ISSUE 8 • APRIL 2020
COVID-19
How we are going to get through this BETANO
Shifting from start-up to local champion
Garrisi Giovanni
Taking control of Stanleybet
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CONTENTS APRIL 2020
6-29 Sports Betting • Garrisi’s journey to the world of probabilities • COVID-19: How are we going to get through this? • Promising signs for Betano’s European expansion • Senior tech leaders reflect on regulatory headache • Balancing act: Why racing finds itself at a crossroads • How SIS is catering for an international audience
30-43 US Market • Sportech well positioned for change and challenge • IGT: Smart European operators are asking the questions • Golden Race takes virtual basketball game online • Sportradar delivers year-round MLB engagement
44-59 Casino • How EveryMatrix has stepped up to support its clients • Genting and Evolution Gaming on live casino innovation • SG: Casino to complement US states with sports betting • Platforms for success: Working with the aggregators
60-67 Payments • Trustly to leverage European experience in the US market • How have age verification rules impacted betting?
68-80 Marketing • The ‘nerdy’ aspect to sports analysis on RotoGrinders • Why sports should commit to the growing Asian market • Keeping people connected in the world of remote working
The SBC Magazine is brought to you by SBC - Sports Betting Community: EDITORIAL TEAM: Andrew McCarron, Luke Massey, Craig Davies, Ted Menmuir, Joe Streeter, Chris Murphy, Erin Gallagher, Tom Daniels, Matthew Ramirez SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Neil Judson DESIGNED & DELIVERED BY Better Mags (bettermags.co.uk) All material is strictly copyrighted and all rights are reserved. No part of this publication may be reproduced in whole or in part without the written permission of Sports Betting Community Ltd. Although every effort has been made to ensure the accuracy of the information contained in this publication, Sports Betting Community Ltd cannot be held responsible for any errors it may contain. Sports Betting Community Ltd cannot be held responsible for the loss or damage of any material, solicited or unsolicited. The views in the publication are not necessarily the views of Sports Betting Community Ltd or those of the advertisers. Produced and published by Sports Betting Community Ltd REGISTERED ADDRESS: Sports Betting Community, 103-105 Brighton Road, Coulsdon, Surrey CR5 2NG, UK TEL.: +44 (0) 161 367 1250 EMAIL: sales@sbcgaming.com WEB: www.sbcgaming.com
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BACCARAT
INTRO Luke Massey Head of SBC Media
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elcome to the second edition of SBC Magazine for 2020! If the year 2020 had been a purchasable product for the gambling industry with any sort of warranty period as cover, we’d all be waiting in line demanding our money back. As the industry convened for its favourite February gathering at the London ExCeL, there were already murmurs of the possible COVID-19 impact bubbling away under the surface. Unfortunately, WANTS TO a reduced turnout AS TAKING from Asia was just the tip of the iceberg.
WHILE NO-ONE BE PERCEIVED ADVANTAGE OF TRYING TIMES, SEEING A SILVER LINING IS NO BAD THING
For so many of us now living under lockdown, or at least subject to stringent self distancing measures, seeing this huge venue - full of life and innovation just two months ago - now deployed as an emergency hospital brings about quite sobering thoughts. As the coronavirus continues to spread, betting and gaming businesses have been forced to announce temporary hibernation periods, as well as the sadly inevitable furloughing of
staff - particularly for those involved on the land-based or retail side of things. Fortunately, this industry is a hardy, resourceful bunch. And while noone wants to be perceived as taking advantage of trying times, seeing a silver lining is no bad thing. As such, there is plenty of focus throughout this issue on products expected to pick up some of the sporting slack - most notably virtuals, esports and a deeper selection of casino games. However, that’s not all. We have five fully stocked magazine sections dedicated to all things sports betting, US market, casino, payments and marketing. You can also expect to find interviews and expert analysis on topics ranging from the future of horseracing to positioning for growth in the US, the development of the live casino vertical, the impact of age verification measures and, ironically, marketing opportunities in Asia. Behind the scenes here at SBC, the team has been working hard to reschedule all of our events for later in the year, with more announcements to come in due course. However, with no certainty or clear timelines as to how long this nasty virus will stick around, our attention has turned to planning the SBC Digital Summit – a five-day remote gathering for the whole industry, with each day set around a different theme for discussion. You can find all the information you need in the final part of this magazine. We hope you enjoy it!
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SPORTS BETTING
The Italian Mr Stanley
SPORTS BETTING
GARRISI’S JOURNEY TO THE WORLD OF PROBABILITIES GIOVANNI GARRISI WAS THE FIRST PERSON to bring UK-style betting
to Italy in 1994. He later became the sole owner of Stanleybet the brains behind the gambling industry's version of the 'Bosman' ruling in football
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e tracked Garrisi’s journey from a mathematician beating the biggest pools game to starting a 50/50 JV with Stanley Leisure, seizing an opportunity to become the sole owner of Stanleybet and creating Magellan Robotech - a new scientific arm of the company to explore new frontiers in gaming and entertainment. SBC: As a Doctor of Mathematics, was a move into a business predicated on probabilities and statistics an obvious career development? GG: No, at the outset my interests were focused on pure research on prime numbers. Everybody was seeking to demonstrate the Riemann theory, through which the mystery of their distribution among whole numbers would be unveiled. Although nobody was successful in doing so, I admit that in my spare time my thoughts tend to navigate in that direction. My conversion to statistical sciences dates back to my season at the Bank of Italy, where I specialised in econometric modelling and balance of payments techniques in accordance with International Monetary Funds standards. Utilising historical series of currency rates, I developed a model
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The Italian Mr Stanley
...MY PASSAGE TO THE WORLD OF PROBABILITIES HAPPENED BY CHANCE, WHEN I DECIDED TO MAKE THE MOST OF MY MATHEMATICAL KNOWLEDGE IN TRYING TO “BEAT” THE ITALIAN TOTOCALCIO - AT THAT TIME THE LARGEST FOOTBALL POOLS GAME WORLDWIDE
that enables me to boast a role in contributing to what was then called the “currency snake” - an international agreement aimed at achieving a controlled band of exchange rate variations, which would ultimately result in the birth of the Euro. Conversely, my passage to the world of probabilities happened by chance, when I decided to make the most of my mathematical knowledge in trying to “beat” the Italian Totocalcio - at that time the largest football pools game worldwide. I won a quite considerable sum in my 57th week of attempts applying a probability model of my own conception, which I reckon would have afforded me a pretty large win every year, with a chance above 95%. But seeing that my toy worked, I’m afraid
8 SBC MAGAZINE • APRIL 2020
I lost interest. It is more or less at that time that Stanley and I came across each other. SBC: How did you become involved with Stanley Leisure to launch SIB? GG: My success with the main Italian pools game made me realise that I could import into Italy the best gaming techniques then existing in Europe. My choice pointed to two directions: Coral and Stanley Leisure. Coral replied to my proposal six months later and missed the train. By contrast Stanley
Leisure, which was at the time listed on the London Stock Exchange, showed immediate interest. Mike Kershaw, then Group CEO, was quick to understand my potential and agreed to create a new 50/50 joint venture between Stanley Leisure Plc and myself, called Stanley International Betting Limited and given exclusive rights for operations outside of England. SBC: Stanleybet was the brains behind the gambling industry’s version of the
MIKE KERSHAW WAS QUICK TO UNDERSTAND MY POTENTIAL AND AGREED TO CREATE A NEW 50/50 JOINT VENTURE BETWEEN STANLEY LEISURE PLC AND MYSELF, CALLED STANLEY INTERNATIONAL BETTING LIMITED AND GIVEN EXCLUSIVE RIGHTS FOR OPERATIONS OUTSIDE OF ENGLAND
SPORTS BETTING
‘Bosman’ ruling in football. What made you so confident that you would be successful in Europe? GG: My time spent at the Central Bank of Italy gave me an insight into not only economics but the legal aspects of monetary integration too. The interactions between the different legal systems that were destined to develop a superior European law, and the problems that the States of Europe would come across to harmonise their domestic monetary legislations, were evidently a breathtaking challenge. Why was I persuaded that my vision was right? Because there was no doubt in my mind that the process of strengthening Europe would be ultimately successful. Let me also say that I view Brexit as an “accident of history” sparked by short term political choices that nobody could come back on without losing face, and electoral consent. In real life, Britain is securely anchored to Europe, its culture and its societal values, besides its economy, and will continue to gravitate towards Europe, whatever the legal infrastructures. Stanley has profound roots in Britain and the rest of Europe alike, and I am sure that we will continue to prosper in 2020 and beyond. Coming back to your question, transposing this overarching idea to gambling was a fascinating legal and intellectual exercise, chiefly of strategy, that proved immensely challenging, especially in the numerous occasions when myself and my advisors were confronted with the European organs and authorities, notably the European Commission and the Court of Justice. SBC: Do you feel that other firms have been the main beneficiaries from your actions in the European courts? GG: All Member States except Italy benefited. The other national authorities did not really challenge my operations, and in the end devised sensible forms of regulation of the gambling industry that business could go along with. Before then, England aside where a pretty good regulatory model was already in place, the sector was totally underdeveloped and an easy prey for organised crime. Italy is a one off, I regret to say, in the negative. In Italy, a couple of large operators that already controlled
horserace betting claimed a de facto monopoly over sports betting as well. The Italian Government sadly played ball, and launched as many as three public tenders to award betting licenses over close to 15 years – which were the sole access to the market – in a fashion that was blatantly in breach of European Union law. The discrimination suffered by Stanley because it dared to legally challenge the regulator was acknowledged by the Courts of all
the clear recognition by the Italian Constitutional Court in 2018 that Stanley is a fully legitimate operator, at the dawn of year 2020 we are still looked at by the Italian authorities as a public enemy to be fenced off out of the system SBC: When William Hill bought the UK Stanleybet shops and Genting took over the Group buying the UK Stanleybet Casinos, how did that change the business?
ITALY IS A ONE-OFF, I REGRET TO SAY, IN THE NEGATIVE. IN ITALY, A COUPLE OF LARGE OPERATORS THAT ALREADY CONTROLLED HORSERACE BETTING CLAIMED A DE FACTO MONOPOLY OVER SPORTS BETTING AS WELL levels of jurisdiction. It is a fact that Italy’s failure to bring its system in line with European law encouraged, rather than discouraged, the infiltration of organised crime into the gambling industry, with a crowd of illegal operators falsely pretending to be in the same legal situation as that of Stanley. It was no less than a sheer abuse of rights, which only recently the Criminal Courts of Southern Italy, who have immense experience of fighting organized crime, came to understand and defeat. That said, and notwithstanding
GG: Everything was changing as we had to give to William Hill a five years noncompetition agreement in England and the same with Genting for operations in Asia. I then seized the opportunity and bought from Genting the remainder 50% of the Betting Group to become the sole owner of Stanleybet. SBC: Exploring new frontiers within the Gaming and Entertainment industry has been a staple of your career. Moreover, you’ve stated that your mission is “to improve the productivity and the efficiency of operators
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The Italian Mr Stanley
and to further enhance the gaming experience for customers”. What is the next stage of this continuous improvement? GG: Let me reply by looking at two key-points in time. The beginning of my adventure and where we now stand in Liverpool - a true frontier of excellence of gaming science and technology. In 1994, I was the single person in Europe having conceived a system that could process a bet entered into a terminal in one country (initially, in Bologna, Italy, where my experimental phase came to life) and accepted by a server located in a different country (to exemplify, London, England). I then utilised a BBS technology and client/server software which I developed in C language to enable a direct dialogue between the modems of either computer. I launched this in May 1994 in coincidence with the World Football Championships and the printers of the London server barely succeeded in coping with the bet flows that kept being sourced by one single shop (four counters) in Bologna. 26 years on, we are designing in Liverpool the first fully robotised teller. But this is for me a means towards an end, indeed not the end of the road. SBC: What’s the idea behind the launch of Magellan Robotech? How involved are you in the day to day business? GG: As we were pretty good at developing gaming and betting technologies, we thought it was the right thing to do to make them available to the marketplace. But our banner in Liverpool is now AI (Artificial Intelligence). I like to think I was the guy to conceive what we call the “Virtual Drone Swarm”. It is an artificial intelligence approach thought of as an intelligent unit composed of hundreds of thousands of cooperative virtual drones. The mutual interaction and communication protocols between each single software unit produce compounded effects of extraordinary potency. Our brand new CVD (Cooperative Virtual Drones) technology is embodied in a unique virtual product which we launched at ICE 2020 in London. CVD is utilised to simulate athletes’ movement, and is governed by the coordinated action of more than a hundred thousand virtual drones for each single athlete.
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I am not involved in day-to-day details but my dream is to be at the top of the new challenges for the use of technology to help human beings. For example, a robotised teller is an opportunity for developing individual components that could converge in a humanized robot capable of helping the everyday life of senior citizens living alone.
I WAS THE SINGLE PERSON IN EUROPE HAVING CONCEIVED A SYSTEM THAT COULD PROCESS A BET ENTERED INTO A TERMINAL IN ONE COUNTRY AND ACCEPTED BY A SERVER IN A DIFFERENT COUNTRY SBC: You worked on the first IT systems in Italy from the 1970s onwards. How big an advantage was that technical grounding for running multinational companies? How do
those compare to the systems of today? GG: Having to deal with Cobol and Fortran (computer languages) and big IBM mainframes, that period was first of all one of learning and training in which, day and night, I was feeding my never-ending curiosity, and learned to apply my mathematical thinking and skills to large computers and memories. I learned how to put my capabilities to use in the global world in my two years’ experience at Honeywell Italy and then in my phase at the Bank of Italy when I worked on IMF standards for balance of payments modelling. SBC: What does your induction into the Hall of Fame mean to you? GG: I am an entrepreneur, but in this season of my life my vision is to use what the future is before me to help society. I think it is a great honour to be counted among those that can support and make new generations dream. This also an extraordinary personal motivation to foster and spread around what I like to call new “explosions of creative energy”. •
Sports vacuum
SPORTS BETTING
HOW ARE WE GOING TO GET THROUGH THIS? AS THE COVID-19 OUTBREAK ushers in a
period of unprecedented downtime for sports betting as we know it, we invited some of the industry’s leading suppliers to explain how they are filling the space and mitigating partner losses
S
uren Khachatryan, CCO at Digitain, said: “When it comes to the recent postponement and cancellation of many of this summer’s events, it goes without saying that we’re entering an unprecedented time. “Just as nature abhors a vacuum, the same goes for our industry. There’s now an empty space ready to be filled by sportsbook suppliers. Those that have the alternative content ready to fill the gap are going to be key to keeping engagement going. “Esports alone is turning over close to $15 billion globally, with online arenas ensuring that quarantine and social isolation are solvable problems. We’re even seeing creative
THOSE THAT HAVE THE ALTERNATIVE CONTENT READY TO FILL THE GAP ARE GOING TO BE KEY TO KEEPING ENGAGEMENT GOING minds jumping on board with new tournaments, with the Esoccer Ultimate Quaran team already proving to be a hit. “Add in virtuals, which enables us to deliver a constant stream of entertainment throughout the day with a wealth of betting markets – and you’ve got every sport covered. From football to greyhound and horse racing, and everything in between.
