SBC Magazine February 2020

Page 1


Data challenges ahead for cricket

Affiliates' fresh focus on safer gambling



CSR - the new dividing line

Research vital to new market growth

John Levy theScore

Taking a holistic approach to sports betting

7-9 Superbet CEO Interview

• Johnny’s at the wheel: Hartnett to drive Superbet’s online growth

10-21 Sports Betting Guide to ICE


• Germany 2020: Betting faces its ‘regulatory nebula’ • Is FTP the best way out of the bonusing woods? • Industry looks forward to landmark year in Latin America • Why you must choose supplier partners wisely to take US lead

23-51 Sports Betting

• John Levy, theScore: No bugaboo - The natural way to engage with sports • Cricket: Why ‘The Hundred’ hopes hinge on high-quality data

3 APRIL 2020

• Howard Chisholm: Downsizing the retail industry to suit new regulations • Sportradar upbeat on tennis outlook after positive integrity impact

18:30 - 01:00 | Grand Ballroom, London Hilton Park Lane




Industry Boxers





• Optima: Combining to deliver the strongest one-stop-shop for sports betting • The four pillars supporting state lottery success for Scientific Games • SIS on live betting: Evolving your product offer with 24/7 content • SBTech: Powering US sportsbooks with best of breed technology

52-61 Casino

• Microgaming and Swintt on making responsible gaming the norm • Operator and charity perspectives clash as CSR divides opinion • Defeating the ‘laddish’ stigma attached to the gambling scene

63-69 Payments SBC Charity Boxing in partnership with Oliver’s Wish Foundation will host an incredible evening of boxing and fundraising for the betting and gaming industry.

All guests will be treated to an all-inclusive evening with champagne reception, luxurious 3 course dinner, and complimentary drinks.

• Pinnacle: ‘We’re not talking about the future… we’re already there’ • Understanding payment complexities when entering an emerging market

71-78 Marketing

• Squashing the outdated ‘them’ and ‘us’ perception of affiliate marketing



• Football focus for Coingaming’s LatAm growth strategy • Why supporting safe gambling is a top 2020 goal for Better Collective

The SBC Magazine is brought to you by SBC - Sports Betting Community: EDITORIAL TEAM: Andrew McCarron, Luke Massey, Craig Davies, Ted Menmuir, Joe Streeter, Chris Murphy, Erin Gallagher, Liam Machin, Matthew Ramirez SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Neil Judson DESIGNED & DELIVERED BY Better Mags ( 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: WEB:

For more information, please visit 3

INTRO Luke Massey Head of SBC Media



A MAJOR VIRTUAL SPORTS EVENT The industry top revenue virtual football makes a qualitative visual leap forward, becoming the most authentic 3D football in the market.


elcome to the first edition of SBC Magazine for 2020! It was meant to be a fresh start. Time for the industry to get its ducks in a row in response to the biggest issues from the year gone by, in particular problem gambling and underage gambling, as well as a current favourite topic for regulators across Europe - advertising. Yet in the UK at least, fallout from the third round of the FA Cup - for which opportunities to watch the matches on betting sites vastly outweighed those with the main TV broadcasters - quickly put paid to hopes that the focus on Brexit would allow for a quiet start to the decade. This controversy was quickly followed by a Guardian report ‘exposing’ the reliance on VIPs and their vulnerability to gambling related harm. Just a week into the new year, and it was already obvious that the industry would not be able to sidestep a repeat of 2019's turbulence - especially as a review of gambling legislation is soon to follow in line with the Conservative Party’s JUST A WEEK INTO manifesto promise. THE NEW YEAR, AND IT However, you shouldn't WAS ALREADY OBVIOUS believe everything you read about the industry. Figures THAT THE INDUSTRY from the latest Health Survey WOULD NOT BE ABLE TO for England assessed problem SIDESTEP A REPEAT OF gambling rates using two 2019'S TURBULENCE different measures, DSMIV and PGSI, both of which recorded levels below the generally accepted rate of 0.7% (0.5 and 0.4% respectively). Similarly, the 2019 Young People & Gambling survey produced on behalf of the UK Gambling Commission found that 11% of 11-16 year olds surveyed had gambled in the past seven days with their own money. Still too high, absolutely, but the numbers represented a significant drop from the 14% in 2018.

Many of these issues are in the limelight more than ever before, but are actually trending in the right direction. And the same could be said about advertising. Figures released by ASA late last year proved that children’s exposure to gambling adverts, relative to adults, has fallen from 38.6% in 2008 down to 20.4% last year. Still, though, the perception remains that the gambling industry is either unaware of or not inclined to take the revenue hits to sort its problems. Something that maybe rang true in years gone by, but times have certainly changed. Just last month, the UK Gambling Commission confirmed a credit card ban for all forms of remote gambling and for non-remote betting with effect from 14 April 2020, in response to last year's call for evidence and subsequent consultation. A quick look at last year also reveals bigger pledges to problem gambling charities, a new 'National Strategy to Reduce Gambling Harms' and formation of the Betting and Gaming Council (BGC), which was launched to raise the standards for fair and safe betting. And that’s not to mention revised CAP guidance for betting adverts and the industry-wide voluntary ‘whistle-to-whistle’ ban. There is clear evidence of the BGC mission throughout this SBC Magazine, as we take a tour of some of the key issues facing companies involved in sports betting, casino, payments and marketing. Inevitably, responsible gambling, emerging markets and technology advancements are a running theme across all four sections. The magazine also starts off with a look at some of the key sports betting-based sessions at ICE, the industry’s favourite early year gathering, including developments in Germany and Latin America, as well as an alternative to the bonus - another long-term regulatory foe. As a company, SBC continues to fight the industry’s corner. In 2020, we are running four major conferences starting with the second CasinoBeats Malta (24-26 March). We then move into Betting on Sports America, which returns to New York and New Jersey from 28-30 April, and Betting on Sports Europe in London (2-4 June), with all three of these events building towards the re-branded SBC Summit in Barcelona (8-11 September). The first SBC summit promises to be our biggest event yet. It will feature 200+ exhibitors and eight conference rooms housing over 70 hours of content about sports betting, igaming, payments, digital marketing and safer gambling. We recommend you drop by our stand (S3-207) to find out more! 5



Superbet hired former Paddy Power Betfair executive Johnny Hartnett as CEO last summer to focus on platform development and building the operator’s profile in Central and Eastern Europe


ust short of six months after taking the role, we caught up with him to discuss the cash injection from Blackstone and making the right investments in both tech and talent, as well as where he can make the quickest difference to the Romanian-based operator. SBC: Superbet seems to have a higher profile than many Eastern European bookmakers. That must give you a good head start for what you want to do with the company? JH: Well, I think Sacha (Dragic) who founded the company has always been looking outside for opportunities to grow. He’s intellectually curious about tech and has invested significant money and energy behind building tech platforms that can work, not just in the home markets but outside of that as well. So I think that in part has generated the kind of interest in the brand externally. And also there’s been a number of people who have joined from operators in more established markets to drive its profile. SBC: What are your plans then? What have you been brought in to do? JH: The business is large and has a good brand and footprint across

...THE OBJECTIVE FOR US IS TO TRY AND GROW OUR FOOTPRINT AND REVENUE AND OUR CUSTOMER BASE. WHERE WE CAN DO THAT ORGANICALLY WE WILL, BUT TRYING TO GO LIVE IN MULTIPLE MARKETS SIMULTANEOUSLY IS PROBABLY NOT PRACTICAL some markets in Central and Eastern Europe. But there’s an opportunity to export the model into some other markets in the region, which presents a reasonable opportunity for growth. The online business is relatively new, in that it only launched in 2015, so there’s still plenty of headroom for growth. The launch of the native android iOS apps with gaming and sports has only happened over the course of the last 12 months. They’re

providing a pretty good platform for growth, and hopefully this can be replicated internationally. As for what I can do, I think they’ve brought me here to try and help steer the ship with regards to some of those opportunities which is pretty exciting. Obviously the business is pretty well capitalised now given the transaction with our partners from Blackstone last year. There’s also been an injection of 7


talent into the business, and a number of hugely talented people here who built the business to where it is today. So Sacha felt it was the right time to bring in someone externally to steer the ship. He’s someone I’ve known for a number of years and respected for the brand he built, so I jumped at the chance to come here. SBC: You mentioned the influx of cash from Blackstone. Does that mean you’re going to be looking for M&A rather than organic growth in the markets you’re in? JH: Well, the objective for us is to try and grow our footprint and revenue and our customer base. Where we

can do that organically we will, but trying to go live in multiple markets simultaneously is probably not practical. So, if situations arise for inorganic opportunities we’ll certainly look at them and we’re open-minded about looking at any opportunity that comes our way. But we don’t have predefined plans about doing one or the other, it’ll be on a case by case basis. SBC: You’ve already touched on Superbet’s investment in tech; you acquired a partner not soon after you joined the company? JH: Axilis had been a partner of Superbet for a while; it was previously a B2B engineering company that


I THINK PEOPLE RECOGNISE THAT TECHNOLOGY CAN BE A KEY DIFFERENTIATOR, PARTICULARLY THE EXTENT TO WHICH PEOPLE CAN HAVE IT IN-HOUSE partnered with businesses in the US but it had been working on Superbet engineering over the course of the last couple of years. It allowed us to bring in Bruno Kovacic as CTO. He was involved in Microsoft and he’s well known in the technology community in Zagreb. And he has helped build a platform

that is scalable. Once we had someone with those skills, it made sense to try and bring them in-house to work as part of the Superbet Group rather than just as a B2B provider. SBC: It seems to be a big arms race to own your own technology these days, as we’ve seen through deals between 888 and BetBright, and more recently


DraftKings and SBTech. Why is it so important? JH: Technology is a key enabler of the strategy for almost any betting business, over the course of the last couple of years and it will be in the future. I think people recognise that technology can be a key differentiator, particularly the extent to which people can have it in-house. This acquisition is reflective of that. SBC: You were talking about other markets where you can make a difference. Can you share which ones you’re going to be specifically focusing on? JH: Yeah, obviously we’re already live in Poland and Romania and there are several other markets in the region that have similar characteristics, where there is full regulation and the idea of multichannel plays well as it has done in the UK previously. I’d rather not be too specific about it, but Croatia, Serbia, Czech Republic and Slovakia are markets with similar size and characteristics. They’re all attractive in one way or another. SBC: Okay, so lots of new potential markets. I’m not too familiar with the retail setup in Romania. Are there dedicated betting premises? JH: They’re dedicated betting shops, so Superbet has over 1,000 betting shops between Romania and Poland. They are fully regulated and primarily focused on sports betting, but also have gaming in them similar to the shops in the UK. And the rollout of SSBTs is starting in those markets as well, which is not as advanced as it is in some other jurisdictions. They look similar to the UK aside from horse racing. The rest of the products in terms of pre match betting, live betting, gaming or lotto all have the same characteristics as the other markets would be accustomed to in Western Europe. SBC: Okay, so what do people in Romania bet on day-to-day if horseracing is not so high on the agenda? JH: Well, it’s pretty much like most of the other businesses, football is their primary driver of both turnover, revenue and customer acquisition. Tennis is also very popular in the region, particularly online and in-play,

but in retail it’s very popular too. So yeah, outside of horseracing, it’s pretty similar to the profile of business you would expect to see elsewhere. SBC: I’m assuming the UK has very little interest given the competition and the taxation at the moment, despite it holding a similar market profile? JH: Yeah, exactly right. It’s not on the agenda at all, not any time soon at least. There were loads of the operators from the UK, but now there’s more attractive growth in investment opportunities elsewhere. I’m seeing people sort of focus on what’s in the US and in other international markets, both organic and M&A, because it feels like there’s better operating environments outside of the UK in the immediate future. SBC: That’s interesting. Are you

...WHEN WE THINK WE’VE GOT A TECHNOLOGY PLATFORM TO GO TO WAR WITH, WE’LL BE COMFORTABLE GOING FURTHER AFIELD TO TRY AND TAKE ADVANTAGE IF WE THINK THE REGULATORY AND REVENUE OPPORTUNITY IS RIGHT keeping a watching brief on the US, or are you concentrating on growth possibilities more locally? JH: We’ll never say never to an opportunity that presents itself to get the brand into international markets. But at the minute our focus is on building out the brand and the technology more locally. And when we think we’ve got a technology platform to go to war with, we’ll be comfortable going further afield to try and take advantage if we think the regulatory and revenue opportunity is right. SBC: And just finally, where can you make the quickest difference for

Superbet? What is your immediate focus? JH: The business has been very successful at building out its retail propositions, and then online propositions. But there’s still lots of headroom for growth in terms of rolling out the full product set and marketing those products. So the focus has been on completing some of the platform development work we have. And in 2020 going to market to promote the brand and the new products that we’ve built, as well as bedding down down the team and making sure we have the right people in place to support. • 9


Regulatory reform


regulatory framework offer little hope for the delivery of any comprehensive future gambling reform


losing its 2019 legislative agenda, the executive of the German Länder (the state) of Hesse disclosed that not a single operator, be it domestic or foreign, had applied to join its sanctioned 2020 sports betting regulatory framework. Eight years since German states agreed to the main terms and conditions established by the ‘Interstate Treaty on Gambling – 2012’, Germany has unequivocally become the industry’s most underwhelming regulatory scenario. Disappointing all industry stakeholders, Western Europe’s richest and most populous nation slumbers towards adopting an undesirable and unwanted federal code for regulating online gambling services, in which the executive of Hesse serves as a ’regulatory placeholder’ assigned with issuing ‘transitional’ sports betting licences. Tasked with ending a near-decade of business and legislative uncertainty, March 2019’s ‘Bundestag - conference of state ministers’ saw Germany’s 16 Länder agree to overhaul interim provisions granted by the existing State Treaty, paving the muchanticipated regulatory foundations for gambling. However, expecting greater clarity and legal oversight for private enterprise, frantic Bundestag debate and deliberation would deliver yet another hard lesson on the German government’s federal legislative limitations stymied by adhering to a further Länder power-sharing mandate, in turn frustrating industry leadership and their exhausted counsels.


