ISSUE 11 • OCTOBER 2020 CIS GO!
BGC PLEDGE
A fresh hunting ground for Europe
What’s the best way to spend £100m?
US MARKET
Attention turns to the supply side
Ralph Topping
Betting shop to the boardroom
6-21 Sports Betting
• Ralph Topping: From the betting shop to the boardroom • Market Making: Data is king, but it must be high-quality • CIS: A fresh hunting ground for Europe’s saturated scene
CONTENTS OCTOBER 2020
• Just the beginning: RTSmunity on the future for esports betting
22-29 US Market
• SPAC: Race is on for US sports betting market worth $35bn • Playtech: Attention turns to the supply side in the US
30-35 LatAm Market
• Betting needs to become an experience in Latin America • BtoBet & Aspire: Emerging strength meets mature market clout
36-51 Casino
• BGC Pledge: What’s the best way to spend £100m? • EveryMatrix: Relaunching BonusEngine as a standalone solution • Tim Heath, Coingaming: Bitcoin, Brazil and the Bombay Club • NetShop ISP: Competing with hosting giants and adapting to COVID-19
52-59 Marketing
• The importance of betting firms using new sponsorship techniques • SBC goes digital in CIS and US, before live return in 2021
60-67 Payments
• AstroPay: Africa the place to be in five years time • Cards: The payment solution of the old world
68-72 Lottery
• Change in role: Why lotteries are no longer just lotteries
The SBC Magazine is brought to you by SBC - Sports Betting Community: EDITORIAL TEAM: Luke Massey, Andrew McCarron, Craig Davies, Ted Menmuir, Joe Streeter, Chris Murphy, Erin Gallagher, Tom Daniels, Matthew Ramirez, James Ross, Lucia Mouriño SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Neil Judson, Reece Calderbank, Ross Main, Jan Willem Volbeda, Nancy Bishop 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
2 SBC MAGAZINE • OCTOBER 2020
21-22 OCTOBER 2020 #BOSEDIGITAL
SHAPING THE FUTURE OF SPORTS BETTING IN EUROPE [ONLINE EDITION] 3,000
Delegates
120
Speakers
20
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SPEAKER PREVIEW
PARIS SMITH CEO Pinnacle
ERIK BACKLUND
DAN LEVY
VP, Communications & Commercial Partnerships Smarkets
MICKAEL MARCEAU
Group Head of Sportsbook Kindred Group
Group Head of Payments Kindred
EIRIK KRISTIANSEN
MAXIM AFANASYEV
CEO Pixel Bet
CPO Liga Stavok
ENNIO BOVOLENTA Head of Integrity FIFA
MICHAL HANAK
Group Chief Sportsbook Officer Fortuna Group
VEIKO KRÃœNBERG
Managing Director of Online Operations & Sportsbook Olympic Entertainment Group
FOR MORE INFORMATION, PLEASE VISIT SBCEVENTS.COM/BETTING-ON-SPORTS-EUROPE
DAVE PILGRIM
Senior Product Manager - Trading Sky Betting & Gaming
ALINA YAKIREVICH Marketing Director Fonbet
EITAN GORODETSKY Acquisition Director Betsson Group
INTRO Luke Massey Head of SBC Media
W
elcome to the fifth edition of SBC Magazine for 2020! From staying in your household bubble to getting cricket back from the confines of a bubble and then watching England’s international footballers inexplicably break free from the team’s COVID-secure bubble - the summer of 2020 has been all about the bubble.
So, ironically - amid a swathe of hopeful Q3 results - it was left to Boris Johnson to burst the UK gambling industry’s bubble by including the closure of betting shops, casinos and adult gaming centres in the country’s ‘tier WE BRING YOU THE three’ response to BEST INTERVIEWS, the spread of the ANALYSIS AND virus. It was described CONFERENCE by The Rank Group’s TAKEAWAYS FROM David Williams as a RIGHT ACROSS THE “kick in the conkers” for casinos, but at GAMBLING SPECTRUM least we know the igaming market is ready to hold the fort. And - for now at least - the condensed sporting calendar in Europe rolls on. Of course it’s not all about the UK and Europe. At the time of writing, a near capacity crowd of 47,000 was pencilled in for the second in a series of three rugby union matches between New Zealand and Australia. But you can’t help feeling that further disruption is afoot. Over the next few months, expect to hear a lot about diversification - and particularly from the online operators who bolstered their own sites with more
4 SBC MAGAZINE • OCTOBER 2020
virtual sports, casino games, esports betting titles and poker products the first time around. Here at SBC Magazine, it’s only right that we follow suit by bringing you the best interviews, analysis and conference takeaways right across the gambling spectrum - from sports betting to casino, marketing, payments and lottery, with specialist US and LatAm coverage to boot. Yes, you will find strong reference to COVID-19 as RTSmunity looks at the future for esports - an “anchor” for operators amid the chaos of 2020 and AstroPay outlines the accelerated demand for digital payments. We also ‘unpack the SPAC’ in the US by asking the question - is the on-trend investment concept a COVID-inspired bubble waiting to burst? There’s that pesky bubble again. But aside from that, there’s so much more to enjoy without constant reminders of the coronavirus pandemic. Ralph Topping, former CEO of William Hill, maps his journey from the betting shop to the boardroom, while we learn about the fresh hunting ground for operators across Eastern Europe’s CIS region, how attention is turning to the supply side in the US and why it’s now time to look beyond football when shaping the betting experience in LatAm. And for everyone holding on to the hope of life going back to normal, we reveal details of five physical events scheduled throughout 2021. We will continue to entertain and educate in a digital setting until then, but we can’t wait to see you all in the new year.
Climbing the ladder
RALPH TOPPING: FROM THE BETTING SHOP TO THE BOARDROOM BEST KNOWN FOR DRIVING THE ONLINE DEVELOPMENT OF WILLIAM HILL, RALPH TOPPING was inducted into
the SBC Hall of Fame in recognition for his landmark achievements as the operator’s former CEO
S
peaking to SBC’s Andrew McCarron at the recent SBC Summit Barcelona - Digital, the former William Hill reflected on his journey through the betting industry - climbing the ladder from a part time job at a betting shop in Glasgow to the CEO of what is now one of the largest betting companies in the UK.
Discussing why he ended up working at the shop, Topping quite bluntly said “my parents”, explaining that it was his father which managed to get him an interview. He said: “I was going to university in Glasgow and I was costing my parents a fortune in terms of travel. So they decided to buy me a car, on the condition that I got a part-time job. Of
Topping spoke candidly about how he never had an overwhelming desire to get involved with gambling, telling McCarron that prior to getting a part time job at City Tote Bookmakers, he had never actually stepped foot in a betting shop.
I CAN’T SAY THAT I EVER HAD A BURNING DESIRE TO GO INTO BETTING SHOPS, I HAD NEVER BEEN IN ONE AT THAT POINT
course, at that age you try and put these things off for as long as you can. “One day, my Dad showed me an advert in the Daily Record and he got me an interview. It was for a company which - at the time - was called City Tote Bookmakers, which later went on to become Mecca. I can’t say that I ever had a burning desire to go into betting shops, I had never been in one at that point. My career then developed from there.” As the conversation shifted towards his role as a cashier, Topping drew comparisons between betting shops now and when he first started, highlighting that the establishments were often considered to be ‘offputting’, yet a vital source of entertainment. “The shops were nothing like they are today,” he continued. “They were pretty bare, you couldn’t see into them. At that time, the whole idea behind betting shops was that they weren’t to be made attractive for the general public - so they were offputting. “But despite this, they were really busy at that time. There weren’t a lot of alternatives when it came to entertainment. It had come from the street, so the people that were involved in gambling when I first started were the private bookmakers. Then we started to see regional bookmakers, and later more national bookmakers. It was definitely an industry going through a lot of change. But once you were in it, it was an exciting environment to be in.” Like the betting shops, the typical consumer profile has also undergone drastic changes in recent years something which Topping believes should be understood in the context of wider societal changes. Not only have the consumer behaviours shifted
6 SBC MAGAZINE • OCTOBER 2020
SPORTS BETTING
more towards the online verticals, but customer demands and expectations have also shifted. Topping explained: “Most of the customers have moved on, they’ve gone to ‘another place’ so to speak. So the customers that I knew when I first started out have definitely moved on. But if we’re talking about types of customers, I think we need to look at it in the context of the way society has changed. “The expectations that people had then have changed considerably. People have become more sophisticated. But in general, customers were more demanding, they expected a lot more and I think we can see that from the shift in clientele. “Betting customers, especially if you’re only looking at retail, are remarkably adaptive. They’ve accepted a lot of changes which have been introduced to the betting shop environment. “Just as people who go to travel
agents go on holidays abroad, go to pubs etc, they become more demanding and they expect a lot more. That's a natural progression I think. Customers have changed without a doubt.” A number of the changes that have been introduced to the retail sector have stemmed from government decisions - many of which have attracted criticism from the gambling industry. But despite this, Topping pointed out that UK betting expertise is in high demand across the world and believes that the government is yet to realise the potential for the sector. If it were to harness that potential, the former
BETTING CUSTOMERS, ESPECIALLY IF YOU’RE ONLY LOOKING AT RETAIL, ARE REMARKABLY ADAPTIVE
William Hill CEO explained, then the UK gambling industry could export its safer gambling knowledge further afield. He noted: “Bookmakers in the UK are in demand, whether it be in the US, South America and Europe, so I think we have a whole lot to offer. And I think if we had a strong government they would realise that and look at the prospects for developing that kind of industry. “As it is, they have a record for killing off strong industries as they never sat down and thought about where they want it to go and I think we are in that situation at the moment. It is a pity. “I think it’s an opportunity for the way gambling has evolved in the UK to be taken elsewhere. I think it won’t happen as the government doesn’t have the imagination.” Favouring the introduction of the 2005 Gambling Act, Topping said that
sbcmagazine.com 7
Climbing the ladder
the regulation was born at a time when there was a strong government which would take positions and work with the industry. However, under the current administration led by Boris Johnson, legislative power has been weakened which poses a serious threat to the gambling industry. Topping said that gambling pressure groups need to have a more holistic vision rather than concentrating on what issue has been in the papers recently: “A lot of the concerns they have I totally accept,” he admitted. “But they are not capable of saying where they want the industry to end up. This means there’s a piecemeal approach. “I just wish they would sit down and work with the industry on where they want to get to, whether that’s actually achievable and have the debate with the industry and decide in a reasonable way what they wish to see happen in the UK. “If there was ever a time when we required the government to be
8 SBC MAGAZINE • OCTOBER 2020
SPORTS BETTING
IF THERE WAS EVER A TIME WE REQUIRED THE GOVERNMENT TO BE STRONG, IT’S AT THE MOMENT strong, it’s at the moment because you could have a very, very strong gambling industry in the UK taking that responsible attitude to gambling that pervades bookmaking in the UK to other places in the world.” Drawing upon his experience as the former Chairman of the Scottish Professional Football League, Topping proposed an alternative to banning gambling sponsorships, instead suggesting that bookmakers should be sponsoring competitions rather than high profile teams. “I think it worked up in Scotland,” he said. “Scotland has always done more football business than any other
THERE’S MUCH MORE TO BE CONCERNED ABOUT IN THE LOTTERY THAN THERE EVER WAS IN BETTING
region of the UK. So it made sense in a lot of ways for bookmakers to sponsor high profile tournaments. It didn’t make sense for bookmakers to sponsor high profile clubs, because if you do that you may attract friends, but also create enemies [from rival supporters]. “So I think what bookmaking did for Scottish football was excellent. The whole issue has been caught up in concern over children getting involved in gambling, but they should have been concerned with children being caught up in lottery betting rather than online or in betting shops." Topping concluded: “I think there’s much more to be concerned about in the lottery than there ever was in betting. I think the relationship was good between betting and football, but everyone’s going their own way now.” •
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Quality over quantity
DATA IS KING BUT IT MUST BE HIGH-QUALITY PANELISTS AT SBC SUMMIT BARCELONA - DIGITAL assessed the importance of accurate data and localisation when it comes to launching new betting markets.
O
ver the last few months as the world has adapted to life under lockdown, betting operators and suppliers from across the world have had to put on their creative hats when it comes to launching new betting markets. From tiddlywinks and Kung Volley to Nicaraguan football and esports, the betting industry has faced the challenge of meeting the needs of the punters looking to fill the void from the global sports hiatus. Speaking at the SBC Summit Barcelona – Digital on the ‘Creativity in Market Making panel’, sponsored by Sporting Solutions, panelists discussed the importance of reliable data in the market creation process, and how to deliver unique content across what can be quite a saturated sporting weekend. One of the ways that operators can gauge player interests is through features such as ‘request a bet’. Joe Lee, Head of GB&I – Sportsbook Trading at Paddy Power, told delegates that Paddy Power has seen a shift in punter behaviour, with many opting to use personalised bet features. He explained: “We’ve seen a shift in pattern in recent times. We’re all aware of the request-a-bet functionalities that various different operators have been using in the industry. “Customers are starting to tell us, through that offering, what they actually want to bet on. So this has been key for us, and that is what we’re using a lot of the time to
10 SBC MAGAZINE • OCTOBER 2020
understand what markets we should be offering. “We’ve also seen an uptick in player props and player-related markets from that. With the likes of the NFL and football in the UK, there are many more people interested in markets such as ‘shots on target’, ‘assists’, much more so than they ever have before – and that has certainly come from the request-a-bet mechanic. “I think the key aspect in terms of specialisation for these markets is data, and the people to interpret that information. I’d say they are your two key requirements. Once you have that, you have the ability to build a product which is user friendly.”
