Asweeping and positive change is about to reshape the American landscape for online sports betting. The U.S. Supreme Court refused to hear a challenge to Florida’s new compact with the Seminole Tribe. This effectively puts in place a Seminole monopoly on OSB in the Sunshine State. (Retail betting is shared with the private sector.)
Mind you, the high court should have at least heard the case, due to its immense ramifications. The Supremes seemed, for the most part, blissfully unaware that they were massively rewriting the Indian Gaming Regulatory Act. IGRA blesses gambling operations that are conducted “on tribal lands.”
In the past, this has been taken in a strictly terrestrial light. But SCOTUS, through its inaction, has redefined “tribal lands” as extending throughout cyberspace. That is, if the computer servers are located within a reservation.
Only Justice Brett Kavanaugh seemed wise to the high court’s inadvertent activism, which raised IGRA-related concerns for him. But seven other justices disagreed and a new era in tribal sports wagering and iGaming has been born.
In Florida, with its 15 million residents, this seals a fait accompli whereby the Seminoles and Hard Rock International become the sole providers of OSB. The Sunshine State is their colossal oyster. The best that DraftKings, FanDuel and their ilk can hope is to be allowed a modest share of the action.
The Seminoles have until 2051 to enjoy their monopoly and to make their Hard Rock betting application a winner. Or they could partner with one of the brand-name biggies in return for what is certain to be a whopping fee. Or, better still, they could sublicense the tech of a major provider for a fixed amount. The tribe is calling the tune.
RIGHT: David McKee, Editor in Chief, Sports Betting Operator
That could be even more the case in California, a gargantuan potential market that remains untapped. Although FanDuel recently made amends with Golden State tribes, most are still at loggerheads with Big Gaming and its OSB ambassadors. Everybody lost in a 2022 electoral donnybrook. California voters said overwhelmingly that OSB was spinach and to Hell with it.
But now the tribes don’t have to go to the ballot box. Thanks to SCOTUS, they can amend their compacts with California to include retail and online sports betting, as well as iGaming. There’s precious little the private sector can do about it besides watch in frustration.
Some tribes will undoubtedly partner with Wall Street’s darlings. But with at least 76 gaming-enabled tribes to choose amongst, many will end up going it alone, as tribes in Arkansas are already doing. The traditional gaming industry elected to piss off the tribes and now it’s reaping the bitter fruits. Tribes, the big enchilada is yours. Congratulations.
CONTENTS
VOLUME 006 - ISSUE 010
CONTACTS
Publisher – Peter White peter@outsourcedigitalmedia.com
Editorial Policy: The views and opinions expressed in Sports Betting Operator remain principally the views of contributors and do not necessarily reflect those of the editor or publishers.
The publishers wish to avoid inaccuracies and, whilst every precaution has been taken to ensure that information contained in this publication is accurate, no liability is accepted by the editor or publishers for errors or omissions, however caused.
Unless otherwise stated, articles appearing in this publication remain the copyright of the publishers and may not be reproduced in any form without the publisher’s written consent.
Printed in the UK by Acorn Web Offset Ltd.
McKee
6 FANATICS AND FUN
SharedBet takes a customer-sensitive approach to the business of sports wagering. By Andrew Behan
11 BRIGHT PROSPECTS
Ronny Breivik, CEO of B90, is interviewed by Peter White
18 THE CREME DE LA CREME
Talent and volatility make Serie A football a great bet. By 1XBet
20 SLOWDOWN IN SPORTS?
United States sports betting keeps growing, but more slowly. By Victor H. Royer
24 FROM ‘WORLDWIDE LEADER’ TO CHUMP
ESPN Bet’s struggles could bring down Penn Entertainment. By David McKee
27 IBIA: INTEGRITY REPORT QQ1 2024
IBIA reported a total of 56 sports betting alerts to relevant authorities concerning six sports during the first quarter of 2024
31 ELA GAME ON FOR IGB LIVE!
ELA Games is to showcase its latest games at iGB Live! Amsterdam
32 MOTIVATIONAL ENGINEERING
Soft2Bet to host MEGA workshops during iGB Live!
35 THE PERSONALIZED TOUCH
Benson Group looks forward to a ‘pivotal’ iGB Live! By Peter White
38 IGATE AT IGB LIVE!
Engage in an enhanced iGaming experience with iGATE at iGB Live! 2024
FANATICS AND FUN
SharedBet takes a customer-sensitive approach to the business of sports wagering. By Andrew Behan
Atwo-decade veteran of the iGaming and sports betting industries, Rob Jarrett-Smith brings shrewd intelligence and broad experience to SharedBet. The parent of Rhino.Bet and NRG. Bet, SharedBet is one of the foremost operators in the United Kingdom. It has planted its wagering flag in a broad range of sports, as detailed below. It’s also had the good sense to stick with its strengths and a time when many Europe-first operators are reeling from ill-advised attempts to penetrate the North American market.
Jarrett-Smith related his priorities, achievements and strategic goals in a conversation with Andrew Behan. Their conversation has been edited for clarity.
What does your current position involve?
As the CEO of SharedBet, I’m involved in all aspects of our organization and guide the strategic direction of our business. As we’re a small, but growing, organization my role is very hands-on. I’m an active voice in meetings and day-to-day communications. We have a leadership team who are my main contact points and we have a wider team that is staffed with experienced professionals alongside people who are in their first or second job within our industry.
I’ve worked within online betting for 18 years, having made the transition from working within the fund management industry. The constantly changing landscape of
gaming, the need for innovation, and the competitive landscape we operate within ensures that my role remains as vibrant and exciting as it was when I first moved into the industry.