“Even though a new licensing process will formally start from 2020, the agreed regulatory approach is somewhat of a blind bargain for operators, as regulators cannot agree on a number of key issues," states Mattias Spitz, Senior Partner at German legal advisory Melchers Law. “As yet the legislation does not solve the conundrum that is German sports betting, forcing the industry to steer through a regulatory nebula perhaps until mid-2021. That is the big question facing operators.”

Entering 2020, all eyes will be placed on Germany’s Bundesrat which has a 12 to 16-month window to clarify its federal legislation, and meet the target 30 June 2021 ‘Fourth Interstate Treaty on Gambling’ deadline. Despite Bundesrat objectives, industry stakeholders hold wellreserved doubts on any meaningful progress being achieved as a

European Commission review lambasted the ‘stopgap measures’ and technical provisions attached to sports betting legislation as failing to meet EU market requirements. Sanctioning a ‘blue letter’ warning, the EC cautioned German lawmakers on enforcing a termination of online casino services, combined with a player spending cap set at €1,000 and further limitations on in-play markets. As the EU business regulatory supervisor, the EC would urge the Bundesrat to discontinue proceeding with developing its legislation – a call that appears to have fallen on deaf ears as Hesse and the Länder of NordrheinWestfalen underline that no changes should be implemented despite EC

objections. Working with diverse stakeholders, Luca Andric, Managing Director of German sports betting association Deutsche Sportwettenverband (DSWV), underlines that industry observers have to understand the ‘conflict between Länders’, which has led to a legislative quagmire. “Some Länder including North

Rhine-Westphalia, Germany’s biggest state are committed to revamping legislation, adding online casino games in the regulation as of 2021,” said Andric, speaking at the Betting on Sports 2019 conference. “However it faces strong opposition from socially democratic ‘city-states’ such as Hamburg and Bremen, in addition to Lower Saxony.” Anticipating conflicts, Andric and DSWV advise industry leadership to be aware of Länder power plays which will shape ‘legislative scenarios and potential market options’ in what is a short timeframe to deliberate on and deliver any form of effective federal framework. Länder concessions may lead to Germany trialling an ‘option model’ in 2021, whereby the 16 states adhere to general terms on a federal treaty, but would be allowed to legislate independently on online gambling services. This would lead to a scenario that “gets operators foot in the door but leaves the German market split,” according to Andric. Preparing for crucial negotiations, Bundestag councillors will seek to avoid a ‘rerun of 2012’, when the executive of Schleswig-Holstein departed the terms of the German

EVEN THE REGULATORS TASKED WITH LICENSING ARE UNABLE TO CLARIFY WHAT IN-PLAY BET-TYPES WILL BE SPECIFICALLY PERMITTED UNDER PROVISIONAL CONDITIONS Interstate Treaty to form its own independent sports betting laws - a scenario that could well become a reality again. Despite its perceived underwhelming regulatory context, Andric maintains that Germany’s gambling reform still holds room for political manoeuvring, which may dictate this year’s regulatory outcomes. “There are still Länder sitting on the fence with regards to gambling,” he added. “One being Bavaria, Germany’s wealthiest state which could back a liberal model, but with likely compromises as there are tensions

European Roundtables •T UESDAY 4TH FEBRUARY, 12:30 to 1:10 PM •W ORLD REGULATORY BRIEFING

between the executive and what members of Parliament want.” However, being forced to monitor Länder movements closely, Spitz warns industry counsel that German regulatory developments should be ‘administered with a health warning’ as operators steer through a myriad of legal opinions and undefined conclusions. For sports betting incumbents, Spitz underlines that the Bundesrat’s unclear doctrine will manifest itself in undefined specifics related to restricted in-play markets and their bet-types. He explained: “The market requires more complexity in what are crucial components for betting operators that appear to be missing. Even the regulators tasked with licensing are unable to clarify what in-play bettypes will be specifically permitted under provisional conditions.” The industry’s rejection of temporary provisions would lead to reprimands by Hesse’s executive, who has warned unlicensed betting leadership of future consequences. Nevertheless following a decade-long wait for German clarity, who can blame operators for not wanting to dance in the dark… • 11

2-4 JUNE 2020

Stamford Bridge, London








New go-to market gateway















Performance Director at SportCaller, unpacks how FTP is helping navigate the regulatory maze, emerging as a genuine alternative to bonusing to boost retention across mature and newly-regulating markets


lthough biblical scholars are still to recognise it as a sign of the impending apocalypse, increasingly stringent regulatory control over the mechanics of sign-up bonusing is rapidly catching up with gambling operators. Consequently, as the adverts for “Enhanced Odds on this” and “Free Bets on that” flap wildly amid these winds of change, the scramble continues to find a more robust alternative with which to replace them as the industry’s best means of effective marketing and advertising. It’s less the beginning of the end, more the end making way for a new beginning. Whilst many rightly view bonusing as a legitimate mechanic for CRM,


certain news publications are fueling the perception that this “targeting” is somehow predatory and unethical. In the face of some alarmist headlines, the search has been on for a new way to retain customers whilst keeping the wolves from the door. Indeed, it was only a matter of time before operators committed to a more ethically robust framework.

IT’S LESS THE BEGINNING OF THE END, MORE THE END MAKING WAY FOR A NEW BEGINNING After all, these shifting sands can coalesce to create a progressive, in-touch industry. Ultimately, such progress will ensure that operators

and their supplier partners can operate with confidence and probity in regulated or newly-regulating markets. And, of course, it’s only a good thing that the industry is finally looking inwards and adopting more socially responsible actions. It is in this evolving landscape that free-to-play games (FTP) continue to find a clear path through the woods of engagement, responsibility and compliance, offering a flexible solution with which to engage and retain an active playing base. That’s an opinion further bolstered by the investor presentation for the proposed Flutter-TSG merger which has listed FTP games as one of six standalone verticals, alongside established tent poles such as the 13


New go-to market gateway

...FTP HAS PULLED UP A CHAIR AS THE GO-TO, COST-EFFECTIVE REPLACEMENT FOR MOVING BEYOND BONUSES AND CASHBACK AS LEGACY REWARD-MECHANISMS Whilst Coral only operate games in the UK & Ireland, it has gone straight for the retention jugular with Correct4, a game that ticks all the boxes of an ongoing successful FTP game – simple to understand, quick to play, available on a timetabled regular basis, with an attainable prize structure and featuring personalised, contextual bet-prompts.

exchange, poker and casino. That’s no surprise, given the importance of Sky Bet’s Super 6 to TSG, but Flutter have truly embraced FTP as a group wide concept for some time now. Beginning with HotShot Jackpot on Paddy Power back in 2016, this was soon expanded to Betfair International (across multiple countries and languages) and to Sportsbet in Australia, swiftly followed by games with TVG in the US, and then more recently FanDuel has headlined a number of high-profile campaigns with FTP games. SportCaller has delivered all these games for the Flutter group and having previously spent so many years with Paddy Power, it’s been fascinating to enjoy such close involvement in what is now a key product and mechanic for a much wider group. On joining SportCaller, the most surprising aspect of FTP was not the customers it delivered, this was taken as a given, but the way in which it kept them coming back – at levels we (in PP) would have killed for across key mass-market events.


FLUTTER ARE NO SLOUCHES WHEN IT COMES TO SPOTTING AN OPPORTUNITY AND THIS HAS CERTAINLY BEEN THE CASE IN THEIR ADOPTION OF FTP Across all SportCaller games, the blended average game-ongame, returning-players ratio sits at 65%, peaking on key events like Cheltenham where daily returning players hit 80% - with over 60% of all Tuesday participants still playing by the closing Friday of the festival. Flutter are no slouches when it comes to spotting an opportunity and this has certainly been the case in its adoption of FTP. It is widely accepted that Beat The Drop was the first genuinely new product innovation in sports betting in recent times, not only fresh but also highly successful with a namecheck in the group’s Q3 update in 2018: “… [we will be] continuing to offer innovative promotional products, such as ‘Beat the Drop’, to acquire recreational

customers at lower costs.” Initially launched as the headline offer for the 2018 World Cup, Beat The Drop (under a variety of pseudonyms) is now a go-to market gateway, opening up untapped territories and audiences. TVG has its own incarnation, FanDuel launched a version to herald the start of the NFL season and Betfair is running localised editions in Germany and Brazil. Pertinently, the regulator in Spain has also just approved the product as an appropriate means by which to target audiences in that territory, fully compliant with local legislation. When it comes to a local approach, however, no-one is running FTP better than the Kindred Group. This was the first tender process that SportCaller had entered, at the heart of which was the requirement to operate at a hyper-local level. This was our gamechanger moment, separating SportCaller from the flock, and winning the procurement process by offering the industry’s first FTP platform. Kindred has truly embraced the platform solution, putting it through its

paces in a way that we had hoped but never expected. This platform solution has placed the controls in the hands of Kindred’s global country managers, from opting in to globally run games to quickly spinning up its own games on local sports, leagues and teams. Having launched its first game in August 2019, by year-end it will have run in excess of 600 games in 17 countries and 13 languages. Given that some of its core territories are amongst the most stringent for legislation, particularly with respect to bonuses, it had no option but to find an alternative. In so doing, it has become the first group to swap out old-school bonusing and embrace FTP as a standalone tool in its marketing armoury.

Given that FTP has become a leading marketing tool for Kindred, they are also innovating to drive deeper engagement. Its latest game, Streakr, allows users to win free bets and cash prizes for correcting predicting consecutive correct results. The player with the longest winning streak scoops a jackpot-sized prize, but in the main this game is aimed at softer marketing to engage and retain players.

Bonuses: The beginning of the end? •T UESDAY 4TH FEBRUARY, 2:00 to 2:40 PM •M ARKETING AND ADVERTISING

The real key point of differentiation in this game is the prize structure which resides at the opposite end of the spectrum from the traditional jackpot model of FTP. It’s a more sophisticated approach with direct weekly costs built into CRM marketing budgets. Not only does this game serve to reward those returning players (over £500k was given away inside the first four months), it also keeps existing Coral customers engaged with its products without any requirement to deposit. These are just some of the reasons why FTP is setting up its own distinct stall in the worldwide marketplace, fostering a fresh vertical for enhanced recruitment strategy, reactivation and retention through deep engagement and organic gameplay on massappeal sporting events. So, if the days of race-to-thebottom bonusing are over, operators’ marketeers and retention teams have now been tasked with fashioning an opportunity out of a challenge. And FTP has pulled up a chair as the go-to, cost-effective replacement for moving beyond bonuses and cashback as legacy rewardmechanisms. In a somewhat standardised sector, left clutching just enough regulatory rope with which to hang itself, FTP can stave off that impending regulatory apocalypse and provide the green shoots of responsible reactivation and retention marketing. • 15


iGaming’s biggest 2020 prospect

“Ultimately, Europe is tough now and getting tougher. European companies are looking at Latin America as a huge growth opportunity.”

JD Duarte

New markets, new opportunities


2019, executives from some of Latin America’s leading operators and suppliers gathered to discuss the challenges and opportunities they will face in the region over the coming year


ith Brazil on the verge of rolling out sports betting regulation, the Colombian market thriving, and other jurisdictions making encouraging steps towards online gaming licensing, Latin America is arguably igaming’s most exciting prospect for 2020. And it is not just operators and suppliers making moves. At Betting on Sports, SBC announced the launch of its Spanish-language news website, the first time SBC has


delivered its market-leading gaming news in a language other than English. During the London panel, discussion focused on the challenges and opportunities facing the sector in Latin America. “When talking about the challenges companies face in the region, the biggest one is access to proper banking solutions,” BetCris managing director JD Duarte told the panel. “There is also a different type of player. The value per player is different, the behaviour is different. It

will take [new entrants] some getting used to, particularly learning how to speak to these customers.” For Graham Luke, a business consultant at Marathonbet, Latin America is a logical next step for European operators. “For European operators there are some synergies with LatAm you wouldn’t get with Asia,” he said. “Language and localisation is easier, there is a natural continuation in the various sports. Setting aside the potential, LatAm is one of the more natural steps to make.” And it is not just operators excited by the possibilities. Andrew Cochrane, chief commercial officer of SBTech, said the provider sees Latin America as a “huge growth opportunity”. “We are always looking at newlyemerging markets around the world for opportunities to expand,” he said.

To capitalise on opportunities across the region, operators will need a market-by-market approach across everything from technology to the way they talk to players. “Latin America is a big and diverse region,” said Alfredo Lazcano, a gaming lawyer for Mexican law firm Lazcano Sámano, S.C. “Around 20 countries, 600 million people. There are a lot of differences between jurisdictions.” Nonetheless, certain trends can be drawn from across Latin America. “There is a relatively low-quality sportsbook product at the moment, so the opportunity is in taking strong features like cash out and request-abet into the market,” added Cochrane. “But of course the player behaviour is different. From our experience in Mexico, we’ve seen there is greater focus on pre-game rather than live betting.” Antonio Salord, LatAm sales director for Magellan Robotech, the B2B division of Stanleybet agreed that while there are similarities with Europe, player behaviour remains very distinct. “We are still in a training phase in Latin America,” he explained. “In Peru, for instance, we have to educate users on how to deposit, how to understand the markets. It is a big difference compared to players in Europe.” Meanwhile, Lazcano said he had high hopes for the future of the Mexican gaming market. “I see Mexico with big gambling operators live already,” he said. “The next step is hopefully to see the market maturing. We need to update regulation to make it clearer for new investment. Mexico is already the second largest market in Latin America, and the only one of this scale where gaming is currently legal. We are hoping for some better regulation over the next couple of years.”

Brazilian bonanza The biggest prize of all, however, is Brazil, where encouraging progress is being made. A licensing framework should be live in the country this year. “Brazil is a good example of a

Graham Luke

Andrew Cochrane

regulator who has listened to the operators,” said Duarte from BetCris. “The first bill came back with a very high tax, but the new draft is speaking about something that is manageable, that will allow operators to enter Brazil with their product as-is without the need to modify the margins. We are just waiting to see when this is made official.” With no limit on the number of licences available in Brazil, many are preparing for entry, including BetCris, which recently signed Ronaldinho as a brand ambassador. And making an early impression will be key to long-term success. “For us, it is about speed to market,” said SBTech’s Cochrane. “We don’t know exactly when the licences will be available. But from a technology platform perspective, we need to have the development work on the roadmap and ready. We are ready to support partners who are going to be trying to take market share very early in that market.