I THINK THE KEY ASPECT IN TERMS OF SPECIALISATION FOR THESE MARKETS IS DATA, AND THE PEOPLE TO INTERPRET THAT INFORMATION While personalised content is important, Philippe Joos, Head of Product & Innovation at Napoleon Sports & Casino, shifted conversation towards the growth in live betting markets - stressing that accurate, upto-date data that meets the speed of customer demands is pivotal when it comes to launching a new market. He said: “During COVID, obviously there were a number of the main sports which were postponed or cancelled. But after sports have resumed, I’d say that the quality of data is still ok. When launching a new market, what is also important is
SPORTS BETTING
IF THE MARKET IS CONSTANTLY GREYED OUT OR THERE ARE LIMITS TO THE MARKETS AVAILABLE, THE PUNTER WILL BECOME FRUSTRATED AND THE MARKET WON’T BE A SUCCESS
Joe Lee, Head of GB&I – Sportsbook Trading at Paddy Power
Philippe Joos, Head of Product & Innovation at Napoleon Sports & Casino
high speed data – especially when it comes to live betting. “If the market is constantly greyed out or there are limits to the markets available, the punter will become frustrated and the market won’t be a success. When it comes to live markets, data should be fast and available to the bettor.”
sbcmagazine.com 11
Quality over quantity
Offering reliable data, as all of the panellists agreed, is a key feature of delivering a seamless user experience. However, Dinos Stranomitis, Chief Operating Officer at Altenar, stated that flooding the market with masses of data can often be confusing for the punter. This does not mean that operators should immediately stop offering new markets, explained Stranomitis. Instead, there should be a focus on delivering ‘stand-out quality’ which is tailored to each individual jurisdiction.
SPORTS BETTING
Dinos Stranomitis, Chief Operating Officer at Altenar
THERE SHOULD BE A FOCUS ON DELIVERING ‘STAND-OUT QUALITY’ WHICH IS TAILORED TO EACH INDIVIDUAL JURISDICTION “When an operator prices up a sport, you then need to come up with a template to decide which markets are best to offer for the punters,” he explained. “Of course, in a very competitive market, many decide to create as many markets as possible. While creating as many markets as possible is a good approach, we need to make sure that there is also quality. “When I say quality, you must have the mathematical models, you must have all of the knowledge on how to derive the markets, and then assume that there is a punter betting from a completely different market – so you have to educate them. “For example, if you have a customer in Mexico, you need to ensure that the layout of the market is tailored to them. I would say that it is very difficult to add something to an existing offer. It requires a lot of discussion, deep analysis, and a strong understanding.” Looking at what the future holds for market creation, Lee predicted that player prop expansion - which has become very popular for US sports in recent times - is a feature that is only going to continue on an upward trajectory. As punters’ demands grow for indepth, real-time data, he explained that European football may see a shift towards individual statistics, or even a gravitation back to the trusted ‘red button statistics’.
12 SBC MAGAZINE • OCTOBER 2020
He added: “It definitely goes without saying that data is king. When looking at player prop expansion and even with the request-a-bet functionality, the US sports have come to the fore in recent months. This is probably because data is freely available to both the punter and our trading teams. There is, so to speak, a
I THINK THAT THIS IS GOING TO BE SOMETHING WE’RE GOING TO SEE MORE OF IN FOOTBALL - INDIVIDUAL STATS IN REAL TIME FOR SPECIFIC PLAYERS
level playing field and you can spend countless hours trawling through data on NFL players. “Obviously the NFL is quite suitable to that proposition because you have individual plays, real-time updates on screen. I think that this is going to be something we’re going to see more of in football when looking to the future - individual stats in real time for specific players. “There may also be a gravitation towards the scenario we’ve seen in the past where you’d have the ‘red button’ option of the camera following player X or Y and you can actually track the individual outcomes yourself.” •
#SBCDSCIS 4-5 NOVEMBER 2020
THE CIS EDITION OF THE WORLD’S
LARGEST ONLINE BETTING
AND GAMING EVENT 1,500 Delegates
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FOR MORE INFORMATION PLEASE VISIT WWW.SBCEVENTS.COM
25
Exhibitors
Time to go East?
CIS BUSINESS EVOLUTION OFFERS BETTING A FRESH HUNTING GROUND FOLLOWING A YEAR of regulatory and business interruptions, to the surprise of industry observers fast-changing regulatory conditions have brought Eastern Europe’s Commonwealth of Independent States (CIS) region into play
T
here have been regulatory changes across the three CIS fronts of the Ukraine, Russia and Uzbekistan, countries with contrasting political narratives, economic ambitions and who each maintain fraught histories with gambling. Changes should be welcome by industry leaders, with CIS bringing much-needed new opportunities to Europe’s saturated online gambling scene. Yet CIS insiders advise caution for new incumbents seeking to advance within Europe’s youngest business environments – as operator ambitions will likely collide with cultural clashes and regulatory inconsistencies. However, CIS market optimism should not be subdued as Ilya Machavariani, Head of Russian and CIS Gambling for intentional law firm Dentons, states that in 2020 any market progress should be welcome. Speaking on the ‘CIS & The Balkans’ panel at the SBC Summit Barcelona Digital, he said: “I have a feeling that generally CIS has started to open up and I mean that Ukraine, Uzbekistan, Russia; all of these countries are trying to somehow work on their regulations, or already existing ones, and introduce some new ones to help
14 SBC MAGAZINE • OCTOBER 2020
Ilya Machavariani, Head of Russian and CIS Gambling for Dentons
their economies. “The vital thing about these countries I see, as a lawyer at least, is that it appears that the regulators and people are responsible for these new laws, and are looking towards the best international practices. I believe that it is our duty to help these governments to shape these regulations in a way that allows everyone to participate in opportunities.” Case-in-point Ukraine, which this summer repealed its 11-year prohibition of all gambling services. Machavariani underlined that its ‘Gambling Law’
IT APPEARS THAT THE REGULATORS AND PEOPLE ARE RESPONSIBLE FOR THESE NEW LAWS, AND ARE LOOKING TOWARDS THE BEST INTERNATIONAL PRACTICES
mandate which received outright approval from Rada (parliament) is viewed as more of doctrine to modernise the economy. “If we take a look at Ukraine, I think it’s really good that legislators are trying to be open to the international community and everybody will notice that because the Ukrainian legislation, which basically has happened in the space of months as was reported globally,” he added. Although concerns remain on tax and licensing policies with regards to how Ukraine will adopt a new gambling framework in 2021, Machavarian maintains that Ukraine’s intentions are transparent as the government seeks to establish an independent agency to govern its marketplace and consumer standards, once implemented. As Ukraine’s government begins to formulate its regulatory framework, it is best advised to take the approach
SPORTS BETTING
THE COMPETITIVENESS OF THE MARKET HAS BEEN AN IMPORTANT FACTOR AS WE HAVE SEEN MAJOR INTERNATIONAL OPERATORS ENTER THE MARKET BY ACQUIRING ESTABLISHED GEORGIAN PLAYERS
Irakli Davarashvili, Chief Marketing Officer at Adjarabet
of Georgia, the CIS nation regionally referred to as the ‘meeting point of Eastern Europe to Western Asia’. Since its breakaway from the Soviet Union in 1992, Georgian governments have modified business policies to accommodate for licensed gambling services, allowing the country to adopt a forward-thinking regulatory system and operator-friendly attitude towards the gambling sector. Georgia’s fast-growth igaming marketplace is now recognised as a CIS region ‘tech success story’, with international incumbents Flutter Entertainment and Evolution Gaming moving to acquire presence and capabilities within the country. Irakli Davarashvili is Chief Marketing Officer (CMO) at Adjarabet, the
sbcmagazine.com 15
Time to go East?
SPORTS BETTING
WE SHOULD BE OPTIMISTIC ABOUT THESE CHANGES, AS THEY FORM PART OF A WIDER PLAN TO EASE BUSINESS CONSTRAINTS IN RUSSIA
Maxim Afanasyev, Chief Product Officer at Liga Stavok
majority-owned CIS sportsbook operator of Flutter Entertainment. Speaking on the same panel, he detailed first-hand accounts of Georgia’s transition. “For a long-time Georgia has held a regulated online gambling marketplace, which has been transparent and competitive, witnessing changes in operator market shares since its beginning. “The competitiveness of the market has been an important factor as we have seen major international operators enter the market by acquiring established Georgian players.” Davarashvili believes that the Georgian government’s progressive approach has helped it govern an igaming market that is viewed as key driver for its wider economy in terms of digital services and investment, noting that Flutter’s £100 million investment in Adjarabet was viewed as a historic achievement for Georgia’s business community. Though Georgia is praised for its modern approach, as a business
16 SBC MAGAZINE • OCTOBER 2020
region CIS’ 10 former Soviet States are governed by their entwined relationships and complicated histories, in which Russia stands as the region’s outlier as to how business will be formed. To the surprise of Russian incumbents, this summer the Duma abruptly approved a new bill on the ‘federal regulations on activities for the regulation and conduct of gambling’ - allowing the Kremlin to implement ‘limits on types of sports events that can be wagered on’ and a further ‘increase on financial obligations of Russian sports betting licences’. Maxim Afanasyev, Chief Product Officer (CPO) of Russian licensed sportsbook Liga Stavok, said: “Things can happen very fast in Russia,
IN 2021 A LEADERSHIP QUESTION WILL BE, DO YOU CONTINUE TO MOVE WEST OR BEGIN TO GO EAST?
especially with regards to changing the law. Just one month ago the Kremlin signed a new law regulating bookmakers activity. “From 1 October, licensed bookmakers will only be allowed to take bets on ‘official sports events. Official is the keyword, Russian bookmakers cannot take bets on sports that are not officially governed, they tell us that all sports must have an official status to be bet on?” Working with Duma legislators, Machavariani interjected that the Russian government’s regulatory intentions have been misunderstood, as they come with the intention of further modernising Russia’s economy. Machavariani explained: “Russia’s economic context has to be understood, as the government from the beginning of 2020 wanted to implement what it labelled as a ‘regulatory guillotine’ with the purpose of eliminating redundant business or commercial laws. “We should be optimistic about these changes, as they form part of a wider plan to ease business constraints in Russia.” The dynamics of CIS ‘fresh appeal’ were best summarised by final panelist Minja Bolesnikov, CEO of Balkans multichannel sportsbook MaxBet, who underlined the region’s capacity to change betting’s business landscape. Bolesnikov views CIS openings as a “clear opportunity for established Balkan operators that have conquered the complexities of servicing developing markets – product offerings, customer service, payments”. “Obviously we are monitoring our CIS neighbours closely, and if a clear chance arises, we will attack it,” he said. “The Ukraine looks very promising, as a market that we could enter with confidence.” As Bolesnikov astutely observed: “In 2021 a leadership question will be, do you continue to move West or begin to go East?” •
Esports boom
JUST THE BEGINNING: RTSMUNITY ON THE FUTURE FOR ESPORTS BETTING ONDŘEJ ŠILHAVÝ FROM RTSMUNITY looks at the future
for esports - an “anchor” for operators amid the chaos of 2020 - and highlights some impressive numbers for fans reached, betting revenues and profit margins
T
his year has been nothing but ordinary. We feel it in all aspects of our lives. But when we look at our industry, 2020 has been tremendous for esports betting. Among all the chaos and uncertainty, esports betting has been the solid anchor for many operators, providing them with a revenue stream they can rely on. But looking forward, what can we expect from esports? Is the growth sustainable? Where can we see esports in the next few years? Let’s have a closer look at the data. $14 billion, that is the key number for 2020. According to a study published by consumer research giant 2CV and market researcher ProdegeMR, the esports betting market will be doubling 2019’s revenue figure of $7 billion. Now it’s fair to say that the situation in 2020 has been anything but standard. The lockdowns and cancellations of leagues damaged traditional sports, while esports were able to switch to online mode. That gave esports an incredible opportunity to catch the attention of all sports betting operators. To some degree, that definitely happened, but many of them still see esports as a low tier market, and they are not sure if it is worth their time. There are two main reasons for this uncertainty. The first one is a lack of clear vision around esports and betting for the next two to four years. The second one is the fact that operators have a poor esports product to begin with. This creates an endless loop of refusing to improve esports product due to low interest from customers,
18 SBC MAGAZINE • OCTOBER 2020
which is based on the low quality of the product as such. To expect customers to move to esports betting when there are operators like STS or Parimatch who already offer great esports, is naive.
THE LOCKDOWN GAVE ESPORTS AN INCREDIBLE OPPORTUNITY TO CATCH THE ATTENTION OF ALL SPORTS BETTING OPERATORS The good news? It does not take any significant upfront investment to go big with esports. Most of the solid esports providers work on revenue share model, so once operators commit to integration which is usually free, they can get the
Source: H2 Gambling Capital (https://h2gc.com)
product up to date and compete with the best in the business. The keyword here is commitment. In order for operators to show any commitment, they need to have a vision. So where are esports and respective betting market heading? Let’s have a look at the data presented by H2 Gambling Capital earlier this year. The GGR generated by esports betting is expected to reach $862mil, which would represent 3.2% of global GGR. That means esports in the TOP FIVE betting sports worldwide. When we look at what the industry experts are saying, this estimation from H2 Gambling Capital can look conservative. Stepan Shulga, Head of Esports at Parimatch, said in an interview with iGaming Times: “Our expectations are to see esports in the top three games in terms of turnover by 2021.” Will that happen? Nothing is certain today, but based on the data we see today, esports are on the way there, sooner or later. Looking at the market from an operator’s point of view, it does not matter how big the pie is if I can’t get
SPORTS BETTING
my share, right? Getting the full picture about the market size is therefore just the beginning. Any operator willing to grab his own share of the esports betting market needs to focus on three factors.
Live coverage Based on our internal measurements, between 80-90% of betting volumes on esports is done via live betting. That’s directly related to the nature of esports. Dynamic non-stop action full of momentum swings. Combined with many minor game objectives, like destroyed towers, kills, or dragons, live betting offers entertainment for the full duration of the match. The uptime of betting odds is in direct correlation to the profits that operators can make. Higher uptime brings more engagement, more options to bet and, frankly, more fun. Operators just cannot be competitive
with an uptime of 40-50%. Sooner or later, customers will go to competition. Remember that esports fans and millenials have low brand loyalty, they don’t have a problem switching to different betting sites, if it brings them more comfort.
Markets selection Wide selection of markets is something that I already touched on in the previous point. Having a broad choice of live side markets is something that is dramatically increasing operator profit. The ratio between main market and side markets can reach 30% in favour of side markets, compared to 70% of volumes on match or series winner. So, what are the options for engaging side markets? Looking at Counter Strike - betting on map winners with handicaps, pistol rounds and winners of specific rounds are some of the most popular markets. Dota 2 or League
of Legends, on the other hand, offer interesting options to bet on first kills, first destroyed towers, or betting on the team which kills first Roshan or Baron. Those are some of the most important objectives in both games.