How much emphasis in the organization is placed on research and development?
We take research and development seriously and there is an expectation within our company that individuals spend time looking at what are competitors are doing, identifying notable trends within and outside of our industry. Our staff are encouraged to share their knowledge and pitch ideas.
What have been the key milestones achieved so far?
Our flagship brand, Rhino.Bet, has operated successfully for over two years in arguably the most challenging market for online gaming, the United Kingdom. We have now launched our second brand, NRG.Bet, with plans to add a further brand before the end of the year. As an organization, we are in a growth phase where, month on month, we are setting new targets, building our team and identifying areas for improvement or to increase efficiency.
What would you like to see in the future from SharedBet? Are there any dream collaborations, projects or ideas that haven’t come to life as of yet?
Our team has many sports fanatics, myself included, and we all take a great deal of pride in working with the sports brand ambassadors that represent our business. Within horse racing we have three jockeys (Henry Brooke, Sam James and Josephine Gordon) that we work with, and it has been a tremendous thrill to see each of them winning races this season, particularly the ones shown on ITV. It would be
wonderful to see one of the team win a Grade 1 event and I have no doubt that this will happen.
In the world of fighting, we have a young British boxer, Aaron Bowen, who has represented the UK in the Commonwealth Games. We’re looking forward to seeing where his career takes him. We also work with an MMA fighter, Thomas Paull, who recently won a Cage Warriors fight at the O2 in London. Thomas is working his way towards the UFC and has built up a stellar resume, which is even more impressive given the fact that he is deaf. It would be fantastic to see either of these two British fighters go on to lift a title.
On the footballing front, we are sponsoring the East Stand at Leyton Orient for the coming season, which we’re all very excited about. To be associated with a club as entrenched in the history of English football as Leyton Orient are is brilliant and we’re looking forward to the season ahead. We’d love to see them reach the championship and we’ve all adopted the Os as our second club.
How is your approach with marketing Rhino.Bet sponsorship of regional race courses such as Market Rasen, Huntingdon and Carlisle?
In a similar fashion to how we have identified sports ambassadors to work with, we have tried to find racing partnerships that are symbiotic. We want to work with partners who are important to us and to whom we’re important.
There is so much brilliant horse racing that takes place in the UK and Ireland nearly every day. It doesn’t all happen at Cheltenham and Ascot. There are a number of tracks within
our shores, and we’re keen to have our brands represented across the UK. We’re delighted to work with a variety of flat- and jump-racing courses, and I hope we can continue to grow this number. We have doubled the number of race days we’re running this year and it’s vital we continue to invest into horse racing, which is a sport that was the entry point for many of our team into the industry.
You recently launched NRG.Bet, aimed at offering a user-friendly interface and innovative features. How does this differ from your alternatives in the increasingly competitive sports betting sector?
We’re keen to make the process of betting as entertaining and as seamless as possible for customers. Betting is a leisure activity and it’s important that our products focus on that.
For a long time there was a widely held belief that digital betting sites needed to be vast warehouses, where you could find a bet on any game around the world, on the most niche of sports, and scroll through thousands of casino games to find the title you wanted to play. This Amazon-style approach of offering everything leads to large menu trees, constant decisions around page management and, for customers, a lot of scrolling down the screen to find what they’re looking for.
We’re working on streamlining our offering, using personalization to give customers the experience they want quicker, and making the whole process more entertainment-driven. This doesn’t mean necessarily reducing choice but being smarter in how we target games and markets.
Can you tell us about the mobile app and what are its key benefits?
Like most operators, most of our customer play on our brands takes
place via our mobile apps. They are a critical part of our business and a key area for our design team to focus on the UI, and overall UX of the products. I believe our mobile app works extremely well. I feel the bet slip is well-designed and intuitive, allowing the quick placement of single bets, as well as building multiples or build-a-bet type bets. The apps contain banners, which serve in an informational capacity to showcase upcoming events and also highlight the relevant promotions we’re running, allowing customers to quickly access their preferred markets.
From a casino and live-casino perspective, we’ve spent a lot of time designing the interface of our mobile app, to ensure that customers are able to visit their preferred titles or search for new content, as quickly as possible. The key areas of banking and customer settings are quickly accessible, and allow customers to deposit and withdraw quickly, and update any settings on their account.
Throughout the app we’ve tried to keep the interface as clean as possible, which is in keeping with our approach to offering relevant content to customers. In an ideal world, we would have the fewest number of clicks from launching the app to being able to place a bet or access content as possible. This is a metric we look at and are constantly trying to improve.
What is SharedBet’s approach to player safety?
We take the safety and well-being of our customers extremely seriously. We are an entertainment-based brand and we’re keen that our customers play within their means. We have a number of player-safety features and alerts to ensure that any issues are addressed as quickly as possible.
We don’t run any volume-based promotions or any other incentives that encourage high frequency of play on our site. Our customersupport team is well-trained, and we ensure that we give customers a betting platform that is fair, pays quickly and is transparent in all of its rewards.
Your market is the UK, Are their plans for expansion?
I’ve had the privilege of working in different countries in past roles but the majority of my career has been working within the UK gambling industry. It’s home, it’s a wonderful, competitive market and we have a product I truly believe in.
Obviously we keep an eye on what is going on in other geographies, which countries are regulating and how the market looks globally. Like many operators, we’re frequently in attendance at different gaming conferences around the world and it’s fascinating to hear about industry trends and other companies’ strategies.
