeover has been designed to match the game’s higher volatility gameplay and increased maximum payout of 50,000-times stake, as Relax has turned up the heat in response to feedback on the original’s gameplay.

The supplier has also given an added punch to the much-loved Money Cart feature, which in addition to the existing multiplier and free spin action, now offers a fresh twist

Betsoft-Mystic Hive

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where an additional two reels can be unlocked if a reel is filled with symbols.

Along with the infamous gang of characters, the notorious leader, debt collector, TNT expert and gunslinger, players will encounter some new faces in the sequel too, with additions like the Necromancer offering greater winning potential in the bonus round.

“The original Money Train was a stand-out success but, despite that, we’re not too proud to admit that there was room for improvement,” said Simon Hammon, Relax Gaming CPO. “We’ve taken the elements that made the original a great game and thrown everything at the sequel to make it a production that really should differentiate.

As well as the new features and mechanics that make this title the epitome of what action-packed should stand for, we’ve also given the visuals a high-impact post-apocalyptic revamp and, basedon current reviews, the narrative has done justice to savage nature of this high-adrenaline game.”

Money Train 2

PRODUCT REVIEW

BETSOFT: MYSTIC HIVE Get enchanted with the luminous wonders of the Mystic Hive. With a 3-4-5-4-3 layout to create a unique playing experience, it’s the latest hexagonal grid video slot by Betsoft. Collect the magical nectar while fireflies dazzle around and help you by summoning storms and awarding multipliers.

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With every spin, the fireflies move clockwise around the grid, increasing the chances of filling the Nectar Meter, and when it’s full, five free spins are a warded. Mystic fireflies ofany type can spawn randomly with every spin.

During free spins, one, two or three Nectar Burst spreading wilds will

appear on the Mystic Hive Grid.

Wilds will spread from their initial place on the grid to adjacent honeycomb cells after every spin, and will continue to spread to other cells until the end of the free spins.

Delve into a world glimmering with tiny sparks of wondrous light.

feature is active, the words Random Wilds appear and the collected wild jokers are added to the reels while they are still spinning.

If the counter has two or more wild jokers, there is a chance that multiplier wilds will appear instead and see two of the wild jokers land on reels two and five with a multiplier of either x2, x3 or x5.

Free spins are triggered when three or more scatter symbols land anywhere on the reels, awarding 15 free spins plus another five for every additional triggered scatter symbol that lands.

During free spins, the triggering wild joker counter is set to five and not 15 as it’s in the base game.

Super Stake allows players to effectively double their bet with every spin for extra chances of hitting insanely valuable win combinations.

When Super Stake is active, an extra feature may trigger, which in Fruits Gone Wild Supreme is Mystery Symbols. On any losing spin, the Mystery Symbol lands randomly on the reels.

They all then change into the same symbol, either a wild, scatter or multiplier wild, to help turn the losing spin into a potentially winning spin.

The second Super Stake feature is re-spin. When triggered, reels that don’t contain a scatter symbol are re-spun and continue to re-spin until there are at least six scatter symbols on the reels.

Fruits Gone Wild Supreme also gives players the chance to gamble their winnings. They can bet on the card colour or card suit, the former potentially multiplying their win two times and the latter four times.

Fruits Gone Wild Supreme STAKELOGIC: FRUITS GONE WILD SUPREME Stakelogic is thrilled to announce the launch of its third game in the hugely popular Fruits Gone Wild series, Fruits Gone Wild Supreme.

Following the success of Fruits Gone Wild and Fruits Gone Wild Deluxe, the exciting slot developer has completely re-imagined the theme for the latest installation.

The classic slot boasts a brand-new design, giving it a sleek and modern look, which has been combined with thrilling features such as free spins, random wilds, Super Stake and Gamble.

Throughout the game, players collect joker symbols, which act as wilds, which are then added to a counter at the top of the game window.

On the 15th spin from the base game, or the fifth spin when the free spins

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A ActiveWins

AstroPay

Agilysys

B

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

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

AGS

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

www.astropay.com / AstroPay is a payment solution that provides merchants with the possibility to receive and send payments easily and securely. With one single integration, operators can provide their customers with the possibility to deposit and withdraw payments safely.

AstroPay is the payment solution of choice for thousands of Latin American, Asian and African consumers.

BBIN

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

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

bet365 Ainsworth Game Technology

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

Aristocrat

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

Aruze Gaming

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

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

BetConstruct

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

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

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C BetGames.TV

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

Casino Technology

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

Betgenius

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

Colossus Bets

www.corporate.colossusbets.com / T: +44 (0)20 3405 8420 / E: b2b@colossusbets.com Colossus Bets is a B2C and B2B provider of the world’s biggest sports jackpots with lottery-size, multi-million pound prize guarantees.

The company pioneered cash-out and holds a series of patents on the technology across the globe. The product portfolio includes FreePlay, a seamless free-to-play marketing extension to its jackpots, as well as award-winning Syndicates, a unique ‘crowdbetting’ platform.

Betradar

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

Betsoft Gaming

www.betsoft.com / T: +356 2122 4481 / E: sales@betsoft.com Betsoft Gaming develops innovative casino games for desktop and mobile. Its portfolio of more than 190 RNG titles reaches players through partnerships with many of the online gaming industry’s leading operators.

BMM Testlabs

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

BtoBet

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

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

Comtrade Gaming

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

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

Connective Games

www.connectivegames.com / T: +7 3822330775 / E: info@connectivegames.com Connective Games develop state-of-the-art, fully-customised and white label software solutions to operators via their flexible and sophisticated gaming platform. Connective Games' portfolio of online and mobile gaming products include casino, poker and a host of popular games.