Profit margin Looking back at the overall esports betting market size of $14 billion, the ultimate question is the profit margin for operators. According to a strategic report released by Kambi, the operator margin on traditional sports betting fluctuates between 7-8% due to the outcome of sporting events with the highest betting volumes and value. Now let’s compare that to esports, where the industry average fluctuates between 1-5%. No wonder that operators are not running en masse into esports betting. Now let’s compare that with leaders in esports betting. I can’t speak for any other provider, but
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Esports boom
RTSmunity having an average profit margin upwards of 10% in 2020, gives a completely different picture. When making a business decision, the question is always based on multiple variables. The opportunity cost and the payback time are two of the most important ones. With no integration fees and clear profit margin expectations, there is one more thing needed to make an educated decision. Local esports betting market size Let’s have a look at the UK market, where the UK Gambling Commission (UKGC) issued a report focusing on esports betting especially during the covid lockdown, and the results were impressive. In May 2020, the GGR generated by esports was $5,835,764. Again, we have to acknowledge there is a clear influence of COVID-19, but the trend is clear, and the UK market shows great potential for upcoming operators, as the local giants like Sky Bet, BetVictor or GVC hesitate on offering comprehensive esports betting offers. Another market to watch closely is Russia. With its 25 million esports fans, they create the third biggest fanbase in the world. Estimates from local experts
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SPORTS BETTING
like Paruyr Shahbazyan place the esports betting market at around 7% of total volumes. That is already an impressive value compared to the global market, and shows why Russian operators invest in Dota 2 and Counter Strike. Strong presence of betting operators like Liga Stavok, Winline or Parimatch is a sign of things to come, and we can expect a huge fight for the unclaimed esports market.
WHEN YOU LOOK AT THE TOTAL NUMBER OF ESPORTS FANS IN THE US, THEY CREATE 12% OF THE GLOBAL FANBASE COMPARED WITH 16% OF FANS IN EUROPE The last market under the spotlight is the US. The situation there is much more complicated, because you need to watch all states separately due to legislation. While the esports betting in the US is still in its infancy stage, there is one key statistic that is really promising. When you look at the total number
of esports fans in the US, they create 12% of the global fanbase, compared with 16% of fans located in Europe. Now if we compare the GGR split by region, we see that Europe generates 40.7% of global esports GGR, while the US creates just 11.8%. That is a huge disparity, which will eventually close as we see continuous progress on US betting legislation.
Conclusion While the COVID-19 and lockdown propped up esports betting numbers to unbelievable heights, the underlying trend is no less impressive. The esports audience is growing year by year, with growth rates around 15% yearly, reaching 500 million fans worldwide in 2020. Esports have shown incredible resistance to outside influences by switching to online. Just look at League of Legends World Championship 2020 in Shanghai. Millions of fans around the world are watching, while EURO or Olympic games were cancelled. As we all hope for return to normalcy, the doubts about esports disappeared, and the race for a new generation of customers has just begun. •
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Unpack the SPAC
RACE IS ON FOR A US SPORTS BETTING MARKET WORTH $35BN THE NEW GOLD RUSH IS ON and being run at a furious pace, with
US sports betting interests now more closely allied to the stock market than ever before. But who will emerge as the winners?
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US MARKET
W
ith intense interest in the rapidly growing US sports betting sector refusing to subside any time soon, it’s become increasingly evident that there is no shortage of investors waiting to buy up any opportunities in the marketplace. The listing of DFS operator DraftKings earlier this year and the meteoric rise in its stock tells us as much. One of the big things to emerge from all this is the SPAC or, to give it its proper name, the special purpose acquisition company. It was the vehicle that DraftKings used to make its move to the stock market, and as a ‘bangon-trend’ market genre is rarely out of the news these days. But is it likely to stick around or is it merely a COVIDinspired bubble waiting to burst? Tackling that question, and others, was a panel of industry thought leaders gathered for the recent SBC Summit Barcelona Digital, an online event bringing together the best of the sports betting industry in a virtual networking, conference and exhibition environment. On the Gambling Gold Rush Investment in the US panel was Jacub Růžička, Investment Manager at Penta Investments; Greg Carlin, CEO of Rush Street Gaming, and Daniel Politzer, VP Equity Research at JP Morgan. Moderating was Anton Kaszubowski, Director at Greenlaw Ltd. For many observers hailing from outside of the US, the SPAC is something of a newcomer to the industry’s vocabulary. Helping to explain the concept, Carlin told the conference: “It’s actually a public company with cash in a trust. So, for example, DMI Technology is a SPAC that we’re merging into. They have $230m of cash on their balance sheet. “We will raise what’s called a PIPE which is a stock offering that’s the same price as the SPAC as additional capital. So we have $160m in PIPE proceeds, $230m in SPAC proceeds less our expenses. “The pros are you are more certain to get a deal done than if you just go the IPO route. As you guys know the IPO market is fickle. Today it’s open for business, but back in April when we were thinking about this it was closed for business and the market conditions can change. So by merging into a SPAC
Greg Carlin, CEO of Rush Street Gaming
YOU ARE MORE CERTAIN TO GET A DEAL DONE THAN IF YOU JUST GO THE IPO ROUTE
Daniel Politzer, VP Equity Research at JP Morgan
SPACS HAVE BEEN AROUND FOR A WHILE, BUT I THINK SOMETHING LIKE $30BN HAS BEEN RAISED IN SPACS IN THE LAST EIGHT MONTHS
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Unpack the SPAC
you’ve got a little more certainty.” One of the other key benefits of a SPAC, according to Carlin, is the transparency that they allow. “When you’re going public you’re very restricted about what information you can share. Given that we’re a big growth story you can’t really talk about that in an IPO process, but because you’re merging into a SPAC you can share more market details about your growth prospects. So for those reasons it makes a lot of sense.” Politzer was quick to point out how the numbers around such deals have grown over the years. He said: “SPACs have been around for a while, but I think something like $30bn has been raised in SPACs in the last eight months versus I think the peak year - 2007 - which was like $6bn or $8bn. So certainly there’s a lot of capital slushing around. “But we have a lot more SPACs competing for these deals. I think you’re going to continue to see SPACs as we operate in this environment where it’s also logistically difficult to do an in-person IPO where people don’t want to travel right now. It’s continuing to be viewed as a way to generate outside capital for your business. So I don’t think they’re going
24 SBC MAGAZINE • OCTOBER 2020
US MARKET
away any time soon.” Talk turned to the US investment market and how valuations in the betting sector are likely to calibrate in the coming months. Politzer cited the quick return to action for major sports as a factor that will influence the market going forward. He told delegates: “To some extent it already feels like we’re in a retailer investment led bubble in certain corners of the market. I think right
WE’RE PROBABLY LOOKING AT A MARKET RIGHT NOW OF $1BN TO $2BN SO THERE’S A TREMENDOUS AMOUNT OF GROWTH LEFT now is a strange scenario where you have virtually every sport happening at once. And everyone’s been stuck at home for the most part so there’s been this pent up demand and then all the sports are released at once. “And a lot of these sports fans that bet on sports in the grey or black market have other ways to get their fix. The easiest extension is the stock market and you’ve seen the Dave Portnoy effect in Barstool where Penn is up 11% today on effectively the hope
that Barstool is going to transform the entire space. Carlin believes that those numbers around sports betting and gaming, while already significant, can grow much more. He stated: “There’s a lot of excitement for the space and rightly so. We’re really in the early innings of this online gaming, sports betting roll out in the US. There are some numbers out there that suggest the market size is $35bn. We’re probably looking at a market right now of $1bn to $2bn so there’s a tremendous amount of growth left.” With some of the biggest names in sports betting already off to a flyer in the sector, it’s no surprise that observers are thinking about who can maintain a sustained market lead and who might be strongest to emerge from out of the chasing pack. Said Carlin: “You don’t know who the winners are going to be yet, but it really comes down to longer term five or six years from now. What market shares do these businesses have - are they profitable? I think this is going to be a big market and it’s probably yet to be seen who the ultimate winners are going to be. FanDuel and DraftKings are off to an early start but we’ll see over time how market share shapes up.” •
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Tipping point
ATTENTION TURNS TO THE SUPPLY SIDE IN THE US PLAYTECH CHIEF OPERATING OFFICER SHIMON AKAD
asks whether the tipping point has been reached in the US for suppliers, as much as it has for operators
T
he merger and acquisition news in recent months has once again focused attention on how the betting and gaming sector is being transformed by developments in the US. The ambitious deals, headlined by Caesars bid for William Hill, indicate the extent of the changes affecting the operator side in the US. The widening out of regulated sports-betting and the gradual stateby-state adoption of online gaming has already had a profound effect on the US market and I’m sure there is more to come. No doubt as I write more executives and their corporate advisors are plotting new deals. But I think that one of the less examined questions about the US is how all this is affecting the supply side. As much as post-PASPA there was a ready-made and previously Europeanfocused industry looking to establish a foothold in the US, so in my area of
26 SBC MAGAZINE • OCTOBER 2020
the sector the B2B are likewise hoping to grab their slice of the pie. The appetite for success is the same but I argue that the dynamic is different. There are already a number of large global players such as IGT, Scientific Games and Playtech which have experience of entering new markets either with their existing client base or for new customers. We have recently launched a selection of our games with bet365 and have seen betMGM run with our casino software in New Jersey, for instance.
Race not to the quickest These are the first of many announcements in the US. You might
ONE OF THE LESS EXAMINED QUESTIONS ABOUT THE US IS HOW ALL THIS IS AFFECTING THE SUPPLY SIDE
say that Playtech’s ‘entry’ into the US market is somewhat belated and it is certainly true that we have taken our time to assess where we see ourselves in the market. And there are certainly companies that have been quicker than us to gain early positions. But this is still early days in the US, particularly for online gaming. One of the lessons from the Covid-19 lockdown was how much online gaming can be a benefit to operators that either have a land-based presence or are more reliant on sports-betting. The figures from both New Jersey
US MARKET
and Pennsylvania over the period of the spring and early summer prove the point. The most recent available revenue numbers from the New Jersey Division of Gaming Enforcement (NJDGE) showed that the year to August, online gaming GGR rose over 100% year-on-year to just under $600m. In Pennsylvania, meanwhile, in its first full month of operation online slots brought in $56m of GGR while table games added a further $13.6m. Nothing makes the case better for the opening up of online gaming than data such as this. It demonstrates the
clear appetite from consumers and shows other states the tax dollars they could be bringing in if they open up to online gaming. It also proves to the gaming industry how much US gaming will be worth over time.
The volume challenge The size of the potential prize in the US makes it all the more important
WE HAVE TAKEN OUR TIME TO ASSESS WHERE WE SEE OURSELVES IN THE MARKET
that operators have the scale of offering to satisfy future demand. Product clearly takes centre stage. To grow the market, operators know they will need more games and more betting options. Operating at scale poses its own challenges. Keeping the customer satisfied is vital as is enticing an audience in the first place. One part of the puzzle is, of course, scalable tech and it is something we are keen to promote. In the US context, as with elsewhere in the world, supplier cooperation is key. This necessitates an open approach
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Tipping point
to the technology architecture and offers the flexibility to approach clients across the spectrum from online to land-based and media. For us, it means we can cater not only to existing and new clients online but also to land-based casinos as well as online platform services to retail casino service suppliers. An important complementary element in this respect is omnichannel. As is well known the nature of the regulatory map in the US is such that we have a mix of products and channels that are open to us; some land-based betting only, some with restrictions around player registration and some fully mobile. It is in this area where experience comes into play. To maximise the opportunities presented by the regulatory variances, you need to have been through this all before.
IN THE US CONTEXT, AS WITH ELSEWHERE IN THE WORLD, SUPPLIER COOPERATION IS KEY
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US MARKET
To coin a phrase, this isn’t our first rodeo and we know how important it is for every customer to be able to maximise their revenue through whichever channels are available. All this against the backdrop of an expanding market. We intend to come to the market in the US offering the full breadth of our portfolio. Not only our platform that includes data driven services for improved cross-sell and player protection services but also all products – including betting, casino, live casino and poker. Our intention is to have our products in each and every state where they are regulated, and we are opening a live casino facility in New Jersey in the coming months. It stands as testament both to our commitment to the market and as a sign of the developments to come and indeed we are committed to opening similar facilities in whichever state demands it. I don’t think any of the estimates I have seen for the size of the sportsbetting and online gaming markets in the US are exaggerated. The US is a highly sophisticated consumer market when it comes to digital and online
ANALYSTS ARE TALKING ABOUT FIGURES UPWARDS OF $30BN FOR REGULATED ONLINE GAMING BY THE END OF THIS DECADE products, particularly e-commerce and I believe we will see a faster adaptation rate to online gaming. In addition, with the after-effects of the current crisis likely to focus the minds of the politicians and stakeholders, we think the US opportunity is phenomenal for both sides of the operator/supplier divide. A year from now the landscape for online gaming and sports-betting will look very different. More states are coming online and by my reckoning there will be two or three more states with online gaming as a regulated activity by the end of next year. At present, regulated online gaming in the US is worth maybe $2bn but the analysts are talking about figures upwards of $30bn by the end of this decade. And I believe them. •
Beyond football
BETTING NEEDS TO BECOME AN EXPERIENCE IN LATIN AMERICA FOOTBALL IS, WITHOUT A DOUBT, THE STAR SPORT
for bookmakers in Latin America, but there are other sports and even other gaming verticals that offer exciting opportunities, such as online casino, poker and betting on virtual events
D
uring the Beyond Football: Expanding Your Sports Betting Offering panel at SBC Summit Barcelona Digital, speakers analysed the ways in which operators can improve their sports offering outside football and future trends.