For now though, we will continue to focus solely on the UK. If that were to change, I would expect that we would look at clearly regulated markets, such as Ontario, as I feel that would be where our experience would be best suited. Right now we have a battle to fight here in the UK and we can wait for another day to look at other adventures.
BRIGHT PROSPECTS
Ronny Breivik, CEO of B90, is interviewed by Peter White
It’s no small trick to reinvent a business in mid-stream. But that’s what B90 did. Under the leadership of Ronny Breivik, B90 pivoted 180 degrees from being a business-to-customer provider of sports betting to a business-tobusiness partner of some of the biggest names in gaming today. To find out how B90 did it and learn the company’s operating philosophy, Sports Betting Operator Publisher Peter White sat down with Breivik. Their conversation has been edited for clarity.
What aspects of the role of CEO of B90 appealed to you most and why? It was always going to be a turnaround story. Rolling up the sleeves, getting to work, then working until the mission is completed is what I am about. B90 did
fit that bill. As the signs of turnaround have gotten more and more clear, and communicated: to be allowed to work with a team of top-shelf people that works together to execute our very ambitious buy-and-build strategy in operations, board, and adviser group.
Can’t beat that!
For those of our readers whom are not that familiar with B90, can you provide an outline of the organization, from when it was originally founded to present day?
B90 stems from a reverse takeover that happened back in 2016. The company listed at the time was Veltyco Group. I got involved in 2021, after the company had scrapped its old business models and was actively trying to reinvent itself. The focus initially was very much on the
WE CURRENTLY WORK WITH OVER 200 PARTNERS, RANGING FROM TOP-TIER OPERATORS SUCH AS BET365 AND STAKE. COM TO UNIBET. WE EXPECT TO SEE THE NUMBER OF PARTNERS MORE THAN DOUBLE OVER THE NEXT FEW YEARS. WE DO NOT HAVE A CAP ON THIS.
B2C gambling business. It became eminently clear the core competence in the management team, and B2C in general, was being squeezed marginwise. This convinced us B2B marketing and service provision would be the way to go.
What was the strategy behind the acquisition of Emwys? What are your plans for the brand and how was the incorporation process into B90? The rationale behind the acquisition of Emwys was that we identified the need to move out of B2C gambling operations and into B2B marketing. Emwys was one of several acquisition candidates available to us. The
acquisition of Emwys allowed us to cement the move into B2B marketing, get valuable insights into pay-per-click marketing and focus on the next phase in our evolution. That, post successful integration of our acquisition, was to align completely with our B2B marketing strategy. All B2C gambling operations were terminated. As a result, the company is now a costoptimized, highly automated, B2B marketing-and-services company. The plan has been to build scalable marketing solutions for the online gambling sector, using the acquired knowledge Emwys presented us with. I dare say we have come a long way in getting said platform ready.
Tell us about the marketing agreements by Oddsen.nu, which are set to achieve ¤200,000 revenue in 2024?
Oddsen.nu is our flagship affiliate website. It was acquired in 2021. It has been a Nordic brand for over 23 years. In April we announced to the market that Oddsen.nu has gone global. One month later we announced that over ¤200,000 was secured in fixed fee-deals. In short, these deals are just that. Fixed fees that Oddsen. nu is being paid to market various gambling operators on the website. In our announcement to the market we also mentioned that the agreements signed carry potential compensation on performance basis. Typically we will receive a fixed amount (CPA) per each first-time depositor we forward to our partner. We also have revenue share-bearing elements. With the sports calendar we have had (and still have) the Euros, Copa America, the Olympics, the start of the top leagues in August and the European cup football in September. It does not take a rocket scientist to understand these performance-based deals can be very lucrative over time.
How many partnerships has the organization established so far and have you a cap on the number? Or will the organization take necessary steps to expand to accommodate? We currently work with over 200 partners, ranging from top-tier operators such as Bet365 and Stake. com to Unibet. We expect to see the number of partners more than double over the next few years. We do not have a cap on this. That said, we want to ensure we provide results for the partners we work with. This sometimes results in a slower pace when seeking new partnerships. We have only seen the tip of the iceberg,
ABOVE: Ronny Breivik, CEO of B90
though, in terms of what our scalable marketing platform(s) can do. And we work our socks off every day to ensure we can provide all our current and new partners with ever-growing traffic.
Is B90 set for more acquisitions this year or is this a year of consolidation? This is one for Uncle Time to tell. What I can say is we analyze the deal flow. We do take note of interesting opportunities. Since I got involved as executive chairman, back in November 2022, we have brought in sector giants like Mark Blandford (strategic sdviser) and Andrew McIver (board member). We strengthened C-level and other management positions. We acquired Emwys, integrated it and completely changed the business from B2C gambling operations to B2B marketing. All this was done whilst building a very interesting platform for scale for all our business verticals. It has been full speed! It still is! Management is rooted in the now. But what we do in the now is all about building for future, longterm shareholder value and, obviously, also value for our many partners.
KEEP ON BUILDING THE BUSINESS AND KEEP ON BUILDING MUTUALLY SUCCESSFUL RELATIONSHIPS WITH PARTNERS!
How important is continual investment in research and business development versus keeping shareholders happy? It is of course imperative. Not everyone has this luxury. But I am very happy to say that all the shareholders of B90 have allowed management to do a great deal of research and business development. We acquired Emwys, great! But what we bought also needed to be set up for proper scale. We have researched everything possible to get traction in other business verticals such as Oddsen.nu as well. This R&D led to Oddsen.nu going global and then securing improved deals. So I think it is fair to say R&D has been essential to keeping shareholders happy.