Suren Khachatryan, CCO at Digitain
“Throw in the ongoing Asian football leagues to keep the live action going alongside, and you’re set with one of the industry’s most comprehensive alternative packages. “However, this is just part of the solution. Plenty of our fellow tier-one sportsbook providers have just as much content as we do. What sets us apart is how we can help our operator partners get the very best out of engagement. “Key to this is tech, and our automated CRM tools outmatch anything else on the market, ensuring that operators have an unmatched opportunity to introduce existing customers to new alternatives. “At the heart of this is our AI-based
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Sports vacuum
modelling, and we’re able to ensure that when each customer logs on, a personalised offering, fully tailored to their betting preferences, is waiting as an invitation to play. “At the end of the day, there’s a wealth of alternatives out there – the challenge for the industry is introducing it to their customer base, and we do it better than anyone else. “In my view, there are as many opportunities as challenges lying in wait during the months ahead. Choose the right supplier who has
“Fortunately, for both land and online business owners BetConstruct has a couple of solutions to save the day and the weeks to come. “Esports and virtual sports are a great alternative to sportsbooks. Esports has seen a rapid growth during the past years and these days it may justify its potential with around 12,000+ monthly live events that come with BetConstruct’s offering. “Virtual Sports has a more traditional choice of sports, but with a twist. The 3D visualisation and RNG-based nature
types - sportsbook and casino players. While their interests are pretty distinct and it’s a rather challenging task to convert one type into another, BetConstruct solves this issue by integrating bet-on features in some of its casino games. “This works with Poker, Skill Games, Mini games with high RTP and Live Casino. Speaking of the latter, our live casino offers a choice of services to boost igaming and take land casinos to a much more accessible and safer online space.
FORTUNATELY, FOR BOTH LAND AND ONLINE BUSINESS OWNERS BETCONSTRUCT HAS A COUPLE OF SOLUTIONS TO SAVE THE DAY AND THE WEEKS TO COME
“Operators can choose to have branded halls or dedicated tables for their online casino. This is a great solution to underline a brand. The benefits are higher player spend, longer player lifetime, increased customer base. Branded key aspects include landing page, casino lobby and elements of the UI. “With online setup all an operator needs is a single physical table on their premises. The rest is covered by BetConstruct - staff training, the equipment for live streaming, software
Edgar Mkrtchyan, Chief Product Owner at BetConstruct
the CRM tools that can introduce your customers to alternatives, throw in bonus rewards and other gamified offerings, and you’ll be ahead of the pack.” Edgar Mkrtchyan, Chief Product Owner at BetConstruct, added: “With massive shutdowns of casinos, the entertainment sector is suffering due to the lack of visitors. With the cancellation of major sporting events, sportsbooks - perhaps for the first time ever - became empty.
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of virtual sports deliver 24/7 realmoney betting and immediate payouts - quite attractive features for any sportsbook player. “We usually distinguish two player
SPORTS BETTING
Keith O’Loughlin, SVP Sportsbook and Platforms, Digital for Scientific Games
and a dedicated website. Even with a single dealer this version of casino attracts thousands of online players.” Finally, Keith O’Loughlin, SVP Sportsbook and Platforms, Digital for Scientific Games, explained how his company is helping its operator partners by sourcing engaging content during this difficult period. He said: “COVID-19 is having a significant impact on the sports betting industry and everyone at Scientific Games is going above and beyond to support our partners during this unprecedented global crisis. “First and foremost, we’ve taken appropriate steps to ensure the health and safety of our employees by implementing remote working procedures and precautions, including social distancing. “For our global network of customers, we’re working diligently to continue providing comprehensive services. “Now is a time for collaboration; great partnerships will really showcase how organisations and people can navigate collectively through difficult times as one team.
“We can only speculate as to when live sporting events will make a return. For the short term, it’s imperative that suppliers do as much as they can to bring alternative experiences to keep bettors engaged. “Of course, with extremely limited events available, many will be focused on enhancing their casino offering and using effective cross-sell techniques
SCIENTIFIC GAMES IS GOING ABOVE AND BEYOND TO SUPPORT ITS PARTNERS DURING THIS UNPRECEDENTED GLOBAL CRISIS to encourage existing bettors to try out new slots and table games, which remain largely unaffected. “However, there are sports-focused options too that will allow operators to push relevant and exciting content to their target audience. “Esports is one such area that is experiencing a continued spike during the shutdown of live sports. Major bookmakers are already offering odds on the likes of Counter-Strike: Global
Offensive (CS:GO), League of Legends (LoL) and Dota2. “It’s one of the fastest growing verticals in the world right now, which is why in previous months we’ve expanded our esports offering within OpenSports. Partners have access to a variety of odds and markets, along with a scoreboard function that gives players overview of in-game events. “There’s also a sudden increase in the demand for virtual sports too, as bettors look for experiences similar to that of a live sporting fixture to enjoy in a responsible way. “The quality of virtual events has improved considerably in recent times, with leading providers utilising state-of-the-art motion capture technology to bring ultra-realistic graphics, while there are far more betting options available, both prematch and in-play. “The OpenSports proposition features a wide range of virtual sports and we’re continuing to source more of these for our partners. “These are challenging times for everyone. Together, we’re showing our resilience to overcome this tough period.” •
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International approach
SPORTS BETTING
PROMISING SIGNS FOR BETANO’S EUROPEAN EXPANSION
PETRA ZACKRISSON, Chief
Corporate Development Officer for Betano, on making the shift from start-up to local champion to international competitor
Z
ackrisson said Betano, the international brand of Greek sportsbook and casino operator Stoiximan Betano, is embracing the challenges associated with this change in approach as it sets about becoming a ‘top three’ online operator in both Romania and Portugal, and building a position in
Germany amid an uncertain regulatory climate. SBC: Do you believe that Betano has been able to replicate Stoiximan’s success on the international front? PZ: The early signs are promising. Our strategy is to be an international company with a localised approach. We know how to be a local champion, which was the starting point for our expansion. We managed to replicate the model in Romania and took on the next challenges in Portugal and Germany, where Germany was a very different “animal”. Customer is the focus. Cutting edge technology and products are the tools, while people make the difference.
We have established local teams and offices in every country of operation in order to adjust to local needs, both in products and services. So, in a way it is not a matter of replication. I would say it is more of continuous adaptation and improvements. The shift from startup to local champion to international competitor is quite challenging, but we like challenges. SBC: How have the sports partnerships associated with your brands aided in boosting your presence and awareness? PZ: Sports lie in our company’s DNA and it is part of our success in many aspects. Convincing A-teams and
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International approach athletes to come on board is one of the differentiating factors that helped propel Stoiximan to the top of the Greek market back in 2016. In a way it boosted our awareness even to nonplayers, thus enhancing the level of trust amongst our client base. Our extensive sports sponsorships program, varying from popular to less popular sports and from team sports to Olympic champions, also provided us with a unique access to exclusive content as well as a broader and more receptive audience for our CSR program. This alternative communication approach worked well for us. That does not mean it works well everywhere, but we will use our learnings and see what also fits in other markets. Again, adaptive or agile is the word.
THE ROMANIAN MARKET IS OUR MOST MATURE INTERNATIONAL MARKET, OUR ASPIRATION IS TO BE IN THE TOP THREE OF ONLINE OPERATORS SBC: You're currently active in five countries. What are your aims in terms of expanding your brand further across Europe? Is anything in the pipeline? PZ: So far we have been growing organically, but we have an opportunistic approach to M&A and are open for it. We are currently assessing a few different markets and our aim is to enter one more market during 2020. SBC: What are your goals for 2020 in all markets, and how do you intend to achieve them? PZ: These are three different markets with different levels of maturity and approach. The Romanian market is our most mature international market - our aspiration is to be in the top three of online operators. We will continue with our current strategy to continuously enhance the customer experience through our product offering in sportsbook and casino, improve our digital marketing and strengthen our presence through sponsorships and CSR programs, all leading to higher brand awareness across segments.
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SPORTS BETTING
In Portugal, we are still new to the market, but we are satisfied with the launch and the first results in 2019. Our ambition in Portugal is also to be in the top three for online operators. We hope to reach that by continuing to optimise and improve our product and service offering together with our local team. Germany is a highly competitive market and it is still early days. Our aim is to establish a position and start building our brand. Given the size of the market and the cultural differences this is a slower process compared to our other markets. There are also pending issues regarding the country’s regulation. We have given notice to the regulator that we aim to apply for a sports betting licence, but like many other operators we challenge the interim solution due to its product limitations. Few operators believe this is the end of it and we hope that the industry can have a constructive dialogue to find a viable solution for all operators that want and aim to regulate in Germany up until the new regulation in June 2021. SBC: What is different between your brand and that of other operators
currently operating within the competitive markets where you are trying to establish a strong position? PZ: We start with our people, recruit local teams that help us to follow a localized approach. We see the differences in each market and adjust our approach according to those while keeping firm to our values. Our size gives us the advantage of being rather agile. The startup culture is still very present and that supports us in how we approach challenges and change.
it a state-by-state approach or group wide? PZ: Our group policy goes beyond local requirements.esponsible gaming is a key pillar of our strategy. We adhere to all relevant rules in countries of operation. However, we have set our own policy which is more advanced in many aspects. This is a strategic decision not only for our company, but I believe for the industry in general. It is about sustainability of our industry. Problem gambling should not be
PROBLEM GAMBLING SHOULD NOT BE APPROACHED WITH A “HIDE UNDER THE CARPET” LOGIC. ON THE CONTRARY, WE SHALL BE AT THE FOREFRONT AS WE ASPIRE TO BE A SOURCE OF HEALTHY ENTERTAINMENT TO OUR CLIENTS Another factor is our commitment and focus on customer service. We have made a costly yet concise decision to have local in-house customer service teams. This gives us an advantage towards competition. Finally, our focus on technology as we try to keep ourselves ahead of competition from companies of our size. SBC: What is your policy around the prevention of problem gambling? Is
approached with a “hide under the carpet” logic. On the contrary, we shall be at the forefront as we aspire to be a source of healthy entertainment to our clients. We have a shared responsibility at a sector level to exceed when it comes to responsible gaming practices. It is us who should set the standards for the health and safety of our customers. Plus, it makes more sense in every way, not only socially but also financially. •
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Tech Talks
SPORTS BETTING
INDUSTRY’S SENIOR TECH LEADERS REFLECT ON REGULATORY HEADACHE FOUR OF THE BETTING INDUSTRY’S LEADING CHIEF TECHNOLOGY OFFICERS
Robin Harrison, Smarkets CTO
discuss whether the sector’s infrastructure is flexible enough to withstand implementation in different jurisdictions with multiple regulatory challenges
O
n the Betting on Sports ‘Tech Talks: Industry CTO panel’ was Smarkets CTO Robin Harrison, Stanleybet Group CTO Pierluigi Chiusolo, Betano & Stoiximan CTO Aris Dimarakis and CTO of the Nederlandse Loterij Maurice Meijer. The session’s moderator Andrew McCarron, Managing Director at SBC, opened up the discussion by quizzing the panel on their day-to-day responsibilities, with Dimarakis taking the lead by stressing what he believed the main aims should be amongst the ‘senior leaders’ in the tech industry. He stated: “Personally, the thing that all senior leaders in the tech industry should do is to try to deploy environments that attract people because the hard thing nowadays is to find the right engineers, attract them, get them to join your company, feel engaged about your product and understand that they are able to assist in a way that will help you continue and expand and grow. So basically, I'm trying to build the environment for people to join Stoiximan and Betano.” This was followed by a similar answer from Harrison, who moved on to voice his opinions on the ‘headache’ of regulation and the recent architectural
WITH MICROSERVICES, THE DIRECTION OF TRAVEL THERE HAS FORTUNATELY MADE ALL TECHNOLOGY COMPANIES THAT HAVE MADE THOSE CHANGES MORE ABLE TO COPE WITH JURISDICTION-SPECIFIC ISSUES changes witnessed within the industry over the last 10 years. The Smarkets CEO added: “I find myself involved in quite a large spectrum of things and that starts at the top with strategy, architecture and hiring. But day-to-day stuff I’m also quite involved on the ground as well with some of the senior engineers in implementation decisions, partnerships and architecture on the ground as well, it's the full spectrum for me.
“I’d definitely say that regulation is causing me more headaches at the minute. There are two key examples for me right now. One is in the state of Indiana. So we’ve announced a partnership in Indiana that is our first foray into the US market and the headache is mainly down to the number of unknowns. “This is fresh for everyone out there, this includes the regulators themselves who are only getting their heads
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Tech Talks
Aris Dimarakis, Betano & Stoiximan CTO
Pierluigi Chiusolo, Stanleybet Group CTO
around how they want to run the state, that includes the gaming labs they’re employing to interface between themselves and companies like ourselves, and there are unknowns. We are trying to move at pace and we are somewhat constrained by them, so that's one area. “I think in some way we are fortunate for some of the changes we have seen in architecture in the last 10 years. With microservices, the direction of travel there has fortunately made all technology companies that have made those changes more able to cope with jurisdiction-specific issues in theory. “I think there is still, on a case-bycase basis, a decision to be made at what level distinction is made between players from different jurisdictions. On one extreme you’ve got to duplicate your whole stack and system. On the other extreme, you may go down to the line of code in the individual
20 SBC MAGAZINE • APRIL 2020
microservice and insert an ‘if’ statement. No-one wants to do that. “I think both of those would be antipatents, and it’s finding the place in the middle, the sweet spot for where jurisdiction-by-jurisdiction changes should be architected.” Chiusolo agreed with his fellow CTO regarding the ‘headache’ that is regulation and discussed the challenges associated with tackling different jurisdictions, explaining that there is no ‘silver bullet’ or single answer to overcoming this conundrum. He commented: “The biggest headache is probably a regulatory challenge rather than the technology challenges. Every jurisdiction is different, probably you can try to categorise and you will find out that there are probably three or four different models. “You can go from the most difficult
WHAT YOU CAN’T DO IS ASSUME THAT WHAT YOU FIND IN ONE REGULATION WILL BE IN ANOTHER, BECAUSE IF YOU START BINDING OLD-SCHOOL STYLE, THEN YOU WILL BE IN A MESS that I know, which is the Italian model where every transaction is recorded, to the simplest, which is documentation to get an online licence in Belgium for example. “This introduces a challenge on the way you design and implement your business logic. You need to take into consideration different ways of doing KYC, different ways of storing/ reporting data, different ways to do logins, fulfilling different obligations. “There isn't a silver bullet that you
SPORTS BETTING
“But, what you see is also that if I try to interpret this particular regulator data, laws and licences I sometimes wonder, from a technology perspective, is it really useful? Why did they put this in? Can we change it? Should it be a controlled database? “These kinds of questions I always have so it’s nice to figure that out. But it also gives me a headache from figuring out what exactly should be built and if you have to build it, will it withstand the check by the authorities?”
Maurice Meijer, CTO of the Nederlandse Loterij
I THINK A LOT OF PEOPLE ARE LOBBYING FOR CERTAIN FEATURES THAT SHOULD BE IN THE LEGISLATION, AND THERE ARE ACTUALLY SOME VERY GOOD THINGS IN THERE
can just shout and say ‘I have the plan for this market’, every time you need to implement a different security paradigm, a different KYC paradigm. And so the key is to keep a minimum record of functions and to be able to extend it to have a lot of flexibility and to provide a lot of extension points where you can easily adapt different ways of communicating with the external parties.” Chiusolo also touched on the flexibility required and how it could be achieved through maintaining a simple platform and ensuring that a ‘decent and flexible’ microservice layer was built. “Keeping the platform very simple, building a decent and flexible layer of microservices will probably allow for the flexibility that you need,” he said. “What you can’t do is assume that what you find in one regulation will be in another, because if you start
binding old school style, then you will be in a mess. “Fortunately, recent technologies have come in and everyone agrees that the technology platforms are very difficult to bring from one jurisdiction to another and I think that everyone, at least in our experience at Stanleybet, realized that the core was not flexible enough even though we purchased the platform, changed it and added the product. So we started doing our platform from scratch.” Lastly, the floor opened up for Meijer to further the regulatory ‘headache’ discussion with the lotteries’ perspective. “We see things that are lost in translation with our current regulator,” he said. “I think a lot of people are lobbying for certain features and things that should be in the legislation, and there are actually some very good things in there.