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In Mexico, as in the entire region, football has the largest fanbase, but the American influence continues to carry weight when it comes to betting. Lenin Castillo, Online COO at Logrand Entertainment, said that 90% of the bets are separated in four sports,
mostly in equal parts, between football, American football (collegiate and professional), baseball and basketball. Such is the latter’s relevance, that Logrand’s online platform Strendus signed in September a sponsorship deal with Mexico’s national basketball league, the Liga Nacional de Baloncesto Profesional (LNBP). “Those are the most important sports, although bettors also focus on boxing, tennis, greyhound and horse racing,” Castillo added. “By merging digital platforms with the land-based offering, in this case with our physical casinos, we aim to combine all possible sports and offer not only the opportunity to bet but also to interact and experience all games in the same room.” Brazil, on the other hand, still doesn’t have a regulated market and its current offering is limited to horse racing. The challenge lies in making sure that the other sports, which will enter the regulated market at the same time as football, don’t lose relevance because they won’t have more time to adapt, like horse racing did. Andre Gelfi, Managing Partner Brazil of Betsson Group, explained that the local
LATAM MARKET
FOOTBALL AND BASKETBALL ARE THE MOST IMPORTANT SPORTS, ALTHOUGH BETTORS ALSO FOCUS ON BOXING, TENNIS, GREYHOUND AND HORSE RACING
Lenin Castillo, Online COO at Logrand Entertainment
market is a traditional one: “In Brazil, the horse racing market has been around for 70 years. In the case of offshore companies, which are delivering their value proposition focusing in Brazil, I would dare to say that they are in line with what we see in the region: football is the star sport and then there are important events, such as the basketball World Cup, rugby or a Grand Slam, but football is the star of the local market.” When asked by moderator Joaquín Gago, founder of BetanDeal, about whether offering bets on horse races in Brazil is used to attract users or to retain customers, Gelfi assured that it’s necessary that the product covers the acquisition and retention aspects. He added: “On the other hand, I also consider this period as a ‘preseason’ since we’re playing in a field where the competition is not what we expect in the future, this isn’t the top league. Once the regulation is in place, the product will be focused on retention because horse racing has a very interesting public. “At Betsson.com.br we have, on average, one race every five minutes, there are many events. You can cover those gaps in the product offering with horse racing, and [this] is attractive since it pays interesting accumulated prizes, frequently, and they’re worth around a million dollars. There are interesting questions around horse racing and as a retention product it makes sense. But, as the only offshore operator, this is the product that we have to work on, both in acquisition and retention aspects.”
As in Brazil, the king of sports also reigns in Colombia. Hugo Llanos, COO of Wplay, said that the second and third places are often in dispute, but he believes that tennis, basketball and baseball are the most relevant sports after football. To address the Colombian market, he said it’s necessary to identify the gaming industry as an entertainment industry. “Entertainment comes in different shapes, there may be people who like casinos, sports betting, poker, etc.,” he explained. “So you have to try to expand your offering and provide as many products as possible. Of course it depends on the target audience and the company’s strategy, on your customer base, but having multiple options is always important. There will always be one that stands out, although
Andre Gelfi, Managing Partner Brazil of Betsson Group
it won’t always be the same. “In Colombia’s case, the regulator Coljuegos gives us the guidelines and the vision for the future and, in that particular case, they have worked well with what the people want and understand it so that the bookmakers can operate. It started with sports betting, then online casino followed. Now they have approved virtual sports and they will keep moving forward.” Castillo agreed that this industry must be seen as entertainment, and said that Logrand, in addition to having an expanded offering, also wants to break the paradigm of the digital world with the land-based world. “Having betting rooms and a digital platform and expanding from an experience point of view has allowed us to offer clients a dynamic interaction not only remotely
Joaquín Gago, founder of BetanDeal
I CONSIDER THIS PERIOD AS A ‘PRESEASON’ SINCE WE’RE PLAYING IN A FIELD WHERE THE COMPETITION IS NOT WHAT WE EXPECT IN THE FUTURE, THIS ISN’T THE TOP LEAGUE
sbcmagazine.com 31
Beyond football
COLJUEGOS HAS WORKED WELL WITH WHAT THE PEOPLE WANT AND UNDERSTAND IT SO THAT THE BOOKMAKERS CAN OPERATE but also on site, which end up being complementary,” he said. “Being a digital platform, you normally have a much broader spectrum of potential clients, and each has different interests. The goal is to meet the interests of every client.” It’s important to visualise the range of potential clients and, based on this, determine with the knowledge of the client what type of services and products may be interesting for them. “That’s where you start the interaction with them and [you can] identify patterns so it’s not just gambling, it becomes an experience,” said Castillo. Logrand’s Online COO explained that there are models to encourage retention through loyalty. He shared: “In our case, working with Captanov has allowed us to establish a model called Strendus Universe, in which we can change the way we interact with customers, so they see it from a gamification perspective, and the experience is more practical.” These thoughts were echoed by Pablo Monti, Esports Manager at LMG, who highlighted that every day there are more virtual competitions in which different events stand out, but that it’s still rare for someone who doesn’t know the land-based betting industry or esports to bet online. “The front door is always betting on a sports event,” he said. “I see that it adds up from a loyalty side, especially when there are gaps due to a lack of competitions or when you can bet but the player doesn’t find it relevant or doesn’t understand the odds.” In the most critical months of the pandemic, and in the absence of traditional sports, esports helped the betting industry. Monti believes that esports took on a “superficial” relevance, especially since celebrities from traditional sports turned to video games or esports. “It’s not that esports became massive as such, it was what surrounds esports,” he said. “Esports have a phenomenal
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LATAM MARKET
Hugo Llanos, COO of Wplay
audience, but it’s still smaller than traditional football, the NBA, and more. Of course it grew when there was no football or basketball and [its popularity] decreased when they returned. “People who consume esports have a certain predilection to gamble, there are many streamers who do broadcasts and they bet or play poker. There’s an increased relationship between betting brands or online poker platforms that sponsor streamers or influencers from the esports world, or advertise in their jerseys, so there’s a direct relationship.”
Pablo Monti, Esports Manager at LMG
Although many experts argue that esports offer the greatest growth potential, it’s an industry that still requires maturity to be able to compete with established ones. “There is a lack of trust in its ecosystems, in the competitions,” Monti admitted. “There are more and more competitions and they’re sustained over time, but [integrity] is still something that has been lacking and perhaps that’s why it’s not very mature. There aren’t many integrity talks either and that’s key to win players’ trust. “Obviously, although there are specialists in generating quotas, it’s still a very young territory, but inevitably in about five years it will clearly be a ‘sports content’ to take into consideration and it will be very relevant in the betting world, without a doubt.” •
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BtoBet and Aspire
MIXING EMERGING MARKET STRENGTH WITH MATURE MARKET CLOUT BTOBET'S ACQUISITION BY ASPIRE GLOBAL was an
"ideal match" for both companies, who have found a mutual balance in each other to achieve their goals
T
hat was the view of BtoBet founder Alessandro Fried, who explained that his company has gained a partner to
34 SBC MAGAZINE • OCTOBER 2020
quickly reach markets missing from its global footprint, while Aspire has filled an important gap for its own B2B product set. “There are two aspects that were fundamental,” said Fried. “Aspire Global was seeking to increase its B2B product offering to their customers, but was missing one of the industry’s most important verticals, which is sportsbook. It’s one of the most important in terms of market requirements, but also from a revenue generation point of view. “From our side we were looking to have a partner that would push us
quickly to markets which we were still missing in our global footprint. So all in all, this acquisition was the ideal match with both companies finding a mutual balance in each other to achieve their goals.”
THIS ACQUISITION WAS THE IDEAL MATCH WITH BOTH COMPANIES FINDING A MUTUAL BALANCE IN EACH OTHER TO ACHIEVE THEIR GOALS
LATAM MARKET
THIS NEW CHAPTER WILL MARK THE PERFECT OPPORTUNITY FOR THE COMPANY TO REACH NEW HEIGHTS
Fried later downplayed the idea of BtoBet losing its identity within the Aspire Group, adding: “The company will definitely continue to uphold its identity as a leading brand on the market, maintaining its own organisational chart, and pursuing a strategy that for the past years has characterised it and put it apart from the competition. The relationship with our partners, the way that we deliver our services and assist all operators, will remain unaltered. “Nonetheless, there is no denying that with BtoBet now forming part of this larger group our partners
ASPIRE OFFERS STABILITY AND CARRIES A LOT OF CLOUT IN THE BETTING AND GAMBLING INDUSTRY ON A GLOBAL LEVEL can expect to have major innovative solutions put at their disposal deriving from an increased investment capacity, and at the same time accessing additional content and products that constitute the group’s portfolio.” Elaborating on how the deal opens
doors to new markets, he said: “The group will have an incredible market cover, with BtoBet leading the way in emerging markets such as Africa and Latin America, and Aspire Global playing a leading role in more mature and new markets such as Europe or the US.” The more mature markets, Fried admitted, require a significant amount of investment and a high level of influence to gain access to the industry’s larger operators and bookmakers. “In this sense Aspire Global was the perfect match for us, with the group offering stability and carrying a lot of clout in the betting and gambling industry on a global level,” he said. “Aspire Global’s iGaming (PAM) platform is already certified in the US and other major markets, and this means that BtoBet with its sportsbook product can now gain immediate access to these yet uncharted markets for the company. “This is what we ultimately expect from this new chapter…gaining a strong entry to these new regions that still do not offer a lot of technological alternatives comparable to the ones that we offer today, and take the opportunity to bring to market a complete product covering all the elements of the iGaming value chain.” Fried concluded: “BtoBet’s acquisition by Aspire Global is testimony of the success and potential that the company keeps in hold. It all boils down to the sheer determination and talent of each and every member that forms part, and has formed part in the past, of this incredible and fast growing company. “This new chapter will mark the perfect opportunity for the company to reach new heights, and we all must evaluate this as another step towards achieving a great group result.” •
sbcmagazine.com 35
BGC Pledge
WHAT’S THE BEST WAY TO SPEND £100M? IN JUNE THE BIGGEST FIVE OPERATORS IN THE UK,
and members of the Betting and Gaming Council, confirmed that they would provide £100m in funding to GambleAware to improve treatment services, but what’s the best way to spend the money?
R
emoving stigma, widening the scope of education and increasing signposting are three crucial and necessary developments stipulated by Paul Buck, CEO of Epic Risk Management, to ensure that changes occur to heighten the “very low” number of individuals that are seeking treatment for gambling addictions. Buck was speaking as part of a ‘What’s the best way to spend £100m?’ session at the recent SBC Summit Barcelona - Digital, which came in the aftermath of a pledge by five of the UK’s biggest operators, and members of the Betting and Gaming Council. This would see £100m worth of funding provided to GambleAware
to improve treatment services, but what is the best way of spending this money? And is the research, education and treatment service industry capable of efficiently using the investment? “There is an environment now in this country, and I'm sure around Europe and we are seeing more and more in America, where people are prepared to talk about mental health, prepared to talk about depression, prepared to talk about anxiety, which is a very positive move because these are all huge issues,” Buck said when addressing the need to remove stigma. “But there seems to be more of an acceptance to talk about them. There is almost an environment where people are prepared to talk about
Martin Lycka, Directory of Regulatory Affairs at GVC
alcohol and drug addictions, more than they would about gambling addictions. “It’s almost more accepted that you would have an alcohol or drug addiction, which is interesting in many ways. There is still a huge huge stigma attached to gambling addiction, it is still seen as a weakness, it is still seen as something that people feel embarrassed about to come and talk about.” Adding on the necessity to increase and widen education, as well as placing lived experience at the core: “We put lived experience at the heart of everything, and we have since day one. Epic came from my own lived experience from a decade long, pretty serious addiction, and the very firm belief that we should be doing more to prevent people from getting to the edge of a cliff. “It’s a very complex addiction, and I think those who have lived it and those who have been through it, and not just those that have the addiction but those around them, husbands, wives, kids, real experts by experience, should really be shaping anything to do with education, treatment or prevention.” Narrowing the microscope of how, and crucially where, exactly the £100m should be spent, and the subsequent split across the research, education and treatment segment, all parties agreed that a balanced split was the appropriate course of action. “I believe that the split needs to be more balanced than just whacking it all on treatment,” said Martin Lycka, Directory of Regulatory Affairs at GVC. “More money needs to be spent on treatment not only in the UK but in many other countries that have been
THE SPLIT NEEDS TO BE MORE BALANCED THAN JUST WHACKING IT ALL ON TREATMENT
36 SBC MAGAZINE • OCTOBER 2020
CASINO
Paul Buck, CEO of Epic Risk Management
the poor sister of prevention, research and education in the last few years, but at the same time it can’t be the case that the other relatives that so far have been better funded would lose that funding.” In an ever changing world, and industry, all panellists emphasised that “it is not a one size fits all addiction”, with individuals, triggered by a range of factors, needing to have a variety of services to be able to recover and have a positive life going forwards. When placing a focus upon treatment, where do the improvement need to come? And where does the
IT’S A VERY COMPLEX ADDICTION. THOSE WHO HAVE LIVED IT AND THOSE WHO HAVE BEEN THROUGH IT SHOULD REALLY BE SHAPING ANYTHING TO DO WITH EDUCATION, TREATMENT OR PREVENTION investment need be placed with this area? Minal Jain, co-founder at RecoverMe, travelled down one particular route that she believes is essential in today’s environment. “From my perspective technology is
very much embedded in our society, I think we are very reliant on it at the moment and I think going forward that’s going to be a definite threat,” she said. “So, how we’re actually looking at incorporating technology into how we address the landscape for treatment provision is very important in my eyes. I think that we do it for a lot of other mental health conditions very well.” She continued: “I think going forward what we really need to be investing in is, to continue investing in solutions that already work, but to be looking at innovative and disruptive technologies
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BGC Pledge
that could potentially change the landscape because we’ll be offering choices to those suffering. They’ll have the ability to access treatment in a different way, they might respond slightly differently but we can also facilitate pathways into treatment. “So, from my perspective the integration of current services is really important and looking to see how we can embrace technology, like RecoverME for example, is something that we could focus our energies on.” An area picked-up, and elaborated on by Buck, who said: “I think it’s a really good question, because the
CASINO
EMBRACING TECHNOLOGY WILL MEAN A MUCH GREATER NUMBER OF PEOPLE, A MUCH GREATER PERCENTAGE OF PEOPLE, WILL BE ABLE ACCESS TREATMENT 24/7 one size fits all addiction. “There isn’t a magic set of pills you can take around on your education programmes with you and give everybody one and say ‘if you have a gambling addiction, or somebody suffers it, give them this pill and they’ll be fine’ because different people have different triggers and different people have different reasons why they gambled in the first place. And
Minal Jain, co-founder at RecoverMe
Matthew Gaskell’s clinics which are expanding and bringing the NHS into the arena. “But I also agree with Minal that we need to embrace technology I think, either as part of the process or a big part of the process.” He added: “Embracing technology will mean a much greater number of people, a much greater percentage of people, will be able access treatment 24/7 in exactly the same way that they can access gambling 24/7. “I’m a big believer in expanding the great stuff that is already going on, but also really embracing technology so that a greater number [can gain access], such as that three per cent getting to 10%, 20%, 30% and beyond, going forward in the future.” Following a deep discussion across each of the RET segments, talk returned to the title of the session, with each panellist offering a succinct answer to the question ‘What’s the best way to spend £100m?’