Tell us about your partnerships with Stake.com, Unibet and Bet365?
These are all amazing businesses, doing very well in multiple markets. They are different in how they go about it, seen from our perspective. But the common denominator is they have resources to do customer acquisition at a bigger scale than most of their competitors. Their systems and flows work. The team is helpful and alert. It is a pleasure to work with them. The same must be said for all of our partners though, not only these three mentioned here.
Is the North American market on your radar for future growth?
I have said no to that on camera before and I will reiterate that here. North America is a cutthroat-competition market, in many ways a race to the bottom. Especially for B2C business. As of late you have seen important B2C operators pull out of the U.S. I am not surprised at all. Unless you have a
sexy strategy to overcome the hefty price you need to pay to play in this market, it is going to be a very tough game. Does B90 have such a sexy strategy? Again, Uncle Time will tell.
As a B2B marketing entity we have some improved cards in our hands that we can play. For us the timing is not optimal. Right now we focus and allocate capital in other markets, ones where the return on marketing spend is expected to be considerably higher than the North American route.
What are among the long-term ambitions for B90?
Keep on building the business and keep on building mutually successful relationships with partners! Add to this selected high-quality acquisitions, when all factors we consider are favorable to us.
Have you anything else you would like to add?
I want to thank Sports Betting Operator for taking the time to speak to us. We may be a small, listed company on AIM. We may have a colorful history. However, I think we have raised a few eyebrows in the most positive of ways with our recent announcements to the market. I am glad you identified this and took the time to speak to us. For all those who found this interesting, thank you for paying attention!
THE GREATEST SHOW IN GAMING
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24-26 SEPT 2024
THE CREME DE LA CREME
Talent and volatility make Serie A football a great bet. By 1xBet
Serie A is a championship that 1xBet players and partners earn money with.
Many European football fans associate Serie A with the Italian football championship. But for hundreds of millions of fans from South America, including hundreds of thousands of 1xBet players, Serie A is the name of the elite Brazilian division.
Brazil is home to world-known clubs, including Botafogo, Flamengo, São Paulo, Palmeiras, Corinthians, Grêmio, Vasco da Gama and South America’s strongest club in 2023, Fluminense. Dozens of worldclass stars started their careers here. The names of Pelé, Garrincha, Rivellino, Zico, Sócrates, Romário, Ronaldo and other legends are forever inscribed in the world football history.
No wonder that every year there are more and more people willing to earn money on the elite Brazilian division among players and members of the 1xBet Partners affiliate program. A tournament of such a level as the Brazilian Serie A deserves maximum attention.
Why Serie A is so interesting for fans?
Firstly, the one-team dominance in this league is always short-lived. For example, in the 21st century only one club managed to become the best for three consecutive years: São Paulo, from 2006 to 2008. After that, no team won more than two titles in a row. This contrasts with the top European leagues, where the same club can dominate for over a decade. In Brazil, the champion emerges as the first among equals.
Secondly, Brazil is not financially dominated by one team that can buy up the best players. There are plenty of talented players — too many for any club to dominate by having a collection of the best. Moreover, the stable interest in Brazilian football by top brands, including 1xBet (which supports Serie A and the national team), allows teams to receive additional investment for development.
Thirdly, due to the world-famous skills of Brazilian football players to perform spectacularly and unconventionally, the matches are characterized by great unpredictability. This allows players of the reliable bookmaker 1xBet to earn in the prematch and live modes. The number of options for winning predictions for a single match on the 1xBet platform is even greater than the number of best players’ feints in the championship.
How can participants of the 1xAffiliates affiliate program earn on the tournament?
Using the example of existing partners, 1xBet representatives demonstrated that 1xPartners provides a high conversion of registrations into deposits, commissions from each attracted player and regular weekly payments using popular payment methods. Partners have a solid database of high-quality promo materials and the support of a personal manager who is ready to answer any question.
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There are 38 rounds in the Brazilian elite division season. Local clubs also participate in state championships, cup tournaments and international competitions. Fluminense has played 70 official matches in 2023, not including friendlies, and youth- and junior-team games. Fans regularly place bets on these games, wanting to support their favorites and for the 1xBet partners it is very convenient. The company gives them automatic weekly commission payouts, so your income with Serie A and Brazilian clubs can be very solid.
Join 1xBet and make money on the matches of the best Brazilian clubs in Serie A and beyond!
SLOWDOWN IN SPORTS?
United States sports betting keeps growing, but more slowly. By Victor H. Royer
According to the U.S. Census of 2020, there are 236 million adults over 18 years of age. This represents 77.6 percent of the entire population of the USA. In 2023, 39 percent of American adults placed wagers on sports and another 15 percent knew someone who had. This means that 54 percent of all American adults are aware of sports wagering, and – more importantly – are aware of how and where to do it.
Even more importantly – at least to the owners and operators of sports books, both land-based as well as online – this translated into $120 billion wagered on legal sports in the U.S. in
2023. This was up from $93 billion in 2022. This included the stabilization of online sports wagering in existing markets, as well as the introduction of Massachusetts and Ohio as the new kids on the block (so to speak). Comparatively, legal sports wagering in the UK produced about £ 2.4 billion in 2022.
