Nov/Dec 2023
MACAU’S BALANCING ACT Gambling Insider assesses Macau’s attempts to diversify, how necessary they are and how best they can be achieved GLOBAL GAMING AWARDS A look back at Las Vegas and a look ahead to London CYBERSECURITY What can be learned from the attacks on MGM and Caesars? ROUNDTABLE We speak to industry suppliers about the latest in live casino
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EDITOR’S LETTER
COO, EDITOR IN CHIEF Julian Perry EDITOR Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITERS Matthew Nicholson Matthew.Nicholson@gamblinginsider.com Beth Turner Bethany.Turner@gamblinginsider.com JUNIOR STAFF WRITERS Lucy Wynne Lucy.Wynne@gamblinginsider.com Ciaran McLoughlin Ciaran.Mcloughlin@gamblinginsider.com
Julian Perry, COO, Editor-in-Chief
Tim Poole, Editor
T
o diversify or not to diversify? That has been the question in Macau for some time. Given the attention paid to it by the Chinese Government, it’s become a prominent topic within Asian gaming and one the cover feature of this very magazine therefore tackles. Before you hear from our experts and contributing guests, however, as Gambling Insider Editor I’d like to give my two cents - or Macanese Patacas if you will. And my money is going straight to the table games of Macau. Diversification is a common-sense approach. If one sector, region or even company is too lopsided in terms of revenue streams, a lack of viable alternatives leaves it exposed to a scenario where its main revenue driver suddenly falters. Macau, though, is different in my eyes. The need for diversification away from casino gaming was mainly borne out of Covid-19 closures. But here’s the kicker: Covid-19 would have closed all other entertainment options too - not just casinos. If anything, Macau should double up on its specialism as the world’s premier gambling hub and legalise online casino... Back to diversification, though, my theory is that the Chinese Government will eventually have to accept that the main attraction for tourists in Macau is its casinos millions in lost investment down the line. Instead, I believe it should embrace its reality as a gambling destination and one that simply cannot compete with other locations for non-gaming options. Las Vegas has now well and truly solidified itself as the entertainment capital of the world. How can Macau compete when the biggest musical acts perform daily in Vegas and there are so many restaurants in Vegas it would take more than a year to get through them all? Yes, Macau is famous for its own food. And gaming consultant Marcus Lim previously told me on the GI Huddle that’s where he would start when selling the appeal of Macau to non-casino-goers. Even then, though, there is Singapore nearby, there is Australia not too far away for the Asian tourist happy to fly and the likes of Dubai are upgrading their offerings all the time. The one thing none of these destinations can compete with Macau on, quality wise, is gambling. So I say Macau should capitalise on precisely that. Greater diversification efforts are not guaranteed to yield results. Accepting Macau’s position as the world’s gambling hub, however, might just be the way to go. TP, Editor
FEATURED IN THIS ISSUE
CONTENT WRITER Megan Elswyth Megan.Elswyth@gamblinginsider.com LEAD DESIGNER Olesya Adamska DESIGNER Christian Quiling DESIGN ASSISTANTS Svetlana Stoyanova, Gabriela Baleva, Abbie Monk, Nia Marinova MARKETING & EVENTS MANAGER Mariya Savova PRODUCTION CONTROLLER Phoebe Petford FINANCE AND ADMINISTRATION ASSISTANT Dhruvika Patel IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 SENIOR ACCOUNT MANAGER Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 SENIOR BUSINESS DEVELOPMENT MANAGER - U.S. Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 ADVERTISING SALES EXECUTIVE - U.S. Ariel Greenberg Ariel.Greenberg@playerspublishing.com Tel: +1.702 833 9581 Tracy Robbison Tracy.Robbison@playerspublishing.com Tel: +1 702 485 3377 ACCOUNT MANAGERS William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 Irina Litvinova Irina.Litvinova@gamblinginsider.com Tel: +44 207 613 5863 Serena Kwong Serena.kwong@gamblinginsider.com Tel: +44 (0)20 3435 5628 CREDIT MANAGER Rachel Voit WITH THANKS TO: Amy Howe, Derek Stevens, Hugo Llanos, Camilo Millon and Andy Phillips, Peter Korpusenko and Ady Totah, John Connelly, Stuart Hunter, Oliver Lovat, Tony Anscombe, Paul Sculpher, Daniela Guerreiro, Gustaf Hoffstedt, Duncan Garvie, Irina Cornides, Emil Hakobian, Nick Patrick, Mark Taffler and Yurii Berest. Gambling Insider magazine ISSN 2043-9466
Produced and published by Players Publishing Ltd
AMY HOWE
CEO, FanDuel
DEREK STEVENS
Owner, Circa Resort & Casino
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.
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CONT E 40
58
60
JOHN CONNELLY
DANIELA GUERREIRO
GUSTAF HOFFSTEDT
ISSUES
HUDDLE
8
20 Amy Howe
Facing facts
Gambling Insider takes a deep dive into the market in Macau over the past six months, looking at the most successful aspects and growths in the region
14 Taking stock
Gambling Insider looks at operators in Macau and areas across Asia, noting stock price highs and lows between May and October
GLOBAL GAMING AWARDS 18 Global Gaming Awards EMEA in London
Gambling Insider reflects on a hugely successful 10th Global Gaming Awards in Las Vegas, previewing what’s to come for the Global Gaming Awards in London in February 2024 – and beyond in Asia-Pacific
22 Derek Stevens
COVER FEATURE 24 MACAU'S BALANCING ACT
Gambling Insider explores the history and present-day power of this region, the postCovid market, and how economic diversification is changing Macau's landscape
FEATURES 30 Timeline: Entain
We look into the industry giant's notable recent history
32 The Big Question
Representatives from Sporting Risk, Kambi and Altenar discuss which LatAm market is most lucrative
34 Roundtable
In this edition of the roundtable, experts from TVBet, LuckyStreak, Evolution and Atmosfera discuss the live casino market
40 Fortress Interblock
While at G2E Las Vegas, Interblock CEO John Connelly spoke to Gambling Insider about the company's 2024 plans and the latest products it is set to launch
44 Q&A: ICE London preview
Get your calendars ready, folks! Clarion Managing Director Stuart Hunter sits down with Gambling Insider to preview its next event, the last ICE to be held in London
48 The Fontainebleau
Oliver Lovat checks out Miami's Fontainebleau, its 70 years of history, and how to build a long-lasting institution in the perpetually shifting Vegas landscape by understanding the needs of customers
52 Cyber attacks!
Gambling Insider investigates cybersecurity attacks against major casinos and the importance of online protection, in a Q&A with Eset’s Chief Security Evangelist, Tony Anscombe
ENTS 64
70
82
DUNCAN GARVIE
IRINA CORNIDES
YURII BEREST
56 How much is too much?
Gambling Insider contributor Paul Sculpher explores the idea of ‘yielding’ players, ever-increasing prices in Las Vegas and whether these prices will ever put players off
58 Cyber attacks – again!
Gambling Insider contributor Daniela Guerreiro assesses the recent cyber attacks against MGM and Caesars
60 Gambling and the EU
Gambling Insider contributor and General Secretary of the Swedish Trade Association Gustaf Hoffstedt discusses gambling regulation, or the lack thereof, in the EU, as well as thoughts on Malta's recent Bill 55
62 A grand entrance
With BetMGM making its UK debut, Editor Tim Poole reflects on the trials and challenges ahead, and how this shake-up could impact the stagnated UK market and its long-standing market leaders
64 The numbers could lie?
Duncan Garvie tells Gambling Insider about quantifying harm, the dangers of these numbers, and how regulators
could inadvertently be arriving at the wrong conclusions
66 UK National Lottery
Did you know that the lottery in the UK began in the 17 Century as a way to fund wars against the French? We look into the past and present of the lottery, and why this centuries-old institution might not have to take part in a statutory levy
INSIDERS 70 Irina Cornides Pragmatic Play
71 Emil Hakobian Relum
72 Nick Patrick Radar
73 Mark Taffler Hub88
PRODUCT REVIEWS 74 What's new on the market? Gambling Insider takes a sneak peek at new products entering the market, to find the latest casino floor products. Want to be in on the ground floor with the latest gaming products? We’ve got you covered
FINAL WORD 82 Yurii Berest
Data.Bet’s CEO wraps up this month's issue by discussing the business' goals and objectives, the esports betting market and how this growing sector can improve its risk management
FEATURES
FACING FACTS
FACING FACTS Gambling Insider compares statistics from Macau and its prominent operators from April to September 2023, looking into the findings of Q2 reports and what this means for the industry. We also look at Galaxy Entertainment and Las Vegas Sands' Macau resorts exclusively and in detail during this same period. All values are in USD, based on the latest exchange rates Macau revenue over past six monthsfrom (adjusted MOP to USD) Macau revenue over the past sixthe months (adjusted MOP from to USD)
1
1
Macau revenue over the past six months (adjusted from MOP to USD)
2.2
2.2
2.14 2.1
Source: Company reports • The growth of Macau’s market over the past six months has put its revenue ahead of Nevada’s, with revenue in September 2023 reflecting a 400%+ increase from September 2022 (despite it falling from August). • Since Covid-19 closures, the casino market has experienced exponential growth, re-invigorating Macau's economy.
2
1.9
Revenue ($ billion)
Revenue ($ billion)
2.1
2.07
2.14
2.07
2
1.92
1.92 1.89
1.9
1.8
1.8
1.7
1.7
0
0
1.89 1.84
1.8
1.8
April
April May
May June
June
July
July August
August September September
Q2 net Q2 net revenue byrevenue operatorby operator
3,000m
3,000m
2,500m
2,500m
2,000m
2,000m
Revenue ($ million)
Revenue ($ million)
Q2 net revenue by operator in Macau
1,500m
1,000m
1.63 1,500m
1,000m
500m
Source: Company reports • Las Vegas Sands’ Q2 net revenue accounts for its five Macau properties, the most of any operator in Macau.
8
1.63
1.11
0m
741.0
770
770 685.3
685.3
500m
0m Las Vegas Las VegasGalaxy MGM China MGM China Wynn MacauWynn Macau SJM HoldingsSJM Holdings Galaxy Sands SandsEntertainmentEntertainment
GAMBLINGINSIDER.COM
2.91 3000m
1.11 741.0
3000m
2.91
1.84
Sands 0m
Las Vegas Sands
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Entertainment
Galaxy Entertainment
MGM China
Wynn
Melco
SJM Holdings
2.91
FACING FACTS
3000m
Macau H1 adjusted property EBITDA by resort property EBITDA by resort Macau H1 adjusted
2,500m
2.0
2.91 939
1000
2,000m
Revenue ($ million)
Total ($ million)
800
600
1.4
559.9
1,500m
378.3
400
353.3
334.5
1,000m 200
58.9
0m
500m Las Vegas
Galaxy Entertainment 4 PROPERTIES
Sands 5 PROPERTIES
0m
MGM China
Wynn
Melco
SJM Holdings
2 PROPERTIES
2 PROPERTIES
4 PROPERTIES
4 PROPERTIES
1.20
Source: Company Reports • Melco, Wynn and MGM China tied closely in H1 adjusted property EBITDA, having less than $35m between them. • Las Vegas Sands’ five Macau resorts pulled in more in H1 than Galaxy Entertainment and MGM China combined by less than one million. This is in spite of these two resorts having a collective six resorts in Macau between them.
Las Vegas Galaxy MGM China Sands Entertainment property EBITDA by resort 5 PROPERTIES Macau Q2 4adjusted PROPERTIES 2 PROPERTIES
SJM Holdings 3 PROPERTIES
H1 Galaxy Entertainment’s adjusted property EBITDA by revenue
600 600
2.91
2.91 541 511.3
400
Revenue ($ million)
500
Total ($ million)
200
400
90
73.9 319.6 70
300
246.2
50
2.6
209.4 0m
200
Galaxy Macau
Starworld Macau
213.4
Broadway Macau
55.0
100 Q2 Las Vegas Sands’ Macau adjusted property EBITDA
0m
750
2.91 653Las Vegas Sands
Galaxy Entertainment
MGM China
Wynn
Melco
Total ($ million)
600
10
450
Source: Company Reports • Of Melco’s four Macau properties, three properties, Altira Macau, Studio City and City of Dreams, 402at a profit, compared to a loss this quarter last year. This growth in business may reflect are operating the wider recovering market following the blows taken by many operators during Covid-19 closures.
300
GAMBLINGINSIDER.COM 150
0m
2.91 239
223
Macau H1 adjusted property 2.91 EBITDA by resort 84
SJM Holdings
Re
1,000m
770
741.0
685.3
500m
FEATURES 0m
FACING FACTS
Entertainment’s adjusted property EBITDA SJM by revenue Las Vegas H1 Galaxy Galaxy MGM China Wynn Macau Holdings Sands Entertainment
H1 net revenue by operator (Macau operations only)
2.91 511.3
600
2.91
3000m
400
Revenue ($ million)
2,500m
200
2.0
Revenue ($ million)
2,000m
90
73.9
1,500m
1.4
Source: Company Reports • Between its five venues, the biggest contributing venue to Las Vegas Sands’ H1 net revenue was The Venetian Macau, which generated $1.21bn. • The lowest contributing venue to Las Vegas Sands’ H1 net revenue was Sands Macau. However, its $158m contribution reflects a $121m increase from H1 last year.
1.20
70 1,000m
50
2.6 500m
0m
0m
600
Galaxy Macau
Starworld Macau
Las Vegas Sands 5 PROPERTIES
2.91 541
Galaxy Entertainment 4 PROPERTIES
Broadway Macau MGM China
SJM Holdings
2 PROPERTIES
3 PROPERTIES
Vegas Sands’ Sands’ Macau adjusted property EBITDA EBITDA Q2Q2 LasLasVegas Macau adjusted property
500
Total ($ million) Total ($ million)
750
2.91 653
400
319.6
600 300
200
100
246.2
402209.4
450
300
0m 150
0m
2.91 239
Las Vegas Sands
Galaxy Entertainment
The Venetian Macao
MGM China
The Londoner Macao
Wynn
The Parisian Macao
213.4
223 Melco
The Plaza Macao and Four Seasons Macao
55.0
2.91 84
SJM Holdings
Sands Macao
H1 adjusted property EBITDA by resort Source: CompanyMacau Reports • The Plaza Macao and Four Seasons Macao accounted for 41% of adjusted property EBITDA - a 19% increase compared to this time last year, when it was responsible for 22% of revenue. Despite this, the income of the property compared to Q2 2022 has almost tripled. 1000
GAMBLINGINSIDER.COM 800
llion)
12
2.91 939
600
559.9
FEATURES
NUMBER CRUNCHING
TAKING STOCK Gambling Insider has tracked the value of operators in Macau and areas across Asia. Stock prices have been tracked across a six-month period (May 2023 – October 2023) and are tracked from the close of the first available date of the month Galaxy Entertainment
Galaxy Entertainment
Galaxy Entertainment US DOLLAR
OPERATORS
GALAXY ENTERTAINMENT
MGM China
40 US DOLLAR
12 HONG KONG DOLLAR
30 40
9
12 KONG DOLLAR HONG
12
12 9
6
30 20
9
9 6
3
20 10 June
July
August
September
6
May
10 0
May
June
July
August
September
October
0
July
August
September May
Las Vegas Sands
October June July
August
September
October
• Six-month high - May ($35.71) • Six-month low - October ($29.87) • Market capitalisation - US$24.4bn (as of 27 October) Las Vegas Sands
LAS VEGAS SANDS
US DOLLAR 80
June
July
July
0
0
June
July
12
August
July August October
Septembe September
H
Wynn Macau Ltd.
HONG KONG DOLLAR Wynn Macau Ltd.
Wynn Macau Ltd.
WYNN MACAU 12 KONG DOLLAR HONG 12
9
9
0 May
June
July
August 6
September
October
6
October
3
6
20
3
0
3
20
0
0 May
June
July
August
September
October
May
June
July
August
September
October
September
May May
0 May
June
July
August
June June
September
July July
October
October
• Six-month high - May ($64.64) • Six-month low - October ($45.70) • Market capitalisation - US$36.34bn (as of 27 October)
14
May June September
July
• Six-month high - May ($10.76) • Six-month low - June ($8.33) • Market capitalisation - US$4.77bn (as of 27 October)
6
9
August
August
Wynn Macau Ltd.