Meijer then closed the panel by highlighting the importance of latency for UI, before explaining how Nederlandse Loterij has a different approach to software development. He concluded: “For us, latency is hugely important. We are not really into this live betting yet, but of course, we have a UI that needs to be delivered to our customers. We have engagement on the side and in every step of this journey we want to make sure that it’s working perfectly. “We’re a little bit different because we don’t have developers in house, we use other companies to develop certain software that we define ourselves but are built by third parties. What we do is to build a whole interface in between to make sure that all our touchpoints can be reached by certain experience API, a kind of gateway. “This particular gateway is also based on microservices which is quite important for us to make sure that we have this latency in place and we can actually put new features into place without any downtime, so actually in selecting certain clouds, operators or making choices for which strategy you have in terms of latency then yeh its a constant factor to take into consideration.” •
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Racing’s survival bid
SPORTS BETTING
BALANCING ACT: WHY RACING FINDS ITSELF AT A CROSSROADS A PANEL OF RACING EXPERTS AT BETTING ON SPORTS agreed that the
industry is being forced to adapt to survive - but making these changes is easier said than done
T
o say that horse racing has come up against some large hurdles in the last few years is to greatly underestimate the challenges that the sector has faced,
and still continues to face. With fixtures cut from the calendar, a drop in levy fund contributions, media rights falling as a result of the FOBT legislation and even racecourse closures, the racing industry simply must implement drastic changes in order to continue as it does. One of the key challenges that the sector is currently facing is drawing in an audience beyond its legacy punters, and keeping that audience engaged with the sport. And to do this, panellists at Betting on Sports suggested that horseracing should take a leaf out of county cricket’s book.
Moderating the ‘Pulling up? Does racing need to implement cuts?’ panel at last year’s event, SEM Global Director Philip Canavan drew comparisons between county cricket and racing, suggesting that the problem that racing has is with the marketing of the sport. He said: “A good comparable is county cricket, how can racing get an increased audience through the door? You see an Ashes test match with 17,000 people watching, you see Cheltenham Festival with 70,000 on day one, and you might see a few big punters trackside. “But on a week day at Newmarket or Sandown, or wherever it may be, that’s not the case. Is there anything that the marketing teams at the racecourses can do to increase their audiences or open it up to new people?” Racing, according to Betting Integrity Manager Stephen Emberson (then with Betway, now with Betgenius), has found itself in a position where it needs to take the risks that county cricket did and try something new to help it survive.
sbcmagazine.com 23
Racing’s survival bid (L-R) Tom Byrne, Operations Manager at the Horserace Betting Levy Board, Will Lambe, Executive Director of the British Horseracing Authority, and Stephen Emberson, Betting Integrity Manager at Betway (now Betgenius)
Emberson said: “I think that there’s always a danger that you look at the criticism that has been thrown at bodies such as the ECB for The Hundred tournament that’s about to start, saying that it’s going to take it away from county cricket etc. But they’re in a position where they need to try something, and I think that racing is also trying to do that. “I think that lunchtime racing is a good idea, and there are a multitude of other options that can also be explored to really just try something new which to the legacy punter or horseman might not seem quite right in their mind but racing is in a position now where it’s probably worth taking that risk.” The risk with this, however, lies with ensuring that horse racing remains the core product when considering new strategies to reach new demographics. Tom Byrne, Operations Manager at the Horserace Betting Levy Board, criticised the suggestion of replicating the county cricket strategy as it ‘forgot the purpose’ of the sport. He said: “I think it’s important not to forget horse racing in the product. County cricket is a good example where the sport is struggling with attendances, and to many, it’s a game in decline. But you could also argue that they’ve forgotten about the game.
24 SBC MAGAZINE • APRIL 2020
“You could argue that county cricket doesn’t produce international-opening batsmen, that it doesn’t produce English bowlers that can bowl at 90mph, and that it is not in its core function to produce the highest quality cricket players in this country. That’s not necessarily the core function of day-to-day UK racing. “We don’t put fixtures on a lunchtime on a Tuesday in February to draw in 3,000 people. It exists in those fixtures
racing and to avoid this, racecourses should be ‘sweating their assets’. He said: “In this day and age, when you look at the cost of land, I think that horseracing should definitely be taking all of the warnings and lessons from its little brother greyhound racing. “When you see tracks that don’t sweat their assets, they get bought by ruthless property developers. If a racecourse is open for 10, 12, 20 days
WE’RE TRYING TO FACILITATE A WAY FOR BETTING OPERATORS TO BE A PART OF THE CONVERSATION AND WORK COLLABORATIVELY WITH RACING, AND TO ALLOW RACING TO TAKE ADVANTAGE OF THE BETTING KNOWLEDGE THAT SITS WITH THE INDUSTRY for a different purpose. I also think it’s important not to forget the purpose of why we put fixtures where we do. If we have a better racing product, that in itself starts to solve some of the issues that the industry is having.” Achieving a successful, engaging horse racing product is something that the sector has been trying to do, and arguably failing. And this isn’t the first time that this has happened. Ben Keith, Founder of Star Sports, explained that this is merely a repeat of what has happened with greyhound
a year for racing, that’s fine, but then it’s got another 350 days a year where it could be having concerts, markets, festivals. “Newbury has put some housing around the racecourse, could racecourses maybe build some office space around the racecourse? Space is very much at a premium now. I think that it is arrogant and maybe dangerously short-sighted for us to think that we can have a great race meeting and that’s that. Racecourses have to sweat their assets, and take expert advice on doing so.”
SPORTS BETTING However, it’s not all doom and gloom. Racing has found itself growing across a number of areas, with the recent data agreement between the HBLB and major bookmakers expected to reap the results of lunchtime trials and wider betting data. Byrne explained that the data should help ‘generate change’, and revealed that changes in the sector has forced the HBLB to ‘refind’ its role in the betting industry: “Hopefully the effect of this data agreement is massive in two ways,” he explained. “Firstly, the levy board wasn’t supposed to be here. The Levy Board was supposed to be closing on 31 March 2019, with its responsibilities transferring over to the racing authority. What this means is that the levy board is having to try ‘re-find’ its role within racing and how it works alongside the BHA, the racecourses and the horsemen. “One area where there seems to be quite a strong role for us is in the development of a betting strategy, and trying to pool those various areas that are well talked about where they don’t sit in a single place with the commercial rights. But with the levy board hopefully sitting between them, we can find a way of transferring over that knowledge between all of the various different groups. “So we are now receiving betting data - we have data from 1 January 2017 from Betfred, Ladbrokes Coral, Paddy Power Betfair, Sky Betting & Gaming and William Hill for all of their retail and digital turnover and gross win on every single race from that period. “We’re trying to facilitate a way for betting operators to be a part of the conversation and work collaboratively with racing, and to allow racing to take advantage of the betting knowledge that sits with the industry. “And I think that with a lack of data for a period of three years between 2015 and 2017, racing has had to make assumptions and decisions on data. And I think that what we’re very keen on is the process. “What does matter to the HBLB is how you have come to that decision, and you can base that decision on evidence and that evidence is based on output and inputs. That work is happening now with the modelling that we’re helping input that betting data into.
Philip Canavan, SEM Global Director
Ben Keith, Founder of Star Sports
“The HBLB hopes to fit that role in the middle to ensure that betting puts its case forward that the BHA, racecourses and the horsemen can then make a reasoned and informed decision. That allows us to generate change and push forward. We’ve recently trialled some lunchtime racing at the behest of the bookmakers. “This will allow us to produce a very limited bit of evidence, but
it’s something that we can go back to racing with and say ‘look, this is what we have found, this is what bookmakers are telling us, this is where we think the upsides are.’” Will Lambe, Executive Director of the British Horseracing Authority, shared Byrne’s optimism that the racing industry is poised for change but explained that at the moment racing finds itself at a crossroads - as it tries to balance the positive growth with the challenges faced from the ramifications of the FOBT legislation. He said: “Should racing be implementing cuts? We’re in no way pulling up. There has been a lot of focus on next year’s fixture lists where we at the BHA believe that it was time to maybe put the brakes on. We’re currently at a bit of a crossroads again in the sport, as we’re seeing a lot of changes particularly in the betting markets. “There has been a reduction in fixtures in 2020, whilst we as a sport now take a proper look as a big economic project has kicked off with everyone involved. We need a common understanding, we need one version of the truth as to all the different income streams and outputs in our sport. But for quite a few years now, it’s been quite piecemeal. “We’re at a bit of a crossroads at the moment. We are seeing growth in lots of areas - that’s for sure. There have been lots of challenges, and with those come plenty of opportunities. We understand that we’re seeing a decent level of growth at the moment in the betting market, including on the high street post-FOBT changes. “Obviously the shop closures will have a particular effect on the sport as well. There is a balancing act to achieve as the governing body - here at the BHA we’re the governing and regulatory body but we don’t have commercial rights. Not akin to other governing bodies in the sport, we’re not seeking commercial rights either. But we will publish the fixtures for the coming year. “That balancing act involved there is getting harder. Even within the betting industry, balancing the interests of high street versus online. Identifying where the growth is, what are the different income streams from the two sports from each of those two elements, it is just becoming that bit more challenging.” •
sbcmagazine.com 25
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Global footprint
SPORTS BETTING
HOW SIS IS MEETING THE DEMANDS OF AN INTERNATIONAL AUDIENCE
2020 MARKS THE TURN OF A NEW DECADE, and SIS has
laid out its plans for what’s to come over the next few years with international expansion, new hires, and product development remaining high on the agenda
W
ith the US market gradually opening its doors, Brazil on the cusp of approving gambling regulations, Europe undergoing a thorough review of its social responsibility mandates and the Asian market continuing to boom, new opportunities for expansion are popping up all over. Speaking at ICE London, SIS
Commercial Director Ian Baynes revealed how SIS plan to capitalise on these new opportunities. He explained that the racing content and data services provider has identified a number of key markets across Latin America and mainland Europe for building a more global footprint, with Spain serving as a ‘bridge’ into the emerging LatAm market. When quizzed on what we can
expect from the multi-channel supplier of 24/7 betting services in 2020, Baynes revealed that SIS will be focusing upon delivering its live betting products across new markets, strengthening its team and capitalising on growth categories such as virtual products and esports. According to the commercial director, data for horse and greyhound racing is a product that has been high in demand for SIS from international betting operators across a number of territories, including those which may traditionally not have a rich history of racing. Baynes explained: “Put simply, we’re doing a lot! Historically, over the last
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Global footprint
30 years, we’ve been a UK-based business with a solid footprint in horse racing and greyhound racing. What we’re trying to do is take that to the US, to Australasia, and certainly to parts of mainland Europe. “I think it's the responsibility of any organisation to continually strengthen its team. And particularly as we continue to expand internationally, we’re doing more in Latin America and further afield, we need to add more depth to our team. What we’ve done is hire someone out of Spain to look at and focus on our Spanish business as a bridge into Latin America. “And I think that having more backoffice support in the Commercial Director position helps set in place better systems, better processes and better structures that allow us to scale quickly as we capitalize on success. It is a really exciting time at SIS now. “So in 2020, what you can expect to see is SIS continuing to invest in people, in more infrastructure within those markets where our large key accounts have footprints or we have discreet opportunities with operators within specific countries. Hopefully this gives you a bit of a flavour, but essentially: more money, and more investment going into international expansion.” One of the key challenges, however, has been rolling out a horse and greyhound racing product across markets which typically haven’t focused on the two sports. Baynes, who identified Romania, Poland, Serbia and Croatia as examples, revealed that bettors have typically requested a more simple ‘call to action’ bet type, and so facilitating an expansion into these markets has meant that SIS has developed 24/7 Live Betting Channels. The product has been one of the key drivers in the growth of betting on racing by delivering frequent, quickfire betting opportunities across a number of events. As bettors are increasingly demanding easily accessible content at all times of the day, Baynes emphasised that the roll out of the 24/7 Live Betting Channel has been integral in offering these wagering opportunities at all times of the day to meet customers’ needs. By delivering betting opportunities
28 SBC MAGAZINE • APRIL 2020
Ian Baynes, SIS Commercial Director
WHAT WE ARE DOING IS SIMPLIFYING THE WAGERING TYPES AND MAKING IT EASY FOR PEOPLE TO PLACE A BET IN AN UNDERSTANDABLE FASHION WHICH CAN RESONATE WITH SOMEONE WHO IS MAYBE BETTING IN THEIR SECOND OR THIRD LANGUAGE every three minutes, translating to approximately 175,200 races each year, this product has been the key to reaching bettors in those emerging markets which may not be as familiar with racing as bettors in the UK. Baynes continued: “The 24/7 Live Betting Channel is different for international markets compared to the UK. Typically, it is presented
differently to accommodate a different type of bettor. To some, horse racing can appear complicated with all the terminology around the going, handicaps etc. in some markets, the UK for example this is part of the appeal, but doesn’t always translate to newer markets with no racing heritage. “Let’s say someone in Serbia or Romania will not opt for a very
SPORTS BETTING
complex bet type. They will often prefer a very simple call to action. So the international product is all about making it quick and easy to engage in a meaningful way for the player. “What we are doing is simplifying the wagering types and making it easy for people to place a bet in an understandable fashion which can resonate with someone who is maybe betting in their second or third language.” Elevating the player experience has also been a top priority for SIS as it enters the new year, and so the upcoming launch of its new InRunning Pricing Feed has been pivotal in supplying that constant stream of content. “The In-Running Pricing Feed, in my opinion, is a great product,” said Baynes. “It is a new proposition for the operators, and essentially what it allows us to do is - after the off, after a race has started - we can allow operators to continue to take wagers and bets. “What this means is, particularly for a younger demographic or for someone that’s interested in live-play, bettors now have an opportunity to engage with the event rather than
WHAT THIS MEANS IS, PARTICULARLY FOR A YOUNGER DEMOGRAPHIC OR FOR SOMEONE THAT’S INTERESTED IN LIVE-PLAY, BETTORS NOW HAVE AN OPPORTUNITY TO ENGAGE WITH THE EVENT RATHER THAN PLACING A BET UP FRONT placing a bet up front. So, that means essentially more revenue, more margin, more wagering activity, and it means a better customer experience for the player.” Tapping into a younger demographic, according to Baynes, has been helped by the growth of esports and the launch of SIS’
Competitive Gaming product in 2019. He explained: “Competitive gaming in esports is a massive growth category. And what is unique about the SIS Competitive Gaming proposition is that it is the first esports product that is built specifically for sportsbooks, so the betting principle is built into the mechanics of the product. “So rather than just having a data feed on a sportsbook of matches that are taking place for the benefit of games publishers, we have tournaments that have been created in a format and at a time that is optimized for sportsbooks, to drive betting turnover. “I think esports will continue to be a growth category. I believe that as the next generation of players come through the importance of an all-digital, live-event format will deliver a more engaging video game experience.” •
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US MARKET
Bump in the road
US MARKET
SPORTECH REMAINS WELL POSITIONED FOR CHANGE AND CHALLENGE IN 2020 GLOBAL SPORTS BETTING TECHNOLOGY COMPANY SPORTECH, like many other
firms, is about to enter what will arguably be the most challenging period in its history. But it does so with no debt, some of the best brains in the business and a pioneering approach to the sports betting sector
Richard McGuire, CEO, Sportech
W
ith the ink well and truly dried on its recent 2019 financial results, Sportech might have considered a brisk start to 2020 trading as a sign of positive things to come for the rest of the year. And so it might have come to pass had COVID-19 not emerged to wreak havoc on the global betting and gaming market. Talking to the firm’s CEO, Richard McGuire, there’s a clear sense that the firm was well positioned to make some big strides this year, having developed its own white label platform to work with big name operators in the US sports betting segment. And with regulatory change on the cards in its own stomping ground of Connecticut (subject to getting the tribes onside), things were looking good. By way of a recap, Sportech’s 2019 fiscal year saw revenues increase 2% to $75m (2018: $73.5m), while adjusted EBITDA reduced by 5% to $10.8m (2018: $11.4m). Adjusted pre-tax profit from continuing operations (prior to sports betting investment) was $1.16m (2018: $1.32m). The company noted a statutory pretax loss from continuing operations
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Bump in the road
of $9.7m (2018: $3.1m) which included a $5.8m impairment to its Stamford sports bar asset. It also revealed that capex had been reduced by -24%, with corporate costs lessened by -28%. Meanwhile, cash generated from operational activities increased by +27% and Bump 50:50: achieved record revenue growth. The CEO understandably adopted a more cautious tone in his 2020 trading forecast, telling investors that the outlook was uncertain while conceding that COVID-19 would clearly impact the business. Speaking to SBC shortly
SPORTS BETTING BECAME A GOLD RUSH PRETTY QUICKLY AND IT’S SEEN SIGNIFICANT GROWTH IN THOSE STATES THAT HAVE TAKEN IT FORWARD started the year (2020) very strongly as well before COVID-19.” According to McGuire, Sportech has invested heavily and purposefully in its white label, pari-mutuel platform to make it attractive to operators and ensure it has the right qualities to
“Our view was instead of diving into that market, which is dominated by global leaders who are building phenomenal platforms, let’s build what we do. We are a leader - a pioneer in our particular business. Let’s look at our business and see if we can take it into sports betting. “So we had discussions with a number of the fixed odds biggest sports betting operators on how to add to their product offering with horse racing pari-mutuel betting. The benefits for sports betting operators is that it’s an absolute no-risk product that enables them to cover global
Connecticut Governor Ned Lamont
after publishing Sportech’s results, that tone remained consistently measured, albeit with a keenness to underline some of the positives around the firm’s activities. “Our US business currently accounts for around 60% of our revenues as a business,” he explained. “It’s a clear focus for us. At this stage predominantly in the US business it’s pari-mutuel or tote betting and our Bump 50:50 business. Those two businesses have definitely performed very well for us in 2019 and we actually
32 SBC MAGAZINE • APRIL 2020
deliver to them a risk-free tool. “We wanted to do something that was significant - we wanted to build a platform which we did. We invested heavily. Sports betting became a gold rush pretty quickly and it’s seen significant growth in those states that have taken it forward.