I THINK THAT IT’S CRUCIAL GOING FORWARD THAT WE HAVE A MORE BALANCED APPROACH
world is changing. The gambling word is changing but in general the world is changing. I obviously went through treatment myself seven or eight years ago after a pretty serious pathological gambling disorder, and different things worked for different parts of my recovery, and I think the thing to remember with this is that it is not a
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different people will need different things to be able to recover and to have a positive life going forwards. “So for me I think it’s just a real increase in investment in treatment across the board, there’s some fantastic treatment facilities out there at the moment such as Gordon Moody, Dr Henrietta Bowden Jones and Dr
“I think that it’s crucial going forward that we have a more balanced approach, like we have discussed today, it can’t all go to treatment,” began Jain. “We need better education, we need better awareness and consequently then we might be treating less people.” “That money needs to be spent both sensibly and efficiently with a view to protecting customers’ interests in this space,” added Lycka. With Buck rounding off the session: “For me, it’s completely nonsensical that the £100m would go to a treatment infrastructure that wouldn’t be able to deal with it, so there needs to be a lot more emphasis on, let's prevent people from getting to the edge of a cliff in the first place rather than just treat them once they have fallen off.” •
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Going it alone
RELAUNCHING CROSS-VERTICAL BONUSENGINE AS A STANDALONE SOLUTION WE SPOKE TO NEW EVERYMATRIX CASINOENGINE CEO STIAN ENGER PETTERSEN about changes to his
day-to-day role, timing and key features of the BonusEngine relaunch, as well as why a ‘blurring of the lines’ between sports and casino underpins many of the company’s 2020 projects
SBC: Can you talk us through your move from the product side to leading the casino unit? How does this impact your day to day role? SEP: Yeah, so I come from B2C - I joined as a product manager in 2015. Since then, I’ve been very involved in CasinoEngine as a platform, but also BonusEngine. In my new role, I have more responsibilities around managing people and paying full attention to the P&L items that lead up to the bottom line. So, I’m busy in areas where I don’t have a lot of experience but still very much involved in the product too. SBC: What is the premise behind
the BonusEngine relaunch? What’s changed? SEP: We launched BonusEngine late fall in 2017 so it’s nearly three years old. It was launched under the name Unified Bonus System (UBS) and was very much tied to our player account management (PAM) platform. It relied on it, serving clients for both casino and sports but only those also taking the GamMatrix platform. The idea from the start would be that it would become modular - a product on its own. So under the BonusEngine name, it is because we have developed a system for handling its bonus wallets without relying on
GamMatrix. What that means for clients, leads and future partners is that they can take casino plus bonus, sports plus bonus, or casino and sports plus bonus - without the requirement to work with GamMatrix. SBC: Why now, though? Is this a product of recent circumstances or just the culmination of the development journey? SEP: The timing is just the end to a development journey leading to the wallet handling of bonusing, which no longer relies on another product. BonusEngine has developed a lot in the last few years but that’s more in terms of features; this is the major change because we can now cater to clients which we couldn’t before. SBC: Does this open the door for more cross-vertical products? And was making it standalone a regular request from clients over the last few years? SEP: It’s been a cross product from day one, but it was a request even before we went live from clients who wanted to take the product without the PAM, like OPAP for example. GamMatrix is a great product, you can go live today and take the whole package, but if you’re a tier-1 with a PAM in place that’s a big move. Now you don’t need to make that move. SBC: Do you have any concerns over the crackdown on bonusing in jurisdictions across Europe? Or does this tool have a major part to play for
CLIENTS CAN NOW TAKE CASINO PLUS BONUS, SPORTS PLUS BONUS, OR CASINO AND SPORTS PLUS BONUS - WITHOUT THE NEED TO WORK WITH GAMMATRIX
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CASINO
THE TIMING IS JUST THE END TO A DEVELOPMENT JOURNEY LEADING TO THE WALLET HANDLING OF BONUSING, WHICH NO LONGER RELIES ON ANOTHER PRODUCT clients in staying compliant with what’s still permitted? SEP: We’d be crazy not to pay attention to the changes, and of course we do, but if we take jurisdictions individually there is a level playing field for all. We adhere to the same rules. And we offer a lot of different variants of bonusing, so it’s not just about paying out a 100% bonus - it has tournaments and gamification features. It’s been the case in many jurisdictions for a while now that you should always be able to withdraw your own money. You might have to forfeit a bonus in the process, but your money is always available for withdrawal. But taking that one step further - based on my experience at least – we are moving into the way poker bonuses are given. You cannot give an upfront bonus with strings attached for poker because potentially players will drop that money to their friends on another website. You do the job first and then you get something - that’s how it works. So, for example, you have missions and targets. If you reach these you get a bonus with no strings attached, there’s no wagering requirements. It could be you get a free bet or free spins, but the strings attached are only tied to the process up to getting the bonus.
WE OFFER A LOT OF DIFFERENT VARIANTS OF BONUSING, SO IT'S NOT JUST ABOUT PAYING OUT A 100% BONUS - IT HAS TOURNAMENTS AND GAMIFICATION FEATURES
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Going it alone
CASINO
SBC: You mention missions and player targets here; can you expand on any of the other gamification components? SEP: Another thing to mention here would be that we have also done integrations with partners specialising in gamification such as Competition Labs. In a nutshell we send data to them, so we send events, and they do their magic - the specifics of the tournaments - and back to us comes the request to give rewards based on where the player ends up. We also have a partnership with BlueRibbon where we’ve integrated their customisable jackpots, which can be considered as a gamification feature.
BONUSENGINE IS JUST ONE OF THE LISTENERS OF OUR RULE ENGINE WHERE IF SUCH AND SUCH HAPPENS YOU GET SOMETHING
SBC:A ‘blurring of the lines’ between sports and casino has been evident in many of the moves you’ve made this year, from the integration of virtuals to slider games and now a relaunch of the cross-vertical BonusEngine; was this a core 2020 objective? SEP: Definitely. We had to make changes to our integration pipeline (when Covid hit) and I would say we acted very fast. For example, in March we realised the need for a wider
From a BonusEngine perspective, it has a lot of cross-selling features. For instance, you can run a single tournament across products. A casino bonus, say free spins, can be triggered by a player placing certain bets on sports, and the wagering requirement on said free spins might have a wagering requirement tied to both casino and sports betting. This has been a cross-selling tool since day one.
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selection of virtual sports. It became very clear for operators that it’s nice to have a platform provider, someone who specialises in integrations. So, all of a sudden you need virtual sports, okay we integrate vendors day to day. That was the casino side. And then for sports, through OddsMatrix we hugely increased our esports coverage as you had to do.
SBC: And finally, what are your hopes and goals for the year ahead, both in terms of BonusEngine but also the wider casino unit? SEP: We have a few projects in the pipeline for BonusEngine, as we always do. Right now, it’s a focus on two bonus types specifically for sports that we’re working on. We’re also spending time on turning BonusEngine into a library of inspiration. So it’s not just ‘you have the training, here’s the BonusEngine, now go and create your promotions’. Instead, it’s based on what we know from serving operators for many years, where we can actually partially make the promotions for you, but you fill in the blanks to suit your needs. That’s one of the focus areas for this year. Besides this, it is on rule engines. Whether it’s from third party or in-house engines, we are working on data to give instant rewards. This isn’t just for BonusEngine, but it is one of the listeners of our rule engine where if such and such happens you get something. You get this message but you also get this reward. Basically, we want to act in real time on the players’ activity as much as possible. •
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BITCOIN, BRAZIL AND THE BOMBAY CLUB: TIM HEATH ON ALL THINGS COINGAMING TIM HEATH RECENTLY STEPPED DOWN AS CEO OF THE COINGAMING GROUP to focus on its fast-growing VC
fund. He explains how Christmas musings brought lift off for the group and how its VC fund opens doors for Bitcasino.io and Sportsbet.io, before discussing his ‘baby’ and first of its kind for the industry - the Bombay Club SBC: How did it all start for the Coingaming Group? TH: It was back at Christmas dinner 2013, I said two things. Firstly, we’re an extremely smart bunch of people doing really great stuff. We can do many things we dream of if only we can control the money. And we wouldn’t be reliant on third parties. And then the second thing was, why don’t we use bitcoin? We can be our own bank. So, we furiously went and investigated, then within a month we had a bitcoin poker network up and running. We put some casino games up on the side of that, and people started playing those games. Within three months we’d turned the poker off and launched Bitcasino. From there, the rest is history. We’ve pushed forward the whole way through in terms of running the two B2C brands - in 2016 we launched the sportsbook (Sportsbet. io). In March 2016, I woke up one day and thought ‘we need a sportsbook for the Euros’. So I said ‘guys you’ve got three months’, and they got it done. We took our first bet at 5:30 on 10 June 2016, half an hour before kick off. I think that really epitomises how we go about things; we work out what we need to do, and take a very agile approach to doing so. We know things might not be launched at 100% perfection, so be it, but if the concept
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is proved right we can go and further improve it. SBC: What are your key target markets for Bitcasino and Sportsbet.io? TH: Look, it’s crypto, it crosses the world. It’s very much gone from a jurisdictional basis to a horizontal basis in terms of what parts of the world enjoy using crypto. Obviously there’s lots of Asian countries who’ve taken a mass adoption approach to it, specifically Japan and South Korea. Not as much China as we initially thought, interestingly enough, although that is changing now with the hardship people have had with moving money out of China.
WE KNOW THINGS MIGHT NOT BE LAUNCHED AT 100% PERFECTION, BUT IF THE CONCEPT IS PROVED RIGHT WE CAN GO AND FURTHER IMPROVE IT Japan, South Korea, Vietnam and Indonesia, India is going extremely well ever since the decision to withdraw all those Rupee notes. Then we’ve got African nations too. So you have all these subsets of jurisdictions; we’ve got a lot of action in Paraguay, Brazil and Argentina because their trading crossborder in bitcoin has become their benefacto, go-to currency.
South America is growing rapidly for us, Central America too, Canada is doing very nicely. Then Germany, Finland, Norway. It’s not like you’re going after a single big market like, for example, Sky Bet goes after England, Parimatch for Russia. We’re not like that at all, we’re sporadically looking for that half percent in many different jurisdictions where people are very crypto-focused with what they’re doing. SBC: So it’s just about marketing to crypto popular areas? TH: If you look at the sponsorship deals we’ve done with Flamengo, and with Southampton and Watford too, they were done because of the global appeal of football. And it was a way for us to really get our name out. Interestingly, we had Chinese characters on the Watford one, but as soon as we did that there was a copycat site in China just 30 days after. We’ve actually taken the characters off this year, because we’re not looking for it just to be a vehicle into Asia specifically, but more for that global reputation, trust and understanding from these deals. SBC: How important was the timing of the Flamengo deal? TH: Absolutely. We will be getting a licence there (Brazil) as soon as the tender becomes available. From what we’ve heard, it will be Q1 or Q2 next year, and it’s one of the markets we believe very strongly in. We want to be fully licensed and ‘white’ for when it opens up. SBC: What have you seen in terms of relative growth of Bitcasino and Sportsbet.io? TH: Exponential. One of the things about Bitcasino is we have a lot of high
CASINO
IT'S VERY MUCH GONE FROM A JURISDICTIONAL BASIS TO A HORIZONTAL BASIS IN TERMS OF WHAT PARTS OF THE WORLD ENJOY USING CRYPTO
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rollers and we’re not scared to take a bet. With crypto, it is very easy for a player to deposit half a million and play, and his bets might be €20,000 a hand at baccarat. So that’s 25 bets. It’s like putting in €100 at blackjack and playing $5 hands, it doesn’t feel like much but for some of these guys this is normal. You can’t do that in a traditional banking network, it’s just not going to happen. We have a lot of high rollers and we’re happy to satisfy their action. The money can come in and out 20 times a day, we don’t care. One of my biggest things is that in the seven years we’ve been going our average withdrawal time is 2 minutes 14 seconds. We’re fun, fast and fair. If I’m in a casino and I win, I’m given the chips. It’s a representation of value, so in the digital world you do exactly the same thing. Now, whether you can buy bread
and milk with a bitcoin, that’s a different question, but the bottom line is if you win the first thing you want is your money. And we don’t mind if this goes back and forth. There’s no charge-back, there’s no payment processing, there’s no fraud. SBC: Is it the same on the sports betting side in terms of high rollers? And if so, for the same reasons? TH: It’s the same thing. Our average bet size on the sportsbook is €242. These are the sorts of players we’re attracting, and so we’re happy to satisfy that. But again, we’re looking at players across multiple jurisdictions who enjoy betting a
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EVERY PART ADDS TO THE VALUE CHAIN IN TERMS OF INCREASING THE VALUATION FOR THESE INVESTED COMPANIES bit higher than normal but enjoy the VIP experience, the speed of the site and the ability to get paid straight away. That’s where our marketing goes towards. SBC: Does the cutting of third party costs enable you to set more attractive prices? TH: Of course. If we don’t have payment processing, and we don’t have fraud, then all of a sudden we can go a bit sharper on our lines, which is attractive to the punter. Further to that, one of the next steps - through our VC fund -
is we’ve just invested in two banks. We’re building our own crypto layer on top of this sort of framework using the Lightning Network. The bitcoin network did eight transactions per second, while the Lightning Network does 60,000 transactions per second. So this is getting to a Visa Mastercard level of speed around the world. We’ve got the platform and product which works for these punters - if we can give them the fintech facility or vehicle to use this as well, who knows what’s going to happen. Well, I do! SBC: You mention this VC fund; can you explain how this all ties together
in terms of the Coingaming Group, and some of the doors it opens for your B2C sites? TH: So we have our strong B2C sites, and we’ve then looked at how to create efficiency and innovation around them. The first was making game studios to provide ourselves with our own slots. Now, whether we own them 100% or have invested in say Kalamba or Green Jade Gaming, we can help grow their business by giving them instant distribution to our network. You’re helping on both sides of the equation there. We then made another one called Hub88 which is an aggregator, but instead of just building for yourself where you might become lazy - we actually have to build for externals which in turn improves the efficiency of our internal work as well. The only way to get on Coingaming B2C brands is through Hub88, but it’s got 50 B2B partners as well. Then you look at doing banking, we’ve just invested in an Australian sportsbook with a Northern Territory licence, we’ve gone into insurance companies, we’re in a couple of big blockchain-type businesses, we’ve got a travel agency, we’re building our live chat communications platform, we have accounting software for the gaming industry. We always treat our start-ups as nurtured businesses who get investment capital from the group, go off and start their business satisfying our internal structure but also can be used on an external basis. Very similar to what Amazon web services did. Then if there’s markets we’re not touching ourselves, we invest in other B2Cs. There’s a monopoly in Paraguay we’re looking to invest in because we believe if we put our learnings from the casino into another operator’s methodology we can really increase their value, but we can also supply them with new deals through Hub88. Every part adds to the value chain in terms of increasing the valuation for these invested companies. We’ve invested so far about €70 million in 44 investments and there’s a net asset value of about €175 million already over the last three years. SBC: Are you looking for particular services, or just where opportunities arise?