Latin America Roundtables •T UESDAY 4TH FEBRUARY, 2:50 to 3:30 PM •W ORLD REGULATORY BRIEFING

Alfredo Lazcano

Antonio Salord

“A good example is when Portugal regulated a few years ago. We managed to get a partner - live that essentially took a 60% market share in three months, purely because they had a regulation-ready product backed up by very strong marketing planning. Getting ready for the green light in Brazil is critical.” Progress in Brazil mirrors similar enthusiasm throughout the Americas, and all the panellists were optimistic about what comes next in 2020 and beyond. “What is happening in the US is helping the region,” said Duarte. “Colombia is also setting the trend. If we see a couple more markets regulating, the rest should come easier. We just need a few more success stories.” The SBC Summit 2020 will be held in Barcelona between 8-11 September, and will feature several Latin American focused sessions. For the latest gaming news in Spanish from Latin America and beyond, visit • 17

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So much more than just a platform The UK’s fastest growing gaming technology supplier. FSBTECH.COM



DAVID MCDOWELL, CEO AT FSB and one of the very few

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Americans with 20 years of online gaming experience, assesses the state of North America’s unfolding sportsbook market, and unpacks his own company’s plans for cracking the States, having recently secured significant working capital from Clairvest

Safe Gaming



Meet us at ICE S1-342 or email *As ranked in The Sunday Times’ list of UK’s top tech companies in 2019.

espite many commentators anticipating a sluggish rollout state-by-state in the aftermath of the PASPSA watershed, the ripple effect of sportsbook regulation is riding an encouraging wave, if hardly rising to the irresistible momentum of a tsunami. This welcome sports betting traction is much more exciting than six years ago when casino games listlessly took hold stateside. That said, our more salient revolution has benefited from forerunner geolocation and payment processing solutions developed for the

online casino market. However, as with any mad dash to market, a fair amount of impulse decisions has led to a distinct sense of buyer’s remorse from those operators who have lumbered themselves with inflexible legacy platforms or more makeshift solutions which can’t easily adapt across different channels or, just as significantly, varying jurisdictions. At least, in those cases of disappointment, many have happily exercised enough foresight to sign short-term contracts. Even if the

ground they may lose in the meantime could be appreciable and the cost of switching supplier is seldom inexpensive. FSB weren’t among those pacesetters. In short, we didn’t want to run before we could walk, so we favoured discretion as the better part of valour. After all, pacesetters invariably drop off an unrealistic early pace – and in this business, I find that people can get carried away with expectations. You never want to over promise only to subsequently underdeliver. Now, though, having secured considerable working capital from Toronto-based private equity firm Clairvest last summer, we have the correct architecture and the right contacts, including existing relationships with North American casinos, with which to make a sustained run at the US market. From the minute they backed us, 19


Relieving buyer’s remorse

it was a validation that we could go and confidently approach a patchwork territory that, for all its inherent complexity and diversity, will one day wind up as one of the largest regulated markets in the world. Whether that takes three-tofive years to manifest itself is a matter of conjecture, but the end result is undisputed. Furthermore, the jury is now in on enough initial questions that operators can determine what’s required with more precision, or at a minimum know where to press their suppliers. With whom should I partner? Who’s the company behind the tech? What’s their philosophy? Where is their product roadmap? These questions demanded answers. FSB can now provide them. You always want to find the right partnerships, though, which will allow you to scale up in the most organic way. As I mentioned, our modular sports betting, casino aggregation and platform technology is already second to none in the space, so the foundations for a US breakthrough are already there. To that end, we can deploy different enterprise solution across different states and aggregate that data into a common centralised risk-management team. If you’re a multi-state operator, for example, we could set up 10 different platforms in 10 separate states, each with its own differentiated trading strategy and facilitating that centralised control at a step-change improvement to total operating costs - certainly a game-changer for those sitting on a legacy system or blackbox managed service. We can deliver the platform, assist with trading, negotiate better fees with data feed suppliers (et cetera and so on) or simply get out of the way and let your own trading team use the most modern tools available in the industry today. Of course, that means further investment into our pricing algorithms, CRM systems, and retail hardware solutions. But, most importantly, we’re stepping up our business intelligence functions, enabling us to grow at a rapid pace. Clairvest’s backing is the engine behind that. Their board was actively looking for a B2B sports betting supplier to


invest in and expose their portfolio to because they could see the rapid growth in sports betting across the globe, not just America where their brick-and-mortar casino contacts are already opening up encouraging doors. Regarding the sports betting market itself, there’ve actually been very few surprises to date under my lights. In a triumph for predictability, we’ve seen the DFS companies, like FanDuel and DraftKings, sharpen their first-mover advantage on mobile and online

across the US. We’ve also witnessed major media companies create their own betting brands (cue FoxBet, exploiting the organic reach of Fox Sports), so 2020 will replay the same lessons that have been playing out in the UK and Europe over the past decade - where media brands who are struggling in a digital age where no-one expects to pay for their content increasingly look to drive their audience to proven revenue products like sports betting. Essentially, the key conclusion from all that aforementioned buyer’s remorse is a realisation that there is no quick fix for the US market and it takes time to build a brand. Everyone instinctively recognises the benefits of modern tech and its economies of scale, but the staffing and management of any sportsbook are pivotal to success. However, anyone who wants to be a tier-one operator will want to maintain more control over their implementation than a fully managed service can provide. Just take those trailblazers in Stoke – they own their technology, source the most reliable in-play data feeds and they’ll doubtless pull up a chair at the Top Five table, while others grope around in the dark trying to coordinate multiple legacy systems

together in search of the right solution. That’s why the efficiency of the FSB platform sets us apart. Our Enterprise solutions hand over the modular reins of flexibility and control back to the operator’s team without the need for them to hire 100+ traders. The platform was designed to be easily deployed across multiple territories in support of the Wire Act restrictions. Anything else is jamming square pegs into round holes. As for the devices on which the development of this greenfield territory will hinge, there’ll be a total absence of shock value when I tell you that this US revolution will be mobile. At least, ultimately. For proof, look at Q3 and Q4 figures out of Pennsylvania which confirm that over 80% of bets placed in the Quaker State were on hand-held devices. These “findings” are consistent with what we already know from mature markets like the UK as well as emerging markets across Africa. To put it simply, mobile will drive sportsbook growth in the vast majority of states that offer it, particularly those that don’t enforce in-person registration. Admittedly, that’s a key caveat for the moment! In time, a faster, more ubiquitous 5G wireless service will also connect even more

fans and improve live streaming for inplay sports. So, this mobile tide is only rolling one way. Instead, rather than worry about the extent to which the war will be waged on each respective battleground (mobile, online and retail), the challenge for operators will be to create the most engaging UX by developing the most intuitive, easily navigable user interfaces. Naturally, that can mean on kiosks and computer screens, but the real test is on mobile where there’s less room in which to articulate your proposition to customers, especially any unfamiliar with sports betting. Endless long-tail markets create a cluttered interface, leading to players not being able to locate the major markets that they want to bet on. After all, the vast majority of bets are still placed on a handful of major event markets (official game result, Vegas lines, total points etc). If players can’t easily access those markets, or have to scroll deep to find them, everyone misses out. Live video, chiefly reliable streaming on mobile, is also vital to fan engagement and sports betting adoption. The challenge, as ever, is for the live pictures to maintain stride with the live data, so that the viewer and betting experience is seamless. Due to pre-existing media rights with the big four US sports, this may take a little longer but it’s already there across most of soccer, tennis and many of the lesser sports, depending on your data package.

USA Roundtables •T UESDAY 4TH FEBRUARY, 2:10 to 2:50 PM •W ORLD REGULATORY BRIEFING We all know where the bulk of sportsbook value resides but online, mobile and retail channels can present a happy cross-sell between each other, given the right joined-up service. So, whatever the sports-betting rollout format, then, I would lean towards a mutually supportive co-existence of channels as opposed to any big cannibalisation effect in the next five years at least. As for FSB’s own selfish perspective, we need to be able to go into any casino and provide them with overthe-counter betting, APIs for their screen display systems, self-service kiosks and a full stack for online. With this well in hand, it's all about building an international sales and marketing team, and that’s when FSB’s new US offices will be acquired. I remain extremely bullish on the US market for online and mobile, but it will still be a meandering path of occasional speed bumps before the market is worth many billions of dollars. Selecting the right technology partners has never been more important. In fact, it could prove the difference between gaining market share and asking your US management team to vocationally relocate. • 21

APRIL 28-30, 2020

Meadowlands Exposition Center, New Jersey









Chair Nevada Gaming Commission

RICHARD SCHWARTZ President Rush Street Interactive



SVP Strategic Development Enterprise Gaming Caesars


Managing Director SunTrust Robinson Humphrey


Senior VP & Legal Counsel Pac 12 Conference



Director, Sports Gaming Regulation Tennessee Education Lottery Corporation

ART MANTERIS VP Sport and Race Operations Station Casinos


Vice President, Legal & Business Affairs, Penn National Gaming



SVP Online Gaming Hard Rock International




Manager, Government Affairs FanDuel


"small potatoes" for some media companies in the US, but it’s everything for theScore CEO John Levy


peaking at last year’s Betting on Sports conference, Levy discussed emulating the successful Sky Bet model but for a North American audience, the opportunities presented by the media company’s multi-state market access framework agreement with Penn National Gaming and a possible opening north of the border. SBC: How do you see the state-bystate legislation of sports betting progressing over the next 12 months? JL: I think it's going to progress faster than a lot of people had predicted. I'm starting to hear at the show today people coming round saying that there's a higher level of excitement, not in terms of the overall business, but just in terms of the pick up on a




state-by-state basis. And I think it really stems from the fact that people are looking at what's going on in (New) Jersey, where we launched 10 days ago, and seeing the success the operators are having there. Some of the other states that people weren't expecting were going to come on as soon as they did. I think it will be more of a rapid pick up than was originally anticipated. SBC: Why have media companies, aside from Fox and yourself, been reluctant to create an operator mobile sportsbook in the US? JL: The short answer is you have

to ask them, because I really don't understand it either to be quite honest. Even in the Fox situation it's a little different from ours. Sky Bet years ago, over here, had it right where you could actually bet in the set top box and they were very creative in terms of the integration of betting and media. It remains to be seen what the Fox scenario is going to be with respect to how they roll it out. I can tell you how we're going to do it, and it's a lot closer to what Sky Bet was years ago but a North American version of it. The reason is that we've never really seen sports betting as anything other than just one of the aspects why people love sports.


I CAN TELL YOU HOW WE'RE GOING TO DO IT, AND IT'S A LOT CLOSER TO WHAT SKY BET WAS YEARS AGO BUT A NORTH AMERICAN VERSION OF IT People go to bars, people watch it on television, people go to the games live, people play fantasy and people bet on sports. They've been doing it for time and eternity, it's not this bugaboo thing. It's just a natural reaction to how people love to engage with sports.

Our view is just make it natural, make it part of who we are and what we are. In the case of theScore, that's a mobile app that reaches 4-5 million people in North America, a high percentage of them bet on sports, 70% are in the US. We know


people are taking our data, taking our content, then going to bet elsewhere. So our whole philosophy is just give them the opportunity to bet inside our brand and inside our app. We think that's a really holistic approach to sports betting. Listen it's not easy, we had to rebuild theScore Bet right from scratch, we built it natively. We're good at building apps because that's what we did at theScore. To answer your question more specifically, a lot of the big media companies in North America probably aren't doing it for a couple of reasons: they don't want to be bothered to be licensed because you've got to go all the way to the top for that, but more importantly they look at sports betting as just this little thing that's out there. I don't think they really appreciate how big it can be. And relative to their main businesses, where they're bringing in billions and billions of dollars, this is small potatoes for them whereas to us it's everything. I think that's probably the other reason why they're more concerned with their legacy businesses. SBC: How might the major sports leagues official data supply deals impact the growth of the US sports betting market? JL: The leagues want to participate in one form or another. Everybody talks about data but I think the real issue as far as the leagues are concerned is they want to make sure that people still love watching their sport - live, on television or streamed. The name of that is engagement, and what's proven to be a real positive influence on engagement is having people bet on sports. So, ultimately I think the leagues see the benefits of sports betting and have come around to that - Adam Silver first from the NBA, years and years ago recognising this. Whether they do it through official data, and how they share or participate remains to be seen but I think the big effort for them is to ensure the engagement of the fan. They also know that for as much as everyone's trying to figure out what their piece is, sports betting is an existing business, people bet on sports offshore - a lot in Canada and some in the States.