June
HONG KONG DOLLAR
HONG KONG DOLLAR
40
July
October
May
May
60 40
0
September
3 0
123
September
August
3
80 60
August
June
9
Las Vegas Sands
Las Vegas Sands US DOLLAR
6 3
0
October
MGM China
MGM CHINA HONG KONG DOLLAR
HONG KONG DOLLAR
Galaxy Entertainment
MGM China
MGM China
GAMBLINGINSIDER.COM
• Six-month high - May ($8.57) • Six-month low - June ($6.70) • Market capitalisation - US$4.66bn (as of 27 October)
August August
September September
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NUMBER CRUNCHING
OPERATORS Genting Singapore
DOLLAR
UniversalENTERTAINMENT Entertainment Corporation UNIVERSAL
GENTING SINGAPORE
SINGAPORE DOLLAR
JAPANESE YEN
Genting Singapore
2 SINGAPORE DOLLAR
Genting Singapore
3,000.00Corporation Universal Entertainment Universal Entertainment Corporation
2,000.00 JAPANESE YEN
June
July
JAPANESE YEN
3,000.00
12
2,000.00
3,000.00
1,000.00
August
September
October
2,000.00
1
0
1,000.00
2,000.00
0,000.00
May
June
July
August
September
May
October
June
1,000.00
June
0 August
July
SJM
September October May June July August September October • Six-month high - May ($1.12) • Six-month low - October ($0.82) • Market capitalisation - US$7.64bn (as of 27 October)
July
August
September
October
1,000.000,000.00
May
June
July
• Six-month high - May ($2,792.53) • Six-month low - October ($2,190.00) 0,000.00 May capitalisation June July August (as September October • Market - US$1.15bn of 27 October) Bloombery May June July August
0,000.00
PHILIPPINE PESO
OLLAR
12
SJM
HONG KONG DOLLAR SJM5
AR
une
JAPANESE YEN
3,000.00
Genting Singapore
AR
Universal Entertainment Corp
SJM
11 PHILIPPINE PESO
HONG KONG DOLLAR 5
12
11.510
11.5
3
119.5
11
3
10.5 0
4
June
July
2August
September
May
October
10
2
0 0
July
August
May
June
July
May June October July September
August August
September September
October October
• Six-month high - May ($4.10) • Six-month low - October ($3.03) • Market capitalisation - US$2.52bn (as of 27 October)
16
June
GAMBLINGINSIDER.COM
9.5
0
0
May
June
11.5 11 10.5
10 10.5 July August 9.5 10
9.5
July
September
Bloombery
PHILIPPINE PESO
12 10.5
4
Se
Bloombery
PHILIPPINE PESO BLOOMBERRY RESORTS 12 Bloombery
11.5
SJM HOLDINGS
August
September
October
0 May
June August MaySeptember
June
July
July OctoberAugust
• Six-month high - August ($11.68) • Six-month low - October ($9.85) • Market capitalisation - US$1.97bn (as of 27 October)
August
Sept
September
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GLOBAL GAMING AWARDS
WHAT DO THE GLOBAL GAMING AWARDS MEAN TO YOU? Gambling Insider reflects on a hugely successful 10th Global Gaming Awards in Las Vegas, previewing what’s to come for the Global Gaming Awards in London in February 2024 – and beyond in Asia-Pacific As we gauged the room at the Venetian Convention Center’s Bellini Ballroom ahead of the Global Gaming Awards Las Vegas 2023, one remark stood out above the others. Indeed, one of our guests – simply buzzing ahead of the ceremony – declared that the Awards are "like the Oscars.” Only the best companies win, only the most qualified executives make it onto our Judging Panel and there is true excitement in the knowledge that to have earned a Global Gaming Award is no fluke. Every winner will have had an extraordinary year or standout product to earn that accolade. Just like the Oscars. And so it proved at the Global Gaming Awards Las Vegas in October, as Aristocrat took home three Awards – not the first time
18
GAMBLINGINSIDER.COM
the industry giant has left with a multiple haul. There were notable victories elsewhere, too, as Circa Resort & Casino won Property of the year in North America for the third time in a row. The San Manuel Band of Mission Indians, meanwhile, also claimed a hat-trick of consecutive victories in the Responsible Business of the year category. These are truly remarkable achievements. The delight across the winners’ faces was palpable – again, you could truly see just how much victory meant to them. Despite the Global Gaming Awards Asia-Pacific taking place virtually in their first two years, you can see the same value attached to the Awards when winning executives come by to pick up their trophies in
person. The Global Gaming Awards is honoured to now host three ceremonies, celebrating the different regions in which gaming is prominent across the world. Running regional Awards also acknowledges the sometimes subtle differences, and sometimes not-so-subtle complexities, that separate rewarding an Asian land-based operator – for example – and a European online supplier. Different sectors of gaming deserve different categories for recognition, and different continents require separate Global Gaming Awards ceremonies. Across each of these ceremonies, Global Gaming Awards Event Manager and host Mariya Savova owns the room, as she is joined on stage by Micky Swindale, Partner at KPMG’s Global
GLOBAL GAMING AWARDS
EMEA EMEA
FEATURES
202 4 202 4
Lead partner
Lead partner
Gaming Team. KPMG’s adjudication, of course, is another reason why the Awards are held in such high esteem across the industry. Every vote is verified and there has never been an anomaly. And so we now look ahead to February’s Global Gaming Awards London, held at the world-famous Hippodrome Casino, and the largest gathering of CEOs and prestigious industry executives in Europe. Will bet365 prevail again? Will LeoVegas continue its dominance of the Online Casino category? Who will be named this year’s Executive of the year: someone new or will we have a repeat winner like Amy Howe just managed at the Las Vegas ceremony? These are just some of several questions on the tips of our tongues, with anticipation
as high as always for potential nominees – and potential winners. The only way these questions will be answered, of course, is through our fair and independent voting system; there is no bias or subjectivity, just the triumph of properties, companies and individuals deemed worth winners by their industry peers. Whatever the outcome, one thing is for certain: there will be numerous happy faces leaving the Hippodrome in February, whether they finish first, second or third. As we’ve highlighted many times over the years, even being nominated is worthy of distinction alone, while those involved in the Judging Panel can take great pride in the part they
have played in crowning the industry’s top performers for another year. So if we’re to return to that original “Oscars” analogy, the process begins in earnest now, with self-nominations, the compilation of the Shortlist and the organisation of the ceremony. In just a few short months, we’ll see the results – before the focus turns to the Asia-Pacific Awards and once again Las Vegas. Such is the rate of change within gaming, the Global Gaming Awards are constantly adapting alongside the industry. But the Awards’ core values will never be lost: integrity, fairness and the celebration of the very best gaming has to offer. Long may the industry’s growth and success continue.
GAMBLINGINSIDER.COM
19
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THE HUDDLE
IT'S A TEAM EFFORT FanDuel CEO Amy Howe joins Gambling Insider Editor Tim Poole in Las Vegas, to discuss the ever-changing gambling industry, her life before she entered the industry, increasing FanDuel’s share of the iCasino market and more We just saw a wonderful keynote presentation you did with Jason Robins at G2E and wanted to say I really enjoyed that as a member of the audience. It was fun. It’s the second year in a row doing it!
"TO HAVE AN OPPORTUNITY TO SHAPE THAT, BE PART OF THAT HISTORY BOOK AND COAUTHORING IS REALLY FUN. IT IS BY FAR MY FAVOURITE CHAPTER. AND IT’S NOT OVER YET"
To start off with quite a broad question, how do you reflect on your time at FanDuel so far? It’s coming up to two years officially as CEO and almost three years with the company. If I were to characterise it in a few words, I would say exciting, exhausting and honestly, probably one of the greatest privileges of my life. It has been so fun to be at the helm of the largest online gaming companies in America right now, in an industry that is changing so quickly every single day. It’s remarkable to think about what we have done. We’re coming up
on the sixth year since the overturning of PASPA, but to think that we’ve established a leading position in sports betting. We’ve drastically improved our offering in iGaming over the last couple of years. We launched FanDuel TV. We are the first company to integrate racing into our sportsbook product. We’ve done some phenomenal things on the business side, but I’m equally proud of what we’re doing in areas like diversity, equality, inclusion, rights and being able to use my platform to do great things for women and all diverse employees. Also, what we’re doing in responsible gaming, even though we’re five years in, we’re still in the pretty early innings compared to some of the more mature markets. And so as we look to the UK and Ireland and Australia, I think we have a real
AMY HOWE CEO, FanDuel
Watch the full video online
20
GAMBLINGINSIDER.COM
THE HUDDLE
opportunity to build this industry in the right way and perhaps a different way with it, avoiding some of the outcomes that you’re seeing outside the US. So I know we’ve talked before about your career and the many kinds of fields you’ve been in, but is gaming your favourite? You know, it is. When people ask me, ‘Are you enjoying this?’ I will say: ‘Hands down, this is by far the most rewarding and exciting chapter of my professional career.’ In some ways I feel like I’ve been training for this my whole life. What I did as a partner at McKinsey teaches you to solve very complex, abstract problems that you’ve never solved before, which is exactly what we do every single day. Also, having run a big technology company, Ticketmaster, there’s just a lot of pattern recognition. But now to come into an industry that is growing so quickly, changing and evolving before our eyes, and to have an opportunity to shape that, be part of that history book and co-authoring is really fun. It is by far my favourite chapter. And it’s not over yet. You won American Executive of the year at the Global Gaming Awards Las Vegas. And you were the first person to do it not only for the second time – but for the second year in a row as well. How do you reflect on how you’ve been able to achieve that so early after entering the industry? Thank you. You guys have been terrific and I will say, and I said this last year, I was not an insider in the industry when I came into FanDuel and one of the things that really struck me was the receptivity that I got from everybody – from competitors, partners
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and suppliers. We work with the biggest leagues and media partners. And so to have an organisation embrace you like that is really remarkable. Candidly, though, the Award is really a reflection of my team and everybody that stands behind me. It was the single biggest reason that I came to FanDuel. I always say life is too short to work with people that you don’t like, trust or respect. Yet I found all of that in FanDuel. And now I have the opportunity to continue to shape and strengthen that team and, importantly, the culture that is so strong and threads through everything we do at FanDuel. But I really appreciate the acknowledgement. You’ve previously spoken to us about increasing your share of the online casino market – which is something that came up in your keynote as well – how do you reflect on the progress so far in the area? It’s something I’m really proud of. It’s interesting; when I first came into the organisation our primary strategy with iGaming was really cross-selling. We had a huge sports betting business, and the legacy and the DNA of FanDuel is very much rooted in sports. So, we had a product that was integrated. Getting a single-account wallet is not easy, so we had all that infrastructure, but we weren’t really investing in going after the core casino customer and so there are a few things we did. One is we brought the best team we could find. We got the right team in place. We’ve made tremendous strides both in the technology platform and in improving the product. And we professionalised the marketing. FanDuel Casino didn’t really resonate a few years ago with the consumer who goes to a Caesars or a Wynn brick-and-mortar casino. And that’s really where you’re seeing the momentum. We just closed August out with the highest share we’ve ever had. So great momentum. But we’re not done yet. A question I’m particularly excited to ask you – given you’re right at the epicentre of this industry – looking at sports betting as a whole and with Fanatics and ESPN Bet being new entrants. What is your take on how the market is changing and progressing at the moment? We are going on five or six years. I think it’s to be expected that you’re going to see new competitors entering the market. There are a lot of well-capitalised players like Fanatics and ESPN that are coming on the scene. We have respect for both of those players. And I don’t know exactly how those are going to play out, but we believe very strongly in a few things. One is having a scale position in any e-commerce industry. Being a number one, two, or three player is important because the economics of acquiring and retaining customers are not trivial. Two, having a superior product and an overall proposition. Getting that right is critical and it’s not easy. It goes back to the scale position. If you have better economics, you’re able to reinvest back into better innovation and marketing. That kind of fuels what we call our flywheel. So we’ll see who prevails in the end. We feel very good about it. We’ve got a good head start five years in, but we’ll see how it plays out. But all due respect to a lot of the competitors in the field, because in the end, it’s a great thing. It’s good for consumers. It forces all of us to up our game.
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THE HUDDLE
FROM START TO FINISH Gambling Insider Editor Tim Poole spoke with Derek Stevens Owner and CEO of Circa Resort and Casino in Las Vegas, to discuss the past, present and future of the world's entertainment capital
"YOU COULD BE WRONG, YOU COULD
MAYBE CHANGE IT DOWN THE ROAD, BUT THAT’S PROBABLY
THE THING THAT STANDS OUT TO ME THE MOST, IS YOU’VE
GOT TO KNOW WHO YOUR CUSTOMER IS"
Watch the full video online
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The first thing we must mention is that we recently had the Global Gaming Awards Las Vegas. For the third time in a row, Circa Resort & Casino won the North America Property of the Year Award. Congratulations and how does it feel? I am very happy for our team. They did a great job. It was a lot of fun coming back and showing everybody the Award, so it was something we were very honoured to receive. How do you make your sportsbook standout? Given, as we look out here, there’s plenty of competition. We just really focus on sports, a bit more than others. The world’s largest sportsbook is a start and having Stadium Swim, with its 143ft screen, we give people a couple of options to come and watch sports. Vegas is now the city for sports. We’re starting off this week with 25 straight nights of football, so we’ve got a lot of content, baseball play-offs, all kinds of good stuff.
grow our sports brand into other states, where we feel like our business model matches up with the regulatory environment provided, so we’d like to continue to grow our Circa Sports brand, as time goes forward. When you talk about strengths and maybe differences, is there a different type of player that a different sportsbook can attract or is it more universal? No, I think every sportsbook has its strong suits and I think there’s not necessarily one perfect sportsbook. It really depends upon what the consumer is looking for. If you’re looking for more in-game or more props or more pre-game menu size, I think there’s a number of elements that play into what is the appropriate sportsbook for each consumer.
Can you talk to us about your football contests? Because there are some big prizes on offer. We started up our football contests a few years ago and, year after year, we’ve increased our guarantee. Last year we guaranteed $12m of payouts and this year we’ve bumped it to $14m between our two football contests. One is called the Circa Millions, that’s the contest where you pick five games each week against a points grab, that’s going to pay out $6m this year. And then there’s also Circa Survivor, this is really just taking off in popularity, and we’re going to pay out $9.2m in Circa Survivor this year; and it’s been a whole lot of fun growing these football contests. Can you talk more about the aims you have for Circa Sports and if there are any more states on the horizon? Our mobile app works in the state of Nevada and we opened in Colorado a few years ago, and opened in Iowa a little more than a year ago. We just opened in Illinois just a couple of weeks ago and we’d like to consider to grow Circa Sports, our sports brand; we’d like to
DEREK STEVENS
CEO, Circa Resort and Casino
THE HUDDLE
I also think it is very important that the consumers need to be aware and learn the importance of having multiple sportsbook apps on their phone. In the sports betting industry, not all lines are the same; if you zero into only one sportsbook or just two sportsbook apps, you’re not going to put yourself as a consumer in the best position. That’s why it is important to have at least three sportsbook apps on your phone so that you are not in a position where you’re forced to take a bad line. In the next few years, are we to expect more to come? We currently have two major residential projects within two blocks of where we are sitting right now. There’s a major project going in front of the city council this week for a 44-storey tower just to the west of us. The growth that we are seeing in the medical distract and earth distract is great, so the vibrancy of Downtown Las Vegas is, I’d say, on a high. Something we’re looking into at the moment is if you are to build a casino from the ground up in 2024, how do you stand out and what are some key components you need? If you were going to design a new casino today? Right now it’s October 2023, so if we were going to design a casino today, when would we open, 2027? You’re going to have plenty on the size and scope, you’re probably going to have a good 12 months of design and development, then you’re going to have a three-year build, so that’s like four years from now. I would say the number one thing that anyone that would want to open a casino right now has to focus on; you have to make your decision today, four years before potentially opening. You’ve got to make a decision who your customer is. You could be wrong, you could maybe change it down the road, but that’s probably the thing that stands out to me the most. You’ve got to go after a group or a sector that you’re going to say 'okay, I’m going to design X and I’m going to go after this type of customer and this is why I’m going to do it.' Then, you design, build, hire and operate around that. In the easiest sense, if you’re going to go after a certain market, let’s just say the Asian market, you’re going to design a table games area with a different element of Baccarat, have your Baccarat focus, it’s going to be more domesticated. You’ve just got to zero in; you can’t just design and be generic. How important is food and beverage among these considerations? Is it very much secondary to gaming or is it something that can lead and bring customers in? Food and beverage is certainly very important. Food and beverage can lead, and it can follow. You could have culinary, food and restaurants and beverages as being the leading part of your business, but at the same time it could also act more as an amenity because maybe there’s a
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different element that’s a strong suit. I would just say it depends. In terms of expectations for the F1 weekend, are we looking at record numbers or are we actually looking at an audience that might be more niche? I expect we’re going to learn something. I think it’s great to bring in international sport; I think it’s great to bring something that’s going to have international viewership. This puts Las Vegas in the spotlight. Obviously, we’re going to have a much higher percentage of international guests and my hope is that many of the international guests, who have maybe never been to America, never been to Las Vegas, find Las Vegas a wonderful place to spend their holiday. In year one, we’re all going to learn how did we perform at the airport? How did we perform at customs? How did we perform at the high-end hotels? How did we perform at the middle-property hotel? How did we perform with the domestic Las Vegas visitor who is not interested in F1? Will they not come to Vegas because of that? So, there are a lot of different elements to play with. I think evaluating F1 in its first year is just premature. I think F1 is going to need a few years to really give a great assessment because I think it’s going to really evolve. I think we’re all really excited about this coming here and it’s going to be wonderful publicity for the city. Finally, with 2024 on the horizon, what can we expect from Circa and yourself? We are excited about getting a full year under our belts in the state of Illinois with Circa Sports. We’re excited about launching 1 January, we’re going to have another sportsbook in Nevada. We’re going to re-do the sportsbook at the Silverton on the Southern part of town. We’re really excited about our property here at Circa Las Vegas, starting off our fourth year with full operations. We’re still in our infancy, we’re learning how to run this Legacy Club, we’re learning how to run Stadium Swim, we’re learning how to run our sportsbook a little bit better every year and every season that goes by. So, we’re excited about what 2024 is going to bring and with some expansion both in and outside of Las Vegas, we’ll have our hands full.