CASINO
TH: We get about 100 pitches a week now from people looking for money. I understand the gaming ecology, and the ecosystem, so that’s obviously where my heart is. So we’re looking at what we can invest in to help our B2C brands. But it’s also the corresponding services and value businesses around that, whether that be innovation in things like live streaming, data, warehousing, business intelligence, accounting, banking or payment processing. We’re invested into a company in China just listed on the Hong Kong Stock Exchange - the biggest merchant aggregator of point of sale (POS) software in the country, a company called Yeahka. It’s innovating fintech which I get a kick out of, but it’s also expanding our network of relationships in the Asia VC area as well. SBC: Just taking it back to the sponsorship deals with English football clubs, how successful have these been so far? TH: It’s an interesting one. People always say what’s your return on investment (ROI), but that’s the wrong way to look at - it’s got to be a return on objective. This might not be bottom line financial, although we are of course in the business to make money. For us, the objective with the Watford one was to announce to the world that we are big enough, secure enough, ready for high roller action, trustworthy and stable. We also put a bitcoin logo on the sleeve, so taking bitcoin to two million
eyeballs every weekend. There was a guy called CZ, CEO of Binance, who wrote a tweet saying ‘I wouldn’t normally give a shout out to a gaming company but these guys are so cool that they’re helping in that movement of taking crypto to the world’. It’s us doing our part for the community, not just an ultra-capitalistic sense of trying to get every dollar out of every single person. We are trying to grow cryptocurrency adoption throughout the world, and if we play our part 5% who have crypto will
WE'RE TRANSITIONING AWAY FROM JUST BEING A CASINO, OR JUST BEING A SPORTSBOOK, INTO BEING A FULL SERVICE AMAZON IF I CAN CALL IT THAT gamble and hopefully we are a part of the fabric of the conversation that they will come to us. We have confidence in our product as the best in the market so we’re happy to indirectly advertise our services. SBC: What are your goals or expectations for the year ahead? Are there any other big projects we should be aware of? TH: We keep understanding where the puck is going, where Gretzky is skating to. For example, we’ve got a huge amount of live dealer action - I think we’re one of Evolution’s biggest
partners. So, how do we improve on what they’re doing, or build our own? We’ve built our own live dealer studio in COVID times (in just five weeks) and we’re building a land-based casino in the old town of Tallinn, where we’re going to mix online and offline. So we will fly our VIPs in to play in the land-based environment using their wallet from Bitcasino (scanning the QR code), then they return to Tokyo, open the site and guess what? They’re playing live dealer but with the same dealers who they’ve just spent a weekend with. So we really build that personal relationship. In my opinion, why would they go elsewhere? Given this feeling and association they have with the brand. That’s the Bombay Club. We’re taking investment from some of the biggest operators so it will work like a B2B white label land-based casino - any of our partners can use it, so you can run your own VIP event and brand the casino as yours for the weekend. Everyone would have the Bombay Club as the software on their website, but then you can come to the actual land-based club which can be branded by the operator. They give their VIPs an amazing weekend of action, then they go home, pull up their live dealer again online and keep playing with the same one. SBC: So it’s about diversification? And building the whole ecosystem around your core businesses? TH: We started out as a casino and sportsbook, but we’ve always looked at how we make it more efficient, how do we work smarter not harder, what supporting services do we need. We are basically peeling back the onion - and actually becoming a fintech company so that’s where the VC arm comes into play about providing those services into the cash cow, or the casino sites we’re operating. And we’re transitioning away from just being a casino, or just being a sportsbook, into being a full service Amazon if I can call it that. If we can do it well for ourselves, others can benefit from what we are doing so we are willing to on-sell the services that we are internally billing ourselves for as well, which grows the value of those supporting services. It’s a massive ecosystem but everything works in sync. •
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More than ‘the product’
NETSHOP ISP: COMPETING WITH HOSTING GIANTS AND ADAPTING TO THE COVID-19 CRISIS NETSHOP ISP CEO STEFANO SORDINI
explains how it stays ahead of the competition by focusing on the customer’s real needs, before discussing the carefully chosen destinations for its three new data centers and a Work@Home relief package keeping COVID-19 affected businesses up and running SBC: As a data center and hosting provider, NetShop ISP competes with industry giants such as Amazon AWS and Microsoft Azure. How do you manage to survive in this business? SS: Indeed the industries we operate in are so aggressive and dynamic that not only we need to be ahead of the technology trends to support our iGaming customers but we also have to compete on a daily basis with giant hosting companies like Amazon, Microsoft Azure and Google Cloud. We understand that whilst the product delivered to the end-client is the same, we can not only survive but stay ahead of the competition by focusing on the customer’s real needs. The final deliverable to a business is a hosting environment for their website, database and application to run. If we call this deliverable as ‘the product’ then someone realises the competition in the hosting industry is immense. At NetShop ISP, we understand that anyone, including
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CASINO
hosting freelancers and amateurs, can quickly set up a hosting company and provide ‘the product’ to customers. Yet this is not the way we manage to outrun the competition. A customer who operates in the so-demanding and dynamic online gaming industry requires more than “the product”. Nowadays, an iGaming business starts operations with a handful of people in the team who may not necessarily carry any technical expertise. Their needs go far beyond having a server to run their software. They demand pre-sales technical consulting in regards to the requirements of the jurisdiction they are applying to. The client will also require competitive pricing having gathered prices from all the hosting companies out there. Moreover, the hosting provider must be able to assist the client during the installation or migration of the client’s application/data and, of course, have the capacity and expertise to offer ongoing managed services and 24/7 technical support to the client. Our 10+ years of involvement in the iGaming industry has given us vital know-how to support our customers on any aspect of their infrastructure and technology needs. Simply said, we beat
the competition by being able to take a client’s project to the next step beyond the end-product’s delivery. SBC: You have been operating data centers in key iGaming jurisdictions such as Malta, Cyprus and the UK, but now you are now expanding to more locations. Which are they? SS: Indeed, our most popular data center location for iGaming customers is Malta, the “Mecca” of the industry where we operate via three carrierneutral data centers ideal for primary
SBC: Why were these particular locations chosen for NetShop ISP’s expansion? SS: The locations where we do hosting is what differentiates NetShop ISP from every other hosting company out there. Each location is chosen after in-depth market research, competitors analysis and best fit for client industries. The Netherlands, and particularly Amsterdam, has been for many years a very popular hosting destination due
I AM EXCITED TO ANNOUNCE FIRST OUR FURTHER GLOBAL DATA CENTERS EXPANSION THROUGH THREE NEW STRATEGIC LOCATIONS; NETHERLANDS, SINGAPORE AND HONG KONG infrastructure and disaster recovery sites. Our Cyprus and UK data centers are also hosting iGaming businesses under the NBA and UKGC regulations respectively. The latest addition to our global infrastructure was Los Angeles where we operate via one data center in the heart of the city. I am excited to announce first our further global data centers expansion through three new strategic locations; Netherlands, Singapore and Hong Kong.
to its key geographical location and the Netherlands’ regulatory framework. A pivotal feature of a data center is its access to the main channels of top internet carriers to ensure fast network performance and high network availability. Whilst Malta is and will always be our prestigious iGaming-oriented location, our new Amsterdam data center has come to offer faster network connectivity to our clients through
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More than ‘the product’
CenturyLink, Cogent and Telia; the top three internet carriers globally. The largest part of our global data centers expansion was allocated to acquiring a substantial bandwidth capacity which will allow us to prevent and mitigate DDoS attacks, as well as enable our customers to efficiently and affordably serve clients across the globe. Singapore and Hong Kong are yet another two offshore, “exotic” as we say, that come to fulfill the need of our customers to expand in the Asia Pacific (APAC) region. All of our three new data centers are interconnected under a private, dedicated network cluster as a first step towards our global private network. For clients, this means they will be able to have servers in any of these three locations and do data exchange between each other entirely free and 100% secure. SBC: You will be officially announcing and presenting the three new data center locations at our Betting on Sports Europe – Digital conference. What are your expectations from this event and what else will you be showcasing? SS: Betting on Sports Europe - Digital 2020 will be NetShop ISP's first time
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exhibiting at a fully virtual conference. The SBC team has brought into the iGaming industry a fantastic platform for virtual events where in these "weird" times we all experience, our industry is stepping above and finds a way to connect businesses with young entrepreneurs, operators and suppliers. In addition to the announcement and on-going promotion of our three new data centers in Amsterdam,
hit Europe, our business operations were not affected thanks to the swift actions taken by our operations team. Although our working patterns were forced to change, we accepted the challenge and immediately switched to remote work to guarantee the team’s health and safety. A milestone for NetShop ISP has been the launch of the Work@Home bundle as a relief package for businesses
THE LARGEST PART OF OUR GLOBAL DATA CENTERS EXPANSION WAS ALLOCATED TO ACQUIRING A SUBSTANTIAL BANDWIDTH CAPACITY WHICH WILL ALLOW US TO PREVENT AND MITIGATE DDOS ATTACKS Singapore and Hong Kong, we will be showcasing our Work@Home bundle to the attendees of the event. It's our most recent product launch to relieve businesses that have been impacted by COVID-19 and are in the process of shifting to home working. SBC: NetShop ISP was among the first hosting providers to offer relief packages to businesses impacted by COVID-19. Can you tell us more about this? SS: When the COVID-19 pandemic
to switch into home working whilst keeping their operations up and running. The online gaming sector was severely impacted and we are proud to have contributed towards restoring business for many gambling operators that suffered. I would like to invite everyone to our virtual booth during Betting on Sports Europe - Digital event from 21-22 October 2020 to find out how they can enable remote collaboration for their business through the products offered as part of this bundle. •
New ways to find value
THE IMPORTANCE OF BETTING FIRMS USING NEW SPONSORSHIP TECHNIQUES
T
he uncertain future for betting sponsorships in sports is no more apparent than across Europe with Italy imposing a blanket ban on gambling advertising, while the likes of Spain already have plans in place to remove betting logos on team’s shirts.
BETTING SPONSORSHIPS IN SPORTS has become
Moreover, even the UK has been urged to discuss stricter measures despite a lot of clubs relying on the financial support of gambling sponsorship for commercial revenue. Speaking on the ‘Future of Sports Sponsorship’ panel at SBC Summit Barcelona - Digital Carmelo Mazza, CEO at OIA Services, highlighted that while restrictions are becoming more strict, there is still value in creating sports sponsorships through the use of new techniques to create a brand identity. He said: “So the experience I have is that no matter what the restrictions are, for example in the case of Italy which has tough restrictions,
sponsorship remains very important. “The point is that we need to create new ways and leverage on new digital technologies in order to avoid the bad and of course this increases the importance of selecting properly and having long term relationships. “In a way, it is part of creating a brand identity that matches with the kind of investment that you do.