So the product is available and the product is priced. If everyone who is trying to get in to that business takes too much, we'll end up with a product that's not competitive. And if we don't have a product that is priced properly and competitive, why are people going to come and bet with us? They're not, they will stay and do what they continue to do. The leagues know that, everyone knows that, so I think you'll see a lot of jostling for position and people trying to get as much as they can for their own companies. If the consumer doesn't see a great product at a great price and, in our case integrated into a great app, then they won't be interested. SBC: How has the launch of your betting app gone and what are your plans for it over the next 12 months? JL: The launch has been amazing,

EVERYONE AROUND OUR PLACE IS PINCHING THEMSELVES BECAUSE IT'S A DREAM COME TRUE FOR US - SOMETHING WE'VE BEEN LOOKING TO DO FOR YEARS AND YEARS we're only like inside of two weeks. Everyone around our place is pinching themselves because it's a dream come true for us - something we've been looking to do for years and years. And it's just the beginning. We've done a deal with Penn National so, after our launch in New Jersey, Penn National gives us the ability to go in 11 more states as the regulations come on board - two immediately operative. That gives us a footprint of about 30% of the potential users in the US, but we're not stopping there. We have big hopes for a lot of the big other states, there's still 70% that we haven't attacked yet and there's an opportunity up north of the border in Canada where noises have been

made in the last little while. I think that in the next 12 months you're going to see the possibility that sports betting may become legal in Canada on a province-by-province basis. A little something they have to take care of federally is provision in the criminal code that prohibits single event wagering but there's been some indication from the federal government that they may be willing to look at that, repeal or amend it, then it's open to the provinces. In Ontario, the Premier said we're open for business, he's looking for ways to generate revenue and recognises that sports betting may be a valuable way to do that. • 25

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Breaking news, previews and stories from the biggest names in the biggest games

agreed that the global success of short-format variations of cricket bodes well for the future of ‘The Hundred’, but conceded that there are data-based challenges to introducing a fourth major format


wenty20 (T20), the sport’s third major format after firstclass and limited overs cricket, was first introduced by the England and Wales Cricket Board (ECB) in 2003. However, T20 success - particularly from a betting perspective in emerging territories across Asia and Africa - has spiralled since the start of the Indian Premier League (IPL). The big money IPL, launched in 2008, is now routinely joined in the cricketing calendar by similarly (but not quite as) lucrative T20 competitions in Bangladesh and South

Africa (Ram Slam). The franchised Caribbean Premier League (CPL) was also introduced in 2013. Grant Fraser, CEO and Co-Founder at Digitonic, said: "Everything we are seeing is in emerging territories, such as Bangladesh and India - they are trying to plant foundations there for when it becomes legalised and they are in a position to do good things. "Obviously the big cricket nations like Australia and South Africa - there's momentum in there as well. However, from my side of things the betting brands that we can see investing 27


BOS Debate

Grant Fraser, CEO and Co-Founder at Digitonic

heavily is to target Bangladesh and India.” Simon Cox, Sports Trading Team Lead at Paddy Power Betfair (PPB), agreed that the wider range of T20 tournaments - even considering a “merry go round” of the same players - means more matches, markets and betting opportunities for both serious and recreational bettors, for whom “reducing the time from bet placement to result” is the biggest benefit. “There is now round-the-clock coverage of cricket compared to a few years ago,” he added. “With that obviously comes the challenges of keeping the operational side of things going.” The operational challenge for a company like PPB means choosing the


right data source to drive the most accurate in-play betting markets, and guarantee close monitoring of the markets from an integrity standpoint, for matches played all over the world. For the betting community it is perhaps the biggest dampener to excitement surrounding ‘The Hundred’, a new ECB-organised tournament starting this summer, alongside the issue of developing a front-end product which houses the four formats in the best way. “Cricket is probably a little bit


Simon Cox, Sports Trading Team Lead at Paddy Power Betfair

behind some other sports such as tennis or soccer, where you have relatively low-level events of little interest still with up-to-the-second data feeds with very low latency,” Cox explained. “As such, you can offer inplay products with very low delays and high confidence. “The challenge is to try and recreate that offering for cricket - finding a source that gives us the quick data to allow us the opportunity to provide a better customer-facing experience.” Francois Vainker is the Commercial Manager for Cricket at Stats Perform - the parent company of Opta, which serves as the official data collection and distribution partner for major cricketing boards including in England, Australia and New Zealand, as well as for the

Francois Vainker, Commercial Manager for Cricket at Stats Perform

IN SPORTS LIKE SOCCER, THE FRONT THREE CORE MARKETS MIGHT TAKE SOMEWHERE AROUND 90% OF VOLUME. BY CONTRAST, IN CRICKET THE MATCH MARKET WOULD BE SUBSTANTIALLY LESS; THERE'S A LOT MORE DIVISION OF THAT TURNOVER ACROSS DIFFERENT MARKETS International Cricket Council (ICC). He admitted that there are operational challenges involved with sending scouts around the globe to provide consistent data, but welcomed the opportunity to change the narrative of integrity problems in cricket and reset the presentation of data for the sport. “There is still a hesitancy or nervousness around betting on the sport,” said Vainker. “Cricket and betting haven't necessarily been the

most comfortable bedfellows in the past. In a market like India where Star control the rights and have a huge broadcast deal, I think they're happy not to give themselves that headache. “That said, it is an important issue to tackle. We work a lot with governing bodies - we've got data for every single ball that's bowled in international cricket so if something does pop up or look a bit odd, it's actually a great resource having that official data to investigate from.”

Vainker later addressed the data collection differences for The Hundred - a competition in which both 100ball innings of a match is divided into 10-ball overs, which may be taken by a single bowler or split as five balls for two different bowlers. He said: “We can basically now completely reset how the data, and statistics - which haven't moved on for hundreds of years - are presented on front-end products. That's a great opportunity for us, and something we're very excited about. "At the same time, we've got a collection tool which after six balls thinks it's the end of the over something that will need completely restructuring.” Cox concurred that the 10 balls change is a “bit of a nuance” from a modelling perspective, but suggested that cricket’s way of dealing with weather-affected matches can offer help. “Luckily, cricket has a history of rain and Duckworth Lewis - functionality you can use to move your match to being 100 balls so we can make that work pretty well,” he said. Finally, the Betting on Sports panel also discussed the impact of shorterformat cricket on the spread of betting volume for the sport. Highlighting the current situation, Cox said: "There's a lot of markets offered for cricket, in comparison to other sports, which are determined in that ball. If you have, for example, a player runs market or a fall of wicket market - if the player is out next ball then that market is settled in that instance. “In sports like soccer, the front three core markets might take somewhere around 90% of volume. By contrast, in cricket the match market would be substantially less; there's a lot more division of that turnover across different markets.” However, Cox did speculate as to whether The Hundred’s free-to-air audience - the BBC will screen 18 matches from the competition in 2020 - could actually reverse this trend. He concluded: “I said before that volume goes away from core markets in cricket, but we might actually see a reversal with more free-to-air coverage because you'd have the more recreational customer who just wants to have his match bet and likes to keep it simple.” • 29

FOBT fall-out


HOWARD CHISHOLM: DOWNSIZING THE RETAIL INDUSTRY TO SUIT NEW REGULATIONS THE LANDSCAPE OF THE UK RETAIL BETTING SECTOR has undoubtedly changed since the fast-tracked FOBT ruling last April, but the number of shop closures has fallen short of predictions made by the Association of British Bookmakers as the industry targets new technology to arrest the inevitable profit slide


fter several months of political one upmanship, and the subsequent resignation of DCMS minister Tracey Crouch, the ruling saw the reduction in Cat B2 gaming machine maximum stake from £100 to £2 back in April. The outlook for the land-based betting sector appeared to be bleak in the initial few months, as many operators were forced to close their doors to the UK highstreet, with the ruling particularly affecting smaller, independent bookmakers.

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Following the introduction of the legislation, William Hill was the first bookmaker to confirm betting shop closures, estimating 900 shops would close their doors for good. Ladbrokes identified 1,000 betting shops which would close in 2019, while Betfred predicted that it would close around 500 establishments during the year. These figures have fallen significantly short of the predictions made by the Association of British Bookmakers (ABB) which had estimated that UK closures could reach circa 4,500. Howard Chisholm, Managing Director of Chisholm Bookmakers and Director of Bookmakers Technology Consortium, shed some light on the ways that the industry has adapted to the shortfall in profits ‘as much as expected’. “The drop in income due to the changes in regulation and the introduction of the £2 stake means that 31


FOBT fall-out


a number of betting shops must close their doors,” he said. “Everyone is looking at their betting estates, and as expected, there are widespread shop closures happening. “To adapt to the changes, the industry is looking at new technologies, we’re looking at new products, but essentially we’re downsizing the industry to suit the

new regulations.” Facing harsh realities, the betting industry has been forced to reevaluate its retail proposition. Many bookmakers have had to shift their attention towards retail technologies to offset the decline in profits generated by FOBTs. Last year, Chisholm introduced double zero roulette across his 38-

shop estate, which he said made a “small but definite improvement to gaming machine income”. “When roulette was a B2 game with £100 per spin maximum, the game probably accounted for over half of all gaming machine income,” he explained. “This was due to the size of stakes that could be played, the game was offered in a single zero format. “Yet, since the government ruling came in on 1 April, B2 games have become unviable and so roulette is now offered as a category B3 game. Serious roulette players have, therefore, left the betting shop for online or land based casinos where stakes are higher. “Consequently, the proportion of income generated by roulette games in a betting shop has dropped substantially. It is now probably between 10 and 20% of gaming machine income.” Chisholm reported that turnover for Chisholm had only dropped by 15%, a result which was much less negative than anticipated. “It appears that the leisure players that are now playing roulette in betting shops are not as price sensitive as bookmakers might think,” he concluded.


“Yet, this should be taken into context. A 70% increase in roulette income only represents an increase in gaming machine income of between 7 and 14%. “This is compared to a more than 30% drop in gaming machine income that has occurred since the change to B2 stakes on 1 April. So, as I said at the Trade Fair (in October), it is a small but definite improvement to gaming machine income.” Chisolm emphasised that the introduction of new retail technologies is becoming prevalent across the UK, and has been a helpful tool to mitigate the negative impact of the ruling. He continued: “There are a number of different technologies that can be utilised. Self service betting terminals are becoming more and more popular across the UK as they offer a wider range of products and betting services. SSBTs are almost certain to pick up some of the slack created by the FOBT decision. “Virtual betting on horseracing, greyhound racing and games is another target area for growth, and is becoming very popular in certain

TO ADAPT TO THE CHANGES, THE INDUSTRY IS LOOKING AT NEW TECHNOLOGIES, WE’RE LOOKING AT NEW PRODUCTS, BUT ESSENTIALLY WE’RE DOWNSIZING THE INDUSTRY TO SUIT THE NEW REGULATIONS locations. There are other products to pick up the slack generated from the FOBT decision, we’re still developing these though so it will just take time.” Chisholm also addressed the negative perception of gambling in the UK, highlighting that in order for the gambling industry to effectively counteract what has been a prolonged period of negative political and media coverage, it must quite simply look after their customers. “The industry must get ahead of the curve,” he said. “We have got to take action on problem gambling, safer gambling initiatives, responsible

gambling, whatever you might call it, to best protect our customers. If we look after our customers, we as an industry have a long term future. But if we don’t, we don’t have any future at all, and rightly so. So the bottom line is that operators need to look after their customers.” Initiatives such as the whistle-towhistle ban have been deemed as a step in the right direction towards self-regulation, which has seen bookmakers ban all TV betting adverts during pre-watershed live sport broadcasts. While the voluntary advertising ban is enforced ‘five minutes before the

event begins, and ending five minutes after it finishes, ‘the industry needs to go further’ according to Chisholm. He continued: “The main problem with advertising is the negative effect that it has on the public who aren’t really too bothered by gambling. So, I think that as the first step, yes it is showing that the industry is taking positive steps towards self-regulation, but it needs to go further. “Whether that’s a blanket ban on any advertisement of gambling products before the watershed, who knows? But we’ll leave it to those companies that advertise to decide that.” • 33


Integrity boost


SPORTRADAR HAS PRAISED the International Tennis

Federation (ITF) for “building an integrity program that is second to none in the sport” after confirmation of the organisation’s new $8m investment in tournament infrastructure, but says the sport still has issues to address


he ITF will invest the money into a series of integrityrelated projects covering key areas such as the introduction of accreditation and access control systems for WTT events, video recording, added security to deter unofficial data collection, the appointment of on-site integrity

protection personnel and enhanced channels for the reporting of integrity concerns by players and officials. David Lampitt, MD of Sports Partnerships at Sportradar, responded by saying: “The ITF should be applauded for its proactive approach in addressing the concerns

raised and building an integrity program that is second to none in the sport.” He added: “The statistics for 2019 show that there has been a significant decrease in integrity issues at ITF competitions with more than a 50% reduction in the number of integrity alerts. It’s often overlooked that ITF events were already amongst the least likely to be corrupted in the sport and we therefore trust that the TIU Supervisory Board will now work with equal focus on delivering the recommendations to address the integrity concerns that exist across all levels.” The ITF’s investment plans were 35


Integrity boost


announced alongside confirmation that the Tennis Integrity Unit (TIU) Supervisory Board had agreed to the Independent Review Panel’s (IRP) core recommendation from December 2018, which was to limit the sale of live scoring data at the $15k level of the ITF’s World Tennis Tour (WTT) but keep it in place for the $25k level. Despite reservations over this recommendation, with Lampitt stressing at the time that “adjusting the arbitrary line between a targeted approach and blanket discontinuance down a level doesn’t stand up to scrutiny”, Sportradar has played an active role in the transitional process towards discontinuance of data at the lowest level of professional tennis. Lampitt added: "In terms of the wider recommendations, what we and the ITF have done on this specific recommendation is one of the biggest parts of the implementation so far with 3,500 fewer matches made available to the betting markets in 2019 compared to 2018. “Putting the ITF’s new measures


alongside the integrity monitoring programme, which we deliver across their competitions, and our implementation of a targeted removal of coverage for higher risk matches on the World Tennis Tour, we’ve developed a best in class approach with the ITF that we hope will be

scoring data at the $15k level once all associated integrity measures are in place. The ITF is also prioritising the creation of more $25k events to provide a more balanced calendar that should help to deter unofficial data collection at events for which the

THE COMMON MISCONCEPTION IS THAT ALL THE PROBLEMS ARE AT THE ITF LEVEL WHEN WE KNOW THAT FROM A RISK PROFILE PERSPECTIVE MATCHES AT OTHER LEVELS, LIKE CHALLENGER AND TOUR LEVEL ARE MORE LIKELY TO BE CORRUPTED, AND OF COURSE THE CORRUPTION AT THAT LEVEL IS ALSO LIKELY TO BE FAR MORE VALUABLE replicated elsewhere. “And the proof is in the TIU’s numbers where the ITF events saw a 53% reduction in alerts compared to 2018, whereas, for example, the ATP Challenger level saw only a 21% decrease over the same period.” Sportradar will continue to work with both organisations to manage the reduction of data towards the complete discontinuance of live

data has been discontinued. Despite Sportradar’s ongoing commitment to the process, Lampitt admitted to frustration over the “fact that the position most commonly presented publicly is that integrity problems are most acute at the ITF level” – a position that is simply not supported by the data. That stigma recently worsened due to corruption claims relating to a

‘Golden Match’ played out in Doha last December. A Golden Match is where a player loses all 48 points in a 6-0 6-0 defeat. Lampitt said: "The issue here was that the player (Ukrainian Artem Bahmet) was somehow able to play, but it wasn’t about the data as the match was not covered for live betting data. “It's actually an interesting example that demonstrates that you don't need live data in order for there to be corrupt activity. This was one of the things that we emphasised repeatedly throughout the IRP process.” As Lampitt alluded to above, this incident was actually an exception to an improving situation for integrity in tennis. From January to September 2019, there were just 72 tennis alerts compared to 121 from the corresponding period of 2018 – a significant downward trend caused predominantly by a reduction in alerts at the ITF Tour level. Lampitt explained: "The common misconception is that all the problems are at the ITF level when we know that from a risk profile perspective matches at other levels, like Challenger and Tour level are more likely to be corrupted, and of course the corruption at that level is also likely to be far more valuable. "Our position has always been that the way to counter integrity problems is to have a joined-up approach with proper controls in place, and by maximising the use of technology and intelligence to identify and target the problems as effectively and efficiently as possible. The ITF should be commended for the steps they’ve already taken and it is obviously very good news that there is a significant positive trend demonstrated in the TIU’s statistics. • 37


M&A Reaction


modular turnkey betting services and solutions after joining forces with Optima, an award-winning sports betting and gaming omnichannel platform business


ate last year, Sportradar completed the acquisition of sports betting and gaming omnichannel platform provider Optima in a deal effective immediately. The acquisition means that Sportradar has extended its current betting services portfolio to become a fullservice B2B data, betting, trading and player management platform business.