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COVER FEATURE
MACAU'S BALANCING ACT Gambling Insider explores whether or not Macau can become a destination akin to Nevada’s Las Vegas, as the push for economic diversification ramps up in the Chinese region and gambling hub 24
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MACAU’S COMPETITION The Asian region has few places where the gambling community can go and bet legally en masse. In fact, until recent years, Macau represented the only real option – however, Singapore has also now become a major player in Asia. In Singapore, Marina Bay Sands (the biggest casino resort in all of Asia, with a quarterly revenue of around $1bn) and Resorts World Sentosa (another of Asia’s biggest casinos) run the duopoly system. Singapore has taken much of Macau’s former VIP business and is itself a tourist destination in Asia, with world-class restaurants and events attracting people from around the globe. But Lee doesn’t see Singapore as a threat to Macau’s ambitions, stating: “Singapore actually doesn’t represent much of competition to Macau as its current market is domestic and its neighbouring countries. None of these markets have been of any significance to Macau nor do we expect them to be.” However, Ben Lee did note one place that Macau sees as a threat: “Thailand on the other hand is the one that we all fear, as it has the potential to divert business from just about every existing jurisdiction in Asia.” That said, Hubert Wang has also noted that since the VIP business broadly left Macau, it has actually been a
In Macau, 1844, now in her late-60s, Zheng Yi Sao dies. This woman spent much of her life known as the infamous and legendary ‘Pirate Queen,’ plundering in the waters of the South China Sea; however, in April 1810 she officially surrendered to the Qing authorities and was pardoned for her piracy. What does this have to do with gaming or Macau? Well, as it turns out, in Zheng Yi Sao’s retirement, she headed to the Guangdong region (which houses Macau) and started a gambling
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net positive for the resorts. In his comments to Gambling Insider, Wang highlighted that: “The speed of recovery has actually exceeded expectations, not just our internal ones but also those of the industry. Moreover, the industry structure has become healthier and more sustainable without heavy reliance on the VIP business. Presently, the market is dominated by the mass segment, with numerous nongaming activities and programmes to boost visitation.” It appears that Singapore’s gain is also Macau’s gain, as the MGM China President & COO highlighted. Now that the VIP market has diminished in Macau, the recovery of its gross gaming revenue (GGR) to pre-pandemic levels is seen in a different light, with Wang adding: “A decade ago, when I first joined the industry in Macau, VIP accounted for 70% of the total GGR. Now, it’s only around 15%. This shift means that we don’t need to reach pre-Covid GGR levels to achieve the same profit, as the mass segment has a higher profit margin. While I can’t provide an exact timeline for when total GGR will reach or surpass 2019 levels, I’m confident that the mass side will narrow that gap soon, leading to profit levels close to those of 2019.” So, with Macau’s profit margin now changed forever – seemingly for the better – Thailand is the biggest threat emerging as the rival to Macau.
house. This is one of the first (and most famous) examples of gambling taking place in a region that would later become the worldwide hub of the practice and is a marker in the rise of modern-day Macau. Then, just three years after Zheng Yi Sao passed away, in 1847, the Portuguese Government (which ruled Macau at the time) legalised gambling so it could tax the revenue made in the gambling houses that had sprang up in recent years. It wasn’t until 1999 that Portugal gave Macau
"Those in charge have watched Macau suffer through the pandemic and want a more wide-reaching source of income in the future, instead of relying solely on the gambling industry to prop it up"
back to the Chinese (after 442 years of rule), who then opened up Macau to international companies, which then saw MGM China, Las Vegas Sands and Wynn Resorts all arrive in the region. By the mid-2000’s, Macau had become the biggest gambling province in the world, as people from across the globe flooded into the casinos to enjoy themselves. But, despite the money pouring in, the idea of changes to Macau’s heavy reliance on gambling had begun to take root in both the Macanese and Chinese Governments – the latter of which wanted the region it inherited to expand its offering by diversifying its economy so that it would not rely so much on the gambling market. Of course, gambling has been illegal in mainland China since 1949, but Macau is the exception – owing to the fact that the Chinese was given control of the province from the Portuguese 24 years ago. However, the calls for changes to Macau’s reliance on gambling (a practice that started over 170 years
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"The challenges of making Macau more of a diverse destination come not only from trying to manufacture THE LAS VEGAS OF ASIA? Many officials and CEOs have stated in recent a kind of Asian Las Vegas – but also from the tastes times that Macau needs to move towards offering a wider tourism trade than just gambling. It is and differences in culture seen across Asia" a policy which the incumbent Government of ago in the time of the ‘Pirate ‘Queen’) are only getting louder.
Macau is intent on pushing the resorts into doing, after it was given a mandate from the Chinese Government – in effect, trying to make Macau into a kind of Las Vegas of Asia. Speaking exclusively to Gambling Insider, Ben Lee – Managing Partner of Gaming Developments and Marketing at IGamiX – gave a candid response to the question of how committed the Macau Government is to expanding the region’s tourism, by saying: “It appears to be the overriding focus of the current administration." This principle of economic diversification had been slowly gaining traction for a while in Macau, but while the money rolled in from the tables, it wasn’t so much of a priority for the operators. Then, in late 2019, as if by grave fortune, the reliance that many had wanted to change over time was brutally exposed by the Covid-19 pandemic. All the casinos closed and the footfall dried up, almost as if it was a punishment by the almighty. In short, the money tap was – for the first time in living memory – switched off. Ho Iat Seng, the Chief Executive of Macau, was scathing in his comments about the state of the region, stating: “We should be soberly aware of the problems and challenges facing the development of Macau. [Covid-19 has] fully exposed the vulnerability and huge risks of the Macau economy’s over-reliance on gaming tourism. This epidemic has once again exposed the problems and risks of Macau’s economic structure.” Ho’s comments were echoed by Wilfred Wong, when the Sands China President and Executive Director added during a speech to the British Chamber of Commerce in Macau that the region and its operators, 'cannot just rely on gaming, because this is not healthy.'
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LESSONS LEARNED Cut to late 2022 and in the last two-and-a-half years, the region has taken a financial pounding as Covid-19 tore a hole through the local economy, devastating the gambling industry that thrives there more than in any other part of the world. After the virus made its rapid journey across the globe, before being dragged down by the scientific community that worked tirelessly to ensure the virus would no longer pose a risk en masse, the Chinese Government decided to implement its zero-Covid policy – which was aimed at controlling the virus with lockdowns and suppression. So, while Macau mired with continued Covid-19 outbreaks and lockdowns, parts of Asia got busy bringing Macau’s gambling community to new shores, with Singapore and the Philippines gladly accepting the newfound footfall. However, watching other parts of the world open up caused multiple protests across China – a rare sight in a country where protesting against the Government can be tricky for obvious reasons. On this occasion, though, the protests against the policy prompted change from Xi Jinping’s administration, as it abandoned the policy and steadily re-opened the borders. In the present day, it is becoming clear that the focus of Macau’s Government and the Chinese officials that govern its policy is hellbent on making Macau more economically diverse, Las Vegas-esque even, a place where the biggest bands play, the best restaurants exist and the gambling flows. Those in charge have watched Macau suffer through the pandemic and want a more wide-reaching
source of income in the future, instead of relying solely on the gambling industry to prop it up. However, going about this is more difficult than it seems – and it already seemed like a Sisyphean struggle to begin with. CHALLENGES In getting Macau to be a one-size-fits-all destination, the Chinese Government has earmarked a place called Hengqin Island– which exists on the banks opposite Macau’s island – to become the (kind of) expansion that would be needed to diversify the region. That said, it comes with the notable caveat that gaming companies would not be allowed to be present across the bay. The Chinese hope that investment will be made from other companies, which would see a general of expansion of the region – minus the gambling. Then there is a question of time, just how long could it take to start really diversifying Macau? When asked if Macau could be made more like Las Vegas, Lee answered this question by stating: “Las Vegas is a unique construct that has not been successfully replicated anywhere, not even elsewhere in the US. Macau first, then Singapore, followed by Manila have all been touted as the next potential Las Vegas of the East and two decades later, none of these cities are even anywhere close. Thailand will probably be the next target for this mantra and perhaps the Vegas gurus may have better luck there. The underlying key differential between Asia and Vegas is that Asians in general have very different priorities when it comes to their wallets.” The challenge of making Macau more
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of a diverse destination come not only from trying to manufacture a kind of Asian Las Vegas – but also from the tastes and differences in culture seen across Asia. It is in changing said culture that any shift towards a more touristy destination will see its most formidable opponent.
“Let’s just say it’s part of the cost of doing business in Macau.” Interestingly, Hubert Wang – President & COO of MGM China – when speaking about the growth of Macau – highlighted the evolving regulatory rules in the region, stating: “In Macau, regulatory rules have evolved to keep up with market growth. As the market matures, WHY NOW? regulations need to adapt to ensure the market Since the mid-1800s, Macau has been a gambling remains healthy and sustainable.” destination and since 1999 it has been under The adaptation of the regulations may now Chinese rule – so it makes sense that the Chinese, be necessary to allow Macau to grow in new after allowing the big US operators to go there, directions, though it remains highly doubtful that would want to continue expanding the province. the Chinese will allow gambling to cross the bay Furthermore, the idea to diversify its economy and set itself on the mainland. didn’t come around as a result of Covid-19, but the push to change it became a sobering reality LAS MACAU? after the impact of the pandemic. Going by what the industry demands and the As Lee explains: “Macau was told to diversify cultural tastes of Macau, it seems unlikely that its economy away from gambling as well as its the region will become a new kind of Las reliance on the mainland China market back Vegas in Asia, as places such as Singapore already around 2012-13 and it’s not remiss to say we exist to hog that market. However, there is failed. This time around, the instructions are very clearly spelled out to make sure there are no workarounds or bait n’ switch tactics being employed.” Additionally, Lee also highlights that the market coming to Macau has been naturally changing in recent years: “The demographics of our visitors have already changed since mid-2012 and it will continue to change. We have been seeing younger visitors and more women, while the amount and type of spend per visitor reflects that.” Finally, when asked if there is a hunger from operators to change business operations in Macau, to diversify further, Lee mused:
a genuine willingness to ensure that Macau has more than one way of drawing people to its bright lights. It is being mandated from the local and national Governments and the impact of Covid-19 created an urgency to see it happen. The billions lost during the relentless lockdowns and border restrictions hurt (badly) and few want to see it repeated in their lifetimes. The question this all boils down to is: ‘Will the economic diversification of Macau happen quickly?’ Well, that doesn’t seem likely, as any sudden changes may have an unwanted impact on an economy that is only now recovering from a near-three-year hell. But could Macau’s next phase of being see it shift away from gaming and more towards entertaining the masses, without damaging the local economy? It is as Lee states: “If the changes are carefully curated – as Singapore did with the design and entry of their integrated resorts – then possibly, but that remains to be seen.”
"That said, it comes with the notable caveat that gaming companies would not be allowed to be present across the bay. The Chinese hope that investment will be made from other companies, which would see a general of expansion of the region – minus the gambling"
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TIMELINE
THE ENTAIN STORY Gambling Insider looks at the last decade of Entain (once called GVC) and the events that it has withstood during the 10-year period in which it has become an industry giant
GVC buys Sportingbet
GVC announces its intent to sell the online payments division it received as part of its £1.1bn Bwin deal
GVC buys Ladbrokes/Coral for £4bn – which came after two prior attempts to merge failed
MGM and GVC sign joint venture deal that launches BetMGM in the US, months after PASPA is overturned
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GVC agrees to buy Bwin in a £1.1bn ($1.6bn) deal, beating 888 in a close fight between the pair
Ladbrokes merges with Coral to create the Ladbrokes Coral Group, while GVC eyes takeover
GVC receives €186.7m tax bill in Greece. The disputed tax claim came from the 2010/2011 trading of Sportingbet, a brand GVC bought in 2013
GVC is fined £5.9m by the Gaming Commission after the regulator finds it guilty of anti-money laundering and problem gambling failings at Ladbrokes Coral
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TIMELINE
GVC rebrands to become Entain, with Shay Segev saying: “Today marks an exciting new chapter for the group, and an important step forward in achieving our ambition of being the world leader in sports betting and gaming” NOV
2020
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DraftKings makes $20bn bid for Entain, which is roundly rejected Entain
The company takes out a $1bn loan with a maturation date of October 2029. The initial sum was supposed to be $750m but following strong demand from investors it upped the sum, which was used to acquire SuperSport
Entain acquires the Polish sportsbook operator STS for £750m
BetMGM launches in UK without its US partner Entain, with MGM Resorts choosing to use its LeoVegas subsidiary instead. Entain comments that it “does not consider that this new launch will make any impact to our business or indeed the market"
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MGM Resorts offers $11bn for Entain. This offer is rejected by the company, which stated that the bid “significantly undervalues the company and its prospects”
Entain pays £17m regulatory settlement to the Gambling Commission over anti-money laundering and social responsibility failures, a record fee at the time that has since been surpassed by 888 Holdings
Entain buys 365scores for £120m
Entain announces acquisition of Angstrom Sports for £203m
Entain sets aside £585m for Turkish settlement, following a Crown Prosecution Service investigation into its previous business dealings – this also meant that it made a loss of £502.5m in H1 2023
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BIG QUESTION
What is the most promising LatAm market? Andy Phillips, CCO, Sporting Risk UNLOCKING THE POTENTIAL OF BRAZIL'S SPORTS BETTING MARKET Brazil’s sports betting market has generated plenty of attention and hype. To better understand the nuances of Brazil's sports betting landscape, we must explore its economic potential, regulatory developments, the local approach and the pivotal role of a product-first strategy. LARGE ECONOMY PROVIDES FOUNDATION With a population of 215 million and an average age of 32, Brazil boasts the world’s eighth-largest economy in terms of purchasing power parity. Above fellow LatAm giant, Mexico, in ninth and home of the world’s most mature gambling market, the UK, in 10th. SimilarWeb has reported that Brazil leads the world by volume of sportsbook website visits, with 22% of global hits. NAVIGATING REGULATORY PROCEDURES Navigating Brazil's regulatory landscape has been a challenge. After years of debate, Bill 3,626/23 was finally signed on September 2022. Then followed a wave of amendments and now further delays in the Senate. The process has left operators questioning the ultimate attractiveness of the market. LOCALISED LICENSING As federal regulation stalls, states like Rio de Janeiro and Paraná have taken the initiative by offering licences at local level. This move provides an opportunity for operators to enter the market with the benefits of regulation at a small scale. They are, however, subject to different licence fees, tax rates and requirements around geolocation and software compliance.
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COMPETITIVE LANDSCAPE As early as March of this year, 39 teams out of the 40 that make up Serie A and B of the Brasileirão have some form of sponsorship agreement with betting firms, indicating that the market has already reached a degree of saturation. That level of competition and the high costs of obtaining a licence raise concerns about whether it’s all worth the investment. US AS A CAUTIONARY TALE With all of these pressures on operators, are we set for a repeat of the US market where many have bowed out to leave the powerful duopoly of FanDuel and DraftKings? Two key challenges will be omitted, providing hope that Brazil won't go the same way: Firstly, federal regulation in Brazil should eliminate the state-by-state requirements faced by operators in the US. The technology, compliance and licensing overheads will be greatly reduced. Secondly, we can predict that sports data costs will be far more affordable than in America. In Brazil, football is king, comprising 90% of revenues. Comparatively, the nature of the sport has never lent itself to driving expensive data rights. The game is slow, goals are infrequent, so latency is tolerable. Local operators who do not need cooperation from data providers for strong product in other sports to satisfy foreign markets will escape a lot of the leverage that these entities typically wield in negotiations. Meanwhile, in Brazil, sports rights holders will have less influence at the federal level than US sports have had at the state level in mandating official data as part of regulation. PRODUCT-FIRST APPROACH IS PIVOTAL Another common mistake, now openly recognised by some US operators, can also be avoided. At the point PASPA was overturned,
industry-wide, the US sports offering was weak and generic. With products so underdeveloped across the board it was easy for operators to spend huge budgets marketing to players, who until then, had nothing but daily fantasy sports and offshore. Via the gradually lightening grey market, consumers in Brazil already have exposure to mature sports betting products and appreciate what is genuinely good. Most operators already possess the foundations of a strong soccer product so they will need to invest in localisation, differentiation and achieving best-in-class status. ADAPTING TO THE BRAZILIAN MARKET It’s now clear that younger demographics have a closer affinity to footballers than teams. This is partly driven by interaction through social media. Talents like Neymar with 216 million followers can completely dwarf the leading club side, FC Flamengo with 19 million. As such, sportsbook innovation needs to start with an understanding of the player-action component as the basic building block. Team-based power ratings simply do not have the resolution to keep up with what is to come. At the same time everything across the football product must be combinable. Unlike in
Andy Phillips
BIG QUESTION
Europe, the audience hasn’t developed, in over a decade or more, with the understanding that certain markets are correlated and cannot be combined. There is to be no patience for a product that can’t offer this. While the scope of the product expands exponentially, UX must adapt. Providing the customer with data is key but operators need to avoid confusing the audience with a self-service
What is the most promising LatAm market? Camilo Millon, Sales Director, Kambi Considering Kambi's focus on regulated markets, the largest currently would be Mexico, where Kambi provides sports betting solutions for our long-standing partner Rush Street Interactive and it RushBet brand. Mexico boasts a substantial population of nearly 130 million people and a robust, comparatively stable economy in contrast to its regional counterparts. Colombia is also one of the largest markets in the region with a strong regulatory framework, where Kambi powers the current market leader, BetPlay, as well as
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CONCLUSION While Brazil’s sports betting market may appear complex and challenging, it holds
immense potential for those willing to work through the intricacies and lead with a product-first strategy. Featuring a buoyant economy, progressing regulatory landscape and a football-mad population, Brazil offers a special opportunity for operators. Drawing lessons from past experiences, both positive and negative, will unlock the vast potential that Brazil’s sports betting market promises.
Rush Street Interactive. A regulated Colombian market was an important stepping stone in Latin America, as other countries such as Peru, Argentina and Brazil have used their regulation as a reference to inform their own legalised sports betting operations. Brazil comes into the spotlight as the standout candidate when considering its potential as a regulated market. They have a massive population that exceeds 200 million people and boasts a deeply ingrained gaming culture. Its gaming industry is projected to surge to remarkable heights, with anticipated revenues reaching a staggering $490.6bn by 2023. In fact, this elevates Brazil to the upper echelons, ranking it among the top five largest gambling markets globally. So Brazil is high on the list, but so too is Mexico.