In all, 38 U.S. States – plus the District of Columbia, where the Capitol City of Washington, D.C. is – now have some form of legal sports betting. Of these, New Jersey – just adjacent to New York State – had the highest per-capita spend on sports betting, with New York and Arizona following in second and third place respectively. Of all these sports bettors, 69 percent
are men and 36 percent are women, but men tend to wager twice as much and twice as often as women. This is different from standard, land-based casinos, where women tend to play slots about as much as men, with these figures nearly identically reversed.
The average revenue from each U.S. sports bettor is about $310. This is expected to grow by about 11.5 percent over the next four quarters – but … there is a potential caveat to this, and that has to do with the upcoming U.S. presidential election, which will also decide who controls the U.S. House and Senate. The uncertainty of these elections and their potential aftermath – regardless of who wins – continue to somewhat dampen more-optimistic forecasts. Ongoing legal battles, such as those in Florida and California between competing tribal interests versus private interests – as well as several tribes also being in conflict with each other – will also factor into potential growth factors in sports betting overall.
Online is King
Online sports books continue to be the most favorite means by which to make bets in the U.S., as well as UK, and generally in Europe and the remainder of the online-connected world. The most successful of these online sports books are:
• FanDuel
• DraftKings
• Bet 365
• BetMGM
• Caesars Sportsbook
• Sky Bet
• William King
Of all the sports bets placed in the USA, 33 percent were on basketball, with 27 percent on the NFL (the American-football league) coming
in second, baseball coming in at 18 percent as third – but technically, the 22 percent of “all other sports” factors in as an actual “third-place.”
In the UK, football (known as soccer to Americans) plus horse racing together accounted for 75 percent of all sports betting. The other 25 percent were divided among tennis, cricket and other minor sports. That’s not to say that cricket is a minor sport, of course, but it isn’t among the most wagered-upon sports. But curiously it is becoming one of the hottest and fastest-growing sports in the U.S.
The majority of sports bets are either $5 or $10. However, about 30 percent of all sports bettors will place wagers of $50 or more, while 10 percent will bet at least $250 or more per wager. Depending on the various tax rates and fees imposed by the individual states, overall about 90 percent of the money wagered on sports in the U.S. is paid back to bettors.
This leaves 10 percent for the operators of the sports books –although these figures are merely illustrative, as there are such significant differences in individual contracts between the states and the operators, as well as ongoing negotiations which may impact overall statistics by the time this article is published.
Growth in eSports
The hottest growth factor in sports wagering is eSports. This type of growth factors in the worldwide popularity of eSports, which currently has a following of around 540 million fans. These fans collectively bet about $2.4 billion on eSports annually.
Based on currently available forecasts, eSports – as an industry – is expected to grow to $3.2 billion in annual wagering by the spring of 2025.
Slowdown in Sports Betting?
Even though it is estimated that U.S. sports betting will grow by about
45 percent year-over-year, these are forecasts based on earlier-anticipated growth figures. They have not yet been tempered by the potential of political and economic problems which may face the market later in 2024 and into 2025.
With global instability also growing, the markets in the UK and Europe, and in Asia, may also be affected negatively – at least for a short period of time, beginning sometime after the U.S. elections in November of 2024. This may continue into 2025, and for that reason there may actually be a slowdown in U.S. sports betting during these periods – even while the overall industry still experiences growth, such as in eSports.
Nevertheless, the sports betting market in the U.S. remains vibrant and even though there are signs of maturation in several of the established markets, the fact remains that only 38 of the 50 states currently have legalized sports wagering. To there is significant room for expansion. While it is true that the state of Utah will most likely never allow wagering of any kind, there are signs that Hawaii may eventually relent and allow some form of casinos or wagering in the state, which had previously been adamantly against any kind whatsoever.
So when I titled this column as “Slowdown?” it wasn’t to indicate that everything is coming to an end – at least in the expansion and market growth perspectives. But within the casino gaming industry as a whole, and the sports wagering industry specifically – and for other than eSports – there is currently a predominant feeling that a short-term, expectational slowdown is inevitable, even if only effectively accounted for in a relatively small variance in growth expectations and earlier forecasts.
FROM ‘WORLDWIDE LEADER’ TO CHUMP
ESPN Bet’s struggles could bring down Penn Entertainment. By
David McKee
At the outset, it looked like a winner: Marry the brand of the foremost sports network with a popular, regional casino chain and hope to break into the top echelon of online sports betting. But it hasn’t worked out that way for ESPN Bet and corporate parent Penn Entertainment.
Initially, when the ESPN/Penn combination hit the OSB marketplace last fall, there was an intense flurry of curiosity, fueled by myriad signups and downloads. But the lookie-lous have proven fickle. ESPN Bet has rarely cracked five percent in market share and usually ranks well below that.
Admittedly, the first-mover
ABOVE:
Jay Snowden, Penn CEO
and brand-name advantages of DraftKings and FanDuel present nearinsurmountable hurdles, ones which even BetMGM and Caesars Sportsbook, big names both, have been hard-put to surmount. In a June investor note, Truist Securities analyst Barry Jonas opined that there were no second-tier OSB operators in the United States, only DraftKings and FanDuel, plus a raft of third-tier providers.
Part of the problem, from Wall Street’s standpoint, is that the horizon for ESPN Bet profitability continues to recede. Losses have not only mounted but Penn executives seem uncertain of when “traction” will be gained. Recently they stated it would be at the beginning of U.S. football season, only to restate
that within a month to late in the NFL calendar.
Such a fluid timeline seems to have been the last straw for institutional investor Will Wyatt. Under the banner of his Donerail Group, he sent a six-page open letter, ostensibly addressed to Penn management but really for the benefit of the investment community.