In response, we caught up with Optima CEO Jacob Lopez and Sportradar CEO Carsten Koerl for their reaction to forming this new ‘one-stopshop’ data, betting, trading, marketing and player management platform business. SBC: Jacob, how excited are you by the prospect of this full-service betting solution?

JL: I think the combination of Sportradar products and services with the OptimaMGS platform not only cover all services an operator needs today, but are those that a leading operator will definitely demand from a top quality turnkey sports betting and gaming solution. Our products are rich in functionalities and are designed to 39


M&A Reaction

Jacob Lopez, Optima CEO

perform, to scale and to be flexible. The combined forces of Sportradar and Optima are no doubt creating the organisation with stronger potential in the worldwide B2B market today, and I doubt there could be anyone in my position that would not be very excited. I’m really lucky to be able to push forward this vision. SBC: And Carsten, how pleased are you to announce this deal? CK: We are very pleased to have announced this deal. Optima is a market leader in delivering high quality betting and igaming services around the world renowned for utilising the best technology to provide clients with advanced and flexible gaming platforms. This company was highly attractive to Sportradar as it would help us achieve a 360 product portfolio offering a full sportsbook solution for clients. The acquisition is an integral part of our future growth. The platform will extend our current risk management and trading solution, Managed Trading Services (MTS), to effectively make us a complete betting, trading and platform business.


OUR KEY OBJECTIVES ARE FIRST GUARANTEEING THAT INTEGRATION OF OPTIMA INTO SPORTRADAR GROUP IS SUCCESSFULLY DONE, AND THAT IT HAS ZERO IMPACT ON OUR CURRENT AND RECENTLY ENGAGED CLIENTS SBC: Having started out with just 12 colleagues in 2012, was a big merger like this always part of your vision for Optima? JL: Actually, a merger was never part of it. The vision of Optima is not different before and after the merge, and that’s the great thing and why this merger has been positively evaluated by me personally. While we have been approached by tens of organizations in the last couple of years, the one and only merging process we have started, has been the one with Sportradar. Opposite to what rumours recently said in the news, we had never started another process. At Optima we were not looking for investment, we were not raising funds. The idea of combining with Sportradar was attractive because it was the natural step for Optima; it was either that, or we would have gone for marketing, trading and data services ourselves.

While we had all the technology and tools ourselves to run a successful marketing, managed trading services and data distribution B2B business, they were different businesses on their own; they aren't businesses that just require technology, they require a lot of excellence and talent on top of an already excellent technology. It would have taken us considerable time to commercialize a service at the level of quality we always look to offer to our operators. A sensible option was to merge with the leading trading and data services supplier in the market, to create the best combination possible with best platform, OptimaMGS, and best marketing, trading and data services in the market, from Sportradar. SBC: And what about for Sportradar, Carsten. Did you set out to find a company to complete the betting and

gaming value chain? Or was it just that the right opportunity came about with Optima? CK: We undertook a comprehensive review of the market and following that selected Optima as the platform provider that best met our goals. We identified Optima as having the best technology, backed by a great management team and high-skilled staff. They also share our vision on the future evolution and likely needs of the global betting and gaming market. As such, we believe they were the best option to help us provide the entire value chain and continue to add to our future growth strategy with an advanced platform that matches our approach to quality and customisability. SBC: Going back to you, Jacob. How will your existing clients benefit from the deal? JL: Optima clients first have guarantee that Optima will continue delivering the quality of products, flexibility and great support we have done until this moment. There is no difference regarding the products that a client of Optima was getting from us yesterday, or the ones that will get tomorrow. Obviously, there will be new products as a result of the combination of the group’s forces, products that will certainly get clients using the Sportradar OptimaMGS platform - putting considerable distance between them and their rivals in terms of technology and product available to them. SBC: Carsten, you said that the acquisition is an integral part of our future growth. How much stronger is the Sportradar position in the US as a full 'one stop shop' betting services provider? CK: One of the key reasons behind our decision to acquire a platform is because of the ongoing emergence of legalised betting markets, such as in the US. In line with some of our core objectives, we believe this will lead to a more transparent and nascent sports and betting industry worldwide and, ultimately, we want to help our sports and betting clients to reap the benefits. With almost two decades within the industry, we understand the uniqueness of each global market and

Carsten Koerl, Sportradar CEO

THE PLATFORM WILL EXTEND OUR CURRENT RISK MANAGEMENT AND TRADING SOLUTION, MANAGED TRADING SERVICES (MTS), TO EFFECTIVELY MAKE US A COMPLETE BETTING, TRADING AND PLATFORM BUSINESS why having a one-stop-shop sports betting provider is so expedient for clients. In the US, in particular, the platform gives us a greater degree of control for if and when licensing opportunities arise in newly regulated states. With it we are better able to meet local requirements, which is crucial in the various markets across the US and the rest of the world. SBC: Jacob, with the support of Sportradar what are your key targets for 2020? JL: Sportradar agreed with the targets that Optima had already set for 2020. Our key objectives are first guaranteeing that integration of Optima into Sportradar group is successfully done, and that it has zero impact on our current and recently engaged clients, which for me personally, has been a key point in the agreement with Sportradar. SBC: And the same question to you Carsten. With Optima on board, what are your key targets for 2020? CK: A detailed integration plan has been developed in partnership with Optima and together we will take this forward across the next year.

The acquisition is an integral part of Sportradar’s future growth across the world, including the US, Latin America, and Asia. Bookmakers and platforms in these different regions have various requirements and we want to be able to offer a portfolio of products and services that can fully serve the needs of the global betting and gaming market. As we have always done, we will continue to develop our solutions based on the new platform to ensure we remain at the forefront in terms of client needs, utilising our combination of global expertise and cutting-edge innovation. SBC: Just finally, Jacob. What can we expect from Optima at ICE? JL: The Optima team is looking forward to this year, where we will arrive more powerful than ever with our awardwinning sports betting and gaming platform, built to be the best in the world. At Stand N2-310, we will show our flexible and solid Player Account Management, Gaming Module, and our Advance Business Intelligent and Reporting solution supported by Oracle Enterprise Edition. Make sure you visit us! • 41


State lottery success





of a successful sports betting offering for a lottery operator and how OpenSports must put the Nederlandse Loterij in a strong position to compete with other Dutch licensees from 2021


cientific Games is now serving seven lotteries with sports betting solutions in Canada, Europe and Asia after a second half of 2019 littered with lottery contract wins. After closing the summer by finalising a fresh deal with Milli Piyango (Turkey’s National Lottery), Scientific

Games celebrated an autumnal double by extending its player account management (PAM) and instant games partnership with Nederlandse Loterij (NLO) to include sports betting before securing a five-year renewal with Canada’s British Columbia Lottery Corporation (BCLC). Keith O’Loughlin is the SVP for

Sportsbook and Platforms at SG Digital, the digital division of Scientific Games. We caught up with him to find out more. SBC: Based on your experience of pitching services to state lotteries with Scientific Games, what are they looking for from their lead technology supplier? KOL: There are four significant areas that lotteries are keen to establish from their sports betting supplier – scalability, trust, differentiated and competitive features, and flexibility. Having these pillars at the core of their offering gives them an overall product that can provide them with a 43


State lottery success

operators, so competition still exists. There’s also the possibility that the legislation of these markets could change at any moment, so the smart operators know they can’t rest on their laurels. That’s why we’re constantly adding new features to our product that allow customers to introduce exciting new ways to bet on their favourite sports. For instance, we launched Match HQ earlier this year, a line of scoreboards that provides bettors with real-time data to help inform them of betting decisions.

solid base from which they can build to increase revenues for their good causes. Here at Scientific Games Digital (SG Digital), we ensure that each of these fundamental factors form a strong part of our sports betting solution for lotteries. We have a proud heritage of delivering services to lotteries across the globe for a number of years now, with new and existing partners entrusting us to deliver a proven, scalable product plus responsible gaming tools to meet their needs. With the strong reputation that OpenSports™ has within the sports betting sector, we are the partner of choice for those lotteries looking to expand their offering. We now serve seven lotteries with sports betting solutions in Canada, Europe and Asia. Most recently, we extended our relationship with Nederlandse Loterij (NLO) to deliver a full digital sports betting solution, further demonstrating our position as a leading supplier. SBC: What would you say is the one key component tipping so many


SBC: You’ve just extended your deal with Nederlandse Loterij to roll out a full sports betting solution; in terms of establishing both market share and trust amongst players, how important is this period pre-regulation in the Netherlands? KOL: It’s absolutely crucial, especially when you consider the current state of play and how the market will change once it becomes regulated in 2021. The Dutch government has taken a tough stance, requiring those who have operated in the “grey” to sit out for a period of time. Now is the perfect time to launch our full sports betting solution with NLO and provide them with a competitive advantage that can be enjoyed by bettors in a responsible and safe way. Through the OpenSports proposition, the lottery will be able to leverage its recognised brand and ensure it is in a strong position when the market becomes fully regulated.

THERE ARE FOUR SIGNIFICANT AREAS THAT LOTTERIES ARE KEEN TO ESTABLISH FROM THEIR SPORTS BETTING SUPPLIER – SCALABILITY, TRUST, DIFFERENTIATED AND COMPETITIVE FEATURES, AND FLEXIBILITY of these tender processes in your favour? KOL: The OpenSports portfolio from SG Digital incorporates those previously mentioned pillars, and along with our cross-channel relationship with the lottery division of Scientific Games, it means that our service simply cannot be matched. We are the pioneers in bringing innovative features such as cashout to market, and are committed to continuous modernisation. The proven OpenBet sports betting engine is now complemented with an array of additional solutions, including OpenTrade, OpenEngage, OpenPlatform, and OpenAccelerate. When you take into account everything that we offer, there’s no denying that we provide the most safe and trustworthy service. The world’s biggest sportsbook operators have

utilised the OpenSports platform for a number of years now, while in the emerging US market established casinos are looking to us to make their first steps into the sports betting environment. It’s why the likes of British Columbia Lottery Corporation (BCLC), Danske Spil, NLO and Turkey’s state sports betting program IDDAA have entrusted us to offer a match-winning service for consumers. SBC: Is it more exciting for Scientific Games to integrate sports betting solutions alongside the traditional lottery services? KOL: We certainly see huge synergy in this area, which ultimately benefits our lottery partners. Our lottery and sports betting businesses have strong reputations within their respective fields, and a collaborative approach

NOW IS THE PERFECT TIME TO LAUNCH OUR FULL SPORTS BETTING SOLUTION WITH NLO AND PROVIDE THEM WITH A COMPETITIVE ADVANTAGE THAT CAN BE ENJOYED BY BETTORS IN A RESPONSIBLE AND SAFE WAY means we can offer an unrivalled service for customers. Above all else, lotteries can offer the definitive omni-channel solution that no other supplier can provide. This approach ensures that players will receive the same quality and seamless experience across all channels, whether it’s in retail or online and across mobile devices.

SBC: Do you have to adopt a more feature-focused approach to sports betting when the lottery doesn’t hold a monopoly over the market? KOL: On the surface, that is the case given the increased competition they face from other operators. However, what you’ll find in most “monopoly markets”, such as Turkey or the Canadian provinces, are grey market

SBC: How much of the OpenSports™ product suite will be on show in the Netherlands? KOL: NLO will now benefit from the full OpenSports solution, which includes a significantly enhanced mobile and desktop offering, as well as managed trading services for all non-Dutch sports. The lottery already deploys our OpenPlatform player account technology, as well as lottery instant games, so this move is the final piece of the puzzle. It’s an exciting move for us, building on our existing relationship with the lottery and providing yet more funds for good causes in the territory. We’re absolutely ready to partner with more lotteries that are looking to expand their sports betting offering. • 45


Live betting boost








TO FIND OUT MORE VISIT US AT STAND S2-180 WWW.SIS.TV/ICE2020 | +44 (0) 3457 400 400 | INFO@SIS.TV

how racing events 24/7 are driving additional revenues for operators globally, helped by the appropriate localised approach


orse racing and greyhound betting events are becoming a key part of the product offer for international operators in a number of new territories, including regions where there has previously been little racing heritage. Both retail and online operators have identified racing betting content

as an effective way to provide their customers with an exciting betting experience, which has in turn led to incremental revenues. One of the key drivers in the growth of betting on racing is the frequent, ‘quick-fire’ nature of these betting events. Bettors demand easily accessible content at any time of the day and products such as SIS' 24/7 Live Betting Channels allow sportsbooks to offer their customers these types of events across all day parts, at times that suit their customers.

Tailored content The way in which racing betting events are presented to bettors is a key consideration, especially in emerging territories where customers may be less familiar with racing.

We have spent a lot of time looking at how our racing content is presented, to ensure it is easy to understand, regardless of customers’ level of racing knowledge. Our channels feature a range of betting prompts and tips on-screen to provide bettors with the confidence to have a bet even if they are new to racing. With our extensive range of markets and prices, operators can also promote markets that will resonate best with their customers and their betting preferences, whether that is Win only markets, forecasts and tricasts or spin and win style derivatives such as odds vs evens. SIS partners closely with our customers to ensure that our products are as successful as possible for operators. We can provide operators with marketing implementation support 47


Live betting boost


in-shop and online, working closely with customers to advise the best way to communicate the racing offer in line with customer needs. To support this process, we have created a marketing portal with collateral templates such as easy to understand “How To Bet” guides, alongside helpful hints and tips for enhanced in-shop point of sale featuring content such as top performing jockeys, trainers, traps as well as track stats.



out to talk about the firm’s recent partnerships in the US, the complexities of operating in Pennsylvania and her views on the increasing appeal that in-play betting will have for a ‘stat hungry’ US customer base

We’ve also established an analytics team that assesses our content performance, which allows us to provide our customers with valuable insight into how best to optimise their offer, including the types of markets to promote to their customers.