Camilo Millon
buffet. Curated statistics can provide the context for different features. They must work like a TV commentator to deliver the most relevant narratives and promote the product when it is at its most engaging.
What is the most promising LatAm market? Hugo Llanos, Americas Regional Director, Altenar Brazil is seen by operators worldwide as LatAm’s leading market and as the Senate’s Economic Affairs Committee continues to consider the sports betting regulation bill, the country remains the brightest growth opportunity on the map. Time will tell how long it takes for regulation to
Hugo Llanos
If we are to remove Brazil from the equation, Mexico is a close second and I believe much of its potential is still to be discovered. It has a sizable market with a gross gambling yield of $500m pass through, with Senate forecasting completion and 10% year-on-year growth, while raising by the end of the year, but operators are already more than $300m in annual tax revenues. It has keeping a watchful eye on developments, making a growing economy, with a population who are preparations for swift entry with an unlimited hugely passionate about sports, in particular amount of licences available. American sports. It is estimated around 40% of Legalisation of sports betting is set to raise up people in Mexico have bet on sport in some form to BRL$12bn ($239.7m) per year in tax, with a in the past year and a quarter of bettors wagered boost of $1bn to the gambling industry expected on sport for the first time in the last year, showing by 2026. The latest bill calls for the BRL$30m huge growth. licence fee to remain, along with an 18% tax As with many of the booming LatAm markets, on revenue, which some operators may find Mexico’s middle class is growing which represents prohibitive, but this is not an opportunity to a demographic of people who have more money be missed. to spend on their hobbies and interests. An Brazil’s massive population of more than 216.4 internet penetration rate of 79% and reduced million displays a huge passion for sport, with a tax regime for sports betting operators to 15% love of football running through their veins. makes this fertile ground for those looking to go There are also vast audiences for basketball, live in the country. volleyball, NFL and MMA, which all represent When it comes to exactly how we can significant growth opportunities for local and make a difference – Altenar already provides non-domicile operators looking to establish a services to operators in countries across presence in the market. the region, including Brazil, Peru, Ecuador, For the above reasons, it is undeniable that Colombia and Mexico. Each country must Brazil holds the most promise for businesses be treated as unique, with varying tastes looking to make a name for themselves in and betting trends and if operators can LatAm. One of our first partners was a large demonstrate an ability to localise and diversify Brazilian operator and we plan to continue our their offering for different LatAm markets and commitment to this region by establishing our customer bases, there are bountiful opportunities first office there when regulation passes through. to be had.
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ROUNDTABLE
WHAT IS THE LATEST IN THE WORLD OF LIVE CASINO? Industry experts answer Gambling Insider's burning questions on everything live casino, including TVBet, LuckyStreak, Evolution and Atmosfera
YURY ERMANTRAUT CEO Atmosfera
ADY TOTAH CEO LuckyStreak
TODD HAUSHALTER Chief Product Officer Evolution
PETER KORPUSENKO CEO TVBet
PETER KORPUSENKO is the of CEO of TVBet, a TV-games provider that offers live betting products for sportsbooks and casinos in the form of software integration. He also founded the company in Warsaw in 2017.
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ADY TOTAH is the CEO of LuckyStreak – a business he co-founded in 2014 and is an online B2B live casino provider of live dealer products and casino aggregation solutions.
TODD HAUSHALTER is Evolution Chief Product Officer, he has worked at the company for eight years and worked for MGM Resorts and Bally’s before that. He is responsible for the overall product and marketing strategy, as well as the chief inventor, motivator and activist for the games.
YURY ERMANTRAUT In 2017, Yury Ermantraut began his career in the gambling industry and progressed to the position of Director of Business Development at a betting company. In 2020, he founded the Atmosfera project, where he serves as the face and the visionary leader responsible for the development of all departments.
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ADY TOTAH:
YURY ERMANTRAUT:
WHAT INNOVATIONS HAVE BEEN MADE OVER THE LAST DECADE THAT HAVE MOST IMPACTED THE LIVE CASINO INDUSTRY
PETER KORPUSENKO:
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ROUNDTABLE
PETER KORPUSENKO:
YURY ERMANTRAUT:
WHAT DO YOU DO TO ENHANCE USER EXPERIENCE ONLINE
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PETER KORPUSENKO:
YURY ERMANTRAUT:
WHAT MARKETS ARE KEY FOR LIVE CASINO AND WHAT ARE THE HOTTEST EMERGING MARKETS
TODD HAUSHALTER:
ADY TOTAH:
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YURY ERMANTRAUT:
ADY TOTAH:
IS IT BECOMING MORE DIFFICULT TO STAND OUT AND DIFFERENTIATE FROM COMPETITORS
TODD HAUSHALTER: PETER KORPUSENKO:
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TODD HAUSHALTER: YURY ERMANTRAUT: ERMANTRAUT:
HOW CAN LIVE CASINOS AID OPERATORS IN TARGETING TRADITIONAL LAND-BASED PLAYERS
ADY TOTAH:
PETER KORPUSENKO:
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INTERBLOCK
BREAKING INTO THE INTERBLOCK FORTRESS Gambling Insider was in attendance at G2E in Las Vegas and caught up with Interblock Global CEO, John Connelly, to discuss its Smart Pit product, the future of AI and the future of Interblock going into 2024
What are you exhibiting here at G2E? And what is the product that has got the best reaction so far? We have several products that, this year, have resonated within the industry, which makes us very proud of the team. The Smart Pit is a new product category from our company and I think one of the reasons it’s resonating with the industry is that there are no chips. That means
the ability of a dealer to make a mistake and overpay someone is eliminated. Now the Holy Grail has been solved because we can rate players, by the second, by the dollar. So when you spend marketing dollars, you can target that marketing spend more effectively. We’ve also introduced live dice recognition, which is another technological advancement.
"The acquisition of Aruze was unexpected and in many ways as you say, one plus one is equalling far more than three" 40
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Interblock’s Smart Pit won Table Game of the Year at this year’s Global Gaming Awards Asia-Pacific. How did you come to create this innovation of a blend between traditional table games and futuristic technology? With the Smart Pit, again, there is the other component to it which is the live dice recognition: something that the industry has been searching for a solution to for decades. They have tried RFID technology – numerous attempts – and we have finally come up with a solution at the show that is resonating with a lot of the operators; as we can now effectively protect craps with one dealer. From an integrity perspective, it is one of the bigger takeaways from the Smart Pit. But also the fact we can integrate an entire pit through technology, generate
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INTERBLOCK
more handle, higher house advantage, eliminate collusion or mistakes by dealers, have live dice recognition and all of the interactive benefits that go along with that. These benefits include rating your players in real time and that transcends into a more effective marketing spend. The Smart Pit is also one of the top three takeaways from Interblock at this year's show. With that said, we also have Aruze in our booth, which is always something exciting. The acquisition of Aruze's table games division was unexpected and in many ways one plus one is equalling far more than three. Not only because of its product innovation and synergies, but the team that came with Aruze. If you ask all of my employees at Interblock about the Aruze acquisition, the first things they would say are about the people, not the products. The people are just so innovative and have given some incredible contributions already inside of the organisation. As I think about 2024, having both Aruze and Interblock’s portfolio and teams working together is a major strategic advantage that was unexpected, so I’m happy about that. Do you foresee any future M&A? With the acquisition of Interblock by Oaktree Capital, which is one of the largest private equity firms in the world, it opens a lot of doors for us; a lot of opportunities
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"Having both Aruze and Interblock’s portfolio and teams working together is a major strategic advantage that was unexpected" we can investigate and look at. The answer is yes. Both Interblock, constantly looking for potential acquisition opportunities, and Oaktree Capital itself should continue to acquire assets within the gaming industry. This would be where we see if there are synergies between those organisations that would be beneficial. I hope that continues and I hope we find other synergistic deals in the future. Tell us about your new products? The blackjack officially gets released at the end of the month, so we will see how that does, which I am excited about. Out of roulette, blackjack and craps, we have baccarat, as well. The blackjack at this year’s show, and the way we designed our own table, really caught people by surprise. There’s a lot of very unique attributes to that product and we will have to see how it performs when it enters the field or the market but, generally speaking, the technology in the Smart Pit is revolutionary. When you think about it, two, three decades ago when someone said we are going to remove coins from slot machines I think a lot of people around said, “That’ll never work.” Fast forward to today, and here we are. At first I think the reaction, when we explained we were going to remove chips from tables, was similar. However I also reminded people that when you play online, there aren’t any chips and there are hundreds of millions of people, on an annual basis, that are playing table games online. Quite frankly I think that, as an industry, we need to start bridging that gap between online casino play and the casino floor, and I think the Smart Pit is going to be a step in that direction. What about the ever-growing impact of AI? In 2023, we have taken the first step towards preparing ourselves to enter the AI realm. We are tracking our data on machines in a much more detailed fashion, enabling us in 2024 to hire some very skilled AI executives, and provide them the tools and data they need to begin innovating. Our vision is that by the end of 2024, maybe even at G2E next year, we will
introduce various forms of AI on our products in real-time tied to players. We are focused and implementing the necessary steps to be in AI by 2024. How about the secret fortress you have with Interblock’s VIP stand at G2E? The layout of our booth, at all shows, is primarily to protect the hard work and innovation my team has done over this past year. Unfortunately, many people prefer just to take pictures and videos of our products and try to simply mimic it. I think I owe it to my team and my employees to protect what they have created, and only give access to those people that are partners and customers from around the world. You can never solve every potential problem relative to companies wanting to steal or copy or infringe, but we are doing our best with the fortress of Interblock to really protect what I consider to be one of the best innovative teams in gaming. Finally, what are your ambitions for 2024? First and foremost, with the momentum we have seen at this year’s G2E, there is a lot of work to be done to implement and execute upon all of the products at this year’s show. After the show, we are going to be very busy executing on the expanded portfolio we have launched here at G2E. From there, we have a product roadmap that extends far beyond 2024. In our minds, we will definitely be entering new forms of periphery gaming such as HHR, Class 2, VLT and other areas that we find are synergistic with innovation that already exists today in Class 3 environments; and extend that into other distribution channels; that is definitely an initiative. On top of that, I have intentionally, over the past several years, buffered Interblock from the online space to allow it to focus on the hyper growth we have seen within the organisation. I felt it was premature to lay an online gaming initiative or strategy on top of the existing growth rate and skill ability of the organisation. That being said, the company has now reached a size I think can sustain both the quality and innovation within the core business while entering the online space. So we are taking the necessary steps, as we speak, to launch online by Q2 next year.
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ICE PREVIEW
MORE, MORE, MORE Stuart Hunter, Managing Director of Clarion Gaming, tells Gambling Insider the last ICE to take place in London will deliver “more connections, inspiration and learning”
What are the main industry trends ICE London 2024 will focus on? With esports taking up a lot of real estate in recent years, will there be more of a focus on AI this year? What’s shown at ICE is determined by the international community of stakeholder organisations. Our role is to serve as a facilitator of opportunity which means providing a platform for the industry’s most exciting innovators to present their latest thinking and interpretation of trends including developments such as AI and of course esports, where we have led the way, in terms of representing the business opportunities which exist for companies within this space.
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Off the show floor, ICE VOX, our learning programme, also draws its inspiration from the industry. The ICE VOX programme is the result of extensive and in-depth research consulting with the industry and understanding the key macro issues impacting business across verticals and across jurisdictions. The VOX programme is curated to meet those needs and we leverage the strength of the ICE brand to secure sectorleading speakers to share their knowledge with the industry professionals who look to the show for insight and inspiration. As an example, we have recently secured the Labour MP Carolyn Harris to speak at WrB. Ms Harris has played a central role in the safer gambling debate and
her views will be illuminating set against the backdrop of the UK Government’s White Paper on gambling reform which was published in April and is currently undergoing consultation. Can you explain the MORE creative initiative you’ve launched in support of ICE 2024? Every year we undertake extensive post-show research among attendees and a consistent theme in their feedback is the sheer scale of the ICE experience measured both in a quantitative and a qualitative sense. What this refers to is the opportunity ICE delivers to engage with the huge number of exhibitors who choose
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to show at ICE as well as the quality of the business enhancing opportunities arising from those connections. MORE: is a proud statement, a pledge to the entire industry to deliver in a way that only ICE can by connecting the entire gaming community of suppliers, operators, legislators and regulators. Our mission is to provide the industry with the most professional, authentic and business-centric environment fuelled by MORE: connections, MORE: inspiration and MORE: learning. ICE 2025’s move to Barcelona has naturally received plenty of coverage. But how do you guys intend to celebrate the last ICE London: will there be any different themes based on this being a ‘goodbye’ to London? London has a special place in the hearts of those companies and individuals who have been part of the ICE success story over the years. The first ICE to take place at ExCeL London was in 2013 and since then the show has grown exponentially. ExCeL has provided the chassis and environment for growth which will be applied to sister brand iGB L!VE when it moves to London in July 2025. The team is finalising plans to make ICE 2024 a spectacular celebration of the brand which will comprise a toast to London and a prologue to the next chapter of ICE opening in Barcelona. What are your plans for the Consumer Protection Zone (CPZ) this year, given its success? I think everyone connected with the Consumer Protection Zone can look back on its development with huge pride. We should pay credit to Tim Miller, Executive Director at the Gambling Commission, whose idea it was
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"London has a special place in the hearts of those companies and individuals who have been part of the ICE success story over the years" and who worked with Ewa Bakun, Clarion Gaming’s Director of Industry Insight and Engagement who helped shape the vision and turn a great idea into reality. Since the first CPZ was launched in 2018 the feature has grown in size, status and prominence. In 2024 it will comprise two feature areas, one for the safer gambling organisations including the SR charities and nonprofits to whom we gift the space and an adjacent theatre area. This area will be where the presentations and speeches will take place including one from Gambling Commission CEO, Andrew Rhodes. Following the UK Government’s White Paper on gambling reform which was published April 2023 there will be a sharp focus on the consultation process and the timetable for, and implications of, the proposed reforms. These and many other issues will be debated at the CPZ which of course takes place against the backdrop of the world’s biggest gambling show. I’m extremely proud that ICE was the first live event to introduce a feature dedicated to consumer protection and safer gambling and that the CPZ has set the benchmark for other industry events. In so many ways the CPZ is a text book example of what can be achieved when an industry-leading exhibition works in partnership with its stakeholders. How are numbers looking for this year’s event (at the time of writing)? We time registration to go live immediately, following the completion of G2E, on the basis that we respect that the market needs to process one major show at a time. As such I can only talk anecdotally and the conversations that I’ve been having following the Barcelona announcement. We made the announcement at the beginning of August. Firstly, the move is being seen as a positive for the development of both ICE and its sister show iGB Affiliate and that secondly the international stakeholder community want to say thank-you to London and in particular to ExCeL, London for helping to nurture a fantastic event. This plays such an important role in the business year. With those issues sitting at the top of everyone’s business agenda I’m very optimistic that ICE 2024 – the last edition to be held in London – will be a huge celebration of everything that makes the international industry so compelling and such fun to be involved with.
Strategically, how does Clarion Gaming approach the fact that there are an increasing number of industry events in the modern day? We have always been conscious of the demands placed on the industry by having an over-supply of events and exhibitions. An over-crowded marketplace causes confusion and a drain on resources both for exhibitors and for visitors. Our strategy has always been to work with our customers and to deliver what the market wants. Whether that’s a jurisdiction specific event or in the case of ICE, the co-located iGB Affiliate, or iGB L!VE – to deliver really dynamic, front-foot, holistic events which cover the totality of the industry both from sector and geographical/jurisdictional perspectives. As an example, visitors making the journey to ICE 2024 do so safe in the knowledge that they will have access to the very last technology-driven gaming innovations and services covering every single vertical and every global jurisdiction. Add to this an array of international thought leaders presenting at ICE VOX – and it’s a potent and powerful proposition – which explains why ICE is so consistently popular with visitors drawn from across the international gaming space. Ultimately though it will be the market that decides the number of industry events that it wants to support. Is moving back to London in the future a realistic possibility? The relocation to Barcelona was driven by requests from our customers and stakeholders who asked us to explore alternatives to London. We employed an expert consultancy to oversee the process and the outcome as everyone knows was the move to Barcelona which provides us with the opportunity to really scale both ICE and sister show iGB Affiliate at pace. Our focus is on making ICE Barcelona a success, working with the city and continuing the ICE success story. ICE 2024 and sister show iGB Affiliate, the last to be held in London prior to their relocation to Barcelona in January 2025, will feature circa 750 exhibitors occupying the entirety of ExCeL London.
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FONTAINEBLEAU’S IMPACT
THE FONTAINEBLEAU'S 70YEAR IMPACT Regular Gambling Insider Contributor Oliver Lovat explores the iconic Miami resort’s influence on Las Vegas In Las Vegas resort development, the 1954 Fontainebleau was perhaps the most influential property built, despite being situated across the country in Miami Beach, Florida. Conceived by hotelier and entrepreneur, Ben Novack, and designed by Morris Lapidus, it was the choice of vacation destination by many of the early Las Vegas financiers and casino owners, who enjoyed the sunshine as much as the gambling at many of the underground casinos. The resort oozed elegance, luxury and aspiration. Lapidus rewrote the rulebook
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on design, with an iconic curved façade, sweeping lines, circles, light, space and place-making throughout. The bowtie motif gave the property a continuity in its design and the famous 'staircase to nowhere' was not vanity: it was to create a sense of arrival, a moment, a memory. Noting the property’s immediate success, Ben Jaffe, a part-owner of the property, looked west, with the aim of creating a Fontainebleau-inspired luxury resort in the burgeoning town of Las Vegas.