D DataSpade Inc.

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

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Degree 53

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

EveryMatrix

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

G Digitain LLC

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

E

GameArt

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

Gaming Laboratories International (GLI) EGT

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

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

Gaming Partners International EnergyCasino

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

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

Ganapati PLC

www.ganapati.com / E: info@ganapati.com

Everi Holdings Inc.

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

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Ganapati produces high-quality, entertainment-focused casino content for the online gaming industry. Ganapati supplies the online gaming market with titles that combine the best Japanese game logic and design with a unique entertainment element.

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

FOR SALES EMAIL: SALES@GAMBLINGINSIDER.COM

Greentube Internet Entertainment Solutions GmbH

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

H Habanero

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

CONNECTIONS

Intertops

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

INTRALOT

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

J Helio Gaming

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

I IGT

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

JCM Global

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

K Kambi

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

Interblock

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

Konami Gaming, Inc.

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

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CONNECTIONS

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L

Newgioco Group

LeoVegas Affiliates

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

Lightning Box

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

M

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

NOVOMATIC

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

O

Merkur Gaming

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

Ortiz Gaming

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

P Microgaming

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

N NetEnt AB

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

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

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paysafecard

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

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

Play'n GO

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

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Playtech

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

CONNECTIONS

Synergy Blue

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

T Prestige Seating Technology

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

R Rymax Marketing Services

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

S SBTech

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

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

Scientific Games

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

Sirplay

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

Tal Ron, Drihem & Co.

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

TCSJOHNHUXLEY

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

Trustly Group AB

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

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

U UltraPlay

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

Y Yggrdasil Gaming

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

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FINAL WORD Bearing fruit Justin Chamberlain, CEO and founder at HungryBear Gaming, has big plans in his sights, with a track record to ensure success of his latest venture

“I HAVE A VISION TO BECOME ONE OF THE BEST GAME DEVELOPMENT STUDIOS OVER THE NEXT FIVE YEARS, DEVELOPING ORIGINAL AND NEW CONTENT THAT WILL HELP ESTABLISH US AS THE LEADING INDEPENDENT STUDIO IN NORTH AMERICA. THE LAUNCH OF OUR FIRST FIVE GAMES HAS ALREADY KICK STARTED THAT VISION, AND WE HAVE NEW CONTENT COMING TO MARKET EVERY MONTH”

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CORE Gaming was just another small games development studio back in 2011, developing and delivering games in Flash, as was the standard and ubiquitous programming language of the day. Business was good but the market was stuck in a rut technically as Flash had its limitations, and some big holes were starting to appear in it from a security point of view.

So in 2011 I made the bold (and some at the time said stupid) move to develop a game in the then nascent HTML5 language, to prove that it could be done despite the numerous challenges with such a new standard. That move lit the touch paper on an incredible journey that would witness CORE Gaming become the fastest growing studio at that time, and one that went on to develop and convert over 250 industry leading titles from Flash to HTML5 in just over three years.

Don’t get me wrong, it wasn’t easy. I had many challenges, issues and problems to overcome on the way. From idiot shareholders, rogue employees, compliance issues, lawsuits, floods, failed acquisitions, cashflow issues, contractual problems and everything in between.

But I stayed focused, committed, and driven to build what became an incredible studio, team and business of 45 developers, artists and QA engineers. After working closely with Sky Vegas from 2013, the business ultimately ended up being acquired by Sky Betting & Gaming in early 2016 in a multimillion-pound deal. They acquired the business primarily for the resource and culture we had developed, and the huge inherent potential in such a team.

The senior management team and I stayed with the business for a further two years to help embed the business into the SB&G corporate business, and to create a huge portfolio of successful titles for Sky Vegas, which was an enjoyable but frustrating part of my journey.

Frustrating mostly because of the alarmingly slow speed at which the corporate world turns, but ultimately because of the culture and people that an organisation of that size cultivates.

I took the experience for what it was, learned what I could from the corporate world and

readied myself for the journey back into the world of the entrepreneur.

So HungryBear was the restart of my personal journey back into games development and the entrepreneurial journey—the chance to restart utilising all the knowledge and experience I have gained over 15 years in the industry including the good, the bad and the ugly, and to put that all to use in this new and exciting venture.

We’re already a sizeable UK team of 12 people, most of whom are ex-CORE gaming that have chosen to abandon the corporate culture of Sky, and instead place their faith in me and my management team for a more exciting, brighter, more fun and ultimately more rewarding future.

We have established offices in Vancouver and the UK, have already secured our GPEB licence (the hardest license to secure globally) and are engaging in a highly valuable contract and future with the British Columbia Lottery in Canada. We already have multiple games developed and live in the market courtesy of the ongoing support and faith shown in us by SG Digital, and are now positioning to expand the business across the other Canadian provinces we can reach in Quebec and Ontario, and then further afield into the emerging US market.

I have a vision to become one of the best game development studios over the next five years, developing original and new content that will help establish us as the leading independent studio in North America. The launch of our first five games has already kick started that vision, and we have new content coming to market every month.

Exciting times ahead, indeed, and I know from deep experience that it will not be all plain sailing.

But being an entrepreneur, I am of course drawn to that thrill of the journey, and it’s all coming round again. But this time, I know how to avoid at least some of the pitfalls that await me along the path. I am ready to embrace it all, fight when I need to, enjoy everything it throws at me, and ultimately share it all with the people who believe and have invested on an incredible and ultimately successful journey.