The “Watch and Bet” formula Presenting these racing betting events in a “Watch and Bet” format has been effective in helping to encourage bettors to engage with horse racing and greyhounds. With no initial need to place a bet in order to watch live racing, this approach allows bettors to familiarise themselves with racing and the betting markets, as well the ability to engage with the excitement of the live betting product. Allowing bettors to access this live content has proved to be successful for our operator partners internationally, creating encouraging growth in acquisition and retention levels. One of our customers in Eastern Europe introduced new international horse racing content via the Watch and Bet model, which has led to a 50% increase in revenue. In addition, a major UK bookmaker customer has already seen a double digit increase in racing turnover since migrating to Watch and Bet.

Proven expertise in delivery With over 30 years’ experience in providing betting services to the



Stat-heavy US sports

industry, SIS is the leading supplier for operators looking to offer their customers regular racing betting opportunities throughout the day, 24/7. Thanks to our market-leading international racing offer, SIS’ 24/7 Live Betting Channels can now deliver a betting opportunity every three minutes – translating to approximately 175,200 races a year. We offer operators a truly end-to-end solution, which includes live streamed pictures, data, commentary, on-screen graphics with betting triggers, prices and derivatives. Additionally, by employing our Complex Automated Production (CAP) service, SIS can now create bespoke channels for different operators across regions, to cater for the varying needs

WE HAVE SPENT A LOT OF TIME LOOKING AT HOW OUR RACING CONTENT IS PRESENTED, TO ENSURE IT IS EASY TO UNDERSTAND, REGARDLESS OF CUSTOMERS’ LEVEL OF RACING KNOWLEDGE of bettors in each territory. At ICE London in February, we’ll be showcasing our live 24/7 Live Betting Channels. Visit to book a meeting on Stand S2-180 to find out more about how 24/7 live content will drive incremental revenues for your business. •

SBC: Could we have an update on how developments are progressing in Indiana, Oregon and Arkansas? MR: Indiana and Arkansas are currently on-property solutions with kiosks deployed under the Bet America sportsbook brand. The business we see there is dominated by prematch betting with a heavy focus on American Football, both the NCAA and NFL. The results have generally been favourable, although at times players did get their revenge with favourites winning and covering, meaning lots of parlays to pay out! Oregon has an online product, with retail expected to launch this year. Since our launch about seven weeks ago, we have seen very positive results - a high number of early registrations with players of all skill levels engaging, and quick adoption by players of our easy to use full online sports offering, demonstrating that there is no need for a ‘lite’ product for the US. The revenues have been dominated by the major US sports, with basketball and football leading the way, and soccer showing surprising popularity. In light of the fact that Oregon does not yet allow wagering on college sports, the numbers have been very promising to date, and we expect to

THE REVENUES HAVE BEEN DOMINATED BY THE MAJOR US SPORTS, WITH BASKETBALL AND FOOTBALL LEADING THE WAY, AND SOCCER SHOWING SURPRISING POPULARITY see them continue to increase in the coming months. SBC: What has been your experience of working with the Oregon State Lottery? MR: The Oregon State Lottery is a very special partner to us, with some unique needs that are different than those of our casino partners. The Oregon State Lottery is in essence a

business that is operating within the structure of a state agency, confined by all the laws and regulations that apply to a state agency. As such, we have had to be very flexible and work together to come up with new creative and customised solutions on the operational front, to enable the lottery to operate optimally as a sports betting business. In doing so, we have developed a 49


Stat-heavy US sports


very strong working relationship and a true partnership. The individuals at the Oregon State Lottery are dedicated and amazing professionals, and it has been a pleasure working with them on creating what can become a roadmap for future lotteries operating a successful sports betting business. SBC: Pennsylvania has been criticized in some quarters for its high tax rate on sports betting. Having launched a sportsbook there, what’s your view of the tax regime and is it as prohibitive as the critics suggest? MR: It is still early days in sports betting in Pennsylvania, so we need to be cautious of drawing too many definitive conclusions at this point. But from a market size and growth perspective so far, the growth in Pennsylvania is not optimal as compared to the neighbouring state of New Jersey in its first year, and the significantly higher tax rate is likely to be a contributing factor. The sports betting ecosystem is very complex and there are many other variables in addition to the tax rate that determine market size and


success. The number of players in the market, player life-time values, cost per acquisition, size of operator marketing budgets, technology flexibility and range of bet types all contribute to defining the eventual market size.

WHEN WE SEE ALL THE MAJOR ONLINE BRANDS LAUNCHED OVER THE COMING MONTHS, WE WILL HAVE MORE VISIBILITY ON WHETHER AND TO WHAT EXTENT THE HIGHER TAX RATE IN PENNSYLVANIA WILL BE PROHIBITIVE OF THE EVENTUAL MARKET GROWTH When we see all the major online brands launched over the coming months, we will have more visibility on whether and to what extent the higher tax rate in Pennsylvania will be prohibitive of the eventual market growth. SBC: In-play betting is widely acknowledged as a ‘perfect fit’ for

the US sports betting sector. Is the market playing out that way and how is SBTech looking to develop and positively impact this style of betting? MR: Across our European partners we typically see around 70% of sportsbook wagering coming from in-play betting, and while the US still lags behind in this metric due to its infancy, the fast-moving, stat heavy US sports such as football or basketball are ideally suited to in-play. We expect to see increasing in-play numbers as the US markets mature and have already seen some very encouraging growth, particularly around major sporting events such as the Super Bowl. In our on-property powered venues, we are also seeing our best-in-class kiosk sports betting software driving player behavior towards in-play betting. Of course, as more states open up the mobile channel, this will significantly increase the uptake of inplay wagering in the US. SBC: What’s next for SBTech in the US and are there any innovations in the pipeline that you can tell us about?

MR: In the last 18 months, SBTech has rapidly expanded its operations in the US. In November, we entered Indiana, marking the sixth US state in which SBTech powers sports betting operations. And just weeks prior to that, we launched the Score Board online sportsbook for the Oregon State Lottery. Our Las Vegas office continues to

grow in numbers, demonstrating our deep commitment to the US market and our US partners. In 2020, we will continue to expand our footprint across the US in new legalized states. SBTech’s product focus will remain on maintaining our core sports engine as best-of-breed, giving US players the best user experience as well as

supplementing our sports product suite with further innovations tailored to US sports. We are and have always been a product led business and we are constantly investing in and improving our product and platform, enabling us to become the ultimate ‘go-to’ turnkey sportsbook supplier for tier one brands in the US. • 51


EXCLUSIVE: Microgaming & Swintt CEOs

David Flynn, Swintt CEO

John Coleman, Microgaming CEO



in recent years as responsible gaming protocols see an increased uptake, spearheaded by the annual Responsible Gambling Week


he public campaigns for the year round commitment to responsible gambling intends to trigger a national conversation, with 2019’s efforts striving to highlight the tools, advice and help available to customers, as well as the best initiatives taken by operators. Last year also saw SBC introduce the inaugural Safer Gambling Forum (SGF) to Betting on Sports' CasinoBeats Forum, as well as the


Pride of Gaming awards which honoured games giant IGT, Green Jade Gaming chairman Jesper Kärrbrink and Microgaming’s PlayItForward CSR initiative. SBC Magazine caught up with John Coleman, CEO of the latter, and David Flynn, Swintt CEO, to discuss the increasingly influential role CSR is playing industry wide, after the pair participated in an SGF panel session alongside Kärrbrink, YGAM Founder

and CEO Lee Willows, former CEO of Sky Betting and Gaming Richard Flint and Yakir Firestane, Director of Digital at The Health Lottery. “To gaming companies, and I would hope to everybody in general, it’s the right thing to do,” Flynn remarked. “There’s many companies around the globe that are doing CSR initiatives, and let’s face it number one, the most important reason I’m doing it, is to make sure that I feel good about what I do for the world. “That’s the reason why I do it, but I can’t really speak on behalf of other gaming companies, but my aim is to make sure that every gaming company in the industry has a CSR initiative, and hopefully working with us.” He added: “In terms of responsible

ON ENSURING BECOMES THE NORM gaming, if we think about the way the industry has been progressing, it’s just really important to look after our customers. At the end of the day our customers are paying my mortgage, they’re helping my children go through school, so it’s really really important that we look after them and we ensure that there are no damaging impacts on their lives going forward. “There’s a number of organisations and charities that are looking after responsible gaming, people that have been addicts in the past and to hear their stories is heartbreaking. So we need to make sure that we look after responsible gaming and that is becoming much more prevalent now, to ensure that we do look after everyone in the gaming business. It

may be a small percentage, but that impact is really hard on those people and their families.” Coleman was then asked how important is it for the gambling industry to ensure that it gives back to local communities. He explained: “I think it’s hugely important. At


Microgaming, we started in 2002 with what we called The Hospital Trust and it was with an intent to give back, that’s since evolved into what you know as Microgaming PlayItForward. “Our evolution has been with the intent to give back and now we have an overriding desire to do good, but I think as the industry grows and the industry expands we’re fortunate that we’ve been successful. “Incumbent on everyone operating in this industry, not just this industry but corporate in general, it’s really important to do good by our society and communities we work in and obviously with respect to the player base and ultimately those who actually play our games - it’s important we look 53


EXCLUSIVE: Microgaming & Swintt CEOs

after those players as well. “We need to ensure that we do more in respect of responsible gambling, the harm that comes but also the treatment that is needed when harm unfortunately is done. So, as an overriding social problem it’s something the industry has to take seriously.” A point backed up by Flynn, who chipped in: “At the end of the day I’m a human, everybody in the gaming industry is a human and we all want to look after each other and make sure that we make money in a responsible way, and make sure that we don’t do any harm to any person in any way whatsoever,” he says. “The measures that we put in place, both previously when I’ve been on the operator side but also now as a provider, I’m sure that we can make a real positive impact for anybody that has had any challenge whatsoever with responsible gaming. And we need to make sure that that just becomes the norm, it just should happen. Everything else that we can do about that in terms of CSR is a very important plus.” Referring back to 2019’s Safer Gambling Forum, Coleman stressed: “I respect a lot of companies in this industry and they do do a lot, perhaps it is just not well known about, but I think what we can do is talk about it more. You know, when we come to

conferences such as this, I’ve come off a panel where we were talking about it openly. “Now this is the first time, the first panel that I’ve been on, where we were talking exclusively about CSR, so talking about it more is certainly a start. And I think that in reality the industry in smaller areas does actually do a lot but perhaps we need to look at things on a more consolidated basis, which might get more public attention than those individual companies do at the moment.” Concluding, Coleman singled out one initiative in particular as a proud introduction at Microgaming: “We actually have a number, but let’s focus on one because it

...WE ALL WANT TO LOOK AFTER EACH OTHER AND MAKE SURE THAT WE MAKE MONEY IN A RESPONSIBLE WAY, AND MAKE SURE THAT WE DON’T DO ANY HARM TO ANY PERSON IN ANY WAY WHATSOEVER was a decision made by our staff and I believe that those which are staff led will ultimately have more impact on our programme, because of what it brings to the overall culture of Microgaming. “So the one I would refer to is that we have a daily allowance for staff and they can go and buy their lunch, they choose what they buy but we set them a task and said ‘right, if you don’t spend all of that on a daily



basis, what we will do is we will give the difference to charity’. “So the staff have the choice of whether they have the extra bar of chocolate or whether they don’t take it, so there’s benefit from a health perspective but it’s also what could we do with that money. The exciting thing is that to date we have raised over £90,000, which I’m immensely proud of because it’s not driven by me or the company, the staff have chosen to do this. Now

we are faced with five to 10 charitable requests every month, and the staff decide where that money goes. “We have a PlayItForward wall sitting in the office, and staff can vote which charity they would like to support. So not only are they funding it by not using all of their lunch allowance, but they also choose where the money goes. So I’m really proud of that.”




CBS Debate










Lee Willows, YGAM Founder and CEO

a panel on the ‘key to sustainable gaming’ saw industry leaders provide contrasting opinions on corporate social responsibility (CSR) from the perspective of both operators and charities






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n the panel was Microgaming CEO John Coleman, Green Jade Games Co-Founder Jesper Kärrbrink, YGAM Founder and CEO Lee Willows, former CEO of Sky Betting and Gaming Richard Flint and Yakir Firestane, Director of Digital at The Health Lottery. Diving straight into a discussion on CSR initiatives, Coleman contributed a provider's perspective on the topic and explained some of the difficulties faced by the industry when working alongside charities: “We have been faced with situations where domestic violence charities have refused to receive funds from ‘Play It Forward’ and I absolutely understand the reasons why but I still think its right that we tried,” he said. “I would absolutely have no issues if the staff chose a particular charity and I would work closely with that charity to find a way to accept it. “On the one hand I understand the obvious connection in regards to gambling related harm, but equally you can’t take a stick and keep beating the industry with it, criticise it for not giving back, shout about it and then when the desire comes to give back you say ‘I don't want your money’, that to me seems odd. “I suspect in this day and age

...WE MADE A DECISION FIVE YEARS AGO TO CONSCIOUSLY WORK WITH THE INDUSTRY BUT MY GOODNESS THERE WAS QUITE A LIVELY DEBATE ALL THOSE YEARS AGO charities should not be turning away donations. We know the good they do, they should hopefully accept all of the funds that come their way and not refuse them.” With this being said, Willows disagreed and provided the panel with a charity perspective as he retorted: “From a charities perspective that’s not the case. Charities are run by trustees, so volunteers and the top organisations are running those and

actually the decision process that goes through the trustees minds is actually ‘what would our beneficiaries think if we were some way connected to the gambling industry’. “As a charity we have to be accountable to the regulator around public trust, so then what would the public think of us if we’re working alongside the industry and then there’s the regulator themselves. “I would have thought that on the boardroom on Samaritans for 57


CBS Debate

Yakir Firestane, Director of Digital at The Health Lottery

...NOT RUNNING THE BUSINESS IN SUCH A WAY THAT YOU DON’T DO BAD IS OK, BUT CSR IS PROBABLY RUNNING YOUR BUSINESS IN SUCH A WAY THAT YOU ACTUALLY DO GOOD example, that debate would have been happening. It’s certainly happened within YGAM, we made a decision five years ago to consciously work with the industry but my goodness there was quite a lively debate all those years ago. “Once the trustees are at that point, they control the governance of the organisation, then comes the exciting bit around what the partnership looks like, what's the social value it can deliver. We would then get involved but some charities are quite guarded with their brand.”