LAS VEGAS’ FONTAINEBLEAU Although Las Vegas already had a handful of resorts on the nascent 'Strip,' none yet had gained the stature or cultural pervasiveness of the Fontainebleau. Jaffe acquired a parcel of land at a location considered to be far away from 'the action,' and had created a separate company, Conquistador, to build and operate. Funds were raised. Alongside Jaffe’s investment were others, some with alleged association with organised crime. Running Jaffe’s new casino was 'illegal' casino operator Phillip 'Dandy Phil' Kastel.
FONTAINEBLEAU’S IMPACT
At a cost of $15m, (only $1m less than the Fontainebleau and an amount that forced Jaffe to sell his interest in the Miami property). The Tropicana, as it was to be named, was designed by M. Tony Sherman, the architect behind The Sea Club, Sinbad Hotel, Waves Hotel and master of the 'MidCentury Modern' form of design that was so prevalent in Miami Beach. Unlike the casino-centric template, the Tropicana was conceived as a resort foremost, and as such, the target customers were the same as those that would be found at the Fontainebleau. The new property was well received and lauded as the finest in town, but as his alleged criminal associations were exposed, 'Dandy Phil' was denied a licence and was out. Jaffe knew he needed a hands-on investor and operator of the casino, and found one in J. Kell Houssels Sr, Part-Owner of Downtown’s Las Vegas Club and El Cortez. Alongside his lawyer son, J. Kell Jr, they assumed the operating mantle of the Tropicana. With an interest in entertainment, the Houssels made modifications, and the long-running Folies Bergère opened in late 1959, while the Tropicana Golf and Country Club in opened in 1961: perfect for the aspirational customer ‘The Trop’ sought to attract. Las Vegas expanded considerably in this decade, with new amenities and high-rise guestroom towers, notably at The Sands, Dunes and Desert Inn and most impactfully, with the arrival of Jay Sarno’s Caesars Palace. Unmistakably inspired by his many visits to the Fontainebleau in Miami, Sarno deliberately incorporated many of its distinctive features, including curved façade, designed by architect Melvin Grossman, a protégé of Lapidus. The once-grand Trop could not compete with other properties that were the beneficiaries of large Teamster loans and Howard Hughes’ unlimited capital; and as the city built upward, the low-rise elegance of the Tropicana slowly lost relevance. The Houssels sold their interest in 1968. After several owners came and went, Mitzi Stauffer Briggs added the Paradise/Tiffany tower to the low-rise structure in 1977, but she too fell victim to the ongoing criminal activity and malfeasance at the casino level and exited to
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"Locations differ and offerings adapt, the fundamentals of customer psychology do not. The ability to create and curate enduring places that encourage positive emotional engagements and enhance the human condition, is very valuable, whatever the generation of customer" hotel corporation Ramada, who built the second tower in 1986. In 1989, the Ramada casino division was spun off as Aztar, which opened a second Tropicana casino in Atlantic City and bought Jaffe’s legacy land interest in Las Vegas. Aztar itself was acquired by hotel operators Columbia Sussex in 2006, who shortly after fell into bankruptcy. The Tropicana casinos were separated, with Tropicana Las Vegas acquired by former MGM Executive, Alex Yemenidjian, and Onyx, while the others formed Tropicana Entertainment, a separate vehicle.
Bally’s was sold to Twin River Worldwide Holdings, which renamed its company to Bally’s Corporation and in 2022 acquired the non-land assets of the Tropicana in Las Vegas from Penn, with the land assets being held by GLPI, having already been sold by Penn to the REIT. At the end of 2022, Caesars Entertainment operated over 50 properties, including Bally’s in Las Vegas and the Tropicana Resorts outside of Las Vegas, while Bally’s operated 15 casinos, including The Tropicana in Las Vegas and Bally’s in Atlantic City, but not Bally’s in Las Vegas. The latter was rebranded as The Horseshoe in 2023, just to avoid confusion!
2015: TROPICANA LAS VEGAS ACQUIRED BY PENN NATIONAL Elsewhere, in a complicated legacy brand merry-go-round, Tropicana Entertainment, now owned by investor Carl Icahn, was bought by both Eldorado Resorts and Gaming and Leisure Properties International (GLPI); a real estate investment trust (REIT) was set up by Penn, which included the Tropicana casinos outside Las Vegas. In 2020, Eldorado then acquired Caesars Entertainment, in which Icahn had built a significant stake and was pivotal in engineering the trade. Caesars Entertainment operated many resorts, including Bally’s in both Las Vegas and Atlantic City. The East Coast
RETURN TO GLORY Stephen Muss, one of the most influential real estate developers of the 20th Century, responsible for dozens of hotels and commercial developments, bought the near-bankrupt Fontainebleau from Novack in 1978, with the intent of breathing new life into the property. By then, Miami Beach had become a shadow of its heyday, now synonymous with drugs and crime. Muss’ nostalgia for the vibrancy of the area remained and, with other notable developers, set about reviving the fortunes of the resort location. Under Muss, there were extensive renovations at the Fontainebleau, removing many of the now-dated original design features, modernising the resort to be fit for the 1980s, ready to compete with the Fontainebleau-inspired properties in Las Vegas and Atlantic City. After a long and successful run, which saw dramatic improvements in the area, Muss sold the property to The Soffer family in 2005; this was to be another new beginning for Miami’s crown jewel. The operating company, Fontainebleau Resorts, led by Jeffrey Soffer, oversaw a complete renovation of the property, reimagining many of Lapidus’ famed design elements, but
"Unlike the casino-centric template, The Tropicana was conceived as a resort foremost, and as such, the target customers were the same as those that would be found at The Fontainebleau"
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FONTAINEBLEAU’S IMPACT
also curating a portfolio of experiences for the next generation of aspirational customers, many of whom had made Las Vegas’ luxury resorts their destination for pleasure. With Fontainebleau Miami on track, Soffer, like Jaffe decades before, looked west, with the aim of creating a Fontainebleau-inspired luxury resort in the again-burgeoning town
of Las Vegas. The Soffer family was familiar with the city, having successfully built Turnberry Place and Towers, and Signature Towers at The MGM Grand. The Algiers and El Rancho/ Thunderbird land had been acquired and the cranes on the rising Fontainebleau Las Vegas joined those of Encore, Palazzo, Echelon,
"By learning the lessons of the Miami namesake, with a clearly defined customer, strong brand equity, clarity of design, proven programming and an experienced opening team, this new resort has been 70 years in the making"
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Cosmopolitan, Caesars Palace and City Center in the skyline. When construction began in 2007, Las Vegas had just completed a record year. Visitation was at nearly 39 million people, gaming revenue breached $10bn for the first time and occupancy levels were at a near high at over 89%. The casino market had proved a good bet with ready capital for development and M&A activity. MGM had raised funds for the Mirage and Mandalay Resorts acquisitions of the previous decade and was pushing boundaries in Project CityCenter. Apollo and TPG took Caesars Entertainment private for $27.8bn and even Carl Icahn took the cash, exiting his Nevada casinos to Goldman Sachs for $1.3bn. When Fontainebleau topped out on 14 November, 2008, the economy had already crashed, the banks were bust, saved just by emergency legislation and, within days the US was formally in recession. The project was 70% complete. The banks controversially pulled their funding.
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The building stopped. Those involved in Las Vegas’ development still recoil when remembering those times. Some projects crawled to completion, others failed, but none were so advanced and left uncompleted as the blue-glassed tower dominating the skyline. Ironically, it was Icahn who acquired the resort from bankruptcy in 2010. He was one of the few that could afford to play the long game, believing that Las Vegas’ fortunes would return.Icahn is usually right and after the project was eyed by many; it was sold to developer Stephen Witkoff for a reported $600m, banking Icahn around $500m. Under Witkoff, the resort was renamed the Drew, and using the existing shell, he sought to re-conceive the opportunity. Witkoff brought in several of those associated with MGM’s CityCenter, as construction recommenced. And then the Covid-19 pandemic came to town. With construction stalled again and the immediate future of the city in jeopardy, Witkoff exited to Jeffrey Soffer and Koch Industries. After two decades of planning, construction, bankruptcy, different owners, financial crises and a pandemic, The Fontainebleau Las Vegas restarted work in 2022 and with Soffer’s vision and confidence, there is palpable excitement in the industry over what is to come. AS ONE DOOR CLOSES, ANOTHER OPENS Unlike Miami, Las Vegas is unrecognisable from the 2000s, never mind the 1950s. It has evolved from a gambling town to a global, multi-faceted tourist
destination with resorts, conventions, entertainment and sports. The Golden Knights started the puck moving and the Raiders accelerated. But, at time of writing and based on evidence thus far, certainties are far from certain. The Oakland Athletics’ proposed new Las Vegas stadium is placed squarely on Ben Jaffe’s land parcel where the Tropicana presently exists. Bally’s, the current operator of the Tropicana, has indicated that it plans to implode the property, leaving only The Flamingo and The Sahara, which have both been extended and renovated beyond recognition from the original resorts on the 1950s Strip. It is likely to be closed within a year. Although GLPI, the landowner, has allocated nine acres for the new arena, the Athletics’ initial drawings show the stadium dominating a larger parcel and there is no doubt that Bally’s will have a new casino resort integrated into the plans. In 2024, when the doors close after 67 years, the story of the Tropicana in Las Vegas will end. It is unlikely that the name will feature in the city again, joining Hacienda and Desert Inn as key artery roads, demarking former properties on The Strip without their namesakes present. The openings of Tropicana in 1957 and Fontainebleau in 2023 are similar; both opened into a heavily competitive marketplace and both with the Miami Fontainebleau as inspiration. The original Tropicana set the scene and elevated the market. The Fontainebleau Las Vegas intends to do the same. Fontainebleau Las Vegas has a clear customer in mind, with its teaser video addressing, “sophisticated travelers in search of the spectacular;” it announced a portfolio of market-leading amenities and a classic design aesthetic, to meet its expectations. The brand alone has generations of equity, denoting elegance, luxury and aspiration, exactly what appealed to visitors back in 1954.
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Oliver Lovat But it is more than just this, that Ben Jaffe, Morris Lapidus and Ben Novack captured in Miami Beach. Although times change, locations differ and offerings adapt, the fundamentals of customer psychology do not. The ability to create and curate enduring places that encourage positive emotional engagements and enhance the human condition, is very valuable, whatever the generation of customer. It was this ability that was originally sourced, distilled, bottled and served at the Fontainebleau in Miami Beach. It was consumed, refined and replicated by Meyer Lansky, Stephen Muss, Jay Sarno and Steve Wynn. If any new resort has all the ingredients to succeed, it is the Fontainebleau. By learning the lessons of the Miami namesake, with a clearly defined customer, strong brand equity, clarity of design, proven programming and an experienced opening team, this new resort has been 70 years in the making.
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CYBERSECURITY
THERE’S HONESTY AMONG THIEVES Tony Anscombe, Chief Security Evangelist at cybersecurity company Eset, speaks to Gambling Insider about the recent cyber attacks at MGM Resorts and Caesars, whether they were related, how casinos handle hackers and what companies should do to preventinfiltration from cyber criminals What kind of cyber attacks were the MGM and Caesars episodes? Some of it in the marketplace is speculation but if you look at the claims by certain groups – not by MGM – as only MGM really knows what happened to them, but the claims from the other group responsible claim it was a socially engineered attack. This means it was phishing a voice through various social means i.e. you get a phone call and unfortunately, hand over credentials and there’s a lot of
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information out there on individuals and you can find out who somebody works for; you can build a profile and make it sound very legitimate unfortunately, when these types of attacks happen. It’s not the first time we’ve seen it, as I recall, the Twitter attack several years ago to an administrator happened in that way, so, unfortunately, it’s human behaviour and people are just playing on that. You can have an awful lot of cybersecurity
technology involved, but when something slips through… Do you think Scattered Spider and ALPHV are working together? Because that has also been speculated as well, obviously not confirmed, just speculated… Again, I can only join that speculation and say it would seem odd to make claims like that if it wasn’t you and typically cyber
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criminals in a case that’s that prominent, they do typically like to claim it. However, saying that, I think Colonial Pipeline put a stop to part of that as well, because you can go and attack a commercial company like a casino, an entertainment group, but if you are attacking critical infrastructure or a hospital, you might be a bit more reserved in coming forward. You’ll get political influence and law enforcement will come after you with political influence, and it might just be a little bit more stronger than attacking a casino for example. Do you think the MGM and Caesars attacks were related? It would seem to be a strange coincidence for them not to be related in some way, but it could be related just by the fact that if somebody has breached one casino, then even another cyber crime group might sit there and go, ‘Oh, let’s give casinos and entertainment groups a try.’ So I’m just saying, are they related by the same group? Not sure. But are they related? It does seem to be a strange coincidence… Two within a few weeks? What will the hackers do with the data? Because they retrieved an overwhelming amount of data. Will they hack the customers? What’s the plan with the data? Do they plan to sell the data? Typically, they try to ransom the data back to the victim that lost it i.e. back to the company whose data it was. And if the company isn’t going to pay, that data then becomes the value in the cyber attack. So they’ll either sell the data on, which is most probable, or what I think people don’t always appreciate in these instances is there is not typically just one group involved. For example, somebody might have done the reconnaissance to find the right person in the company to breach something and somebody else might come along and do the actual incursion and exploit vulnerabilities. Whereas for ransom, a service group might come along behind it and provide the services for encryption and exfiltration. I think there’s groups of people who specialise in different things. Are they the experts at campaigning or
abusing that data, causing identity theft or creating phishing scams against those users? Probably not. There’s probably another group somewhere else that has teams of people who are specialised in phishing emails that are tracked. You have to think of this like business, in the same way that we do business online. At your company, you’ll have somebody that’s a specialist in email tracking, a specialist in websites etc, so I think it’s much the same scenario. But if you had an MGM account, firstly if you’re using the same password somewhere else, please go change it, but people should be cautious because you’re likely to see emails coming to you that look like they’re from MGM. And at the same time, MGM may well be emailing you to turn around and say that there has been a breach, so you’ve got to be really cautious of which ones are real and which ones are not. The good thing is to marry the content with content that’s online. So if MGM is sending you an email about a breach notification, the details of the breach notification probably are replicated ontheir website. For example, if you’re a Californian, then breach notifications are actually held by the State Attorney General as well. So you can actually go look them up in some other states in the US as well. Why do you think Caesars paid the ransom? And what does it mean for other casinos if one pays the ransom? Interestingly, with the MGM one, I think you’re looking at somebody that had a clear policy and a clear procedure. If we experience this cyber incident, then we
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start shutting down all systems, and then we slowly bring systems back online in this priority order; and it would appear that they had a practised policy and procedure. If somebody isn’t as confident in their policy and procedure or somebody further up the chain, who maybe is outside of that typical operational bit; i.e. a Board member for example, turn around and say, well, for $15m it’s just not worth worrying about. Just pay it. They’ve probably got cyber liability insurance as well as cyber risk insurance. So there’ll have been a discussion with their insurers about whether they’d be covered because of how the incident unfolded. The insurer might be on the hook depending on how that unfolded for part of the operational cost of the business as well. So if that’s the case, the insurer may well have turned and said it’s good for us to pay, or good for us to fund whatever percentage is their part of it. Cyber insurance is expensive, but bear in mind an insurer would have provided forensic teams, they would have provided a negotiator and the negotiator would have probably already known how to deal with that particular group. Who are the contacts within that group? Then being able to validate that it is the right group that you’re paying and you’ll get decrypted or your data will be deleted. So there’s an entire industry sitting on the sidelines if you’re on that cyber insurance side. Personally I think it kind of feels wrong, ethically, there’s something in me that says you shouldn’t be paying in that way, but I also understand that businesses need to keep operating.