In his lengthy screed, Wyatt took issue with Penn’s entire OSB strategy, beginning with its investment in controversial Barstool Sports, a $551 million commitment. Foul-mouthed and indiscreet Barstool founder Dave Portnoy proved to be more trouble than he was worth. Last year, Penn decided to ashcan Barstool but had to sell it back to Portnoy for a mere $1.
Wyatt also took umbrage with Penn’s billion-dollar marriage to Canadian OSB provider theScore. He argued that theScore’s limited market penetration (basically Ontario) and revenue didn’t justify the high purchase price.
But Wyatt’s crosshairs were firmly upon ESPN Bet. Wyatt contended, “Penn has been unable to disintermediate the online sports betting landscape,” which led to a 80 percent decline in Penn’s stock price during the 2021-2024 period.
“After its first foray into an online sports gambling platform underwhelmed, PENN thought it wiser to simply give Barstool away in favor of forming a new partnership with ESPN, as the company sought, yet again, to create an entirely new online sports betting business from scratch,” wrote Wyatt. He faulted Penn for “no improvement” in its execution of OSB and for escalating negative returns on investment, including a half-billion dollars (estimated) for 2024.
The Donerail document criticized Penn’s board for “an obstinate and heightened level of confidence in the company’s management team,” as well
as “exorbitant amounts of money” paid to CEO Jay Snowden “notwithstanding the continued earnings misses, guidance cuts, and stock-price underperformance.”
Without using the exact term, Wyatt particularly faulted Snowden for engaging in pump-and-dump stock transactions. He accused the CEO for selling off large blocs of Penn shares right after happy-talk announcements about online performance.
Then there was Snowden’s pay package, $99.3 million for the 20202023 period. It was described as beyond “what we would view as reasonable, given the objectively poor business and stock-price performance.” The As You Sow investor-advocacy newsletter had already made Snowden the poster child for CEO overcompensation or “a casestudy of wrongdoing.”
Wrote Wyatt, “To shareholder detriment, PENN has not been able to demonstrate the management expertise necessary to build a business that could become a formidable competitor in the online sports betting oligopoly. The company’s inability on each interactive initiative has resulted in a loss of market confidence and the stock being dragged down with it …”
“The continued deflating guidance misses represent a biting uncomfortable contrast to not only the stable cash flow profile that the company enjoyed for years.” He weighed $4 billion in interactive investments against the value of Penn’s brick-and-mortar assets, faulting management for continuing to pursue its OSB strategy.
Pointing a finger of blame at Snowden, Wyatt wrote that Snowden’s four-year tenure had coincided with a 40 percent decline in Penn’s stock price, while shares of the overall gaming group appreciated 60 percent. “It is rare that we have ever seen such a sustained and underwhelming underperformance
under the same CEO without intervention from a company’s board of directors.”
However, Wyatt did not call for Snowden’s sacking. He proposed other drastic solutions to Penn’s perceived malaise but not that one.
Continuing in the same vein, Wyatt asked whether board members were “really just riverboat gamblers, content with doubling down after each loss – of shareholder capital, of management confidence, of board credibility.”
Deriding ESPN Bet as Penn’s “newest bright and shiny object,” Donerail and Wyatt concluded by asking “that the board take a moment to reflect objectively on the past four years of execution, assess the shareholder capital that has been destroyed, and recognize that shareholders may simply be tired of continued gambling on uncertain outcomes.”
While Penn did not immediately comment on Wyatt’s nostrums, which included calling for the sale of the entire company, it was not completely unresponsive. J.P. Morgan met with top Penn execs and found them not only unmoved but determined to double down on ESPN Bet. Wrote Greff, Penn “continues to be focused on top-offunnel acquisition from the ESPN database and reiterated its laser focus on ESPN BET product improvements and ESPN ecosystem integrations ahead of the football season, which
management believes will ultimately grow its wallet share.”
Penn brass told Greff they continue to perceive “strong and improving trends” in both downloads of ESPN Bet and market share. They believe college and NFL action will improve their share of consumer spending. Taking a long-term view, Penn executives stated they can operate profitably with 10 percent market share, plus greater cost efficiencies. They believe this is particularly true “around the potential for meaningfully lower marketing spend on non-ESPN properties than current expectations.”
But Wyatt’s damage may have been done. Wall Street analysts began to talk of Penn as a takeover candidate and by June 19 Boyd Gaming was stealing a march on the competition. Nevada Independent gaming correspondent Howard Stutz sussed out a new hire at Boyd, Director Michael Hartmeier. An investment banker by trade, Hartmeier, it was speculated, was engaged to help with merger-and-acquisition strategy.
Later that day, Reuters, citing unnamed sources, said Boyd was exploring a takeover of Penn. Whether it was a complete absorption or, as Stutz mused, a consumption of pieces and parts was left unsaid. But in a subsequent investor note, Deutsche Bank analyst Carlo Santarelli came down on Stutz’s side.
Santarelli believed that Penn’s casino and iGaming assets might be worth $25 per share to Boyd (a 25 percent premium to the Penn share price) … but not ESPN Bet. The latter would probably be spun off to any third party willing to pay $500 million or more for it. Prospective suitors for the OSB network were not named or even speculated upon.
What a comedown, in less than a year, for ESPN Bet – from contender to orphan. Could anyone have foreseen it?