Carmelo Mazza, CEO at OIA Services
52 SBC MAGAZINE • OCTOBER 2020
a growing topic of discussion in recent years with many countries pushing an agenda for stricter guidelines, particularly when it comes to partnering with football clubs
THE EXPERIENCE I HAVE IS THAT NO MATTER WHAT THE RESTRICTIONS ARE SPONSORSHIP REMAINS VERY IMPORTANT
Selecting very specifically what you want to have gives the opportunity to have high values of sponsorship. “This opens up the questions about the meaning of such restrictions. Of course, this is a different discussion, but at least I believe that sponsorship value is there also within countries with tough restrictions.” During the panel, Dan Towse, the head of brand at Marathonbet, also highlighted that it is now incredibly valuable for gambling sponsors to create valuable relationships with teams in order to develop a trusted relationship with its fanbase. However, he also explained that it is
Dean Akinjobi, CEO at Football Media
MARKETING
Conor McGregor
imperative that if stricter restrictions come in then clubs need to also work with the sponsors to ensure that the commercial value of the partnership remains sufficient. Towse commented: “You can’t just badge a logo on a shirt and expect it to drive a serious amount of value for your busines, there needs to be a lot more of an emotional connection. “It is getting harder for the sector but at the same time, I think rights holders are going to have to adapt as well. I don’t think their reliance is fully on gaming companies or brands from other sectors regardless of what they’re promoting. The rights holders need to adapt and help us to be able to drive value from those sponsorships. “If you looked at some of the data that was shared last year I think for shirt sponsorship in the Premier
YOU CAN’T JUST BADGE A LOGO ON A SHIRT AND EXPECT IT TO DRIVE A SERIOUS AMOUNT OF VALUE FOR YOUR BUSINESS
League, the gaming sector was paying double what other retail sectors could offer. Now if we do find ourselves in say 5/10 years, it might even be sooner, then those sponsorships can’t be so overt as what they are now. “What are clubs going to be offering in replacement? Or what can we do differently to still drive that awareness of both our brand and our products?” The topic of developing a trusted fanbase was delved into further by Dean Akinjobi, CEO at Football Media, who puts particular emphasis on brands going further than just signing a deal with a club and expecting it to drive customers. Instead, further activations need to be implemented to integrate yourself with the team, creating a relationship with its fans. Akinjobi explained: “I think that one of the things we find is that even when you’re going into these markets, where you’ve got a global sponsorship, it comes down to how you activate it. “It’s really important to leverage those assets across multiple channels such as fan sites, because most fans
SOME YOUTUBE CHANNELS THAT WE WORK WITH HAVE MORE FOLLOWERS OF FANS LIKE AN ACTUAL OFFICIAL WEBSITE don’t spend a huge amount of time on the official website, those fans go to the official website, stay there for a period of time, then recent news and then go to the unofficial channels. “Some YouTube channels that we work with have more followers of fans like an actual official website.” Neill Simpson, Brand Director at Mr Green, agreed by expressing that sponsors should not expect to be ‘done and dusted’ as soon as the rights fee has been made. Simpson added: “Actually, your level of investment outside of that is almost more important than the sponsorship money itself. “We’ve done individual sponsorships, boxing events for example, you can maximise those to the hilt and push, whether it be new product launches that you’re doing,
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New ways to find value
MARKETING
Peter Schmeichel
expansion in markets, new entry, whatever it might be. You can still make so much out of that by actually leveraging the property that you’ve invested in.” The panel's final expert, Nikita Lazarev, Senior Sponsorship Manager at Parimatch, also explained the growing possibility of athlete sponsorships should club partnerships become even stricter. Lazerev took his firm’s recent partnership with Conor McGregor as an example of how gambling sponsorships can get the most out of athlete representation whilst enhancing the company’s marketability. Lazarev commented: “It really depends who you partner with and it’s very important that you not just partner with an athlete but some who
IT REALLY DEPENDS WHO YOU PARTNER WITH AND IT’S VERY IMPORTANT THAT YOU NOT JUST PARTNER WITH AN ATHLETE BUT SOME WHO CAN SPARK THE INDUSTRY
54 SBC MAGAZINE • OCTOBER 2020
can spark the industry. “Conor McGregor is a great example in my personal opinion because he always gets attention. If he goes on Twitter, he posts something it goes viral. He goes on Instagram and says something, it goes worldwide. “If you have this opportunity to bring the athletes and do stuff with them, it is very important that you do so.” However, Simpson had doubts over the use of athlete sponsorships, with the brand director emphasising that the gain that the brand could garner might not be worth the potential risks to the company’s image. He said: "You know, it might be a little bit controversial, but it's my own personal opinion that when you're looking at these the influencer type approach, yes there is value in but I very much think that its hard time to sort of improve your brand equity through an influencer. But it's very, very easy to devalue your brand and continue if you get the wrong influencer. “Bless him for example, Peter
ACTUALLY, YOUR LEVEL OF INVESTMENT OUTSIDE OF THAT IS ALMOST MORE IMPORTANT THAN THE SPONSORSHIP MONEY ITSELF Schmeichel, he must have been with 15 different operators, right? If you just type his name in along with betting, you won't get anywhere with your brand if you're just coming to sign him up now. This is because he's been used so many times, and in my opinion, that would devalue your brand equity.” As we moved through the panel, ably moderated by Martin Calvert, marketing director at ICS-digital – Spotlight Sports Group, there was much debate about the future for football sponsorship, with different methods and a variety of marketing strategies discussed. Nevertheless, the panel ultimately agreed that no matter the restrictions there will always be a market for gambling sponsorships in football in some way, shape or form. •
www.betssongroupaffiliates.com | Enjoy gambling responsibly. BeGambleAware.org 18+
Live events near
SBC GOES DIGITAL IN CIS AND US, BEFORE LIVE RETURN IN 2021 AS THE END OF 2020 APPROACHES, SBC continues
its efforts to keep the betting and gaming industry connected with further virtual events, but can also now reveal details of the return of its live events programme for 2021
T
his year’s unprecedented conditions have presented the events industry with huge challenges. SBC has responded to the difficulties in innovative fashion with the launch of its digital events series, which has helped businesses from the gambling sector to continue to share knowledge, build relationships and drive sales. The series has included both large-scale global conferences and exhibitions, such as SBC Digital Summit, and specialist regional events dedicated to markets that have started to attract
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the attention of the international industry, such as those in Latin America and Africa. The 2020 programme will end with two more regional events, one focused on the betting and gaming industry in the CIS and the other on the vast potential created by the legalisation of
WE’RE DELIGHTED TO BE STAGING OUR FIRST EVENT FULLY DEDICATED TO THE CIS REGION
sports betting in a growing number of US states. SBC Digital Summit CIS, organised in association with Sports Media Holding, will take place on 4 - 5 November. It is set to feature an online conference, an interactive display area showcasing the latest products tailored for the region, and a number of networking roundtables. More than 70 expert speakers will tackle an agenda that includes sessions evaluating the exceptional opportunities in Ukraine following the introduction of new legislation, the planned regulatory regime in Uzbekistan, and the lessons Georgia’s neighbours can learn from the success of its gambling industry. In addition to panels offering practical insights on topics such as effective marketing strategies, responsible gambling, and payments provision in local markets, delegates can expect
MARKETING
THE STABLE OF BRAND PARTNERS THAT WE ARE ABLE TO SECURE AMONG OUR SPEAKERS IS TRULY SECOND TO NONE
to hear from some of the region’s most influential executives on broader issues such as the economic impact of developing a regulated gaming industry, and the importance of strong operatorsupplier relationships. Rasmus Sojmark, SBC’s CEO & Founder, said: “At our previous events, conference sessions about opportunities in the CIS have always proved popular, so we’re delighted to be staging our first event fully dedicated to the region. “SBC Digital Summit CIS will shine a light on the rapidly-changing betting and gaming industry in a number of countries, providing ideas for established local operators and in-depth information for businesses considering entering the markets there.” To say that much has changed since SBC’s first US event in April 2019 would be an understatement, whether referring strictly to the sports betting sector or to wider society. There is plenty for the industry to debate and they will have the opportunity to do it at Betting on Sports America - Digital 2020 on 1 - 2 December. The eight-track agenda for the virtual conference focuses on key issues such as the impact of the rapid post-PASPA growth of the US sports betting industry, the implications of the Presidential election result, and how operators can adapt to the changing regulatory environment and the tough economic conditions expected in 2021. Delegates can also expect content examining M&A activity in the industry, sports integrity, the latest technology for sportsbooks, and the trend for sports teams, venues and broadcasters
Sue Schneider, SBC’s VP Growth & Strategy, Americas
to sign partnerships with betting operators. A comprehensive agenda requires a high-level speaker line-up to deliver valuable insights, and BOSA Digital certainly has one. The roster of 130 senior executives and specialists features some of the highest-profile leaders in the North American industry, including MGM Resorts International CEO and President Bill Hornbuckle, William Hill US CEO Joe Asher, theScore Chairman and CEO John Levy, and Roar Digital CEO Adam Greenblatt. Sue Schneider, SBC’s VP Growth & Strategy, Americas, said: “The stable of brand partners that we are able to secure among our speakers is truly second to none. Attendees have
come to expect conference sessions that are unparalleled in both subject matter and presenters. BOSA Digital will be no different with MGM Resorts International and William Hill US among our keynotes.” The event, which is free to attend, will also have an interactive product display area where operators will be able to learn about the next generation of products and solutions from international suppliers, while there will be further opportunities to connect during the programme of virtual networking roundtables.
The return of live events While digital conferences have proved a valuable way for the industry to stay connected during 2020’s unprecedented conditions, the face-to-face interaction only possible at physical events has been sorely missed. SBC will restore that in 2021 by staging conferences and exhibitions in Malta, New Jersey, Barcelona, Colombia, and London. Sojmark said: “After what has been a challenging year, we’re really excited about the prospect of staging a full
AFTER WHAT HAS BEEN A CHALLENGING YEAR, WE’RE REALLY EXCITED ABOUT THE PROSPECT OF STAGING A FULL PROGRAMME OF PHYSICAL EVENTS IN 2021
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Live events near
programme of physical events in 2021. “Our sponsors and delegates are equally enthusiastic about the return of live trade shows and the additional business opportunities they lead to, so it’s great to be able to announce five events for everyone to add to their 2021 calendars.” The programme opens with CasinoBeats Summit 2021, which takes place at the InterContinental in St Julian’s, Malta on 22 - 24 March. The event is part of Malta’s Spring iGaming Week, which SBC will deliver in conjunction with its partners at KPMG Malta and GamingMalta. In addition to a high-level conference, the event will provide an opportunity for innovative online casino and gaming suppliers to exhibit their latest products to an audience of senior decision makers from both Malta-based and international operators and platform providers. The exhibition will include a special Game Developer Showcase to allow studios to present recent launches and forthcoming titles for 2021. It will be accompanied by Game Developer Awards, which are to be voted on by a panel of judges and by the audience on the day. CasinoBeats Summit will close with the Molly’s Malta Game poker tournament, which will be hosted by Casino Malta and US poker legend, author and entrepreneur Molly Bloom. The second major SBC event of the year will be Betting on Sports America 2021, which returns to its home at
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MARKETING
Meadowlands Exposition Center, New Jersey in the new date of 8 - 10 June. The largest dedicated sports betting conference and trade show in North America, BOSA’s second live edition will see a gathering of the key decision makers in the fast-growing US industry. The event’s expo therefore offers an unrivalled opportunity to showcase new products and high-value services to an audience of operators who are actively expanding into the markets being created by more states legalising betting.
IT’S GREAT TO BE ABLE TO ANNOUNCE FIVE EVENTS FOR EVERYONE TO ADD TO THEIR 2021 CALENDARS SBC Summit Barcelona 2021, which takes place at Fira de Barcelona on 21 - 24 September, will provide one of the year’s most important business opportunities for the industry, as senior executives from sports betting, casino, and lottery operators from around the world travel to Catalonia for a comprehensive conference covering every major regional market and vertical, exhibition, and programme of networking activities. The venue for SBC’s flagship event has an 18,000 sq m exhibition space, which will be divided into separate zones for suppliers from the sports betting, casino & gaming, payments & compliance, and affiliate & marketing sectors. There is also a ‘Big Stage’ auditorium for major product launches and the most indemand conference sessions, which will
take place in front of an audience of decision makers and the most influential industry media. Following the success of SBC’s first dedicated digital event for the Latin American market earlier this year, the company will stage a physical edition of the SBC Summit Latinoamérica conference and expo in Cartagena, Colombia on 27 - 28 October. The show will provide a forum for operators in the increasingly important markets in Colombia, Brazil, Peru, Argentina, and Mexico to connect with the leading international suppliers. SBC returns to its home city of London for its final major event of the year, when Chelsea FC’s Stamford Bridge stadium hosts Betting on Sports Europe 2021 on 9 - 11 November. The conference attracts a gathering of the senior teams of market-leading operators from across Europe keen to learn about the latest developments and trends, emerging opportunities, and next-generation technology. The focused nature of the audience makes the associated expo and networking events an ideal setting for suppliers to connect with target customers and discuss products that can give operators the competitive advantage they are searching for. • For further details about SBC’s 2020 and 2021 events programmes, visit www.sbcevents.com or contact sales@sbcgaming.com.
Untapped payments scene
ASTROPAY: AFRICA THE PLACE TO BE IN FIVE YEARS TIME SBC: What is the state of play for payments in Africa? ML: There are differences between the African countries and each one has individual needs, but it is clear that there is an ongoing shift from traditional payments towards cashless in all of them. This drift has been accelerated by the pandemic all over the world and Africa is no exception. In our opinion, the future of payments in the continent is in taking advantage of new technologies, where e-wallets and real time payments look really promising. Even though in many African markets, mobile payments have been dominated by telecommunication services providers like M-Pesa, none of them is continent-wide. African consumers tend to be very local, and this is the reason why the balance leans towards national brands. With a population that rounds 1.2 billion people - equivalent to 16.72% of the total world population - and a median age of 19.7 years, Africa is in the sights of international companies that want to develop their operations in this untapped region. SBC: How does it compare with Latin America? ML: In our experience, when speaking about emerging markets we can say that the multiplicity of countries, cultures and regulations these two continents have requires a great deal of adaptability and flexibility. We have a wide experience in dealing with the specificities of
AFRICAN CONSUMERS TEND TO BE VERY LOCAL, AND THIS IS THE REASON WHY THE BALANCE LEANS TOWARDS NATIONAL BRANDS
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ASTROPAY IS JUST ONE of the international companies with Africa in its sights. The company’s CEO Mikael Lijtenstein discusses the state of play for payments, the demand for change amongst the young population, and why e-wallet solutions like One Touch are helping the continent’s cashless catch-up
PAYMENTS
emerging markets where we have learnt that it is important to work hand-in-hand with local payment methods, especially in Africa where local brands are really strong. In most of these countries, the levels of financial inclusion are low which leaves an open door to reliable payment solutions that fill the gap. It is important for operators to keep pace with the new payment options customers want to use. SBC: Has a slower shift to digital payments, against for example Europe, been more cultural or technical? ML: Digital payments require technological infrastructure as well as people adapting to cashless culture. Regarding technology, African countries have significant differences among them in their technological development which affects the availability of electronic payments continent-wide. But as a large part of its population is young and they demand for such payments, sooner or later they will have to meet their requirements by offering a broader range of experiences. African consumers have shifted away from a cash economy to rely on mobile devices and we believe this is the main gateway to digital payments. User experience is a key factor when promoting contactless payments as it has to be intuitive and as natural as possible for the consumer. We all have some responsibility in easing this transformation process and making it accessible to people. This is why we devote many resources to developing a good UX. As payment providers we have to adapt to the needs and reality of the population segment we want to reach.