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CYBERSECURITY
And what does it mean for all of the other casinos that end up in this situation afterwards? Would you say, if one pays a ransom, they all have to? Or would you say that all individual cases deal with it differently? I hope it wouldn’t influence them. Let’s be clear, if they did, the amount of money would probably only escalate upwards. So I think that might be a barrier as well; but I think it depends on the attitude of the Board, the attitude of the security team and management team within each individual organisation. One of the things that the US Securities and Exchange Commission (SEC) did was put a ruling in so that public companies in the US are asked questions of whether they have cybersecurity people on their Board. Now, while it’s not a mandatory requirement from the SEC, the fact the SEC asks the question, may well mean some of these companies - and this is only a recent happening - have got cybersecurity people within their Board or cybersecurity knowledge within their Board. And I think that would help as well in an incident, because you’ll have greater understanding at Board level of exactly what’s going on and potentially, a Board member even getting involved in the operation and overseeing part of it. So I think it really depends on each individual company. Also, how can the casinos make sure the hackers keep to their side of the bargain? So they’re saying, ‘we’re going to return your data for $20m’. How do they know they won’t run off with the money and the data? That’s where those negotiating brokers step in because they typically understand how
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that process works and how that plays out. Now, one thing I think we don’t always appreciate about cyber crime, the dark web, the whole general piece that we think is that 'dark back of the garage entity’. And it’s not, let’s be clear, it’s not a back of the garage entity. If you and I went on the dark web now and looked to purchase data from a data breach, what you’ll find is that I’ll be offered escrow so somebody will partially release the data to me; I’ll be able to validate the data, my money will be held in escrow and then once I confirm the transaction and the data is good, the money will come out of escrow and go to the cyber criminal who’s holding the data. My point is, there’s honesty among thieves. There’s actually a business process behind this that makes it the kind of thing that if you pay the ransom and they don’t stick to their side, one of these groups would be ending their reign. If somebody paid and they failed to unencrypt, then bear in mind it’s not the next company that would need to know that, it’s the negotiators and the cyber insurance industry that probably have that core information to hand. So they know how that situation would go. For example, if you were a big casino, would you pay the ransom? With your knowledge? No. But I say that off the bat. If I was to own a casino, I’d make sure that we had good policies in place and that we tried and tested them on a frequent basis. So that you know what’s going to happen and you know the down time and everybody’s aware of how this plays out. However, I’m going to caveat that and turn and say, if I was the CEO of a hospital and somebody took control of my ICU unit and somebody’s life was at risk, yes, I’d pay the ransom. Is there a potential that the hackers could re-hack? If they’ve got a way in, could they do it again and again? Typically, if somebody’s been attacked, they get attacked again. Every company is being tested at some stage; a company of that size is going to be a target. However, a company of that size will also have, well I hope, an excellent cybersecurity team and excellent technology in place. The ones that I think find it challenging the most are those medium-sized businesses that struggle to get good cybersecurity people involved, as it’s expensive and there’s not enough resources in the industry to go round. I think some of those smaller companies suffer. Do you think casinos should be somewhat unhackable? Is there a way to be unhackable, or is it always a small percentage that you could potentially get hacked? As you’ve seen in this MGM case, human behaviour steps in and there’s potential there to be hacked. Nobody has an impenetrable network or system. It’s a bit
like saying ‘is there a piece of software that doesn’t have vulnerabilities?’ Well, yeah, there’s software that hasn’t got any vulnerabilities, but it’s just because we don’t know about them yet, it doesn’t mean they’re not there. It doesn’t mean somebody won’t exploit it at some stage. And that’s true of casinos as well. However, I don’t know factually, but I would make the assumption that there’s an awful lot of segmentation in a casino’s business. In the same way that when you get on a plane, you hope the avionics on the plane aren’t attached to the public WiFi you’re using in the back. Casino systems are not related to the hotel reservation system and I’m 99% sure they’re probably not. With one of the attacks, they targeted the hotel rooms though didn’t they? Yeah, but that may well be part of the policy and procedure of ‘actually, we’ve been attacked on this segment right now, shut everything down and bring things back up in a strategic fashion’. It doesn’t mean the attacker got to those parts. You may be better off switching off everything, investigating where the attack took place, where the attacker has been, where the lateral movement through your networks has been and then bringing up the segments that haven’t been touched. Lastly, can you give some tips on what casinos and people in general can do, to stay safe from hackers? Well, two-factor authentication is obviously a strong element. Because if somebody’s trying to breach credentials, or breach a method into the network, then that two factor authentication – however, even though many users don’t like it – is valuable and is a huge protection. And it should be app-based, not SMS-based, but also you have to make sure you’ve got policy and procedures in place. Make sure you are running simulations of cyber attacks and make sure you’re actually prepared for it. Silly things, like have you got a list of the people that need to be contacted offline? Did you print it out? Because the first thing that you lose access to is the list of people that need to be contacted. But, you must have the procedures in place, have the security in place and run simulated scenarios and make sure you’re using the latest technologies. In a company that size, you need to have a SOCK (socket secure), it needs to have good threat intelligence systems, you need to have EDR (Endpoint Detection and Response) on the end points collecting all the data, because it’s not just about malware, it’s about the incursion. It’s about understanding where the cyber criminal went, what points they touched and where they may have left another route in. Once they’re in, the first thing they do is put another route in.
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VEGAS COSTS
HOW MUCH IS TOO MUCH? Fresh off his Huddle interview with us at G2E Las Vegas, regular Gambling Insider contributor Paul Sculpher explores the ‘yielding’ of players. Will operators ever go too far? Have they already?
With G2E 2023 in the books, it felt like time to reflect on the show, the exciting new developments, products and rumours. However, the overriding feeling was of the bruising we’ve all taken from the pricing of – well – everything in Vegas. Many show attendees may have been fairly well protected from the pricing strategy by virtue of expense accounts and sales budgets; but for those of us paying our own way, it’s an expensive proposition. As I was thinking about this piece, I had a little Déjà vu and sure enough I’d written something about the financial piracy afoot in Vegas before – seven years ago! Rereading it now seems almost quaint, with my moaning about resort fees and prices in the casino shops. Little did I know then that I’d seen nothing by then. Truly ferocious table minimum increases, surge pricing in some of those shops now, with the same item costing more on a Friday night than a Tuesday afternoon, penalty charges for having the temerity to put a non-casino item in your fridge and so on. My conclusion back then was that sooner or later they’d stretch things too far and face a backlash. Well, I could not have been more wrong. Seven intervening years, including a
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devastating Covid-19 pandemic and Las Vegas is making more money than ever, certainly judging by gaming revenues stats. Other income must be through the roof too. Part of me still wonders if the backlash is coming now, but if I’d been in charge of Vegas Inc back in 2016 and throttled back on aggressive pricing, I’d have missed out on literally billions of revenue. Yielding as a concept is nothing new, but of course when automation is involved, everything gets a little sharper. We’re all familiar with hotels and flights getting more expensive as supply
runs out and of course casino gaming has a vast amount of data to analyse, in order to make a pit (and casino resort) as efficient as possible. Table management systems ensure that there’s a type of entropy, where every limited resource (whether that’s staff hours, playing positions or willing customers) is stretched as far as possible. The simple truth is that once you have a customer on site you can push them around a lot more than you think, price wise. It doesn’t feel comfortable to most older school casino people, because you spend your entire career trying to make
"There has to come a point where the Emperor’s new clothes start looking a bit transparent – for me it was paying the same for two glasses of booze as I’d pay for three litres of the same drink in a supermarket"
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customers happy, not force them begrudgingly to play a slightly higher stake than they wanted – but they still play. There are a couple of wider questions surrounding the pricing model – and bear in mind this is written by someone who was mildly surprised, to say the least, to be presented with a bill for $92 (inc tax and tip) at a bog standard casino bar for two gin and tonics recently. Those questions are wondering how this affects the staffing in the casino world and what happens if and when the customer eventually does rebel. On the first point, it hasn’t escaped the notice of plenty of team members in Vegas, that while the house is making increasingly crazy money from visitors, they as employees are not. In my experience, while dealers in Vegas have, to put it generously, a mixed approach to service standards, the F&B teams are absolutely exceptional. That exceptional performance can certainly be assisted by top-notch training, but it most certainly is also assisted by fat stacks of (tip) cash. When teams are being asked to do more with less and guests are taking a view on tips when the base prices are so salty, staff maybe start similarly taking a view on how hard they want to work to keep players happy. Servers I’ve
spoken to certainly aren’t seeing the kind of crazy money they used to receive and it’s absolutely the case that staff turnover rates have increased of late. Some of that relates to the pandemic and a general re-assessment of working life, but I’d argue some of it is also because the money isn’t quite as plentiful as years gone by. I’ve certainly never seen as many trainee bar people as I have this trip and speaking to operators confirms staff turnover is very high. I do also wonder what happens when the music finally stops and the operators push the pricing too far. Perhaps they’ll react to analytics and pull back – certainly, for example, room rates post Covid-19 were lower to re-start the Vegas economy – but I’m thinking more of the “frog in the slowly boiling pan of water” situation. It’s always easy to find something on which to blame a faltering top line that doesn’t sound like “we got greedy and got our fingers burned”, but there has to be a limit, right? Strip occupancy rates are still incredibly strong, even at very high room rates, so there doesn’t look to be any red flags yet and as long as incredible new attractions, like Formula 1, the Sphere and NFL football keep generating reasons to visit, who knows where the limit lies?
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But, but, but…. There has to come a point where the Emperor’s new clothes start looking a bit transparent – for me it was paying the same for two glasses of booze as I’d pay for three litres of the same drink in a supermarket. I now take a view on accommodation location in Vegas, splitting my time between the Strip and further afield. Operators won’t care right now – in the same way as there’s someone right behind me who’ll play $50 6/5 Blackjack when I decide it’s too volatile, there’ll be someone right behind me to take my exorbitant room when I decide to go off Strip. But what about when there isn’t?
Paul Sculpher GAMBLINGINSIDER.COM
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CYBER ATTACKS
DON’T GAMBLE WITH CYBERSECURITY Daniela Guerreiro, Associate at law firm MdME and Gambling Insider contributor, assesses lessons learned from recent cyber attacks
Multiple news sources have been reporting cyber attacks targeting US gaming companies, with Caesars Casino and MGM Resorts being the poster-children victim of these incidents. In the MGM case, it seems that the attack has been so severe MGM had to shut down several systems to better protect the data, affecting everything from hotel room digital keys to slot machines. MGM’s cybersecurity issues have been intermittent and have even resulted in guests and patrons’ personal data leaks. These events show that gaming operators – even if subject to stringent cybersecurity measures and the heavy scrutiny of regulators – are not immune to cybersecurity breaches.
The attacks on US gaming operators have just highlighted the rising prevalence of cyber threats and the relevance of appropriate cybersecurity systems: other than the immediate financial losses suffered by the gaming operator itself, being victim of a cyber attack could also erode customer trust, as it could entail personal data breaches, making patrons vulnerable and resulting in reputational damages for the gaming operator. The impact on the image and revenue streams is imminent. In other words: the stakes are high. Being a well-known and reputed gaming hub, these US occurrences prompted a discussion about the cyber resiliency across the globe. In
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the case of Macau, according to some insiders, it seems that some gaming operators conducted the relevant internal security checks to further shield against cybersecurity vulnerabilities. Some voices have assured that gaming operators in Macau have robust systems to prevent the occurrence of incidents, partly due to the Macau Cybersecurity Law enacted in 2019. The Macau Cybersecurity Law regulates the cybersecurity system of Macau, by establishing specific duties to operators of critical infrastructures. In summary, gaming operators are precisely deemed an ‘operator of a critical infrastructure’ under the Macau Cybersecurity Law. Gaming operators in Macau have been establishing strict cybersecurity measures prior to the Cybersecurity Law as a best-practice commitment; such best practices became enforceable duties. Under the Macau Cybersecurity Law, operators of critical infrastructures (such as gaming operators) are required to comply with several duties, including responsibilities of organisational nature, as well as procedural, preventive and reactive measures, self-evaluation and cooperation with public authorities. In the Macau example, the Cybersecurity Law
CYBER ATTACKS
requires gaming operators to appoint a person responsible for overseeing the cybersecurity systems, adopt appropriate technical measures to protect the systems, conduct self-evaluations and submit reports on its own systems annually. Moreover, gaming operators are required to work closely with the Cybersecurity Incident Alert and Response Center (CARIC) – the entity responsible and specialised in alerting and responding to cybersecurity incidents and report any potential cybersecurity incidents directly to the CARIC. With the increasing relevance of technology and cyberspaces, cybercriminals are becoming bolder and more sophisticated. It is imperative to rethink cybersecurity in the gaming sector. One way to better respond to threats and to prioritise business continuity, is to have gaming operators strengthen its infrastructures. This could be achieved by conducting regular risk assessments. Gaming operators should analyse and constantly monitor its information systems and assess potential risks. Having identified these risks, gaming operators will be in a better position to find the best mitigation strategy and develop an incident response plan. The incident response plan should be as detailed as possible: it
should define the responsibilities of each actor, the communication channels between each member and the specific duties to be undertaken in the event of a cybersecurity incident. Another actionable plan is to raise awareness about cyber risks within the organisation. It is essential to educate employees about potential threats, to ensure the personnel can carry out their work efficiently while keeping the organisation secure. Cybersecurity in the gaming sector can also benefit from open dialogues with other industry players, to share cybersecurity intelligence and foster an environment of collective combat against the common enemy: cyber attacks. The gaming industry is extremely profitable and has grown exponentially in recent years. Unfortunately, this popularity also attracts cybercriminals, who see this sector as a lucrative target and a goldmine of personal data. Although zero-risk is impossible in practice, the proper implementation of cybersecurity measures can greatly mitigate the existent risks. By staying on top of recent cybercrime trends and staying vigilant by implementing robust cybersecurity measures, the gaming sector can overcome its challenges and continue to thrive.
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Daniela Guerreiro GAMBLINGINSIDER.COM
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EU COMMISSION
THE ABSENT ARBITRATOR Gustaf Hoffstedt, regular Gambling Insider contributor and General Secretary of the Swedish Trade Association, discusses the EU’s absence from gambling regulation
From the outset, it was clear that the EU’s withdrawal from the gambling sector was a mistake. In 2017, the EU Commission signalled that it would cease all proceedings related to member state violations in the gambling sphere. Member states that had previously faced scrutiny over their actions were not only exempt from EU oversight but were also authorised to determine if they themselves had violated the rules of the internal market, making them both judge and defendant in their own cases. Unsurprisingly, not many states have since been found in breach of EU law. By leaving the gambling market to its fate, the EU Commission greatly underestimated its importance in maintaining law and order within the internal market. In my native Sweden, EU law had been violated when the Government continued to uphold its state-run gambling monopoly, vigorously promoting
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Government-controlled gambling while denying other operators access to the market. It did not matter whether other companies adhered to the same regulatory framework as the monopoly operator or exceeded it in terms of consumer protection. The EU Commission took note of the situation and in 2014 decided to sue Sweden for breaching EU law. The Commission successfully championed the principle of equal treatment in the EU, asserting that entities should not be treated differently based on their country of origin. Sweden eventually acquiesced and introduced a competitive licensing system that took effect in 2019. Regrettably, it marked the last time a nation would abandon a discriminatory monopoly system following an EU Commission lawsuit. All member states would have benefitted from a shared understanding of how the gambling market should be regulated: A unified EU
framework and a single EU licence, setting a standard for what the entire Union demands from gambling companies that want to offer their services to EU citizens. Today, this notion feels more remote than ever. Individual states regulate domestic gambling market as they see fit. To complicate matters, states often operate their own gambling companies that engage in commercial, and often aggressive operations, in both monopolistic and competitive markets. It is in this context that one must consider Malta’s contentious Bill 55, which aims to shield gambling companies based in the EU island state from legal proceedings in other member states. The core EU principle of recognising and treating other member states’ authorities and courts as our own demands equal treatment and a robust EU law framework to resolve disputes. With the EU abandoning this principle in the
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"It is somewhat pitiable for countries like Austria and Germany to request EU assistance when they are among the worst at providing their citizens with a gambling market that is free from discrimination and protectionism, contravening the fundamental idea of the EU"
gambling sphere, it is hardly surprising that Malta does not automatically enforce an Austrian court’s decision to expropriate a gambling company with a Maltese gambling licence. To enforce a foreign court’s decision, Malta must trust the EU to uphold the law on both ends, respecting a member state’s right to have its court decisions enforced and assessing whether a member state genuinely has the law on its side when requesting intervention against a gambling company with a Maltese or another EU licence. The EU Commission’s absence at one end has corresponding consequences at the other end, which should be obvious to member states like Austria and Germany. If you as a state are allowed to operate freely within your own gambling market, you cannot expect significant support when turning to the EU Commission for assistance in your national court decisions.
I don’t particularly like Malta’s Bill 55; I view it as another setback for the internal market. However, for other EU countries to have a legitimate basis for their demands that Malta rescind Bill 55, then Malta, as well as the gambling companies currently seeking protection there from Austrian and German court decisions, must be assured that a just and fair EU Commission will uphold law and order within the internal market, stretching from Valletta in the South to Stockholm in the North, and from Lisbon in the West to Vienna in the East. On a final note, it is somewhat pitiable for countries like Austria and Germany to request EU assistance when they are among the worst at providing their citizens with a gambling market that is free from discrimination and protectionism, contravening the fundamental idea of the EU.
Gustaf Hoffstedt
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BETMGM UK
MAKING AN ENTRANCE Gambling Insider Editor Tim Poole reflects on BetMGM’s UK launch, the initial surprise that came with it and what the ultimate goal is for a well-backed brand that cannot afford to rest on its laurels LeoVegas CEO Gustaf Hagman was emphatic on the GI Huddle a couple of months ago. In his eyes, the UK market has been static and bereft of true disruption for 20 years. That, according to the serial entrepreneur, is exactly what BetMGM will be trying to change following its launch on this side of the Atlantic Ocean. A surprise to many in the industry once it became public news, BetMGM entered the UK market with a bang. Chris Rock fronted its launch campaign, appearing on adverts across the land. Indeed, a brand synonymous with the US (where it runs as a joint venture between Entain and MGM Resorts) was not shy in announcing its arrival among the many legions of existing British betting operators. Gambling Insider heard rumblings over the summer that LeoVegas, which runs BetMGM’s UK brand, had something 'major' in the pipeline. The BetMGM news did not disappoint.