FEATURE: IBIA REPORT
Integrity Report Q1 2024
Integrity Report Q1 2024
represents many of the largest regulated betting operators in the world. IBIA’s principal goal is to protect its members, consumers and partners, such as sports bodies, from fraud caused by the unfair manipulation of sporting events and associated betting. The association combats this fraud with evidence-based intelligence,
IBIA’s
What we do
IBIA: INTEGRITY REPORT Q1 2024
Analysis: Football
Q1 2024 ABC Trends
Breakdown: Turkey
Focus on Canada
Ontario’s onshore sports betting channelisation is expected to reach 92% in 2024 and then rise to 97% by 2028. In contrast, if the current monopoly regulatory position were to remain, the rest of Canada combined is forecast to continue to languish below 15%, with an onshore rate of around 11% in 2024 becoming 13% by 2028
ELA GAME ON FOR IGB LIVE!
ELA Games is to showcase its latest games at iGB Live! Amsterdam
ELA Games studio is proudly announcing its participation at iGB Live! Amsterdam, taking place from 17-18 July 2024 at the RAI Amsterdam.
ELA Games will be showcasing its latest innovations, including the high-stakes game Bandidos Bang! and the strategyinfused creative one-reeler Joker Cashpot. These titles exemplify our commitment to delivering engaging, dynamic gaming experiences that resonate with both new and experienced players. Bandidos Bang! transports players to the Wild West, offering a fast-paced, instant-betting shooter experience with high volatility and unpredictable gameplay. Joker Cashpot, on the other hand, combines strategy and randomness, allowing players to accumulate and multiply rewards with each spin.
The studio team is ready to talk about their latest achievements. Most recently, one of ELA Games’ most colorful games, Kraken Bay, was nominated for the prestigious SBC Game Developer Awards 2024 in the “Slot of the Year” category, and the most creative game combining a claw machine with a digital interface and gaming
community, Cash Crab, was included in the Skill Game Supplier category. But that’s not all: The studio team is excited to tease the very first details of forthcoming games – Madshow Circus and AquaMafia. These upcoming titles promise to push the boundaries of innovation and player engagement even further.
Join us at booth 12-J72 to connect with our team and explore how our cutting-edge games can help take your iGaming business into tomorrow.
About ELA Games
ELA Games is an innovative slot provider in the iGaming industry, geared towards creating an immersive experience for players through their engaging slots. Since its formation in 2021, it has been working to establish a strong reputation in the sector through its games’ top-quality graphics, highly interactive nature and innovative gameplay. In under a year, the game provider has produced a total of 28 games for players’ enjoyment. Their goal is to provide a safe and fun gaming experience for all our players while also creating the hottest game titles to appeal to every player out there.
MOTIVATIONAL ENGINEERING
Soft2Bet to host MEGA workshops during IGB Live!
Soft2Bet is delighted to announce that it will be hosting exclusive workshops on Motivational Engineering Gaming Application (MEGA), its revolutionary gamification solution during iGB Live!
On 17-18 July, Soft2Bet’s Chief Business Development Officer Martin Collins and Product Manager Olga Melnyk will host exclusive workshops on Motivational Engineering Gaming Application (MEGA), the gamification solution that has revolutionised iGaming, enabling operators to engage, retain and increase the lifetime values of their players.
Getting the best return on investment (ROI) is crucial for online gambling companies and creating engaging content that drives player activity, loyalty levels, and increases revenues is at the heart of what Soft2Bet delivers with MEGA. Delegates will also have the opportunity to meet other senior Soft2Bet leaders, such as the group’s founder and CEO Uri Poliavich, Chief Marketing Officer Oksana Tsyhankova, Chief Product Officer Yoel Zuckerberg and General Counsel David Yatom Hay. Having already presented MEGA to U.S. audiences during G2E Las Vegas
2023, Soft2Bet is expanding the reach of the workshops and will provide a deep dive into how MEGA enables operators to deliver the best gamification features to their players.
Martin Collins commented, “These workshops are a great occasion where our partners and clients can spend quality time with Soft2Bet’s product, sales, and commercial teams, and understand the full scope of our B2B portfolio.”
What: MEGA workshops
Where: iGB Live! 2024, Soft2Bet Stand #12-E30 When: 11 a.m. on 17 & 18 July 2024. The workshops will take place within Soft2Bet’s immersive booth, where the company will also showcase its latest B2B turnkey solutions and state-of-art platform innovations. Make sure you book your place https://www.soft2bet. com/mega as interest is high and space will be limited!
About Soft2Bet
Soft2Bet is a leading iGaming turnkey solutions provider that delivers high-quality products and services for online gambling operators. The company is known for its Motivational Engineering Gaming Application (MEGA), proven to enhance retention and engagement. Soft2Bet has deployed numerous successful iGaming brands and holds 11-plus global licences.
THE PERSONALIZED TOUCH
Betsson Group looks forward to ‘pivotal’ iGB L!VE. By Peter White
As the iGaming community prepares for July’s edition of iGB L!VE – the last to be held at the RAI Amsterdam prior to the 2025 migration to London – Shakyra Jonsson, senior affiliate operations and events manager at Betsson Group, identifies the trends, the opportunities, and the threats facing the industry and explains how iGB L!VE is a pivotal platform for networking, and for developing key strategic partnerships.
What do you regard as being the three most important industry trends which visitors can expect to see at iGB L!VE 2024?
Responsible gaming has become a cornerstone of our industry, driven by increasing regulatory pressures as well as by a growing awareness of the potential harms that can be associated with gambling. I’m extremely happy to see more companies prioritizing player protection through various measures, such as implementing advanced AI tools and algorithms to detect problematic behavior, offering self-exclusion programs, the setting of deposit limits and much more.