Richard Flint, former CEO of Sky Betting and Gaming

Jesper Kärrbrink, Green Jade Games Co-Founder

Firestane continued discussing CSR in relation to charitable donations, drawing on his experience with the Health Lottery to add: “When the Health Lottery was setup we setup one single charity that gets all the money we raise and there job is to find projects to fund. “The Health Lottery, as the one selling the tickets, we have absolutely no influence with what they do with the money and then that gives them the freedom of choice and the freedom of decision to go and find really small grassroots projects that are interesting. “I think that is actually a very interesting model because let's be honest with ourselves, Cancer UK doesn't need our money, they have enough. But there are many small vulnerable charities, projects and initiatives that do. It’s harder to find them but if we truly are in this to do

CSR IS SOMETHING YOU DO OUTSIDE THE BUSINESS WHERE YOU USE YOUR MOMENTUM AND POWER TO DO SOMETHING GOOD good then we don't really need that brand. “I think that it's not only running our business in a way that doesn't harm people its running our business with having the ability to do something good built into the business model. So, not running the business in such a way that you don’t do bad is ok, but CSR is probably running your business in such a way that you actually do good. That’s how I would put it.” Kärrbrink took Firestane’s point of finding the charities, projects or initiatives that need funding and

some fantastic initiatives that are reducing carbon dioxide from the atmosphere because we need to take out some to cut out the largest problem of mankind global warming, and there is some really good charities doing that. Super difficult to sell in the gaming industry, I haven't given up yet, it's a fantastic concept but whenever I speak to people they say ‘it sounds good but…’ “There is something in this industry where maybe we’re afraid of being accused of whitewashing, we don't dare to step up and do these things. I also think that we are a bit on the back of our feet now because we are hammered by the media so we are a bit afraid and uncertain of who we are and how strong we really are. “As soon as you open a newspaper it says something bad about us, it takes some balls to step up and say ‘never mind that we are doing the right thing and now we are going to do this as well’.”

discussed it further. He noted the gaming industry’s obsession with responsible gambling and CSR and touched on how many within the industry are confusing the two. Furthermore, he also discussed his organisation’s latest CSR concept which had a primary focus on environmental conservation. The co-founder of Green Jade Games stated: “The gaming industry is so consumed with responsible gaming and a lot of people in the gaming industry see responsible gaming as CSR. In my opinion that is wrong. Responsible gaming is something that we should do anyways, to take responsible gaming carefully is not CSR. CSR is something you do outside the business where you use your momentum and power to do something good. “We developed a concept we call ‘Tip the Planet’. So this is every time

THERE'S THE SORT OF DOING BROADER GOOD THINGS BUT ALSO THERE HAS TO BE A FOCUS ON RUNNING OUR DAY-TO-DAY BUSINESS WHICH IS GAMBLING IN A WAY THAT PROVIDES THE MOST ENJOYMENT WITHOUT HARMING PEOPLE you do a winning transaction you tip the planet, like when you play casino and you have a good run you tip the dealer, its a normal procedure if you win you tip the dealer. This is the same but if you win you tip the planet. That’s the kind of transactional system, we even developed a tip man that flies up and tips the planet and money goes off. “In our case we will use that for

Flint concluded the panel discussion by providing a highly contrasting opinion to Kärrbrink on CSR: “I like to be controversial,” he said. “I think what has been said about doing stuff that is unrelated to gaming and that has a broader social purpose is obviously a big part of CSR and is really important not least to change the debate and to recruit people etc. “But, I do think there is potentially a risk that if we don't focus on doing the right thing, which will involve turning away certain revenues in our core business which is gambling, then all this stuff will be seen as trying to wash the story and an irrelevance to try and distract people from what many think is a fundamentally damaging activity. “So, I think there's two parts to it. There’s the sort of doing broader good things but also there has to be, maybe as a hygiene factor although I don't think it is for everyone, a focus on running our day-to-day business which is gambling in some shape or form in a way that provides the most enjoyment without harming people.” • 59


Gender imbalance


THE ‘LADDISH’ FEEL to gambling advertising has

contributed to the gender imbalance in the industry, both in terms of bettors and potential employees, according to Star Recruitment CEO Simon Banks


he ‘Ladbrokes Life’ campaign, said Banks, is a good example of this. Launched in 2014, the bookmaker changed the typical focus on odds and prices to a campaign following an ‘ordinary’ group of men engaged in ‘commonplace leisure activities’ - in this case betting. Finding some praise for its focus on the ‘bettor’, albeit mixed in with some ASA reservations over the implication


that gambling could enhance personal qualities, the campaign missed a beat by featuring just men. “I think the gender imbalance in the gambling industry is partly down to the way the industry portrays itself in its marketing,” explained Banks. “Too much of the advertising has a ‘laddish’ feel, which not only alienates female potential bettors, but also potential female employees.”

As part of an interview at last year’s CasinoBeats Summit, he added: “That’s the reality [of the marketing] - the ‘Ladbrokes Life’ or Ray Winston saying “get on”. Why would a female computer science graduate want to go and work in an industry like that? “So yeah, there’s definitely perception issues there. We’re approaching people who have got no experience and we are trying to persuade them that this is a good business to get into!” While recruitment for the gambling has routinely struggled with these perception issues, a newer problem has been finding the right level of experience to meet increased compliance demands. “The big thing as well is compliance,


the regulatory side,” continued Banks. “Nowadays, not only do traders have to be able to manage liabilities, they have to start asking questions such as ‘where is the money coming from? “Affordability checks, some sort of things like that, these are the new things coming in. These things are quite difficult to recruit for because if we see the large fines that the massive operators are getting. “One of the things behind that is because the operators aren’t putting the money into the resources, so they might have a compliance team of four when they should have one of 10. “But where do you get six experienced compliance people? There’s a shortage. I think there are also issues around training, I think if the industry wants to grow, they have to train more people in those skills.” The biggest agenda for recruiters, whether they are targeting university graduates interested in sports or finding those with an eye for compliance, must be defeating the ‘laddish’

stigma attached to the gambling scene, and portraying a place of work where anyone would want to start out on their career path. “It would appear that career progression is easier for men than it is for women and operators should ask themselves why that is,” said Banks. “Some

Particularly when the gambling industry tends to market itself, as being about young white males.” Banks concluded by stressing that the aim must be to package career opportunities which bring out an underlying passion, and not just focus on the money side of things.


He explained: “We find that the biggest challenges when there are completely transferable skills, is why come and work for a gambling industry when you could go and work, for example, at a bank? What is the better package? It’s not just about money, it’s about other things as well, but money does talk obviously. “The traditional university graduate with a maths degree who is mad on sport, yeah they’re going to join the industry. It’s getting the people who have a degree in computer science to say ‘yeah I want to get involved in the gambling industry’ when they’re not interested in sports. It’s about moving away from traditional bookmaking roles in the industry, and moving into more technical roles.” •

companies have made an effort to attract and retain women, and it is notable that they are the operators that have the most inclusive marketing campaigns and display diversity on the careers section of their websites. “It’s a challenge. How do we recruit people who have traditionally not worked in the gambling industry? 61

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of Payments Isabelle Delisle discussed the current situation of crypto in igaming, the potential banks perspective of the industry and what’s ahead for payments in the new digital age


s many countries and industries around the world engage in digital transformation, the number of payment options available continues to rise. Since gaming is now judged as more of an ‘online industry’, all methods have to be explored. However, it has

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become difficult for bookmakers to sieve out the best from the rest. Furthermore, the growth of popularity in crypto assets could be considered another headache for operators - not only due to the amount of coins available but also on a reputational level as the industry continues to face criticism.

The online ecosystem that cryptocurrency is built upon features many possible vulnerabilities surrounding anti-money laundering (AML) and know-your-customer (KYC) - two issues that operators face on a daily basis already. Yet, operators would be mistaken to dismiss virtual currencies as research by Azoth Analytics reveals that the global cryptocurrency market is projected to grow by a CAGR (compound annual growth rate) of 11.9% between 2019 and 2024. Isabelle Delisle, Head of Payments at Pinnacle, believes that the ‘main issue’ revolves around communication 63


EXCLUSIVE: Pinnacle Head of Payments


between all parties - operator, regulator, financial institutions and the consumer. “Whenever anybody is talking about crypto they refer to it in a very technical perspective and many experts in the field possess such a high level of knowledge it is often difficult for them to break it down for those who don’t,” she explained. “This can cause problems when you are speaking to someone in a position of power who has no understanding of crypto or technology surrounding it. “We need to change our approach and more explain how it can be used and paint a complete picture.” This breakdown in communication often creates a barrier for operators to utilise crypto assets due to regulators' caution over something that they might not fully understand. Cryptocurrency gambling has begun to gain more traction in recent years as punters seek out their preferred method of betting. This style of gambling has become attractive due to the decentralised nature of these currencies which


enables direct interaction, faster deposits/withdrawals and lower fees. Furthermore consumers in countries that deem gambling illegal can now access fully anonymous gambling sites using a VPN service. However issues with AML, KYC and cybersecurity means many choose to

ultimately come into our innovative industry.” Despite ongoing responsible gambling debates in many countries, one could argue that now, more so than ever before, igaming is being considered a genuine industry by the big banks.

WHENEVER ANYBODY IS TALKING ABOUT CRYPTO THEY REFER TO IT IN A VERY TECHNICAL PERSPECTIVE AND MANY EXPERTS IN THE FIELD POSSESS SUCH A HIGH LEVEL OF KNOWLEDGE IT IS OFTEN DIFFICULT FOR THEM TO BREAK IT DOWN FOR THOSE WHO DON’T avoid any affiliation with crypto. “For example, everybody focuses on anonymity of cryptocurrencies when actually it is probably the least anonymous solution there is,” added Delisle. “Every transaction is traceable, it’s all online and you can see everything from the beginning of the process to the end. “It’s all about changing the overall reputation of crypto, if you can quash a normal person's doubts then it will

Delisle noted that since the passing of PASPA many financial institutions are beginning to follow suit as ‘globally banks are often guided by the United States’. She said: “The US spent a lot of time, effort and PR into demonising gambling for several years and now they have decided to regulate the industry, many banks are starting to change their perspective of it. “Now that they are opening up and banks are starting to see the benefits

As an example of this change in mentality, Delisle described her recent meetings with Canadian banks who were ‘suddenly very interested’ in the industry. “Previously they would have told me that ‘we can't be involved with gambling because we will lose our US banking’ but now they are responding with ‘let us talk to our US banking, see if their opinion has changed and then we will be more open to it’ so acceptance is slowly happening.” Although the outlook is positive, Delisle added that until regulators get on board firms cannot begin uncovering the true potential. Without compliance guidelines, operators can easily put themselves at risk of hefty fines or possibly worse with the implementation of the fifth antimoney laundering directive (AMLD5). On top of this, with the demand for crypto still growing, customer conversion rates could disappoint operators if they were to launch a tailored solution. “It is a market that’s growing fast but there’s still a long way to go,” admitted Delisle. “The perception in banking and across the board remains very negative and there has to be a change to the mentality that crypto is the ‘bad guys' money’. “From a merchant's point of view, it is the biggest hurdle when speaking with financial institutions. Nearly every contract I read quizzes about crypto involvement and you do think what would happen if I said yes? “Am I not going to receive a bank account because I deal with something that they don’t possess the knowledge so that in turn bites me?” • 65


PEF Debate Andrea McGeachin, CEO of Amack Consultants

Richard Connolly, Associate Director of Payments Business Development at The Stars Group


huge level of anticipation within the igaming industry, not least for payment providers, but understanding local rules is key to taking advantage of their size and potential


hen you are entering new markets, doing the right research into local or alternative payment methods (LPM/APMs) is ‘vital to success’ said Andrea McGeachin, CEO of Amack Consultants. Whilst moderating the 'Payments in Emerging Markets' panel at the most recent Payment Expert Forum (PEF), McGeachin opened the floor by asking the panellists to analyse their approach when seeking to maximise the opportunity presented by an

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emerging market “Fundamentally I look to secure the four main product types in every country that we operate in - cards, wallets, banking and cash vouchers,” explained Richard Connolly, Associate Director of Payments Business Development at The Stars Group. “From there once you’ve identified the four products in the market I then look for two versions of each product for a broader view.” He continued by explaining how the wide spectrum of players demanding

card might seem like it would make an operator’s job easier, but cautioned that certain markets will block 7795 processing, the merchant category code (MCC) for gambling. Bryan Blake, CEO of Hexopay, elaborated on how the approach differs from a payments platform perspective and how, unlike an operator, a payment service provider needs to grasp the complexities in order to securely support the new endeavour. He said: “We spend a lot of time understanding these emerging markets looking at what solutions are available, what the regulatory position is and how they work. “We do this so we can go back to an operator and present what we’ve identified, state what works and what 67


PEF Debate

doesn’t. We try to do a lot of the heavy lifting to understand the scene that’s there for the merchant and almost try to hold their hand through the journey.” Regulation is undoubtedly another crucial aspect to understand before entering a new market. Paul Bolton, chief payments officer at Costa Consultants, highlighted the difficulties that have been faced in the US. “For me the biggest issue faced on entry is the regulation that’s in place already,” said Bolton. “As Richard said you want to secure as many payment options as possible but the regulator might make that more challenging than they need to.” “7795 is a prime example. The US has been open for betting-based transactions since around 2012/13 but there’s still several large US issuers blocking 7795 and 7801 today so that is inevitably something difficult to overcome.”