Resorts so BetMGM’s international ventures will receive heavy backing). It will also need to offer something significantly different. Going back to his interview with me, Hagman is confident BetMGM can do just that. So too is Sam Behar, UK Director, whose confidence shone through when I met him at a recent media event. But the key question is what exactly is that special something BetMGM can offer that is so different? BestOdds Co-Founder Will Armitage recently asked me that question during his own appearance on the GI Huddle and it’s one I couldn’t directly answer myself. Its eventual answering holds the key that will unlock the brand’s UK fate. What type of player is BetMGM trying to attract and how will it do so? The main focus is going to be on casino – a natural choice, given LeoVegas’ Global Gaming Award-winning success in this arena. The sportsbook, powered by Kambi, will also be important in getting players through the door. I THE STATE OF PLAY have been assured BetMGM is positive about the But, of course, there is good reason little has numbers it’s seen so far in the UK, which is handy changed in the UK market for such a long time. because everyone at the company is well aware Big players like bet365, Sky Bet, Ladbrokes, Coral, their MGM backing has to produce results. There Paddy Power, William Hill and more have served are no free handouts in this industry, especially online customers ably for years. Taking them when we’re talking about this kind of scale. on is a challenge many have attempted – and subsequently failed. To compete in a market as THE APP ITSELF mature as the UK’s, BetMGM will need to utilise So how does the app compare? Again, the good all of its resources (LeoVegas is owned by MGM news is that things are looking positive so far
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here, too. As a casual sports bettor, I can vouch for the site’s constant promotions, variety of markets and not-too-uncompetitive odds compared to the likes of Sky Bet and bet365. Immediately, this evidence all points to the wider backing of MGM and LeoVegas – because no small-time player could afford to offer free £5 ($6) and £10 bets with the regularity BetMGM already is. There is perhaps a small snag in the minimum deposit being £10, a definite inconvenience for the bettors out that there that will want to deposit for a quick £5 bet (and are able to do so on bet365 and Sky Bet). This is, however, something I personally have been able to overlook, especially considering the very generous welcome offer (bet £10 get £40 in free bets) and the fun I’ve had using the app since. For me, it’s very quickly become a happy third accompaniment to my usual sports betting options. I can easily see that being the case for many other sports bettors across the UK. As much as I do like the BetMGM app, though, I also like bet365 and Sky Bet – and regularly receive offers, odds and promotions from them too. That’s where the key issue still lies for BetMGM. It hasn’t just arrived in the UK to make up the numbers. If that was the case, BetMGM would have stuck with the US and not bothered to target internationalisation. Just like in North America, the ambitions are obviously high
BETMGM UK
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– BetMGM wants market share and a place at the top table is clearly the aim. CREATING A NARRATIVE I asked earlier how BetMGM can stand out and truly offer something different. As we've said, on the product side, that remains a rhetorical question for now. Yet one way the brand can make its mark early on is via its marketing messaging – and this is something that’s already well underway. Rock, in BetMGM’s adverts, emphasises giving UK players the Las Vegas experience. In B2B circles, meanwhile, the operator is highlighting the narrative that the UK market has become stale and needs freshening up. Much like Fanatics in the US – and particularly ESPN Bet – it’s truly fascinating for an industry analyst like myself to see where potential big new players can settle into a market. The brand recognition is there for both Fanatics and ESPN Bet – and there has been much industry ‘hype.’ I myself have generated plenty of it! Of course, the same can be said of BetMGM in the UK. The proof will ultimately be in the pudding and a good timeframe to judge results is probably US market not the UK. But these are very between two to five years, barring the kind similar examples that really run in tandem of underperformance that prompts an early exit. with BetMGM on these shores. That’s why I think we will definitely be able to conclude in THE MARKET OF THE FUTURE five years’ time whether BetMGM’s UK pursuit In five years’ time, will FanDuel and DraftKings was truly worth it. It’s a strong brand – it has still lead the biggest state markets in the US, or a good product and a great team I was very will someone like a bet365 or even BetMGM impressed with when meeting. There seems take hold of the American online sector? Within to be a sense in the company that it can never that same timeframe, will Fanatics have made rest on its laurels, which is exactly the attitude a true impact or will it have decided the betting that has driven LeoVegas to date and, experiment was fun while it lasted, but that it comparatively, an industry giant like bet365. should return to its bread and butter? Will ESPN Entering the well-established UK market, Bet, in parallel, become a household betting however, and setting itself the mission of name, or another expensive deal that didn’t quite creating the region’s first real change for two work out for Penn Entertainment? decades, is the equivalent of entering the These are all questions to do with the Premier League for the very first time and
looking to attain instant Champions League qualification. That’s not to say it’s mission impossible: BetMGM has the resources, the talent and the interface to succeed. But the UK online market is far more established than its American cousin. BetMGM has made a grand entrance, its lion roaring onto mobile phones across the UK. The pressure to keep that up, though, will be unrelenting. The brand has to go from betting’s best-kept secret to betting’s secret weapon. And, learning from so many of my C-Level interview guests over the years, I’m not going to commit to picking, in binary fashion, whether it will or will not succeed. But I know one thing: I look forward to watching the journey unfold with relish.
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RESPONSIBLE GAMING
QUANTIFYING HARM Duncan Garvie explains to Gambling Insider how regulators quantify harm and why he thinks that, often, both regulators and the industry arrive at the wrong conclusion
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RESPONSIBLE GAMING
Recently we have been seeing a steady stream of organisations asking about figures. How many people download BetBlocker? How many users click through from our domain to BetBlocker? Can you help us establish the size of the black market? Operators, regulators, other support agencies, they all want to put a number on harm so that they can tally it in their spreadsheets and provide soundbites about the good they’re doing. This is a completely understandable drive. Coming from a background in mathematics, numbers can help make a complex world simple. They provide easily understood data points. They help explain to non-experts in the field how we’re making a difference. If the graph goes up, we’ve done more good. Unfortunately, however, when discussing gambling harm, numbers can often be misleading. That intuitive data point that the CEO, press and MP wants to see, misrepresents the reality of the situation. They’re a lazy attempt to simplify something that can’t be simplified, resulting in decisions being made based on flawed information. As the famous phrase, popularised by Mark Twain, goes "there’s lies, damned lies and statistics." Examples: i) An operator with large quantities of traffic asking about the volume of referrals we receive from them to decide whether it’s worth continuing to support our service. ii) A regulator asking us to help them quantify the black market in terms of traffic. WHY QUANTIFYING FAILS Quantifying in this manner is based on a fundamentally flawed base assumption: that all gambling addicts are experiencing the same levels of harm. The reality is that levels of gambling harm will fit a normal curve. This is the bell-shaped graph shown below. On the left-hand side are the people who gamble but experience no problematic behaviours whatsoever. In the middle is the bulk of players. These are the people who show some markers of harm, but aren’t destroying their lives by engaging in gambling.The further right on the graph we go the more substantial the harm experienced until we reach the far right of the graph where we have the people whose lives are severely negatively impacted by gambling. Those who face bankruptcy, imprisonment and potentially even suicide. The extreme end of this sample represent a small number of people compared to the bulk in the middle, but these are the people whose lives are being ruined and who are the most likely to cause significant harm to others, the most expensive to treat and the most likely to end in tragedy. What does this have to do with why quantifying fails? Let’s discuss the examples we gave a little earlier:
I LARGE TRAFFIC = SMALL TRAFFIC Time and time again we’ve seen operators conclude that because they have huge traffic and a comparatively small amount of that traffic clicks through to BetBlocker (or indeed other responsible gambling support services) that these resources aren’t making a lot of difference. This is then used to justify giving less or stopping donations altogether. It is notoriously difficult to get players to use blocking software. It’s easy to understand why, in the position of the operator, it can be concluded that not many users are actually engaging with blocking software. It must be an ineffective solution. But the truth about blocking software is that it is almost universally used as a crisis response option. So many users only look to engage with blocking software once they’ve already experienced significant harm and are scrambling to stop the rot. What does this mean? This means that while the proportion of an operator’s traffic that’s referred to a blocking software may be unimpressive compared to their overall traffic, it represents the far right side of the normal curve. The people that are most addicted and at highest risk of harm. The people experiencing the highest levels of harm and therefore those that are most likely to benefit from using blocking software. The small numbers don’t mean we aren’t making a lot of difference. Our support is being taken by those that need it the most. II JOLLY ROGER ON THE STARBOARD BOW We’ve recently seen a number of regulators approaching us looking for information on the size of the black market. The clear intention has been to establish what proportion of the players in their country are choosing to play with unlicensed operators. It seems like a reasonable data point for any regulator to want. Unfortunately, it’s a data point that is very misleading for anyone who doesn’t know better. Looking to the UK market as an example – this jurisdiction has Gamstop, the national self-exclusion register. This allows a player to self-exclude from all UK-licensed operators in one go. But it’s also allowed for more nefarious activity. Unscrupulous operators and affiliates engineer their websites to rank in Google for search terms like ‘casinos not on Gamstop.' Traffic searching this search term is effectively
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Duncan Garvie 100% confirmed gambling addicts. These are users that have signed up to Gamstop because they have experienced difficulty controlling their gambling and are now trying to get round the restriction they put in place. As markers of harm go, this behaviour has to come very close to the top of the list. What point am I making? Like the previous example, I’m highlighting that while play with the black market may represent a small proportion of the overall market size, the black market targets the most vulnerable subset of the market. We’re not talking about an evenly distributed cross-section of the market. We’re talking about a focused attack on the most vulnerable section of the market. The propensity for the black market to cause harm, both in the human terms of despair and tragedy, and in the cold financial terms of the cost to the taxpayer, is huge. While the black market may be proportionally small, it’s capacity far outstrips that which we would expect when we consider the problem based on the proportion of the market alone. NUMBERS LIE That’s not true. But they can be misunderstood with a lack of context or knowledge. And they can be misrepresented, in this case, to make the problems of gambling harms appear smaller than they actually are. We all naturally see figures as a solid facts. Reliable. Dependable. But perhaps we need to start asking a few more questions and thinking about the questions we ask. Because if we ask the wrong questions, the numbers will end up taking support away from those that most need it.
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UK LOTTERY
THE BLACK SHEEP OF THE FAMILY Gambling Insider looks into the complicated history of the UK Government’s state lotteries and the struggles to regulate them, from 1694 to 2024 Since the UK Government published its Gambling White Paper back in April, endless proposals, consultations and publications have followed. However, there was a particularly strong reaction to the open consultation on the statutory levy on gambling operators, that was published on 17 October 2023, when it was revealed that despite a mandatory levy being imposed across all gambling licence holders, one particular entity seemed to be excluded: The National Lottery. In the proposal, the UK Government said: “We have concluded that charging a levy to the National Lottery under separate powers would be disproportionate and therefore do not plan to consult on this issue.” The reason for this was that The National Lottery already makes ‘significant’ voluntary contributions to Research, Prevention and Treatment (RPT) causes. Of
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course, this received immediate scrutiny, the most prominent critic being the Betting and Gaming Council (BGC). Brigid Simmonds, BGC Chairman, said: "The National Lottery’s contribution to GambleAware over the last three years has been approximately 0.01 per cent of its annual Gross Gambling Yield (GGY). This equates to an average donation of around £440,000 ($539,000) each year on GGY of around £3.5bn.” Unfortunately, it seems that despite a National Lottery existing to some degree since the late 1500s, the UK still doesn’t really know how to confidently handle the wider perception of it. The first UK lottery was recorded back in 1567 when Queen Elizabeth I wanted to finance the repair efforts for UK harbours. According to letters written at the time, the public didn’t really know what to make of it. The notion of the
Government using ticket sales to fund a project was found to be too strange to the people of England, which ultimately led to its failure. Almost 100 years later the first ‘successful’ lottery was introduced. In 1694, the Million Lottery was launched to fund the Central Government – and its upcoming war against France. The proceeds from the initiative would be used in several wars later on, including the Nine Years War and the American War. This was a much easier concept to sell to the public and seeing the financial opportunity this scheme had afforded the Government, all other lotteries were banned in 1699. This effectively gave the UK Government a monopoly on the lottery business. Considering this success, the first abolishment of the UK Government lottery may be a surprise to some. Once Napoleon was defeated in 1815, the lotteries were no longer required to fund the
UK LOTTERY
war and, subsequently, they were dissolved in 1826. The general consensus among the public and Government alike was that, as there was no impending war-based crisis, there was no need for a nationwide lottery. Of course, this was also during a time of changing public perception. After a gambling boom in the early 1800s, the idea that gambling was immoral grew in popularity. This culminated in the Gaming Act 1845 being published, which deemed any ‘game of mere skill’ unlawful, including bowling, tennis and archery. It seems that this ‘immoral’ sentiment was difficult to shake off, even over 200 years later when the National Health Service Lottery was cancelled in 1988, before it even got to do its very first draw because of legal reasons. It wasn’t until 19 November 1994 that the National Lottery as we know it was unveiled to the public, with Noel Edmonds presenting the first draw from the operator, Camelot Group. Those familiar multi-coloured balls entered the clear glass contraception and seven numbers were selected at random; 30, 3, 5, 44, 14, 22 and 10. These past 30 years have seen the National Lottery explode in popularity, with Camelot
reporting sales reaching £8.19bn in 2022/23. Of course, this led to an entire episode in itself, when it was revealed that Allwyn would be taking over the fourth National Lottery licence for 2024 – the first operator change since it was launched with Camelot back in 1994. Allywn then duly acquired Camelot. This brings us back to the present – lotteries have been organised in the UK unofficially for over 500 years and a state lottery was even held in 1694. It seems surprising, then, to see that going into 2024, there are still public debates on how the lottery should best serve the public. Those in lottery don’t tend to see themselves as part of the wider gambling sector. But, quite simply, they are kidding themselves. While we (thankfully) no longer require a state lottery to fund war efforts, or to repair the nation’s harbours, this has let the National Lottery fall into a grey area of intentions. What is the purpose of it, other than to give players the chance to claim a win of a lifetime? In its 2022/23 financial year report, Camelot reported that the National Lottery raised £36m a week for projects and communities across the UK, with a further £3.11bn raised for society
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through good causes, lottery duty and retailer commission. Of course, countless projects can only exist and thrive through the funding provided by the National Lottery, which is objectively a positive impact on society. But we cannot completely avert our eyes from the full scope of the impact the lottery has. The lottery has always been viewed as separate from traditional gambling, as the delayed nature of the win is very different from casino games. However, it’s undeniable that the ‘chance’ of the win is still a risk. The National Lottery requires specific gambling licences to operate, so should it be exempt from a statutory levy that is applied to ‘all Gambling Commission operating licence holders?' With the landscape changing to bring more accountability to the industry, across all kinds of operators, it will be interesting to see how this aspect is handled by Allwyn when the licence goes live in 2024. At the moment, all eyes are on the National Lottery and alleged special treatment from being excluded from the statutory levy. How long will said special treatment continue?
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THE INSIDERS In every issue, Gambling Insider commissions guest columns and interviews with people at the heart of the gaming industry – to discover more about the challenges its leaders, pioneers and innovators face. These contributors form The Insiders
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71 EMIL HAKOBIAN RELUM
72 NICK PATRICK RADAR
73 MARK TAFFLER HUB88
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INSIDERS IRINA CORNIDES
Twist, transform and elevate With the competitive world of live casino pushing traditional gaming experiences into new realms, Gambling Insider spoke to Irina Cornides, COO at Pragmatic Play, to discuss how the supplier’s strategy aims for the merging of technology and delivering innovative products
the PowerUp feature in Boom City, which can activate an extra dice roll and multiply bets by up to 20,000x for a chance to win the €500,000 ($530,670) maximum prize.
What goes into the research and development of new products in your live casino?
Can you tell us a bit about your ‘twist, transform and elevate’ strategy for your live casino vertical?
‘Twist, transform and elevate’ is our design and development blueprint for creating original live casino content that creates new experiences for players. In essence, we aim to add a twist on classic titles, transform player favourites and elevate the entertainment with novel mechanics. The twist comes from switching up classic titles, such as by adding the PowerUp bonus rounds feature in our PowerUp Roulette, which inspired the Lucky Numbers with Lucky Multipliers to the traditional Roulette format in our upcoming Lucky 6 Roulette game. We also transform player favourites into immersive game show experiences. Sweet Bonanza CandyLand was inspired by our popular Sweet Bonanza slot, for example, while Snakes & Ladders Live was a fun take on the popular board game. And we elevate live casino content across the Pragmatic Play portfolio by introducing different types of gameplay and ways to win – such as with
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Pragmatic Play benefits not only from creative and imaginative individuals who build and shape our live casino roadmap, but also teams of experts who understand player behaviour and help to refine ideas into topperforming products. Our product development is detail-driven focusing on providing quality gameplay both in terms of the studio atmosphere and the welcoming presenters, creativity that tells a story to take players on an exciting journey and of course most importantly the insights gained from our most successful titles. We do this against the backdrop of our ‘twist, transform and elevate’ strategy, which guides us when choosing new themes and mechanics to develop. Because ideation is deeply entrenched at multiple levels, we always have a diversity of new concepts to consider. There’s certainly no shortage of brilliant ideas. Obviously, we review our own portfolio to see how best to expand it and we also look at the wider industry to see what’s working, what’s missing and what could be better. We also continually seek to push boundaries with elevated design and research new technologies to apply in the space. But the best research and development leans into what we know players love, because ultimately that’s what it’s all about: learning from player behaviour to create even stronger entertainment experiences time and again.
Pragmatic Play’s live casino range has certain themes such as Sweet Spins, what other themes would you like to incorporate in future?
Sweet Spins is a bonus game in Sweet Bonanza
CandyLand that sprinkled a little slots magic in live casino. PowerUps, Mega Multipliers and Mega Wins are some of the many other popular features we’ve introduced to our game shows in recent years. We even have some more slots magic in store for 2024 by putting a live casino spin on one of our biggest franchises that we know will be a big splash. The idea is to keep diversifying our portfolio with highly engaging new features. We’ve already explored a variety of game themes to date, but arguably our most adventurous yet is coming this November in the form of Treasure Island. This epic game show will take players on a multibonus quest across an expansive deserted island where treasure and mystery await.
Can you tell us about the game show you plan to release at the end of November?
This year especially, we have placed a considerable focus on creating the ‘razzle dazzle’ of live casino – the excitement, the ingenuity, the entertainment. Treasure Island is set to resonate greatly with players that are keen to discover the soft and adventurous game play that comes with this game show format. The game show is inspired by the nostalgic treasure island theme packed with adventure, mystery, and unexpected turns. Introducing cinematic effects that use the same technology as Hollywood blockbusters, we’ve been able to create rich, layered gameplay that merges the physical and the digital to produce the extraordinary. Treasure Island offers a multi-level, interactive experience for players, with the attention to detail clear across every aspect, from the props on set to the outfits and even the personas enacted by the presenters themselves. It moves the game show format even further into the realm of an immersive virtual world in which art and technology combine to offer unique entertainment experiences.