The development of emerging markets is also key and presents important growth opportunities for the industry. By expanding into these markets, operators and affiliates can diversify their revenue streams, and mitigate risks associated with saturation in more traditional markets. The third trend that I would identify is the move towards providing personalized gaming experiences. Advancements in data
analytics as well as AI enable operators to deliver bespoke gaming experiences which are tailored to individual player preferences. This includes personalized promotions, game recommendations, and user interfaces, all of which enhance player engagement and retention.
In your opinion what are the three main opportunities facing the industry over the next 12 months?
In terms of opportunities, AI is definitely up there. Companies will be leveraging AI to provide highly personalized experiences through which they can significantly enhance customer satisfaction and retention. In addition AI will be used to help in identifying and mitigating problem gambling behaviors, courtesy of predictive analytics. Another opportunity will be the wider adoption of Web 3 technologies, such as blockchain, which can enhance transparency and fairness by providing irreversible records of bets and outcomes, which in turn will enhance trust-based relationships
between brands and consumers.
I think we will also see operators more actively exploring cryptocurrency as a payment method. The third opportunity is enhancing live-gaming experiences through exclusive game variants, localized content, and interactive features such as AR and VR integration. By offering highquality, differentiated experiences with multilingual dealers, themed events, and branded production, companies can attract and retain a loyal player base.
What about the threats? What do they look like?
As I see it, the three main threats facing the industry over the next 12 months will be regulatory uncertainty, cybersecurity risks, plus market saturation and competition. Rapidly evolving regulatory landscapes across jurisdictions pose challenges in terms of compliance, licensing, and market access, requiring companies to stay agile and adaptable to navigate these changes. Cybersecurity threats such as data breaches and cyberattacks remain a significant concern, necessitating robust security measures and risk mitigation strategies to protect customer data, and to maintain trust. Additionally, in certain regions, market saturation and intense competition can lead to pressures and challenges in customer acquisition, and retention. This makes it crucial for companies to innovate, and to find unique value propositions to stand out and both recruit and retain customers.
iGB L!VE continues to grow both in terms of exhibitors/sponsors (35 percent more than in 2023) and attendees (10,000 projected in July). How important is iGB L!VE to your business and for what reasons?
iGB L!VE serves as a pivotal platform
for networking, knowledge sharing and forging strategic partnerships. It provides invaluable opportunities to connect with current and prospective stakeholders, gain insights into emerging trends, and showcase our latest innovations and offerings.
What do you expect to gain from participating in July’s show and what does success look like?
Our objectives are to forge new partnerships, engage with industry leaders, and meet with potential collaborators and solution providers. Overall, we want to explore synergies and opportunities for mutual growth. The event enables us to showcase our expertise, products, and services reinforcing our position as a trusted and innovative affiliate program. iGB L!VE keeps us informed about market trends, regulatory developments and consumer preferences through panel discussions, workshops, and networking sessions. Success will see us establish meaningful connections, gain valuable insights and generate tangible leads, all of which will contribute ultimately contributing to Betsson Group’s strategic objectives.
Lastly, how do you think the industry will say farewell to Amsterdam and what are your aspirations arising from iGB L!VE’s relocation to London in 2025?
The industry will bid farewell with a nostalgic and grateful sentiment, cherishing the memories of the successful iGB Amsterdam events which have been held over the years. With ICE relocating to Barcelona, iGB L!VE’s move to London presents a valuable strategic opportunity.
For more information on iGB L!VE (16-19 July 2024: Expo Days 17-18 July) and to register for a free visit: https://www.igblive.com
IGATE AT IGB LIVE
Engage in an enhanced iGaming experience with iGATE at iGB L!VE 2024
iGATE, a rapidly expanding iGaming platform, specializing in white-label casino solutions focused on driving customer success, is set to showcase its cutting-edge casino platform at iGB L!VE 2024 from July 17-18, 2024, at the Amsterdam RAI Exhibition and Convention Centre. iGATE’s solutions specialise in merging high-end artistry with innovative functionality designed to optimize the gaming experience and enhance player engagement.
iGB L!VE 2024 is an essential gathering of iGaming professionals to explore the latest developments and connect with industry leaders. The event is celebrated for its comprehensive coverage of gaming innovation and strategy.
John Foster, managing director at iGATE, commented, “iGB L!VE 2024 is a mainstay in the iGaming industry, and an exciting opportunity for iGATE to demonstrate how our solutions not only captivate but also retain players through
superior design and technology. We look forward to engaging with our peers and revealing how our developments can benefit operators and players alike.”
iGB L!VE 2024 participants are welcome to meet the iGATE team at Stand 12-J60 to explore the sophistication and functionality of our gaming solutions in person.
About iGATE
iGATE is a rapidly expanding provider of iGaming platforms, specializing in dynamic iGaming solutions focused on driving customer success. The platform features an extensive game portfolio with over 14,000 games from 140 providers, available in more than 20 languages. iGATE emphasises art and design to boost user engagement and retention, and provides access to over one million live sports events, 800,000 pre-match events and eight million eSports events annually, delivering a comprehensive betting experience.
SPORTS BETTING OPERATOR
Sports Betting Operator provides technology features, news and new product information, keeping online gambling companies up to date with the fastest growing gambling sector in the world
A highly regarded team of Internationally experienced journalists, all of whom have a wealth of knowledge in online and land-based gaming involving, legislation, e-commerce, responsible gambling along with the latest online operating systems and solutions.