AFRICAN CONSUMERS HAVE SHIFTED AWAY FROM A CASH ECONOMY TO RELY ON MOBILE DEVICES AND WE BELIEVE THIS IS THE MAIN GATEWAY TO DIGITAL PAYMENTS SBC: Is the standard African operator aware of the digital wallet advantages? ML: We can highlight the benefits One Touch offers to merchants, starting with a single integration through an auto enrolment channel, with little
to none IT intervention required on the merchant side. There is also the possibility of identifying users from a single code, allowing greater control over the transactions and minimising risk. Merchants can receive deposits with a simple "touch", with automatic approval for recurring users, generating greater fluency and less friction in the interaction between the merchant and its customers. Then there is the KYC verification and identification control, access to analytics and reports, as well as fraud alerts. On the user side, a multi-currency
DIGITAL PAYMENTS REQUIRE TECHNOLOGICAL INFRASTRUCTURE AS WELL AS PEOPLE ADAPTING TO CASHLESS CULTURE
IN MOST OF THESE COUNTRIES, LEVELS OF FINANCIAL INCLUSION ARE LOW WHICH LEAVES AN OPEN DOOR TO RELIABLE PAYMENT SOLUTIONS THAT FILL THE GAP
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Untapped payments scene
PAYMENTS
THERE IS THE POSSIBILITY OF IDENTIFYING USERS FROM A SINGLE CODE, ALLOWING GREATER CONTROL OVER THE TRANSACTIONS AND MINIMISING RISK
wallet can be used in local currency or American dollars. Users can set auto-approve for a specific merchant so deposits can be made with one touch without leaving the merchant's cashier. Also, if the user has no balance, he or she will be able to purchase online seamlessly when confirming the transaction directly from an adopted payment method such as a credit card. SBC: How is a company like AstroPay helping Africa to play catch up? ML: The experience gained after more than 11 years working in emerging markets gives us the flexibility required to enter a diverse territory such as Africa. We offer a variety of local payment methods which consumers recognise and feel familiar with. As a B2C company our focus is on end consumers. We constantly receive feedback from them and use it to make their payment experience better. This is also one of the reasons why we developed One Touch, a payment solution that is easy, quick and safe to use. SBC: What do you expect the situation to be like in five years-time?
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AFRICA IS A FAST-GROWING SOURCE OF OPPORTUNITIES FOR INTERNATIONAL OPERATORS THAT ARE ATTRACTED BY THE SCALE OF THE YOUNG POPULATION
ML: In our opinion, Africa is a fastgrowing source of opportunities for international operators that are attracted by the scale of the young population. Also, there will be an important adaptation to new technologies which will carry out new ways of digital payments, as well as modifications to the existing regulatory framework. It will definitely be the place to be in five years-time. •
What are APM’s?
CARDS: THE TRADITIONAL PAYMENT METHOD OF THE OLD WORLD BUT NOT THE NEW ONE PAYMENT METHODS that
were once considered alternative have rapidly transitioned and grown into the mainstream as card payments begin to take a backseat
Isabelle Delisle, Global Head of Payment Solutions at Pinnacle
T
he gambling industry, just like many others, has been forced to accelerate the way it embraces alternative payment methods (APM) as the digitalisation of transactions grows - both with advances to technology and in light of the pandemic. The exploration of these alternative payments was prevalent at the SBC Summit Barcelona - Digital, where leaders from the betting and payment sector came together to define what is an APM and their evolved role in the payment ecosystem.
IT SEEMS NOW THAT AN APM IS MORE CRYPTO VERSUS WHAT IT USED TO BE Taking place on Payment Expert track, which was sponsored by Neosurf, the firm’s CCO Andrea McGeachin commenced the discussion on the ‘Future of Alternative Payment Methods’ panel. She challenged the panel to detail their description of what an APM is. Isabelle Delisle, Global Head of Payment Solutions at Pinnacle, reflected on her early experiences in sports betting as she stated: “When I first started in the industry an APM was anything that wasn't credit cards. Those aren't alternatives
64 SBC MAGAZINE • OCTOBER 2020
anymore, they are the meat and potatoes, that’s where most of the volume comes in, they just aren't cards. It seems that now an APM is more crypto versus what it used to be.” Vasilije Lekovic, Director of Gaming at Trustly, emphasised: “In my view, the alternative payment methods should be methods that aren't commonly used
in the market - so there are traditional payment like cards and wallets which in specific markets are the most used ones, so the alternatives should be any payment method that are disrupting the common ones. “I think the future of what makes APM’s smart is innovation speed and security. It helps solve problems that both consumers and merchants
PAYMENTS
are facing today. Payments need to be simple and seamless but it's not enough to help move money anymore, APM’s need to become more than just payments, they need to offer help to merchants with KYC or to help users skip the verification process. I believe this is the future of APM’s. “Localisation is extremely important as it comes with brand recognition and knowledge of the market. However, APM’s could be used to change customer behaviours in a positive way. “I think the change is inevitable and I think that banks are already
Vasilije Lekovic, Director of Gaming at Trustly
I THINK THE FUTURE OF WHAT MAKES APM’S SMART IS INNOVATION SPEED AND SECURITY changing. Markets such as the UK were very quick to implement new API’s and identification methods. All of these activities and actions are improvements that will bring in improved user experiences. So I believe that inevitably banks will move into the direction of innovation. “I think the future looks bright, I think there will be lots of opportunities
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What are APM’s?
PAYMENTS
Tim Heath, Coingaming Group
for APM’s to use lots of technologies to improve. When it comes to bank payments there is the open banking initiative which is opening up capabilities for improvement. I think there are several markets across the world where we can bring payments closer to consumers. “The new technologies will help payment providers to offer more than just payments. It will help make a seamless experience for the user regardless of industry, and the new technologies and innovations are making the future exciting. “In my view, it depends on the strategy of the operator. A lot has to do with user profiling, however, the business strategy will influence the payment methods.” To expand upon these points, McGeachin brought in Lior Segal, Director of Payments at The Stars Group, who took it a step further by stating his belief that - in the not too distant future - cards and wallets could become APM’s. He explained: “The transition that we see in technology and access to payment solutions and open banking, as well as the way we are using the technology to pay for things - the approach that Amazon has taken for example, I think that current APM’s will become the new main payments in the future.
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“Even if you look at Apple and Google Pay, those that use the old rails, maybe, they are going to transfer forward their payment method. If you look at Africa and Latin America, it’s clear that credit and debit cards can be the payments solution of the old world and not the new one.”
THE HARDEST PART IS EDUCATING PEOPLE. IF YOU LOOK AT UBER, YOU NEVER CALL A TAXI DISPATCH NUMBER AFTER YOU’VE USED IT FOR THE FIRST TIME He also revealed his belief that gaming provides a different challenge as firms expand to alternative regions, and that the importance of providing a myriad of payment options can’t be underplayed when it comes to customer engagement. He highlighted Brazil as a strong example of a market that requires specific payments methods for each demographic. Tim Heath, Founder of Coingaming, agreed and added that it’s ‘good to see a technology built so long ago is now being considered an alternative payment method’.
He went on to underline the potential role of digital currencies as APM’s evolve into the mainstream: “My perspective is more horizontal in that some markets that may be considered alternative become primary,” he said. “So, take Japan for instance, we are finding that crypto is your primary method and your bank payments and credit cards are your alternative. “However, that may be very different in Europe where your open banking is changing the way things are working and then wallets in some of the other regions, so it’s very different in each jurisdiction. “The hardest part is educating people. If you look at Uber, you never call a taxi dispatch number after you’ve used it for the first time. What we found was that once players can onboard money from their local payment methods into crypto, the money can flow in and out of a gaming merchant incredibly seamlessly with no costs. “So for us, it’s all about education on how we integrate local payment methods for people to come into the crypto world, which is basically a digital casino chip. The other side of the coin here is also from a merchant perspective of how easy you can reconcile your money out without being done under forex and you need to reconcile seamlessly and quickly.” •
Breaking from tradition
LOTTERIES ARE NO LONGER JUST LOTTERIES JARI VÄHÄNEN, formerly of Veikkaus and now a Partner at The Finnish Gambling Consultants OY, said that lotteries who have expanded their product range have fared much better than those who have stuck solely with their core business
Jari Vahänen, Partner at The Finnish Gambling Consultants OY
V
ähänen was joined by SISAL’s Head of Lotteries Concession Renewals Camilla Folladori, Danske Spil’s Sportsbook Director Jens Nielsen and PinProjekt COO Vedran Katic to predict the future role of lotteries and assess changes made in recent years. Taking place at the SBC Summit Barcelona – Digital, the discussion - moderated by GLMS President Ludovico Cavi - saw Vähänen kick off proceedings by highlighting some of the key areas in which traditional lotteries have been forced to adapt. “Lotteries have made big changes in three areas,” he explained. “Firstly, they have expanded the product portfolio into other areas not just lotteries. “European lotteries for example are selling other products such as Veikkaus that now sell all gambling products. Lotteries who have expanded their product range have managed quite well, better than those who have stayed solely in the lottery business. It is important, however, that companies remember products and customer service remains at a high level. “Secondly, some lotteries have expanded their operations to other business areas such as technology. Personally, I don’t know if this is good. And third is that I’ve noticed lotteries have traditionally operated as a monopoly in one country. But now they are expanding into other countries. This might make sense if they can
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LOTTERIES WHO HAVE EXPANDED THEIR PRODUCT RANGE HAVE MANAGED BETTER THAN THOSE WHO HAVE STAYED SOLELY IN THE LOTTERY BUSINESS utilise scalability in the business.” Regarding her organisation’s international plans, Folladori said: “We
have a 70 year-old heritage and we’ve stayed in Italy until 2017. We decided to internationalise in 2017 and in the last two and a half years we have entered Spain and Morocco as well as Turkey. “There are a number of factors driving our change. The two most important drivers that we took into account are an acknowledgement of the market potential outside Italy and second we assessed our internal
LOTTERY
Ludovico Cavi, GLMS President
capabilities to see whether this path was successful or not.” Folladori also elaborated upon the process of internationalising and spoke of the necessary factors required for an organisation to make a success of the process, adding: “If you want to start a path of internationalisation you need to have the best structure possible but you also need to be brave and start it. “Every time you move from the status quo to a new move there will be a number of factors that you can see as hindering your success and make you decide it’s better not to move. What you do need is a leadership/ management team that is brave enough to overcome that challenge and infuse optimism in the company and commit deeply to this path. “If you don’t have this prerequisite then it’s too hard to be brave enough to start it. To me that is the most important part in transiting from domestic to international. It’s good to have structure, but you need to be brave.” Internationalisation across the globe has no doubt brought about competition for local operators. One such operator is Danish incumbent Danske Spil, whose Sportsbook Director
Camilla Folladori, SISAL’s Head of Lotteries Concession Renewals
Nielsen informed the panel as to how his organisation was approaching these challenges. He stated: “We are lottery but our company is based on sports betting from day one. Danish people associate us with sports betting as well as lottery. We now have a licensed market and I would say that the competition began 20 years ago with the emergence of online sports betting.
the global picture; we aren’t as big as most of our competitors. Some of the big licensed operators have licences in Denmark, it’s a fact we have to face and that’s why we try to engage with good suppliers to fit our strategy. “We focus on the areas where we believe we are experts. We match our in-house resources with solutions we can find from the outside and constantly review the mix we have in place.”
IF YOU WANT TO START A PATH OF INTERNATIONALISATION YOU NEED TO HAVE THE BEST STRUCTURE POSSIBLE BUT YOU ALSO NEED TO BE BRAVE AND START IT
Nielsen also discussed the importance of digitisation and modernisation in regards to the future of Danske Spil: “Retail business is still very relevant and quite popular in Denmark,” he continued. “What we have done over the last few years is modernise the user experience in the shops. “We still have the old fashioned betting coupons but it’s clear that our clients are happy with digital and updated solutions. This has been a successful journey so far and that’s the way we will go forward. I’m sure it will be the most popular road ahead in retail, omnichannel digital solutions.”
“What changed from 2012 is a more level playing field. Licence holders have the conditions now in terms of regulations, player control, taxes. Rather than looking at them as challenges I’d say we always try to turn it into opportunities. We try to be a safe, user friendly option for Danish players, and we want to be competitive within the responsible boundaries. “One big challenge though is that in
Meanwhile, Katic, who likened the industry digitisation to that of everyday life, stepped in to say: “Keeping the player in mind is key because we are
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Breaking from tradition
Jens Nielsen, Danske Spil’s Sportsbook Director
aware that their habits change due to changes in the entire world. We can see instances in having on demand TV making standard TV redundant for example. “This means that consumers are taking advantage of instant communication and information where they are connected to one system where they have the ability to access content at any time and they are bombarded from all sides. “This is beginning to influence gaming. We have always known that everything will switch to online and mobile. The reason is that the system we live in is instant communication, we have a desire for instant gratification. Our games we developed are based on live content which means we brought up the frequency of lottery to an incredible standard. “We keep part of the operations mechanical and live but we brought up the speed a lot. We found that as we create a new demographic we also get more engagement from existing players because when they enter the lottery game that has one flow after the other they keep more engaged. Without understanding the world we live in it would be impossible to create a game such as this.” Katic also revealed that his
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LOTTERY
Vedran Katic, PinProjekt COO
organisation benefited, on a relative basis, from the COVID-19 pandemic due to the sudden demand for content. “Coming into COVID-19 it was all unclear,” he said. “In reality we received a lot of requests and closed many deals with operators looking for additional content when there was a lack of, especially live content. “Our product is live and we received a huge number of requests and lots of integrations, more than we expected under current circumstances. Some
KEEPING THE PLAYER IN MIND IS KEY BECAUSE WE ARE AWARE THAT THEIR HABITS CHANGE DUE TO CHANGES IN THE ENTIRE WORLD reasons were because of lack of content and because lotteries have started exploring additional verticals. “I would say it positively impacts our business and in the long run the operators of lotteries will start to value additional site content more and more and it’s not only lotteries but all operators. They all want to bridge the gap and secure themselves if another situation like this would arise. I would stress the importance of new games
which can be available as live content and I feel bad about profiting from COVID-19 but it was the case.” Similarly to Katic, Vähänen also provided his opinion based on data gathered throughout the COVID-19 period, which depicts a bleak future for lotto operators who are yet to begin the digitisation process. “What we noticed during COVID is that lotteries who have digital business in the last years have survived with less damage than others,” he said. “I wonder why there are still so many lotteries who have a fear of making necessary changes. “Lotteries should do things in a totally new way or they won’t have a way to manage in the future. Too many lotteries trust the monopoly position. They can’t do that anymore. Although they have monopolies in their own jurisdictions in principle, but, in practice they all face competition and need to find a modern way to run business which should be based on data. “If you want to utilise data you have to digitise business. It might already be too late to start this digitisation process but lotteries who have not done this yet should at least try as I predict their future being bad if not.” •
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