EMIL HAKOBIAN
INSIDERS
Quality over quantity Emil Hakobian, Relum CEO, tells us all about the company’s iGaming ambitions heading into 2024 Our Free Round promo tool, for example, provides free rounds, spins, or bonuses for players to enjoy the playing experience without spending real money across our game's portfolio. This tool boosts player loyalty and engagement in any game at any time.
Tournament tool
Relum's tournament tool, which is games provider independent, can be used across multiple games providers' content, allowing casino operators to drive more monetisation by increasing player engagement and loyalty. The tool enables operators to use different schemes for points calculation that get reflected in leaderboards to improve players' participation levels in tournaments and play more games during the game sessions, thus increasing GGR per player contribution.
How does Relum aim to redefine the vision of optimal iGaming solutions' like your website states? Relum is a young company that undertook to redefine the casino aggregation supply chain. Traditionally, the aggregation supply chain and the incumbent suppliers in the market competed on the quantity of slots studios that they could offer B2C brands in a single endpoint integration. So, therefore, the model was “content is king” and they provided as much gaming content as possible to attract operators to their service. While, of course, depth of game content via a single API integration is essential, perhaps for new brands coming to market, it is the quality of that content and services that can sit on top of the content portfolio that helps operators scale and create engagement and revenue opportunities. We decided as a business to focus on quality, data, business support, and providing tools, features and services that help operators grow their brand.
Talk us through your products and features.
Relum provides a rich toolkit of features and back-office tools, such as free round tools, to maximise player engagement and retention.
Partner success team
Our team’s core focus is to grow our partners' businesses and gaming revenues. We do this by providing strategic planning covering operational and marketing areas for growth opportunities. This would include new player acquisition, activation, retention, reactivation, marketing campaign planning, ROI forecasting and milestones. Relum is part of your extended team, and your success is, therefore, our success.
How many countries are you live in, and are there any countries on your radar that you would like to launch into?
We are live in several European and South American markets with numerous partners
and are continuously investigating new opportunities to enter new markets. For this, we make sure that our product and infrastructure are compliant with all regulations, and that new functionalities are built with all required regulatory parameters.
What differs Relum from other iGaming solutions providers?
As we mentioned, our key difference is to offer a holistic product solution and service support. We provide partners’ post-integration, and that is ongoing, with content and the features and tools provided on top of the core gaming engine to drive revenue opportunities.
Can we expect to see any more partnerships before we begin 2024?
The business has attended a few key iGaming industry trade shows, and our enquiry pipeline for onboarding new operators is strong until the year's end. You can expect to hear more announcements in the next few months, especially in Latin America, which is a growing market for our solutions.
What can we expect to see from Relum in 2024?
Our core focus remains the same: quality over quantity and providing more tools and features that drive engagement both for acquisition, retention and reactivation for our partners. Our success is driven by that focus, and delivering the best customer support and expertise in the marketplace.
"Our core focus remains the same: quality over quantity and providing more tools and features that drive engagement both for acquisition, retention and reactivation for our partners"
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INSIDERS NICK PATRICK
A geo-fenced future With its launch into fraud detection and geocompliance solution ins October, Gambling Insider had the chance to talk to Radar CEO and Co-Founder Nick Patrick, about motivations, the market and what this solution means for consumers Could you elaborate on the importance of geo-compliance in today’s gambling market and how this technology impacts our day-to-day interactions/ transactions?
a wide range of use cases other than compliance, including on-property app experiences and location-based messaging.Lastly, enterprisereadiness. Unlike other upstarts in the space, we already work with global brands like the ones The market is rapidly growing and evolving. mentioned earlier. Our customers also love us There are lots of innovative, exciting new entrants for our support and we think of ourselves not who need cost-effective, developer-friendly just as a vendor, but as a true partner. geo-compliance solutions to get started. At the same time, existing operators are both overpaying As a follow-up, if a business deal such as for existing geo-compliance solutions and a merger was put on the table between Radar and GeoComply, would it be underutilising location features in their apps. something you would consider? Competitive markets are good for customers. Competition drives down prices and stimulates We are growing quickly and well-funded, having innovation. Both of these things are sorely most recently announced a $55M Series C in 2022. Our 'plan A' is to continue building needed in the geo-compliance space. towards our vision of 'location infrastructure for GeoComply is the biggest company every product and service.'
What was the motivation behind establishing the business in fraud detection and geo-compliance?
Our vision is location infrastructure for every product and service, and we’re always thinking about expanding into new markets. We’ve long been an industry leader in geofencing, powering geolocation for leading brands like Dick's Sporting Goods, T-Mobile, Panera and Zillow, processing over 100 billion API calls per year from over 100 million devices.We see this new product as a natural extension of our geofencing offering and we’re really excited about the market opportunity.
working in gaming geo-compliance. It provides for the majority of the industry. How do you intend to penetrate the market with a competitor that prolific and do you have any concerns?
VPNs have become popular in recent years. For some people, location spoofing has become crucial to access banned information or hide information A few things differentiate our offering: First, our from a government or authority that may persecute them. What are your developer-friendliness. Think of Radar as a 'stripe for geolocation.' Technical teams love thoughts on navigating this and how our open-source SDKs (Software Development do you plan to integrate this product? Kits) and developer documents. Secondly, fair and simple pricing. Our solution is significantly more cost-effective than alternatives, with pricing based on monthly tracked users instead of location pings, making it easy to forecast costs and to check a player’s location as often as needed. Thirdly, we recently launched Radar Maps Platform and our Geofencing Platform supports
“We hope that operators can use our technology to make their apps more fully location-aware, and therefore more useful and engaging for players”
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Our geo-compliance offering includes proxy and VPN detection, which is industry-standard and required by most state gaming laws. Right now, we’re focused on helping iGaming operators stay compliant with those laws.
What could consumers expect from platforms that integrate this technology? In what ways could their daily experience change?
Two things: First, if you read app store reviews of top sportsbook apps, you’ll see lots of complaints about location. We hope that operators can use our geofencing technology to make the player experience more seamless. Secondly, many iGaming apps stop at geo-compliance. But geofencing can power a wide range of other app experiences, such as in-stadium betting experiences or on-property messaging. We hope that operators can use our technology to make their apps more fully location-aware, and therefore more useful and engaging for players.
MARK TAFFLER
INSIDERS
Delivering luxury online Gambling Insider spoke with Hub88 and Bombay Commercial Director, Mark Taffler, to discuss entering new markets, the responsibility of Hub88, providing luxury iCasino experiences and more casinos have access to an eye-watering amount of provider content whereby, in turn, players can access a wide variety of casino games, promotions and bonuses. However, it really goes much deeper than this. Increased exposure comes as standard when, for instance, smaller studios’ content appears alongside the bigger guys helping them reach a larger player base. This is ‘enabling’ at its finest when we’re setting these studios on their way to get into the eyeline of a more extensive and diverse audience. Let’s chase this even further. What this also does for our partner is reduce their marketing spend. Casinos can reduce marketing resources by leveraging Hub88’s platform instead of individually targeting new business, allowing them to allocate resources more efficiently. We really think this creates a win-win situation for all involved.
Tell us a bit about Bombay and Hub88, and how the two connect?
Starting with Hub88, as a casino aggregator, it really forms the centre of the Yolo ecosystem. Among Bombay, OneTouch etc, it consolidates and centralises a range of different financial and casino offerings, to provide our customers with a convenient and wide reaching access to a range of tools. While it’s Hub88’s role to bring a range of business enabling tools, it’s Bombay Live’s role to bring in a range of world-class games. Bombay is a single point of access to a diverse selection of games, including live dealer, table games and more, which is then available via Hub88 different casino operators. Hub88 provides tools for comparing promotions and bonuses offered by various suppliers, helping them make informed choices.
Hub88 describes itself as a ‘business enabler.' How?
What do you think the biggest mistakes online casinos can make are? And how do you overcome these?
This really is a matter of opinion with no silver bullet to answer it. Ineffective marketing, limited or even slow payment methods, complex or unclear bonus terms, failure to innovate or inconsistent user experience can all be pointed to as reasons why companies fail to survive long term and cement a good reputation in a densely crowded industry such as ours. We provide assistance to our partners by providing an infinite toolkit that allows them to deal with payments, competitor analysis, data, new games; pretty much anything that enables them to focus on providing better products and services to their customers be that suppliers to casinos or casinos to players.
How do you add the luxury element to all of your offerings?
There’s no better place to start than with our Hub88 facilitates the success of our partners in crown jewel, Bombay Live. Any VIP-oriented a number of different ways. By offering a one- casino can distinguish itself by offering a tailored stop shop in the form of a centralised platform, gaming experience for high-value players. But
there has to be much more than this alone. Beyond the online space, Bombay is soon to take part in the real estate game with some incredible land-based environments set to appear in the next year. Coming in 2024, we’ll be opening the doors to a land-based casino over two floors boasting 11 different gaming tables in total, including a svelte and private gaming salon. This exclusive casino environment will be accessible to Bombay members only. This space will also boast Michelin-starred dining, handcrafted refreshments, entertainment and unparalleled service. A perfect place for our members to come together and live the Bombay experience in addition to 17 awe-inspiring rooms that will be open to our player base at the Bombay Hotel.
What markets have Bombay not touched yet but would like to? As with any burgeoning business, we’re always looking for new opportunities. We’re always striving to be the first dog at the bowl when it comes to new markets opening up. In line with the first-in-class experience to players across this market that Bombay Live offers, we were extremely proud to be the first and only licensed live casino studio in Argentina. But we’ve been wired this way since the very beginning. We’re proud to be offering marketoriented games such as Dragon Tiger, Andar Bahar, Teen Patti and more, which have really consolidated our success in the Indian and Asian markets. To return to the question, however, it’s purely speculative at this point. We’re always keeping a beady eye on what the markets are doing, whether it’s new markets emerging in South America, Europe, Asia, Africa and so on. Beyond physical market spaces, however, it’s poignant to note we’re constantly making moves in new cryptocurrencies that come to the market and as with everything else we’ve done, we’re always aspiring to be the first in our clients’ minds to utilise these services.
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WHAT’S NEW ON THE MARKET? Gambling Insider takes a close look at some of the exciting products that are now available on the casino floor NOVOMATIC V.I.P. X SERIES The Very Important Player X-perience Gaming above and beyond At G2E in Las Vegas, Novomatic launched an exclusive V.I.P. X series. Novomatic caused quite a stir at this year’s G2E in Las Vegas with a powerful product portfolio, presented in an elegant new booth design. Among other products targeted at the US audience, for the international markets, Novomatic presented an exclusive premium product line for the first time at the G2E in Las Vegas. The V.I.P. X Royal 1.85, the V.I.P. X Dream 3.43 and the V.I.P. X Lounge 2.32 offers exceptional luxury gaming with exquisite V.I.P. comfort, extra-high and wide gaming screens and an integrated sound system in the comfortable chair that ensures an intense player experience and maximum immersion. Discerning operators know that every player deserves to feel like a V.I.P.
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JUMBO TECHNOLOGY: THE P43 JACKPOT LINK SLOT MACHINE
Jumbo Technology is dedicated to developing high-quality products and achieving breakthroughs in technology, with a variety of its products gaining popularity in the market. At the end of 2023, casinos in both South Korea and the Philippines introduced the flagship model, the P-43 Jackpot Link Slot Machine, aiming to inject new excitement into the gaming market and enhance player experiences with this advanced gaming machine. The P-43 Jackpot Link Slot Machine, integrated with the ‘Jin Fa Cai™’ jackpot, features two games: ‘Money Bull’ and ‘Money Tiger.’ These games have made consecutive appearances in various Integrated Resorts (IRs), generating enthusiastic responses. Certified for quality, the P-43 Jackpot Link Slot Machine boasts a 43-inch 4K curved touch screen, immersive audio, and a noise-reduction design, all of which work together to enhance the gaming experience while minimising noise. The associated games, ‘Money Bull’ and ‘Money
Tiger™’ under the ‘Jin Fa Cai™’ jackpot link, offer the unique ‘Spin & Stack’ gameplay, enabling players to collect coins and unlock higher-level rewards. With its powerful game engine and innovative gameplay, the machine provides players with a visually stunning, audibly pleasing, and exciting gaming experience, complete with
simple yet entertaining gameplay and dynamic audio-visual effects. The P-43 Jackpot Link Slot Machine, widely discussed and powerful in its impact, is slated to complete its rollout across Asia by 2024, accompanied by the launch of several new games.
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SMART PIT: BRIDGING TRADITION AND TECHNOLOGY With over three decades of industry experience, Interblock’s commitment to innovation is a cornerstone of its success in the gaming industry. The award-winning Smart Pit, named ‘Table Game of the Year’ by Global Gaming Awards Asia-Pacific 2023, seamlessly blends traditional table games with cutting-edge technology. This innovation, known as the ‘Technology Umbrella’, transforms the gaming experience by increasing decision-making opportunities per hour, enhancing the house advantage across all games, and elevating customer service to unprecedented levels. The Smart Pit appeals to both existing and
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Gambling Insider speaks to Yurii Berest, CEO of Data.Bet, about the growth of esports betting and how the company helps operators maximise both revenue and efficiency by using Data.Bet’s services Tell us a bit about Data.Bet. Data.Bet is a tech-savvy esports data provider, offering operators a comprehensive esports betting solution. Our services include a live score feed, odds feed, iFrame solutions and advanced risk management. What makes us unique is the synergy of our traders’ expertise and data-driven automation, resulting in a high-quality product. We offer a centralised entry point to esports betting with a portfolio including 12,500+ live events monthly, 2000+ markets and 30+ popular esports disciplines. Our commitment to speed, efficiency and delivering outstanding results for our clients is paramount. We maintain an in-house trading team, ensuring weekly platform updates for enhanced performance. Moreover, we are proud of partnerships with official esports live data sources like Bayes and Grid, providing minimal delays in delivering in-game information for a seamless user experience. Is the popularity of esports betting growing and, if so, why do you think that is? Yes, the popularity of esports betting is consistently on the rise. Recent data from The Global and United States eSports Betting Market Report & Forecast 2022-2028 underpins this growth. The global market is set to rise from $523.9m in 2022 to a projected $1.45bn by 2028, with a CAGR of 18%. In the US, it’s expected to grow from $56.5m in 2021 to around $240m by 2028, with a CAGR of 23%. The global esports betting market share by player age highlights a growing audience. The majority of esports bettors are expected to be between 26-30 years old, making up over 44% of the audience by 2028. This younger demographic is a big part of esports betting’s rising popularity. What aspect of the business is Data.Bet currently focusing on? We’re committed to helping operators make the most of their marketing investments, ensuring they maximise revenue and operational efficiency. Additionally, continuous innovation and product enhancement are integral to our business strategy, keeping us ahead in the esports betting industry.
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What markets haven’t you broken into yet, that you would like to? While esports is a growing industry, it has yet to reach the same level of popularity as traditional sports betting. It presents a unique challenge, where the industry generates less revenue despite higher operational costs. To resolve this, we believe in the significance of widespread esports education and awareness. As for our goals, we are planning to expand into new markets, with a specific focus on LatAm and the US. Explain to us about your ‘Player Props’ feature. Player Props is an exclusive feature crafted by the Data.Bet team initially launched in CS:GO and recently extended to Valorant fans. This feature adds a personal touch to esports betting. It empowers users to bet on individual player performances, such as Total Kills and Total Deaths, bringing a customised and personalised aspect to their betting adventure. The introduction of Player Props brings benefits to both bettors and operators in esports betting. Operators can enrich their offerings by expanding the variety of markets and bets available when, for players, it means a more exciting and personalised betting adventure. Operators often hold the misconception that introducing new content or features results in bettors shifting from existing offerings to newer ones; ultimately, not impacting future turnover or player activity. However, it is crucial for us to emphasise that the addition of new content does not mean a player moves from one market to another, but rather improves engagement within the current market; it’s about adding, not replacing. We firmly believe that operators must provide a different quality content for live events. It will not only keep them competitive but also make bettors more active due to the wide variety of markets, significantly influencing the company’s turnover. Our approach is to provide players with opportunities to engage in varied betting activities during a single event (match). Operators can achieve this through various means: offering a wide variety of newly added markets, settling bets quickly and increasing the frequency of bet settlement. We at Data.Bet
intentionally provide markets that settle fast. For instance, in some games, bets are settled three to five times, every 10-15 minutes, during the match (the frequency varies by the event and its type). This combination of frequent bet settlements and a diverse range of content creates a more engaging and personalised experience for players, boosting their chances of winning during a match. Simultaneously, operators benefit from a broader range of offerings and increased engagement from bettors. The increase in bets represents the success of the Player Props feature, demonstrating that introducing new markets and personalised content enhances player engagement, ultimately, resulting in increased betting activity. This data supports the idea that introducing new markets aligns more closely with player preferences, creating additional volume and turnover. How do you think risk management can be improved across the esports industry? Risk management plays a crucial role in the world of betting, directly impacting operators’ profits. Historically, the established approach for supplier companies has been to provide odds without requiring information about the actual bets. Some of them do offer risk management for the operator for an additional fee, but this is more of an exception than a rule. At Data.Bet we realised that we could enhance accuracy by including data on how users place their bets. For us, the company’s primary technological value is mathematical models for line calculation. The process of their development involves a deep analysis of historical data and the search for additional sources of information. At Data.Bet, we have seen an opportunity to achieve a new level of accuracy by incorporating user behaviour trends based on their bets into our calculations. As a result, obtaining feedback from the bookmaker is not merely an option but a mandatory requirement for achieving the highest level of accuracy. Consequently, AI-based models analyse player bets and make immediate adjustments to the odds. Combined with minimal bet delays (down to one second) and a strong technical infrastructure, we aim to provide a topnotch experience for players and maximum profit for operators.
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