markets in horse racing seamlessly. And it’s got, on average per dollarspend, a significantly higher average margin than sports betting. It’s a complimentary product.” McGuire added that a lot of attention was diverted into making sure that the platform stood the test of time. That
HAVING FOUR OPERATORS IN CONNECTICUT WOULD BE SIGNIFICANTLY POSITIVE FOR US AS A GROUP, SO WE’RE INCREDIBLY FOCUSED ON PROGRESSING THAT AND WORKING WITH STATE LEGISLATORS
US MARKET
meant getting up to speed with the needs of the fixed odds market place in terms of CRM and CMS tools as well as player account management wallets, aspects of the business that Sportech hadn’t really invested in historically. Looking beyond the white label business, one of the major hopes for Sportech is regulatory transition in Connecticut where it operates its Winners and Bobby V’s betting and sports bar outlets. “Where we’re really focused on in sports betting and where we have a strong position is in the state of Connecticut which still has not yet licensed sports betting,” he said. “We are surrounded in Connecticut by states that have. “And it's impacting the performance of our venues’ business, amongst other things obviously. Players head to New Jersey in particular and play at Meadowlands. They’ll play the horses in the afternoon and the sports in the evening. That’s had a damaging effect.”
Hopefully that will change. At the beginning of March, state Governor Ned Lamont backed one of two bills that would greenlight sports betting in Connecticut. But it goes directly against the will of the Mohegan and Mashantucket Pequot tribes who back a second bill granting them rights to take sporting wagers, open a casino in Bridgeport and offer virtual casino
state legislators. The standoff between the tribes and Lamont is an example of staggering brinksmanship. “It’s a poker game now,” noted McGuire, adding: “I would say that we have won the battle, but the tribes absolutely believe that they have full exclusivity. The bigger issue is that the tribes have stated unequivocally that they will challenge
THANKFULLY BEFORE THIS (COVID-19), WE ESTABLISHED CONTINGENCY PLANS SO THAT THE ENTIRE TEAM HAS THE ABILITY TO WORK FROM REMOTE LOCATIONS AND MAINTAIN THE SPEED, STABILITY AND SECURITY OF OUR PLATFORM games on smartphones and computers on an exclusive basis. McGuire believes that Lamont’s favoured bill makes more sense. “It would provide a sports betting licence for us and also the tribes and the lottery,” he said. “Having four operators in Connecticut would be significantly positive for us as a group, so we’re incredibly focused on progressing that and working with
any decision or sue the state under their MOUs or compacts with the state. “The elephant in the room is the money the tribes currently pay the state - ballpark $250m a year. But that’s a commercial agreement. The tribes pay $250m a year which is 25% of their slots revenue which means they make $750m. So they are allowed to continue slots in their casinos which is huge, clearly. They also get
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Bump in the road
the protection in this agreement that no other casino is allowed to operate slots across the state. If the Governor does put this bill through and the tribes follow through with their challenge - it is a huge risk. Because if they lose it they no longer have slots in their casinos or they’ve got to pay a much higher rate - I don’t know how that’s going to play out.” McGuire, like most, hopes that common sense will win through and that everyone will work together for the greater good rather than bicker over a business that isn’t exactly big on margins. But the real threat in the medium to long term isn’t tribe versus policy maker versus commercial competitor, it’s the coronavirus pandemic. His assessment is not for the faint hearted. “We’re looking at the impact of COVID and as a company we’ve got to look at our liquidity,” he warned. “We still want to be operating here but we don’t know how long the business is going to be closed and that’s a massive variable. How long are we going to be down and to what extent?” Product and payment are two more
34 SBC MAGAZINE • APRIL 2020
big variables, as McGuire explained. “Hong Kong Jockey Club closed its doors about 10 weeks ago. They were racing behind closed doors and they have continued to operate very successfully through that period, through that time,” he explained. “Through our clients - globally - we have a significant amount of volume that goes through there. Those volumes have been maintained.
WE’VE GOT CASH, WE’VE GOT NO DEBT, BUT WE ARE A SMALL COMPANY WITH A HUGE GLOBAL PLATFORM “So we have to maintain our liquidity. But the other unknown is are people going to pay what they either owed before or what they continue to owe for the services we provide. We’re looking at that from a ‘war room’ situation. Let’s assume people don’t pay, let’s assume we continue to provide all these services. How long can we take this through? And that’s a question of how long is a piece of string?”
Sportech is at least in a position where it doesn’t owe any money. “We’ve got cash, we’ve got no debt, but we are a small company with a huge global platform,” said McGuire. “We’re in 37 countries already so it's challenging across the board. Where we thought we were geographically reasonably well diversified, that means nothing with this particular situation.” The CEO said that Sportech is currently working through the revenues. “We’re speaking to all of our customers in terms of what they need going forward, what we can do to help them to mitigate their costs. Our big costs are - in certain businesses rents for commercial properties which we’re addressing and licensing which we’re also addressing. “The biggest cost to us, like any business, is personnel and the staff which is the toughest decision to start to forecast when one doesn’t know how quickly you’re going to come out the other end. Difficult decisions are going to be made. Nobody knows the timetable - none of us at all - but we are tackling rents, licenses and personnel.” •
US opportunities
US MARKET
THE SMART EUROPEAN OPERATORS ARE THOSE ASKING THE QUESTIONS CHARLES COHEN, IGT PLAYDIGITAL VP SPORTS BETTING, highlighted US
market opportunities for Europeans at this year’s ICE London. He also told SBC Magazine why the casinos as ‘hosts’ need to learn a new business and how all operators - for online and retail - should not be taken for a ride by a “thicket” of different suppliers
SBC: Hi Charles, thank you for talking to SBC Magazine. Just to set the scene for European operators; what are the key differences to look out for in the US? CC: The US is a completely different market, in pretty much every respect you can imagine. For starters it's not really one market, there is currently a dozen or so, soon to be 25 or 30 markets. Each one of the states is going to be run in a completely different way. The economics are different, the technology is different, the players are different, the sports are different, the root to market, marketing - everything about it is completely new. The smart European operators are those asking the questions before they jump in and get themselves into trouble. SBC: What has IGT learned so far about regulated sports betting for the US market? CC: We're fortunate because we've been in the market for about five years already given our presence in Nevada. We had our platform certified there in 2014 so we learned a huge amount
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US opportunities
from that and, obviously, we are already present in all these markets as a supplier of casino equipment and systems, and the lottery space as well. We learned that sports betting is as hard and complicated to do as we thought it would be, if not more than we thought. For the states and regulators it's something new for them to get up to speed on, and the regulatory environment will evolve very quickly - as it has done already. And we also learned that the casinos, who are essentially the hosts and beneficiaries of most sports betting right now, needed to learn a completely new business. This involves cutting through a thicket of different types of suppliers,
36 SBC MAGAZINE • APRIL 2020
WE LEARNED THAT SPORTS BETTING IS AS HARD AND COMPLICATED TO DO AS WE THOUGHT IT WOULD BE, IF NOT MORE THAN WE THOUGHT where it's quite easy for them to be taken for a ride. There's lots of money being thrown around, it's actually quite a surprise how much cash has suddenly materialised and is being thrown at marketing, operators - it's quite extraordinary. SBC: So the key thing for newcomers to the market is that you cannot just
make a decision to enter the US, it has to be on a state by state basis? CC: There is no choice. You have to approach each state as a separate market. The Wire Act in itself makes it impossible, illegal even, for you to manage bets across state lines. You've got to do the licensing, the compliance, the certification, the hosting, the reporting, the accounting, the liquidity - everything within the borders of each state. And actually, more so if you're dealing with tribal operators, so then you've got to do it on sovereign land within the state - it's incredibly complicated. SBC: In a recent interview for SBC
US MARKET
legally on sports. So they'll give them that opportunity.
THEY ARE NOT AFRAID TO MAKE BIG INVESTMENTS TO CAPTURE A NEW MARKET, AND THEY KNOW THAT THEIR CUSTOMERS WANT TO BET LEGALLY ON SPORTS
Americas, you said that 2020 would be the year of tribal sports betting; can you just explain what you meant by that? CC: It's just straight forward arithmetic. The majority of the casino business in the US is tribal, much bigger than the commercial sector. If you look at the map where the states are regulating, they are states with tribal gaming. Where you've got tribal gaming and sports regulating, you're going to see tribal sports betting. These properties are seriously impressive and they are very forward thinking commercially too. They are not afraid to make big investments to capture a new market, and they know that their customers want to bet
SBC: As well as the online technology for sports betting, you are also exhibiting your SSBTs here at ICE; how much of an education process is there for US punters? CC: It's been quite interesting because if you went to Nevada, the only legal market for sports betting until two years ago - there were almost no SSBTs. There were some, William Hill had some, but on the strip almost non-existent. The culture was betting at the window - if you were to go to Vegas for March Madness or before the Super Bowl - don't be surprised to stand in line for an hour just to get a bet on.
And what was really interesting was that when the market opened up outside, particularly in New Jersey, as soon as SSBTs started to appear on the floor players went straight for them. They didn't need to be educated or persuaded, or have promotions thrown at them, they just wanted the convenience. Now, some of the data we're seeing from our customers shows that when you add SSBTs you just increase volume. It doesn't take away from the window, it adds to it. And the reason is probably just that it makes the whole experience that much more convenient. It's also less intimidating to use a kiosk because you don't feel like
you're having to explain to somebody else what the bet is, there's less risk of an error especially because it's noisy and also some people just don't want to be judged - they want to put their cash in, take their ticket and go. SBC: Is there a dividing line between more seasoned bettors wanting to bet over the counter and new players choosing the SSBTs? CC: No, actually the division seems to be the size of the wager. SSBTs by definition are limited on the size of the wager, because of the physical amount of cash people don't want to have to carry around, but also because of the rules around money laundering in title 31. This makes it very difficult for
someone to place a very large bet on the kiosk, so what you see is customers who want to make large wagers, or complex sets of bets, will go to the window to place their bet but everyone else is quite happy to - $40 I think is the average bet size we're seeing - do so at the kiosk. SBC: And finally, if you could state one key goal for IGT in 2020, what might that be? CC: Another 10 states. SBC: Is this from a company or regulatory perspective? CC: For us, it's the same thing. If a state regulates, our customers expect us to be there and that's what we're doing. •
sbcmagazine.com 37
Virtual slam dunk
GOLDEN RACE TAKES BASKETBALL GAME ONLINE GOLDEN RACE CEO MARTIN WACHTER said that 3x3
Basketball can become the “big game for 2020” after launching it for the online market at this year’s ICE London
F
ormerly intended solely for the retail betting market, 3x3 Basketball was the first virtual game to come with a cashout function when it was launched in December 2018. However, as Wachter told SBC Magazine, the “flexibility” of the online market makes the cashout so much more attractive. “You are a bit limited with what you can do in retail because it is still on scheduled games - you play it together and there is a social element,” he said. “By contrast, when you go online, where we do millions of tickets every day, you have so much more flexibility.” The online version was rolled out as part of Golden Race’s ‘instant games’ - a set including Real Fighting, 3D Horse Racing, Dog Racing, Speedway, Motorbikes and Virtual Keno. The Golden Race CEO admitted that the primary aim for 3x3 Basketball had been to create a realistic virtual game complete with a wide selection of in-play betting markets, before the opportunity to add pre-game markets and a cashout function became apparent. “The main idea was to make a realistic basketball game with real odds for in-play betting,” said Wachter. “Therefore, we decided to go for a 3x3 version where after 10 minutes, or when either team reaches 21 points, the game is finished. “But how can you make it more realistic? We took professional players from the US because it's prerecorded, we brought them on the court and showed them the scoreboard for the
38 SBC MAGAZINE • APRIL 2020
last minute so these two teams could prepare for the last minute and play out the remainder of the game for real. They know what they have to do - the clock is saying one minute to go. “This was the first idea, but then my
IF YOU WORK VIRTUAL SPORTS LIKE A CASINO GAME IT WILL NEVER WORK BECAUSE YOU DON'T HAVE THE OPPORTUNITY FOR SO MANY BETTING MARKETS bookmakers were saying why don't we offer pre-game? So now we offer this too, followed by in-play bets for the first nine minutes of the game. “And when this nine minutes has elapsed - based on the actual status
of the game - we have the brief stop in the game. The in-play markets then resume with the action and the cashout function becomes available throughout the final minute.” Wachter said that his confidence in the cashout component for 3x3 Basketball becoming a success stems from the use of real odds, increased understanding from betting operators of Golden Race’s vision for virtual sports, and a period of product testing with key clients. “It [cashout] is a new concept for virtual sports, but because we do realistic odds it is going to work,” he explained. “If you work virtual sports like a casino game it will never work because you don't have the opportunity for so many betting markets.
US MARKET
“You need a lot of markets for cashout, just like in real sports. We are very confident that no-one will follow us because everyone knows Golden Race works with real odds. “As I say to our clients, Golden Race is sports betting with a virtual outcome - we are getting more and more clients that understand this is the only way to work virtuals. We had some tests with clients and they were really into it, so this will be the big game for 2020.” Basketball is expected to play a headline role in Golden Race’s stateside push, after it secured a partnership with Las Vegas-based consultancy group SCCG Management to strike new partnerships with US operators. Supporting its expansion across
the post-PASPA US market, SCCG Management will represent Golden Race across both the Native American and Non-Tribal gaming market. Wachter continued: “When you see the US market up to now, sports
GOLDEN RACE IS SPORTS BETTING WITH A VIRTUAL OUTCOME - WE ARE GETTING MORE AND MORE CLIENTS THAT UNDERSTAND THIS IS THE ONLY WAY TO WORK VIRTUALS betting is very new, and I think that sports betting and virtual sports come together. It takes a bit of time for people to understand these games. It's very important, as it was in 2001/02 in
Europe, you have to come with simple games and build the trust of the players. “In Africa, there are some players that trust more in virtuals than in real sports. But the US is very new, so we all have to learn how the market works. It's only possible if you're flexible enough like us. If you have a ‘take it or leave it’ product, you will fail in America.” Golden Race has been preparing for an assault on the US market since 2018, when it was granted associate membership to the North American Association of State & Provincial Lotteries (NASPL) – a regional organisation spanning Canada and the US which facilitates better communication between lottery operators and gaming vendors. •
sbcmagazine.com 39
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NO MATCHES, NO PROBLEM: SPORTRADAR DELIVERS YEAR-ROUND MLB ENGAGEMENT
SPORTRADAR’S FIRST VIRTUAL GAMING SOLUTION
developed in association with a major US sports league is now providing baseball fans with the perfect way to engage with MLB all year round
A
t an exclusive roundtable meeting last summer, SBC Magazine learned that Sportradar and Major League Baseball (MLB) would be developing and distributing exciting new products, which included an extension of the ingame betting markets available. However, we were unaware at the time that this official data partnership would produce a new virtual baseball offering for licensed gaming operators in the US and across the world. Readied for what was meant to be the start of the season in March, this concept of year-round engagement could not be more timely given the impact of the coronavirus on the sporting calendar, which of course included the current postponement of MLB matches.
IT STARTED LAST YEAR, SO WE’VE ALREADY DONE ONE SEASON AND ARE LOOKING FORWARD TO THE START OF THE SECOND David Lampitt, Managing Director for Sports Partnerships at Sportradar, offered his thoughts on expanding the partnership with the new virtual game, for which more than 1,300 motions were captured using a combination of motion capture technology, and software developed specifically to add to the real-life look and feel of the game. Speaking at ICE London, he explained: “We have a multi-faceted partnership with MLB. It started last year, so we’ve already done one season and are looking forward to the start of the second. We’re very pleased to be announcing the launch of a new product, a virtual baseball inplay betting product that we’re excited to be delivering into the market.”
42 SBC MAGAZINE • APRIL 2020
US MARKET
David Lampitt, Managing Director for Sports Partnerships at Sportradar
Kenny Gersh, EVP Gaming and New Business Ventures for MLB
Frank Wenzig, Sportradar’s Managing Director of Gaming Solutions
Just like for the in-game betting feed, the virtual game leverages official MLB data. Across international markets outside of the US, Sportradar holds exclusive distribution rights for the statistics, as collected at every ballpark via the league’s proprietary technology and stat operators, to both media companies and regulated sports betting operators. Meanwhile in the US, it serves as the official supplier of MLB’s real time betting data feed, where distribution to regulated sports betting operators is on a non-exclusive basis through Sportradar and additional authorised distributors. Lampitt explained the importance of the official data for the virtual game, adding: “Obviously, official data is the fastest, best, most diverse product out there in the market. “What that means is it provides the most realistic solution possible. It’s using the best data and therefore most closely resembles the sorts of outcomes that you would expect in a real MLB game, so as a punter or fan you’re going to get as close to a real life experience as possible because it's all been based on the real data.”
provides further backing to Kenny’s claim at last summer’s roundtable in London that Sportradar was, amongst all competing providers, the best positioned to meet all of the “data distribution needs” for baseball’s premier league. At the time, he explained that Sportradar would be helping MLB
another to speak with SBC Magazine at this year’s ICE. He said that virtual sports are known to create value in emerging markets, especially around partnerships with a real association or league. He added: “With our MLB partnership, we have the advantage of proper marketing support, giving our clients
WE HAVE SEEN IN THE PAST THAT THERE IS A CLEAR TENDENCY FOR VIRTUAL SPORTS TO GROW ALONGSIDE SPORTS BETTING
access to use official MLB branding as a stamp of authenticity. Even beyond the US, the MLB is a brand that is well known and well perceived, which will help clients in regions such as Latin America and also Asia. “We have seen in the past that there is a clear tendency for virtual sports to grow alongside sports betting. Nevertheless, due to changes in technology, perceptions quickly change. A couple of years ago, it was all about the desktop, now it’s all about the mobile. So get it up and running in the right way on the right devices, that's the key.” •
Kenny Gersh, EVP Gaming and New Business Ventures for MLB, said: “One of the reasons we partnered with Sportradar was to develop new, engaging products for our fans, leveraging the power of MLB’s bestin-class content. This first-of-its-kind virtual offering does just that, and we are excited to bring fans this new entertainment option.” The rollout of the virtual game
to take all the rich, reliable and fast data it collects in the ballpark through Statcast – “a system that is much more than balls and strikes” – and deliver it to the betting market. Frank Wenzig, Sportradar’s Managing Director of Gaming Solutions, was
sbcmagazine.com 43
CASINO
COVID-19 response
CASINO
GAMING AND CORONA: HOW EVERYMATRIX HAS STEPPED UP TO SUPPORT ITS CLIENTS EVERYMATRIX GROUP CEO EBBE GROES explains how
his company is supporting its clients through the coronavirus outbreak and why CasinoEngine was the right platform for a fresh influx of virtual sports titles, before suggesting that another emerging gambling vertical is better equipped to fill the sports void
SBC: How is EveryMatrix navigating the coronavirus outbreak? EG: EveryMatrix is not suffering as much as sportsbook providers because we have other products such as virtuals and esports, and our casino is not affected - our large casino clients are not seeing less casino volumes, if anything a bit more. If we were more like a Kambi or SBTech and had the majority of our volumes on sports then it would be worse for us. Our main product is still CasinoEngine, sports comes in second. The first thing for sports is to make sure that you have as good a coverage as possible - so we are putting a lot of effort into this. You have to adapt. One of the biggest sports for us at the moment is table tennis. We can very quickly add new sports into our sportsbook. While table tennis, as an example, doesn't replace football, tennis etc., it does have an effect - we had around eight times the volume for it against two weeks previously. SBC: Can you just explain to our readers why the virtual sports are integrated through the CasinoEngine, and not your OddsMatrix product? EG: This is simply because the CasinoEngine is built to make it very easy for us to integrate vendors. So as you know, we have more than 80 game vendors across slots, live games and also virtual sports. Last year, we added
30 or 40 new integrations across all types of vendors. CasinoEngine is the platform that best supports this. It allows us to then quite quickly add more vendors. When the coronavirus first started, I think we had five vendors already for virtual sports. So the first thing we do is start identifying and contacting other vendors. And we can quickly increase our offering around virtual sports. The approach we take is that the best thing for the bookmakers is to get as many providers and as much content as possible. This is similar to say live casino. You could say I'm content to have this from Evolution or Playtech, and tailor the setup to those products, or you can say I will integrate content from as many providers as I can. It's the same with virtual sports. If everything is from Sportradar or Inspired, you can build a lobby to fit with those products. Or you can say, as we're doing, the better
sbcmagazine.com 45
COVID-19 response approach is to get as many games as possible. For virtual sports, we are doing two things. Add more content as quickly as we can. And the other is to build a front end user experience that goes across vendors so I can navigate between them - for example, I can see virtual horse racing but across four different providers. And the same way for football, tennis, boxing etc. In this way I can showcase the offering from different providers and group them via sport, which is a bit different to most bookmakers adopting more of a single provider focus. SBC: It seems like every platform provider is rushing to talk up the selection of games that they have to offset a lack of sports; why would the number of games housed by an online casino make any difference to traditional sports punters? EG: You are sort of right. If you already have 2,000 casino games then adding another 500 probably won't make a big difference. This is different for virtual sports because the number of
titles is much, much smaller. Providers might only have two or three titles, not 50 or 100. They might have football and horse racing, or horse racing and darts that's it. And that's why the benefit of aggregation is much higher when it comes to virtual sports than for casino. SBC: As virtual sports providers strive to make their solutions as realistic as possible, in some cases incorporating real sports odds, might it be time to integrate the product into OddsMatrix in the same way you do for esports content? EG: Well you could do both. From the
46 SBC MAGAZINE • APRIL 2020
FOR SOMEONE WHO IS NOT FAMILIAR WITH ESPORTS, THE FIRST THING YOU WANT TO BET ON IS GAMES YOU UNDERSTAND user point of view, it doesn't matter so much which of our platforms we use to do it. The key thing is that virtual sports are not put into the casino tab, you will not see them hidden amongst all the slot games. We will make a special main tab so you see it alongside sports, casino or live casino for example. This makes it as easy as possible for the sports player to see the virtual sports offering without having to visit the casino section. The fact that virtual sports are integrated via the casino doesn't mean that the games will be presented as a casino component - we are just using the CasinoEngine for the quickest integration. It allows us to build dedicated lobbies, as we have done for slots, live dealer, table games etc., and will do so for virtual sports.
SBC: Is the virtual sports cross-sell opportunity bigger for sports or casino players? EG: With virtual sports I am looking at a random number generator (RNG), something that is put together in the same way as a roulette or a slot game. The other type of game, which we've touched upon already, that we think will actually work even better in the absence of real sports is esports. These are actual games being played. There are many titles, of course, but some where the experience is very close to the one you have already for sports betting. For example, you can look at two
people playing on FIFA at a high level and place a bet on this. There's no RNG involved - it is actual players where the best player wins. The other big title in this regard is the basketball game NBA 2K. SBC: Sports-based games have been seen as low-level games in the world of esports; might this enforced ban on real sports bring about a change to the pecking order? EG: Yes, I think so. For someone who is not familiar with esports, the first thing you want to bet on is games you understand. So if you're betting on NBA 2K or FIFA, for example, you can see the stream presented in a nice way, you know the rules, it is very straightforward and includes the same betting markets you are used to. Over/under, betting on the first half, number of cards, all of these things are exactly the same so the barrier to entry is very low for real sports bettors. This is where I think it will all start, and we have seen this already. We've been trying to promote the esports sections more for our clients and the take up has been really good. Particularly these sports titles are taking a lot of the volume, even though they are not the ones with the highest number of events. That is the likes of DOTA, LOL and so on - for those who like traditional computer games, not sports. Now as people get used to this, they might spend time in the esports section and get curious as to what else is available. We're getting into speculation, of course, but for the first few weeks (post sports lockdown) it is clear that esports has benefited a lot - it has grown almost by a factor of 10 in less than a month. And that's without us adding any new clients, simply through people switching from real sports to esports - in particular for FIFA and NBA 2K. SBC: On your OddsMatrix platform, punters would still see esports as separate to real sports; might there come a time when these are mixed in? EG: Both options are possible. The main reason to split them out right now is visibility - you want your sports players to notice that there is such a thing as esports. Yet, another thing is that streaming is key for esports. We have a live video stream for 90% of all matches that we cover, whether
CASINO
this is CS:GO, FIFA or whatever else. Almost all live events have a video stream, which is very different to real sports where the live stream is rare outside of the richest bookmakers. In esports, these video streams are readily available, they are free and add entertainment value. That's why you want to have a different look and feel for your esports section. The way we will do it is basically have both options available. Our clients can mix esports into the regular menu, for example placing FIFA next to Football, or keep the two separate. At this stage, when it comes to capturing a new audience, we think it's best to keep the two concepts apart. We already have a great level of esports coverage but we don't have a separate tab, so this is something we are building now. We are offering it to clients as a new tab, but one you can place next to your existing sports. It's also good for us because if a bookmaker has poor esports coverage, they can frame the esports tab from OddsMatrix and put it there in the same way as if it was a virtual sports tab or a casino tab. Longer term you might want to do a deeper integration with the sportsbook API, but you
have to note there are two distinct audiences. SBC: These are distinct audiences as things stand, but after this extended period of reduced sports coverage might there not be such a split? EG: Yes, this can happen. As with all these situations, there is a silver lining and there are opportunities to evolve. You can have a sports brand who,
AT THIS STAGE, WHEN IT COMES TO CAPTURING A NEW AUDIENCE, WE THINK IT'S BEST TO KEEP THE TWO CONCEPTS APART because of complacency, didn't put any emphasis on promoting esports. And now they are forced to do it. In a good scenario, what they will discover is that they can reach out to a new audience and when the regular sports are back they will still have their old audience, but they will have also managed to sell a new experience and build a new audience. In the end, you might have big losses now but a year from now you might
look back and see it as a blessing in disguise that you were forced to catch up from a product point of view and broaden your portfolio. SBC: Final question. How does the betting world look after this crisis is over? EG: It will have quite dramatic effects I think. And of course it depends how long this lasts, but we will no doubt see that some operators will struggle. We have ongoing consolidation in our industry with bigger brands taking in smaller ones. This will keep happening in the coming months. If you don't have a healthy product margin you will be forced to shut down, which provides impetus for further consolidation in the market place. So the two main things are to focus better on other products. This includes regular casino - there are sportsbook operators out there not doing well enough in order to promote a world class casino offering. But mainly virtual sports and esports, two products which can bring about long-term positive effects for those who do it well. Those who react fastest will be in the best situation. And then, of course, the consolidation part too. •
sbcmagazine.com 47
Live casino development
Amy Riches, Head of Marketing at Evolution Gaming
CASINO
LIVE CASINO’S PLACE AT THE IGAMING TABLE
is seemingly going from strength to strength, with numerous organisations opening up to the sector and new studios increasingly cropping up across a number of jurisdictions
T
wo specific examples come in the form of Evolution Gaming and Genting, with the former enduring consistent growth on a global basis and the latter aiming to strengthen its position in the aftermath of last year’s €15m purchase of live gaming specialist Authentic Gaming from LeoVegas. Following the purchase Jeremy Taylor, managing director of GentingBet, told CasinoBeats that a key part of the firm’s digital strategy is the growth of its ‘live from’ casino offering, as Genting strives to utilise the power of its worldwide land-based casino estate to bring “truly unique experiences” to online players.
GENTING AND EVOLUTION ON LIVE CASINO INNOVATION AND PERSONALISATION
However, with a history steeped in land-based real-estate, should, or could, live casino be doing more to embrace new technologies? And how much of a role does this play with regards to innovation within the sector. “Innovation is crucial to the development of the live casino sector,” Amy Riches, Head of marketing at Evolution Gaming, asserted. “Each company should look at new ways to anticipate and prepare for new and emerging technologies, something Evolution has always strived to do. From looking at product launches in recent years and at our product development roadmap, we have embraced these new technologies in the sector. “Our chief product officer recently spoke about how gambling should be entertaining enough for every type of player; therefore, the industry needs to innovate and adopt new types of technologies to attract more than
sbcmagazine.com 49
Live casino development
just experienced casino players. Live casino is evolving with virtual reality, scalable options and multipliers not available in land-based casino games.”
EACH COMPANY SHOULD LOOK AT WAYS TO ANTICIPATE AND PREPARE FOR NEW AND EMERGING TECHNOLOGIES, SOMETHING EVOLUTION HAS ALWAYS STRIVED TO DO
She addressed perceived difficulties in cross selling individuals from other sectors into live: “At Evolution we honour the classic games while also enhancing them,” said Riches. “For example, slots, bingo and first-time players alike are being attracted to the extra thrilling opportunities presented when RNG-based multipliers are blended into the gameplay of these classic games.”
“And with the advancement in mobile technology, it is always going to play an important role moving forward. For example, looking at the option of using ‘voice activated commands’ as opposed to ‘prompting buttons’ is something that I believe live casino should embrace moving forward.” He went on to emphasise that the company’s strategy of utilising
Chris Worthington, head of casino at GentingBet, agreed that new and emerging technologies could play a pivotal role in the future of live casino: “In the early years of live casino, there was a real lack of player trust due to the fact technology wasn’t advanced enough. There were low definition cameras, poor-quality audio and slow internet connection, so it meant that players didn’t really trust live casinos and they didn’t have the best start. “However, 20 years on, technology has now moved on with high definition cameras and faster internet connections, all of which allow for a seamless and immersive customer experience, as if the customer is playing at the live table itself.
50 SBC MAGAZINE • APRIL 2020
WE ARE ALWAYS LOOKING AT NEW TECHNOLOGIES TO DIFFERENTIATE OURSELVES IN THE PRODUCT OFFERING its global estate as streaming sites ensures that Genting proceeds with a USP that stands the firm on the precipice of surefire success: “At GentingBet, we are always looking at new technologies to differentiate ourselves in the product offering, in what is a highly competitive market place,” he said. “One of our unique selling points is our range of dual play tables for roulette and baccarat, which means our players are allowed to play
on our tables from our land-based casinos, as well as online. “This means that our customers get the real sense of being immersed in the land-based casinos from the comfort of their own homes. What’s more, we actually stream these tables from our flagship casinos in Birmingham and Manchester, and from our high-end casinos that we operate from casinos in Mayfair, London, such as Crockfords and The Palm Beach Casino.” Riches took a different tack when discussing Evolution’s current, and future, manoeuvres within the space, pointing to the “commercial success” of its Lightning Roulette game that leverages RNG technology, as well as its growing game shows category which aims to shift the focus to putting entertainment at the heart of games. Commenting on the Monopoly Live title, Riches stated: “The game blends RNG, live gameplay and augmented reality to immerse players in a multilayered live casino version of the world’s best-loved board game. It has now beaten all previous in-house records for a game and attracted huge numbers of new players to live casino, many of whom had never played a live casino game before. “At ICE 2020 we introduced 12 more brand-new products, including our first ever bingo-style Mega Ball game, and the most fun game yet in live casino, Crazy Time, which mixes virtual reality, RNG, slots style elements and more bonus games than ever. “New technologies are embedded in all of these new games, but technology plays a subservient role. What drives us is creating games that players love. If we can use new technologies to deliver the fun and entertainment in the slickest and most impressive way possible to the widest range of players, then great. Every component of the game has to work hand in hand to deliver a fantastic gaming experience.” With global ambitions evident across both organisations, certain industry buzzwords spring to mind concerning
CASINO
NEW TECHNOLOGIES ARE EMBEDDED IN ALL OF THESE NEW GAMES, BUT TECHNOLOGY PLAYS A SUBSERVIENT ROLE
Chris Worthington, Head of Casino at GentingBet
the need to consider all of our compliance and licensing regulatory concerns in each individual market to ensure that our customers can play in a safe and responsible way.” Riches picked up the debate when looking at the US, a key target market where the firm’s footprint continues to expand, when discussing how the group is meeting the needs of players across the country and tailoring the product to suit them.
the strategies of both Evolution and Genting - personalisation and localisation. What challenges exist in meeting the differing needs of users across jurisdictions? And how key is it to achieve a tailored product to meet the needs of players in a variety of regions? “Having the knowledge and understanding of the markets is key for a successful online casino across multiple jurisdictions,” Worthington noted. “For example, in Western Europe, games like blackjack and roulette are the top performers, but when you compare that to the Far East, baccarat is incredibly popular.
HAVING THE KNOWLEDGE AND UNDERSTANDING OF THE MARKETS IS KEY FOR A SUCCESSFUL ONLINE CASINO ACROSS MULTIPLE JURISDICTIONS “And then when you compare this with Latin America, there, the simpler the game, the more traction it will take. So there, roulette is the main game but lottery is also in high demand. “Ultimately, it’s all about looking out for that one game that will appeal to the particular market. Finally, as a responsible operator, we always put that at the forefront of our concerns,
Launching a New Jersey studio in Atlantic City during 2018, the process to build a similar entity in the neighbouring state of Pennsylvania has begun and agreements with new operators for that state have already been struck. “In terms of meeting players’ needs in the US, we have a multi-faceted approach,” Riches continued. “Firstly, we select games from our portfolio that we know are well-suited to US players. In all markets where we operate, we pride ourselves on having a strong understanding of player needs and local gaming customs. “Often, we will modify the game to suit local rules or local player preferences, or both. Sometimes that involves creating a very specific game, such as our American (Double Zero) Roulette. In other cases, it might involve just some small tweaks to the rules of an existing game. “On top of that we have also included US-specific and US-inspired games in our product development roadmap. The dice game craps, for example, is an important strategic release and another global first for us. “Evolution Live Craps is the first ever live online version of this extremely popular dice game. We’re also adding an RNG version of craps to our first person gaming range, complete with a Go Live button that will take players straight to the live table. “Overall, our US licensees and their players have access to an exciting and fast-growing games portfolio that is very much tailored to their needs.” •
sbcmagazine.com 51
THE ONE-STOP CONTENT MARKETPLACE
VIRTUALS & eSPORTS
BEYOND LIVE SPORTS
CONTACT OPENMARKET@SGDIGITAL.COM TO LEARN MORE
State of play
CASINO
CASINO CAN PROVIDE ‘COMPLEMENTARY BALANCE’ FOR STATES WITH SPORTS BETTING DYLAN SLANEY, SVP GAMING AT SG DIGITAL, spoke to SBC Magazine
at ICE London about how online casino can bring in a different type of player to sports betting, before sharing his excitement over taking Free Rounds to the US and rolling out Jackpot Wars - a unique take on a jackpot product
SBC: For our readers who are unaware of the current landscape, can you just explain the current state of play for regulated igaming in the US? DS: The US has been really interesting. For the last four or five years, we’ve been live in New Jersey (NJ) as the only igaming state, and towards the back end of last year Pennsylvania opened up and hopefully we’ll see two or three more states open up over the next 18-24 months. NJ is doing fantastically well I think for everyone in igaming. We’re seeing record numbers including year-onyear growth. A little bit of news as well is that we’ve just come out of January with our record month across our platform and for our first party business as well so we’re really excited to see the new states come on board. We’ll be launching Pennsylvania probably during Q1, so we’re absolutely thrilled to be live in NJ and looking forward to continued growth throughout the next few years across the US. SBC: What are the likeliest states to join the regulated scene in the next year or so?
NJ IS DOING FANTASTICALLY WELL I THINK FOR EVERYONE IN IGAMING. WE’RE SEEING RECORD NUMBERS INCLUDING YEAR-ON-YEAR GROWTH sbcmagazine.com 53
State of play
DS: If I had a crystal ball it would be great. I think where sports betting is going live, igaming and casino will follow on, so if I was a betting-man I’d probably put some money on Michigan. SBC: Picking up on sports betting, do you think the successful spread of this vertical has lowered the barriers for more states to regulate on the online casino side? DS: Yes absolutely, I think when you look at the infrastructure that goes around setting up sports, with an account platform or the KYC, geolocation, responsible gaming/ betting programs age verification, things like that definitely help from a time to market point of view for casino. And we’ve also seen in the mature UK/European markets that sports and
54 SBC MAGAZINE • APRIL 2020
casino are complementary. We’ve seen in the US as well, even through the early days of sports betting being live in NJ alongside casino, it’s bringing in a new type of player. DraftKings has got a very different type of player to
announcement we made three weeks ago. We’re absolutely thrilled to be live with probably one of the leading players in the casino and sports industry in the US. We’ve now got over 100 games live with DraftKings over the last few weeks. I’m looking forward
IT’S BEEN AROUND IN BONUSING FROM A UK AND EUROPEAN POINT OF VIEW FOR MANY YEARS, AND WE’LL SEE THAT CONTINUE OUT INTO NJ AND OTHER STATES Golden Nugget, so we’re seeing that complementary balance where sports and casino can live side by side and really enhance the new player experience. SBC: How excited are you to go live with DraftKings in the NJ market? DS: Super excited. It’s an
to continued growth and collaboration with the DraftKings team. SBC: Another recent rollout for Scientific Games in New Jersey has been with Free Rounds; can you tell us a bit more about this? DS: It’s been a stable bonus mechanic in the UK and Europe for many years.
CASINO
We have about 40% of our UK and European operators using our Free Rounds product. We put that into the US early December and we’ve now got three or four operators that are using that on a continued basis, so we expect that to roll out, not only to more operators in NJ but then we’ll also go into Pennsylvania and other states where we launch igaming. And we see it as a core mechanic of the platform, allowing players to use their free rounds on a wide variety of compatible games. As I said, it’s been around in bonussing from a UK and European point of view for many years, and we’ll see that continue out into NJ and other states. SBC: In terms of how it works as a bonus mechanic, is it just for your library of titles, or can it be applied
for games that operators take across other aggregators? DS: It’s a great question. Most free round products that exist in the industry only work on a set amount of content. As Free Rounds is a platform feature that lives on our Open Gaming System (OGS), it not only takes care of products that we build through our own studios, but also studios and partners that are integrated in the right way can also take advantage of our Free Rounds product. Now in the UK and Europe we have something like 500 games that are already Free Rounds enabled across a plethora of different content - so not only our own content but people like Big Time Gaming are using Free Rounds as well. We’ll take that same mechanic out into the US as well so it's available on any game that's live on our platform so long as it's integrated in the right way. SBC: Just a final question on Jackpot Wars™; why is it such a big deal for the online gaming industry? DS: Jackpot Wars is a new innovation
NOW IN THE UK AND EUROPE WE HAVE SOMETHING LIKE 500 GAMES THAT ARE ALREADY FREE ROUNDS ENABLED ACROSS A PLETHORA OF DIFFERENT CONTENT we launched at ICE. It fuses the world of random number generator (RNG) casino gaming with the social gaming world. What we’ve developed is a platform feature that will, eventually, sit across any game on our platform. Essentially, it allows players to interact with the game like they normally would but then actually opting to win a jackpot in a very new and innovative way. Kind of like a fusion of social gaming with RNG, players can then create their own robot, they can create their own features around the robot and essentially enter that robot into a tournament and into a jackpot system that allows them to potentially win a number of different jackpot prizes. •
sbcmagazine.com 55
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Winning on aggregate
CASINO
PLATFORMS FOR SUCCESS: WORKING WITH THE AGGREGATORS AS CASINO PLATFORMS continue to become a more
important element of the supply chain, Simon Hammon, Chief Product Officer of Relax Gaming, examines the pros and cons of choosing to work with the aggregators
S
tudios seeking the quickest route to market and widest exposure for their products, and online casino operators keen to stay ahead of the competition by offering the latest games to
their customers first, have turned to aggregation platforms in increasing numbers. Whether this trend continues or there is a move away from such third-party platforms to operator and
supplier-led alternatives is one of the key issues for the future of the sector. SBC: Are we going to see more suppliers franchise their product? SH: It is important to thoroughly understand what is meant by ‘franchise’ in this context. Operators with white label businesses have been doing this for years, but no supplier really ‘franchises’. It is more a case of offering different tools or leveraging experiences and technology. It’s easy to see that what is
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Winning on aggregate
positioned as a ‘franchise’ is actually an outsourced tech-kit based on a commonplace business model. So the wording should be considered with this in mind. If, like one name in the market, you’re selling the ability to duplicate a model in any market, there will naturally be eyes watching to see if it actually translates into something positive for the end user and how well the compliance and legal needs are managed. What does come across is the need to present and offer faster routes to market while making it easier for new suppliers to offer services, and operators to take on new content. SBC: Is there a case to be made for gaming suppliers to acquire their own platforms?
method. It requires heavy initial and ongoing investment in the technology itself, the integration team to support it, compliance and legal teams that are geared up for various markets of interest and all that comes with it, plus a strong contacts book ready and willing to prioritise your content for integration without delays that cost you money. I can see that a lot of suppliers will choose to streamline expenditure rather than invest in a fully-fledged RGS and the choice for innovative suppliers is for a partner that provides a simpler integration with faster timeframes. However, large suppliers with a bank of hot content will usually end up at least playing with the idea of their own RGS and this is another reason that Relax supports server builds as well
THE EXPLOSION OF CONTENT PROVIDERS IN THE LAST TWO YEARS HAS DRASTICALLY EXPANDED OPERATOR CHOICE AND REDUCED THE APPEAL OF DIRECT INTEGRATIONS THAT ARE EXPENSIVE AND TIME CONSUMING SH: It certainly happens, as platforms aren’t cheap to build or maintain and a tried and tested one is therefore attractive. As an aggregator, Relax Gaming supports both, as not all suppliers are in a position to invest in their own platform. It was originally argued that having your own platform affords you the potential of direct integrations to an operator, independence and the ability to define your own tool suite. Although this still holds true today, consideration also needs to be given to the market landscape. The explosion of content providers in the last two years has drastically expanded operator choice and reduced the appeal of direct integrations that are expensive and time consuming. The efficiency for studios of owning their own platform is a reduction in the cost of rebuilding on several different server APIs if they choose multiple distribution routes. However, if a Remote Gaming Server (RGS) provider needs to use a middleware to reach the operator and its tools, then it dampens those benefits. The argument in favour of this no longer works if a fast and direct choice isn’t combined with a cost-reduction
58 SBC MAGAZINE • APRIL 2020
as platform integrations. The value of a natural evolution onto a proprietary RGS is then a case of how well it’s done and how deep the pockets are to support it. SBC: Is the idea of operator-built platforms now gone? Is outsourcing the only solution? SH: If the ideal is for operators to centralise their platforms for uniformity, then the idea of operatorbuilt platforms is almost more important today than ever, given the influx of content and regulation. Naturally, however, an operator needs to consider the more stringent landscape that regulation and general market conditions are shaping. Current conditions pile pressure on hiring, building and maintaining a large tech workforce to service their needs, which makes the idea more difficult to put into practice. Outsourcing, meanwhile, can provide pockets of innovation especially in relation to key areas such as business intelligence, analytics, promotional engines, AML and the like. It can harness expertise or indeed fast-track development in areas whilst letting the operator focus on what they do best.
I think there will always be the desire for a centralised operator platform, but with the changing landscape also comes a changing mindset to plug in additions from outsourced specialists. SBC: How can we improve the operator and player experience at a platform level? SH: There are numerous ways through which the platform can provide a unique and improved partner experience. At an operator level, ease of use lies at the heart of working with a platform and follows four basic principles: ease
CASINO
of content access; ease of campaign set up; ease of understanding player behaviour and interaction; and ease of performance-tracking. Ultimately, if a platform isn’t user-friendly then regardless of the complexity of the functionality, it will be drowned out by the competition and consigned to the background. When we take the player experience into account, there are countless ways of making improvements that could have positive effects on the gameplay. How the mechanics are extrapolated from the backend to the final gamescreen can have major effects on the
I CAN SEE THAT A LOT OF SUPPLIERS WILL CHOOSE TO STREAMLINE EXPENDITURE RATHER THAN INVEST IN A FULLY-FLEDGED RGS AND THE CHOICE FOR INNOVATIVE SUPPLIERS IS FOR A PARTNER THAT PROVIDES A SIMPLER INTEGRATION WITH FASTER TIMEFRAMES enjoyment of the game. A reduction of fragmentation, for example, is a key area that benefits both the operator and player and is directly linked to the platform. Players are not interested in where the inspiration for a game comes from, or how, but they do care about
game persistence - the ability to carry through bonuses, goals and tournaments from session to session. The reduction of fragmentation in the industry, which is centrally routed in common platform functionality or standards, will help drive the market forward. •
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PAYMENTS
Getting US ready
PAYMENTS
TRUSTLY TO LEVERAGE EUROPEAN EXPERIENCE IN THE EVOLVING US MARKET
AS SPORTS BETTING EVOLVES at an accelerated rate in
the US, the relationship between the industry and the payments sector will play a pivotal role in maximising market engagement
N
icholas Tucker, Trustly’s Head of Sales for igaming, and the firm’s Head of US Sales Ken Myles spoke to SBC Magazine about how they think the US market will evolve compared to Europe, as well as what sets Trustly apart from its competitors. SBC: Can you tell us more about the UK payments market and its adoption of cashless payments? NT: The UK is traditionally a card focused market, so increasingly
casinos are allowing players to use contactless payment and perhaps e-wallets in some cases. But, with open banking and PSD2 really at the forefront of things from a regulatory and structural perspective, it’s becoming easier and easier for consumers in the UK to initiate a payment from their online banks. We are hoping to grow in the UK market, offering fast payments and getting winnings back to players’ bank accounts very quickly. That’s something we will be looking to leverage.
The UK market isn’t a core market for Trustly, but it is something that we are hoping to grow going forward as open banking takes hold and bank transfers as a payment method become more popular. SBC: And in terms of the European market, how important do you believe cashless payments will be? NT: I think it’s very important that casinos across Europe adopt cashless payment solutions. We are able to help them around responsible gaming, we are able to cater to newer audiences that are comfortable making deposits on mobile and we are able to provide KYC information alongside payments that really tighten the regime from a money laundering perspective. In order to keep up with an ever-
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Getting US ready
Nicholas Tucker, Trustly’s Head of Sales for igaming
changing regulatory landscape, accepting cashless payments is going to be key. And it also helps them reduce costs, as there are a lot of costs associated with handling cash. SBC: From your perspective, what do you believe are some of the key differences between the US and European consumer when it comes to payments? NT: Payments across Europe vary from country to country. Some places like Denmark and the UK are card dominated, whereas other countries like to use e-wallets, prepaid cards or different local methods. So it really changes country by country and that’s the case in the US as well. KM: In the US, sports betting online is very new, so it’s a very immature market, but it’s going to be a very, very large market. We have 50 states in the US, the first few states will set the standard and then everybody will adopt and there will be fast followers. So the idea is get in now, figure out the best way to work and then you’ll see it grow very quickly.
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Ken Myles, Head of US Sales
That’s where Trustly comes into play, because being the best payment alternative for initiating the deposit in the US market is critical to the companies that are entering to offer services. That's why we are poised
THE UK ISN'T A CORE MARKET FOR TRUSTLY BUT IT IS SOMETHING WE ARE HOPING TO GROW AS OPEN BANKING TAKES HOLD AND BANK TRANSFERS BECOME MORE POPULAR very well in the US. NT: With the business being very mature in Europe, we are working with most of the large operators in European online betting and casino and we are now looking to work with them in the retail landscape. We can leverage the experience in the European market with the US, where it is a much newer scene, but we can also learn from what we have done over here in Europe and extrapolate that for the US market.
SBC: Speed and efficiency have been key to ensuring customer engagement in Europe, do you believe this approach will be replicated in the US? KM: It’s extremely important; the reality is that the rails for settling funds don’t support it yet, so we have to figure out a way to offer the net same effect. And the way we do that is through a risk assessment on every transaction, guarantee to the merchant they will get their funds and we’ll take the risk and tell the merchant immediately, let the individual play if the funds are good and then it’s up to us to actually collect the money. That’s the challenge, managing the risk. And we do that very effectively. That's why we have the success that we have. But, to answer your question, speed and efficiency will be extremely important. SBC: In Europe, payments within sports betting have innovated faster than payments in other sectors. Do you think that this speed of innovation will be mirrored at a
PAYMENTS similarly exponential rate in the US? KM: In the US, the e-commerce market is much more mature when it comes to traditional methods than it is with sports betting in payment methods. This is because sports betting is very new and the law has only just changed within the past couple of years to allow betting online. As a result of that, we are looking at infrastructure that was in place for e-commerce and seeing if we can apply it to sports betting. The challenge is that the number one way people pay online in the US is with their Visa or Mastercard, but neither of these are supportive for sports betting.
THE CREDIT CARD BAN CREATES A REALLY INTERESTING OPPORTUNITY FOR TRUSTLY, BECAUSE THAT’S ONE PAYMENT METHOD THAT’S NOT GOING TO BE IN THE CASHIER ANYMORE, AGAIN BRINGING BANK TRANSFERS, WHICH TRUSTLY SPECIALISES IN AND LEADS THE WAY WITH, TO THE FORE wants to buy £10,000 worth of shoes on an e-commerce site with a credit card, why shouldn’t they be allowed to do that if they’ve been approved to do so with gambling? That’s one argument, personally I think these changes play into Trustly’s hands as our business model is very much to offer payments from the bank account where the consumer has
and leads the way with, to the fore. It also may have some interesting implications for e-wallets. If I load my e-wallet with a credit card is that going to be allowed or not? That could knock some e-wallets out of the blend. There’s a lot of interesting changes that are really playing into the way we like to do business. KM: I’ll add to this too. With the way
This is a key difference in the US; so you have to look for alternatives and that is very much where we play a key role.
money in the account. So we are not encouraging people to gamble with money they don’t have, we are letting them deposit cleared funds that they have in their account. The responsible angle here is very important and bank transfer as a payment method very much plays into that. It’s betting responsibly with money you have in your bank account. I think the credit card ban creates a really interesting opportunity for Trustly, because that’s one payment method that’s not going to be in the cashier anymore, again bringing bank transfers, which Trustly specialises in
that Trustly works, you’re leveraging the individual’s bank account and leveraging the bank’s authentication system, to make sure they are who they say they are. That’s a challenge in the credit card world. Merchants will try and do a lot of different things for fraud mitigation, but here Trustly is relying on the bank to know their customer with multi-factor authentication and so we can reduce, if not eliminate fraud. That’s a very important piece of the overall cost of payments, which is where Trustly becomes an extremely economic payment model. •
SBC: It’s interesting that you mention Visa and Mastercard, as in the UK we recently had the announcement of the credit card ban for sports betting. Do you see this as a regulation that needs to evolve? And is it a step in the right direction? NT: I think at the end of the day, consumers should have choice and there’s one argument that says if someone goes on the internet and
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Age old debate
PAYMENTS
HOW HAVE AGE VERIFICATION RULES IMPACTED BETTING?
AGE CONCERN HAS BEEN A HIGHLY DEBATED TOPIC
ever since online gambling came to prominence, with the major concern being that young people can lie about their age to place a bet
A
s of 7 May 2019, the UK Gambling Commission (UKGC) issued a new policy to crackdown on underage gambling by implementing stricter age verification regulations. The new rules state that gambling website owners must complete age verification checks before consumers commence play. This means that no funds can be deposited, and no form
of gambling can take place, until age checking is complete. At Payment Expert’s Forum, SBC got some of the industry's leading contributors on the age verification sector, from both the operator and regulator’s perspective, to discuss this multifaceted topic. The panel featured operators Steven Armstrong, Group Money Laundering
Reporting Officer for William Hill, and António Veríssimo, VP of Payments, Risk and Fraud at Addison Global (MoPlay brand now insolvent). Whilst industry expert’s Tony Allen, Founder and CEO of Age Check Certification Scheme, and Warren Russell, CEO for W2 and co-chair of Age Verification Providers Association, provided the supplier stance on the discussion. The panel was also moderated by Trustly’s Director of Gaming Accounts Vasilije Lekovic. The first topic brought to the experts’ attention was how the betting industry is struggling to adapt to the new policies, with Allen feeling that the reason for this is the UKGC’s decision to quickly launch the new polices.
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Age old debate
Discussion of the new policy only officially began in January 2019 before being executed in May that same year. Allen stated: “I think the new rules came in quite quickly. The Gambling commision had a consultation, decided to do it and then brought it in. Whereas in other industries the build up to new policies has been a bit slower. “The UK Gambling Commision are renowned for throwing you in at the deep end, they throw the rules at you and then provide you with a little bit of a ‘grace’ period when you try and figure out how to do it and then five/ six months later they ask you how have you done and what have you changed?” However, Armstrong had a different take on the question, insisting that from an operator’s standpoint, the reason why betting companies are struggling to implement the policies is because the industry is worried about its initial practicality. The William Hill employee stated: “From the operators side, the difficulty is ensuring that your customers have the best journey. To be able to do that you need a smooth onboarding process and as I've looked across the industry, both internally and externally through different operators there are many different ways that they do it. “If you are trying to bet on a sporting event at three o’clock and you are trying to open up a new account at 2:30 and you are asking them to send documents in, it’s never going to work.” Lekovic then moved the topic on to discuss what is the best strategy to implement when applying the UKGC’s new policies. Russell implied that the best way is to not make rash decisions regarding re-structuring a betting operator's current age verification process. He said: “You've got to take a reasonable approach to what you are going to do. Whilst the regulations came in quite quickly, most if not all of the operators had age verification in their workflows as part of the KYC (Know Your Customer) process. So the knee jerk reaction to meet the requirements was to push the KYC right to the front of the process because it would tick the box from the
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Vasilije Lekovic, Trustly’s Director of Gaming Accounts
GC but it isn't a sustainable process.” However, MoPlay’s Veríssimo added: “Nowadays age verification is at the point of registration. If we have a client who wants to come on to our site and play with us. If he doesn’t pass an age
along with the potential risks of illegal intentions towards the business relationship. This has been heavily implemented in the betting industry to solve underage betting and problem gambling.
THE NEW RULES CAME IN QUITE QUICKLY. THE GAMBLING COMMISION HAD A CONSULTATION, DECIDED TO DO IT AND THEN BROUGHT IT IN. WHEREAS IN OTHER INDUSTRIES THE BUILD UP TO NEW POLICIES HAS BEEN A BIT SLOWER verification test then he is unable to interact or deposit funds. There was an immediate impact on the conversion funnel.” KYC is the process whereby a business verifies the identity of its clients and assesses their suitability,
Despite the age verification policies only coming into place quite recently, multiple other sectors are currently dealing with the issue of trying to verify its customers in order to eradicate underage consumerism. Currently, the knife industry is
PAYMENTS
tackling a very similar issue with the introduction of the 2019’s offensive weapons act, placing further restrictions to reduce underage customers purchase knives, among other ‘weapons’. Whilst e-cigarettes are also being implemented with age verification protocols in order to prevent young people purchasing the product, especially through online outlets. Russell believes that while gambling companies can learn from these sectors, the key issue is separating age and identity. He explained: “Just because you buy an e-cigarette doesn't mean that the company needs to know who you are. But for betting companies, they need to know who you are for money laundering purposes. “The Age Verification Providers Association is the trade organisation that was set up off the back of that change in perception to really define that difference between age and identity. Can different markets collaborate? Yes they can. Will they?” Armstrong quickly stated: “The gambling industry is always welcome to collaborate, sometimes it’s the case
THE GAMBLING INDUSTRY IS ALWAYS WELCOME TO COLLABORATE, SOMETIMES IT’S THE CASE OF ASKING THE OTHER WAY ROUND of asking the other way round.” One possible way around providing a sustainable environment to protect age verification is through collaboration. Gambling industries are being held in the same regard as finance and foreign exchange companies when identity requirements are mentioned. So, in theory, a working relationship with these companies on how the firms verify its customers could benefit the betting industry as a whole. Nevertheless it's getting businesses willing to disclose information that is the challenging situation, as Armstrong explained: “It’s not something that a lot of the banks want to do because
they rate gambling companies as high risk business. The old school markets, the banking sectors, that information would be the most useful.” The forum concluded by discussing how UKGC and operators can communicate better in order to sustain the betting industry’s financial gain whilst also protecting young people from the possibility of betting. The panel was unanimous, by providing feedback. Veríssimo concluded: “The key point for me would be to have a feedback loop with the UK Gambling Commission. They have asked for changes, we have implemented it despite not being very clear what the final goal was. “But now after a few months later, they should go back and ask if there has been any impact? If not then we need to do something else differently. We all need to do this within our companies.” •
JUST BECAUSE YOU BUY AN E-CIGARETTE DOESN'T MEAN THAT THE COMPANY NEEDS TO KNOW WHO YOU ARE. BUT FOR BETTING COMPANIES, THEY NEED TO KNOW WHO YOU ARE FOR MONEY LAUNDERING PURPOSES sbcmagazine.com 67
MARKETING
Reading the weather
MARKETING
THE ‘NERDY’ ASPECT TO SPORTS ANALYSIS ON ROTOGRINDERS
THE WEATHER is one of the ‘nerdy’ aspects of the
RotoGrinders.com sports analysis, which helps its community to identify the right fantasy sports picks and place winning sports bets
R
otoGrinders.com is known for presenting a wealth of information to both die-hard and more casual sports fans, but has taken things a step further by
employing a meteorologist. To highlight the impact of its own community, RotoGrinders has tracked more than four million daily fantasy sports (DFS) entries between
September 2017 and August 2018. It found that its members won over 35% of prize pools on DraftKings and FanDuel, equating to over $150m in payouts. For RotoGrinders’ users, the weather is playing an increasingly prominent part in their daily fantasy sports (DFS) selections and affiliated sports wagers. Step forward, Kevin Roth. Roth is a degreed meteorologist with a unique and singular focus on analysing how weather impacts sports – primarily
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Reading the weather
within the NFL and XFL. His work goes far beyond just making a forecast, however, as he is armed with databases on how weather has impacted games in the past, which he uses to predict impacts on future fixtures. If the data shows that in the NFL an 18mph wind has led to a 20% decrease in passing yards and a 15% decrease in total scoring, Roth will project that impact on to a future game well in advance, giving RotoGrinders users an edge that hasn't yet been reflected in betting lines. The first part of his job is getting the correct forecast out to the people. "I can't tell you how many times I've seen people relying on a dated or
70 SBC MAGAZINE • APRIL 2020
downright wrong weather forecast," said Roth. "All it takes is one tweet from someone glancing at their weather app, and all of a sudden the wrong forecast is going viral on social media.” This exact scenario played out in the NFL playoffs earlier this year when a prominent league insider tweeted a weather forecast to his 2.1 million followers highlighting "15-25mph winds and a 90% chance of rain" for a Ravens game. However, Roth was quick to jump in and relay his own forecast of much milder weather, which proved to be correct. "It ended up with winds under
15mph and no rain, the weather was legitimately nice,” he recalled. “I have no idea where that 90% came from. People are making decisions and placing bets based on this weather, so you have to get it right." Another clear example of Roth’s helping hand came in the Patriots’ first and only post season game this year, where they were favoured to win against the Titans. Roth explained: “Temperatures were in the 30s and it was a little breezy, so conditions weren’t ideal for the passing game that the Patriots rely on, as cold hands and gusty winds can cause drops and miscues on passes. By contrast, that's not as big of an issue
MARKETING
for a team like the Titans whose offense is committed to running the football.” Having looked at similar weather games in the past, Roth found that total scoring and passing yards had dropped 10%, while rushing yards remained unaffected. Therefore, he was able to advise RotoGrinders users to expect a lower scoring game, in which the weather advantage lay with the Titans. In the end, he was vindicated as the Patriots were beaten and the Titans mustered just 13 points, while the combined 33-point total was well under the betting total of 45.5. Last year, Better Collective acquired 60% of the shares in Rical LLC - the
TEMPERATURES WERE IN THE 30S AND IT WAS A LITTLE BREEZY, SO CONDITIONS WEREN’T IDEAL FOR THE PASSING GAME THAT THE PATRIOTS RELY ON, AS COLD HANDS AND GUSTY WINDS CAN CAUSE DROPS AND MISCUES ON PASSES operator of news and information portals rotogrinders.com, pocketfives. com, sportshandle.com, usbets.com and pennbets.com - for $21m. RotoGrinders is the home of the DFS community in the US with 300,000+ members. The purpose of the site is to help players to build better daily fantasy sports lineups for the NFL, NBA, MLB, PGA, NHL and XFL through
strategy, tools, analysis and exclusive content. Better Collective also confirmed that it will acquire the remaining 40% of the shares between 2022 and 2024 at a valuation based upon an EBITDA multiple between 5x and 10x. The valuation will be determined by the future profitability of RotoGrinders and certain aspects of Better Collective's business in the US. •
sbcmagazine.com 71
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Asian appeal
MARKETING
WHY SPORTS SHOULD BE COMMITTING TO THE GROWING ASIAN MARKET RONGTIAN HE, HASHTAGE SPORT CEO and former
Aston Villa board member, spoke to SBC Magazine about why Asia is such a lucrative market for sports
T
he Asian market, specifically in sport, has seen a huge surge in popularity when it comes to new sponsorship agreements to enhance a sporting organisation’s global brand or for those firms looking to build on their advertising opportunities. For some clubs, gathering global sponsorships and elevating their brands can be just as crucial as team performance, hence companies will be employed in order to broker deals specifically to deal with a certain market. Hashtage Sport is one such UKbased company which brokers deals between organisations and Asian companies. It has helped complete deals with the likes of Sheffield Wednesday, the Croatian Football Federation and Robin Van Persie. SBC: Why is forging connections between sporting organisations and the Asian market so important? RH: The Asian market has a very high potential and it has been continuing to develop since the 90s. A lot of that is thanks to the Premier League exposure, having the games accessible on TV. The Premier League has a huge fan base in Asia and so for football clubs, in terms of fan engagement and financial opportunities, it is one of the biggest markets in the world. I definitely think it is very important, especially now considering everything in the world is well connected by
social media, TV, internet etcetera. For any sporting organisation, either short term or long term, you have to value the Asian market.
THE PREMIER LEAGUE HAS A HUGE FAN BASE IN ASIA AND SO FOR FOOTBALL CLUBS, IN TERMS OF FAN ENGAGEMENT AND FINANCIAL OPPORTUNITIES, IT IS ONE OF THE BIGGEST MARKETS IN THE WORLD SBC: Would you then say that with social media and the world appearing closer than ever that even smaller organisations and football clubs can benefit from the market?
RH: Yeah, just compare it to what it was like 10 years ago. If you went to the TV or on your mobile all the information was from the top sporting organisations and top league. But now, every sporting club has the chance to promote their brand through social media. If you are successful in marketing and using strategies you can now in fact gain equal opportunities to gain fans like Manchester United. So the landscape is very different now. SBC: How beneficial do you feel it is for football clubs to enhance their brands in the Asian market? RH: Clubs like Sheffield Wednesday are known as ‘recognised clubs’ in Asia. They have a huge history and a lot of fans can recognise the brand even
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Asian appeal
though they play in the second-tier. It’s very good for the club’s international brand and commercial value as a whole. For Premier League sides, they already have huge commercial revenues. However, Asian brands might find sponsoring them too expensive. So in the Championship a lot of brands see these competitive sides and want to find the best team to sponsor. The relationship works both ways. SBC: In turn, how important is it for Asian companies to integrate themselves into the sporting world? RH: It depends on the company. Football is very popular in most Asian communities so brands will want to use the sport as a tool to expose their business. It also provides other bigger scaled companies with the chance to grow along with the sport’s growing popularity and international reach. SBC: Your company, Hashtage Sport, specialises in brokering partnerships between sporting firms and brands in Asia; why is it important to have
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somebody in the middle of these negotiations? RH: It’s really important because there is obviously a challenge with language barriers. But, most importantly the brand in Asia wants to use us not just because of the deal, but about activation because we understand culturally what the client in Asia wants to achieve. We understand the cultures both in Europe and in the other Asian markets.
RH: In the long term definitely all the trends are pointing towards that. However, it highly relies on how much promotion the sport has in Asia and how much TV exposure they have to benefit the market. US sports such as basketball, hockey and American football have a huge fanbase in China because they went into the market early and so from a commercial perspective they are in a
CLUBS LIKE SHEFFIELD WEDNESDAY ARE KNOWN AS ‘RECOGNISED CLUBS’ IN ASIA, THEY HAVE A HUGE HISTORY AND A LOT OF FANS CAN RECOGNISE THE BRAND EVEN THOUGH THEY PLAY IN THE SECOND TIER This applies to what the company can do or what the sporting organisation can offer, which also includes the legal rights to make the deals possible. We bring the deal to the table and discuss how the activations can take place. So we feel Hashtage Sport is very important. SBC: Asian marketing is still predominantly football; how do you see this changing?
really good position now. In Europe it’s still going to take time for other sports because they haven't yet got the global reach because most are in an early stage of development. But again back to your first question, with social media it's certainly something that can happen now because everybody has easy access to watch any sport through the internet. •
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MARKETING
SBC DIGITAL SUMMIT: KEEPING PEOPLE CONNECTED IN THE WORLD OF REMOTE WORKING PHYSICAL CONFERENCES
might be temporarily off the agenda as the world faces up to the COVID-19 pandemic, but the SBC Digital Summit is set to provide a valuable new way for professionals to stay up to date with the latest developments and engage with industry colleagues around the world
T
aking place from 27 April to 1 May 2020, it will be the largest online conference the global betting and gaming industry has ever seen, with 140 renowned experts set to share their insights on how companies can recover from the virus disruption and respond to the longer-term challenges facing the sector. With most professionals restricted to their home offices due to muchneeded public health measures, the SBC Digital Summit is a groundbreaking and timely event that will allow thousands of people to learn from the best, join vital debates and make valuable new connections. Its importance is emphasised by the speaker line-up it has attracted, with luminaries such as Carsten Koerl (CEO & Founder, Sportradar and Founder of bwin), Adam Greenblatt (CEO, Roar Digital), Paris Smith (CEO, Pinnacle) and Jesper Svensson (CEO, Betsson Group) among the confirmed participants. As with everything happening in the world of business today, the Summit is partly shaped by the pandemic. In fact, its creation is a result of the adverse
Carsten Koerl, CEO & Founder, Sportradar and Founder of bwin
impact the spread of the virus had on SBC’s day-to-day operations. Even before the widespread implementation of the restrictions on movement that effectively prevent physical conferences taking place, SBC announced the postponement of its CasinoBeats Malta and Betting on Sports America events in order to help keep its staff and customers safe. The decision was met with an overwhelmingly positive response from the industry, with sponsors, exhibitors and delegates welcoming the move and
almost all committing to participating on the new dates later in 2020. While that level of support is a huge plus for the rescheduled events, the postponements still left a big gap in the betting and gaming sector’s calendar. The major problems that were to be addressed by industry leaders at the conferences still exist and still require solutions, and the need to identify growth opportunities remains a key requirement for every operator and supplier. The challenge faced by SBC was how
THE MAJOR PROBLEMS THAT WERE TO BE ADDRESSED BY INDUSTRY LEADERS AT THE CONFERENCES STILL EXIST AND STILL REQUIRE SOLUTIONS, AND THE NEED TO IDENTIFY GROWTH OPPORTUNITIES REMAINS A KEY REQUIREMENT FOR EVERY OPERATOR AND SUPPLIER sbcmagazine.com 75
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Tim Heath, CEO Coingaming Group
Paris Smith, CEO Pinnacle
to plug that gap and ensure that the sharing of knowledge, best practice and ideas continued at a time when so many people within its community of partners have been forced to work remotely. And that’s where the idea for the SBC Digital Summit came from. What followed on from the initial concept was a significant investment in the technological infrastructure needed to stage such an ambitious event, along with widespread discussions about the plan with contacts across the betting and gaming industries. The feedback was enthusiastic and, as numerous big names from the industry expressed a real eagerness to take part, the idea soon became a firm plan, complete with an extensive agenda
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DAY ONE’S CONTENT TRACK IS LEADERSHIP IN BETTING, OPENING WITH A KEYNOTE ADDRESS BY KOERL, ONE OF THE MOST INFLUENTIAL FIGURES IN THE DEVELOPMENT OF THE INDUSTRY AND A MEMBER OF THE SPORTS BETTING HALL OF FAME that addresses the main problems and opportunities shaping the future of sports betting and online casino. The big issue troubling almost every company in the world today is how to recover from the disruption resulting from the unprecedented change in market conditions caused by the pandemic. That will, of course, be a central theme of the SBC Digital Summit agenda, but it is far from the only issue that will go under the microscope.
Day one’s content track is Leadership in Betting, opening with a keynote address by Koerl, one of the most influential figures in the development of the industry and a member of the Sports Betting Hall of Fame. It will be followed by sessions examining topics including business continuity in the face of the pandemic, what players have been betting on in the absence of live sport, the omnichannel model, and the
MARKETING
Fabio Schiavolin, CEO Snaitech
opportunities that esports present for operators. The panels are packed with CEOs from market leaders around the world, with Svensson, Smith, George Daskalakis (Stoiximan / Betano), Tim Heath (Coingaming Group), Johnny Hartnett (Superbet), Giovanni Garrisi (Stanleybet), Fabio Schiavolin (CEO, Snaitech), Per Widerstrom (Fortuna Entertainment Group) and Sergey Portnov (Parimatch) among those set to offer expert perspectives. The first track on day two is to focus on Leadership in Gaming, with panels taking an in-depth look at whether the switch from sports betting to online casino during the lockdown signals a permanent change to customer
behaviour, safer gambling during self-isolation, poker, live casino, and marketing for slots. It features another heavyweight speaker roster, including Alexander
THE SESSIONS ARE SCHEDULED TO TAKE PLACE DURING THE BUSINESS DAY IN SOUTH AMERICA Stevendahl (CEO, Videoslots), Ariel Reem (CEO, Genesis Group), Alex Tomic (CEO, Slotsmillion), Itai Zak (CEO, GoWild Gaming), Ewa Kazmierska (COO, Energy Casino) and Martin Lycka (Director of Regulatory Affairs, GVC).
A second track on day two is all about one of the areas that offers potential for huge growth, sports betting in Latin America. The sessions are scheduled to take place during the business day in South America and will address topics such as regulatory regimes in emerging markets, opportunities for European operators, developments in Brazil, and the lessons from Colombia’s successful regulated online gambling sector. Local market specialists due to share their insights on growing business in Latin America include JD Duarte (CEO, Betcris), Julio Cesar Tamayo (CEO, Wplay), Gonzalo Perez (CEO, Apuesta Total), Andre Gelfi (CEO, Suaposta) and Alberto Alfieri (COO, Vivagol).
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A Lottery track staged in partnership with GLMS takes centre stage on day three, presenting an opportunity for state-run gambling entities to examine the impact of the COVID-19 outbreak on their operations. Speakers from major European lotteries including Veikkaus, Danske Spil and Nederlandse Loterij will also share their experiences of dealing with increased competition from commercial operators and developing a compelling online offer.
Paloma González Mascaraque, Head of Payments, VBet
A LOTTERY TRACK STAGED IN PARTNERSHIP WITH GLMS TAKES CENTRE STAGE ON DAY THREE, PRESENTING AN OPPORTUNITY FOR STATERUN GAMBLING ENTITIES TO EXAMINE THE IMPACT OF THE COVID-19 OUTBREAK ON THEIR OPERATIONS On day four, attention moves to payments and compliance, with in-depth examinations of issues such as the importance of ID checks as consumers have more time to gamble during the lockdown, the difficulties operators face in finding banks willing to take their custom, affordability checks, and the effectiveness of age checks. The panels will feature a host of specialists from operators, including Steven Armstrong (Group Director of AML, William Hill), Paloma González Mascaraque (Head of Payments, VBet), Mickael Marceau (Head of Payments, Kindred Group) and Rahul Das (Head of Payments, Virgin Bet). When the North American business day gets underway, the focus will switch to the rapidly expanding US sports betting market. Representatives of market leaders will offer insights on developments in the state-by-state rollout of regulation, M&A activity, the growth of sports books at landbased casinos, and the betting markets proving popular with US punters while the big four sports are on enforced shutdown. The SBC Digital Summit concludes with a day devoted to digital marketing, taking in sessions on how affiliate businesses are coping with the change in market conditions brought about by the coronavirus disruption, the future of
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SEO, managing the relationship between affiliates and operators, and the need for marketers to adapt to evolving regulatory regimes. It features a speaker line-up packed with leading names from the world of affiliate marketing and in-house experts from operators, with Stuart Simms (CEO, XL Media), Celine Crawford (CCO, Smarkets), Jonathan Edelshaim (CEO, Natural Intelligence), Simon Pilkington (CEO, KaFe Rocks), Marcos Oliveira (Chief Affiliate Officer, Clever Advertising Group) and Eitan Gorodetsky (Director Of Acquisition, Betsson Group) among those taking part. In addition to the content, the organisers have given plenty of thought to that other great staple of a successful
IN-DEPTH EXAMINATIONS OF ISSUES SUCH AS THE IMPORTANCE OF ID CHECKS AS CONSUMERS HAVE MORE TIME TO GAMBLE DURING THE LOCKDOWN conference - making new business contacts. While SBC’s famed networking parties are not an option for the digital space, it has put in place ways to connect with fellow delegates and begin potentially valuable discussions about working together. For more information about or to book tickets for the SBC Digital Summit, please visit sbcevents.com/sbc-digitalsummit. •
DECEMBER 1-3, 2020
Meadowlands Exposition Center, New Jersey
THE LARGEST DEDICATED
SPORTS BETTING TRADE SHOW
IN THE WORLD SPEAKER PREVIEW
JOSEPH ASHER CEO William Hill US
SANDRA MORGAN
Chairwoman Nevada Gaming Control Board
RICHARD SCHWARTZ President Rush Street Interactive
2,500 DELEGATES
JOHN LEVY CEO theScore
JOHNNY AITKEN CEO Pointsbet
ADAM GREENBLATT CEO Roar Digital
200
SPEAKERS DAVID REBUCK
Director NJ Department of Gaming Enforcement
SCOTT KAUFFMAN-ROSS SVP, Fantasy & Gaming NBA
JAY ROOD COO Betworks
50
JENNIFER ROBERTS Director of Sports Gaming Regulation Tennessee Education Lottery Corporation
ART MANTERIS
VP Sport and Race Operations Station Casinos
SHEILA MORAGO
EXHIBITORS
Executive Director Oklahoma Indian Gaming Association
FOR MORE INFORMATION, PLEASE VISIT WWW.SBCEVENTS.COM