Bryan Blake, CEO of Hexopay

WE TRY TO DO A LOT OF THE HEAVY LIFTING TO UNDERSTAND THE SCENE THAT’S THERE FOR THE MERCHANT AND ALMOST TRY TO HOLD THEIR HAND THROUGH THE JOURNEY Justin Ferrabee, CEO of Mazooma, echoed Bolton’s thoughts on the difficulty of regulation in the US and pointed out the importance of complying with both gaming and payments rules. “I would add that the challenges of regulation on the merchant side for gaming is massive,” said Ferrabee. “As much as it’s important to understand the gaming regulation you have to remember there’s equivalent banking regulations alongside each payment which can be very different country by country.

“There are over 10,000 banks in the US whereas in the UK and Canada there’s much less. Then there are different regulations that you have to meet on a federal level but also on a state level. You have to integrate these solutions to comply with the range of regulations otherwise you simply cannot operate there.” Connolly added that despite the monetary value in igaming, many banking infrastructures around the world will not have a regime in place to accept gambling payments. “Sticking with the US a little longer, huge banks there are treating gambling as basically a new industry and they simply will not change their policies for us,” he explained. “Getting older and more traditional banks to fully accept our industry will be very difficult.” One the other hand, Paloma González Mascaraque, Head of Payments at BetConstruct, believes one of the biggest challenges is in fact

Paloma González Mascaraque, Head of Payments at BetConstruct

Justin Ferrabee, CEO of Mazooma

Paul Bolton, chief payments officer at Costa Consultants

internally as the shape of the company has to change and adapt to suit the needs of the market. She said: “It is basic to say but when you go to an emerging market you need to ask the payment provider specific questions such as are they accepting a virtual licence?” “Then once licensing is done you have to establish a corporate structure and reach out to a payment provider and look at which solutions you want to take up.” As simple as it may sound, González made clear to point out the entire company’s structure will change with a new market and some alternative solutions will severely impact costs due to processing in the given market. To decide on what APMs are best for your business, Blake presented a range of principles to follow in order to know how beneficial it would be. He said: “You do really need to look at market share and understand simple


things such as which method has the biggest brand, is it easy to use online, what is the customer flow like, is it seamless in the sense of one-click or two-click?

WE OFTEN USE OPERATORS THAT MIGHT HAVE OFFICES THERE ALREADY TO ADVISE US WHO TO CONTACT IN THE BANKING INDUSTRY SO THEN WE CAN UNDERSTAND WHAT NEW PAYMENT SOLUTIONS THAT ARE INBOUND “We look at those and then study what’s upcoming in the market. We often use operators that might have offices there already to advise us who to contact in the banking industry so then we can understand what new payment solutions that are inbound.”

Panellists agreed on having ‘people on the ground’ to be one of the most effective routes to understanding a market but all made clear to never disregard a newcomer. “Solutions can often change an entire landscape,” added Blake. “The European market has seen this in recent years and we assess it on the basis of what is going to be most beneficial for the customers.” Gonzalez concluded by stating that you cannot completely ignore any method, as it may end up backfiring further down the line. “If you choose to not read an email from a payment supplier then it is at your own risk,” she said. “You have to understand that this is their objective to get you on board and as frustrating it might be at times, with 99% of them being rubbish, you can’t disregard products in one country as they could operate in other markets you are looking at in the future.” • 69


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on some of the key areas for digital marketers, operators and affiliates to consider in 2020 as they gear up for an exciting growth year ahead


very year the affiliate marketing sector continues to change, and this year is going to be no different. Despite being met with a host of challenges and opportunities as the regulatory landscape adapts and new technology trends come to the fore, one thing is clear - it shows no signs of stopping. Here are five key things to consider:

Consumers will be more demanding Customers are already sophisticated in terms of what they want to see, as well as when and where they can access offers, participate in entertainment and enjoy recreational experiences online. Yet, the rise of the millennial and the demand for user generated and trusted content in things such as reviews and loyalty programs will drive brand marketing to a new level in 2020. Marketers are going to have to think differently about where and how they spend their assigned budgets to maximise both reach and engagement from their media spend. Mass marketing is not going to work any more. You’ll need to be niche and laser focused on who you want to target, then work your marketing strategy accordingly to ensure maximum consumer reach.

MASS MARKETING IS NOT GOING TO WORK ANY MORE. YOU’LL NEED TO BE NICHE AND LASER FOCUSED ON WHO YOU WANT TO TARGET… As technology allows customers to comment and drive experience reviews in real time on social channels, brands will need to consider the customer as part of their extended content marketing and brand building initiatives. Word of mouth and influencer experiences will be a big part of brand development, while affiliates will need to be considered as a bigger part of the brand marketing strategy than was previously considered. Why? Because they have large

volumes of data and an inherent insight to customer requirements that can help operators reduce the need for mass marketing spend. We’ve seen this discussed by big brands at last year’s #DigitalMarketingForum - hosted by AffiliateINSIDER - such as Catena Media, who are aligning themselves more closely to operators as a digital brand sponsor vs a lead generation or performance marketing partner. Understanding what your customer wants and values is going to drive your marketing success in the year ahead. That means putting the customer first and listening for the right opportunities to sell to them. It also means looking at your acquisition channels and how you currently use them, considering the bigger picture and how it can integrally mix to meet 71


Rising star of digital strategy

your end objective. There is no label that will define what an acquisition partner can or should deliver. The term affiliate marketing will likely become outdated as it no longer provides a clear description of performance marketing partnerships and is no longer a good enough descriptive “label” to encompass the complexity of the relationship it serves in the wider digital marketing mix. It means we will need to start rethinking the past to build the future whilst accommodating an ever changing landscape that we must work in.

Technology will develop and your channel focus will get more niche Brands will need to start choosing a place or channel to niche into. This will be a key point of focus for businesses to reach and engage their target consumers. What I mean by this is that you will need to consider whether your website still offers the method of engagement that is relevant for reaching your audience? Should you be using social channels to reach and engage and convert your customers instead? What about focusing on their preferred device? Would it be more beneficial to offer an app or build a web based platform that provides loyalty with a membership (community) offering? Added to this, should you be focusing more on content creation and then picking a channel that supports this style to reach your target customer, such as video content as an example, which can be streamed or hosted in Twitch and YouTube? It’s going to be impossible to successfully hit every available

content tailored directly to your interests are going to revolutionise the way customers are engaged and attracted to information being put online. Brands need to be on the lookout for these distribution platforms and ensure their content is being made visible on it.

Your efforts will be more easily measured as data, tracking and new technology like blockchain will continue to become more widely accepted in the digital mix. According to a report I read recently by Business Insider, artificial intelligence (AI) will help boost profitability in retail and

THE TERM AFFILIATE MARKETING WILL LIKELY BECOME OUTDATED AS IT NO LONGER PROVIDES A CLEAR DESCRIPTION OF PERFORMANCE MARKETING PARTNERSHIPS… outreach channel. Therefore, it will be incredibly important to create content that is authoritative and adds value to your brand offering, before finding the right place to put it for maximum effect. Budgets will get scrutinised further, with mass marketing and brand spend reduced in favour of trackable performance marketing channels.


wholesale by nearly 60% by 2035. From an affiliate marketing perspective, I’d like to think this is already happening with the slew of development I can see based on innovative add on tools that are being developed to sit alongside standard marketing program automation and tracking platforms.

We are entering a new age of data overwhelm Using AI to drill deep and create evidence based decisions is going to influence how we embrace customer personalisation. AI tools can learn about a user, their preferences, and their behaviour to the point that it can know what the user needs and when they need it. This information will help affiliates get a lot more targeted in the way they engage new customers, and how they convert them to the right offers - thus offering better ROI results. We also need to consider how natural language processing (NLP) and voice search popularity are going to change the way we acquire traffic to offers. SEO and content marketing for keyword ranking is surely going to need to change. Search engines like PUBLC that offer user generated

Your marketing budget will have to work a lot harder The slowdown in economic growth, alongside the political instability or indecision on regulatory frameworks in some regions, is going to impact how brands distribute their marketing spend and where affiliates focus their efforts for achieving year-on-year growth. This economic concern affects people’s eagerness to spend online and businesses to invest in riskier growth opportunities which, in turn, impacts how companies (and ultimately brands) will spend their marketing budget. There will be an opportunity to develop and increase the value of your affiliate marketing channel within the overall marketing mix, as this model allows operators and brands to create new relationships and bring together activities across a range of digital channels.

...IT WILL BE INCREDIBLY IMPORTANT TO CREATE CONTENT THAT IS AUTHORITATIVE AND ADDS VALUE TO YOUR BRAND OFFERING, BEFORE FINDING THE RIGHT PLACE TO PUT IT FOR MAXIMUM EFFECT Attribution plays a key part in digital spending. We now have the data to really analyse it and build strategies that can improve conversion and acquisition based on price and effectiveness of targeted messaging.

It will be a year of using data driving performance marketing and perceptions of the past being changed based on evidence and facts The year ahead is going to be about re-aligning relationships. Put simply, the previous “them” and “us” perception in affiliate marketing is going to get squashed. We’ve come a long way since 2017 when brands were shutting affiliate programs down because they simply didn’t know how to manage them effectively. Affiliate

entrepreneurs have stepped up and taken ownership of their conduct, with some serious new contenders growing their business ranking and volume quite fast because of it. The fact is, operators will realise that affiliates can innovate, pivot and react a lot faster than they can, and the ones who embrace this will seek to build stronger relationships because of it with positive long term results in mind. At the same time, new brands using affiliate marketing as an entry route into different regions will also become more commonplace. Brands will be using affiliates first to test these areas in a low risk way, get brand recognition and early data learnings on consumer behaviour before attributing budgets to advertise in these regions. The US and LatAM are key examples of this. Affiliate marketing will not be dying off anytime soon. It will, however, be changing to better suit brand requirements and help close the loop between lead generation, conversion and retention. • VISIT the AffiliateINSIDER stand (Q13) at LAC to find out how you can growth hack your affiliate marketing in 2020 73

Dancing the Flamengo

Tim Heath, Coingaming Group CEO

MARKETING in gaming, may have a little disposable income to spend, but previously had no means of depositing and withdrawing. In these cases, cryptocurrencies are a complete gamechanger.

FOOTBALL FOCUS FOR COINGAMING’S LATAM GROWTH STRATEGY THE OPERATOR OF CRYPTOCURRENCY-LED BRANDS and outlines ambitious growth plans in Latin America including the sponsorship of reigning Copa Libertadores winners Flamengo


hortly after Brazilian club Flamengo won the Copa Libertadores final in thrilling fashion last November, SBC Magazine spoke with the Coingaming Group CEO Tim Heath to discuss the Flamengo sponsorship, the disruptive power of cryptocurrencies and the operator’s next steps in the region.


SBC: recently announced a shirt sponsorship with Flamengo. What was the thinking behind this, and how has it been performing so far? TH: Brazil has been an important market for us for some time. We had already been working with sporting ambassadors in the market, including World Cup winning footballer Denilson

SBC: How do you localise your products for key Latin American markets? TH: Both the and Sportsbet. io websites are available in Spanish and Portuguese. But we believe that localising products means more than simply offering the website in a particular language. We also have full, live chat customer support available in these languages 24 hours per day; we regularly work with ambassadors and influencers in Brazil and across Latin America; the Sportsbet. io Brazil Twitter feed has become hugely popular in the country, with tens of thousands of followers; we run local promotions across the region, and allow players to deposit in Brazilian Reals. In short, we are looking to offer a truly local and bespoke experience to these players. and MMA fighter Erik Silva, but we wanted to ramp things up. We initially signed a digital partnership with Flamengo, but it soon became clear that there was more value to be had with a shirt sponsorship. Our shirt sponsorship of Premier League team Watford has been a big success, so we jumped at the opportunity to put the Sportsbet. io logo on the shoulder blade of Flamengo shirts. The first game of the sponsorship was Flamengo’s 5-0 Copa Libertadores semi-final victory over Gremio, so it couldn’t have been timed better. The following morning, images of celebrating players - and the logo - were on the front pages of newspapers across Brazil.

Latin America’s igaming market is at a turning point. We are seeing several major operators and providers eyeing up the region with immense interest; several markets are in the process of implementing new igaming frameworks. Everything is set up for significant growth over the coming years. So we are extremely happy to already be well established in the region. The focus for us now is to continue to build upon the growth we have enjoyed so far.

SBC: How important a region is Latin America for the Coingaming Group? TH: Brazil has quickly emerged as one of our key markets, but the region as a whole is also showing encouraging signs of growth. Argentina is another interesting territory. recently partnered with one of the country’s leading football teams, Rosario Central, to help develop and sponsor a free match-day app for the club’s fans. If you take a step back, it is clear

SBC: Have customers in Latin American markets been more willing to adopt cryptocurrencies as a payment method than users in other regions? TH: Latin America is an extremely interesting region for cryptocurrencies. Several countries in the region have had serious issues in recent years with inflation. In Argentina, the peso has lost roughly half its value against the dollar over the past 12 months; in Chile, the recent unrest saw its peso lose

...IMAGES OF CELEBRATING PLAYERS - AND THE SPORTSBET.IO LOGO WERE ON THE FRONT PAGES OF NEWSPAPERS ACROSS BRAZIL 10% of its value in a matter of days; and of course the crisis in Venezuela has rendered its currency practically worthless. Against this backdrop, and an increasing distrust of central banks, many people are turning towards cryptocurrencies for greater control of their money. It is a trend I can only see continuing over the coming years. From a gaming perspective, cryptocurrencies also open gaming to a wider audience. Around 70% of people across Latin America are either unbanked or underbanked; yet 64% own a mobile device. That adds up to millions of people in the region who may be interested

SBC: What have been the key successes for the Coingaming Group this year, and what is planned for 2020? TH: 2019 has been a game-changing year for us as a company. We continue to grow extremely quickly as a company. We are now a team of more than 300, and we will shortly move into our new headquarters. As well as signing landmark sponsorship deals with Watford and Flamengo, was also the headline sponsor of the CONIFA European Football Club in Artsakh. Alongside our core and brands, this year we also introduced our Bombay Club live casino, tailored to our VIPS and capable of accepting wagers of up to 50,000 euros per hand. Our growth so far has been built upon two principles: delivering a fun, fast and fair experience for customers, and putting those customers at the very centre of the universe. For 2020, we will continue to scale by following this ethos. We hope to announce some exciting new sponsorship deals, we will work tirelessly to improve our product offering, and there will be a few surprises along the way as well. • 75


2019 in review


on a strong 2019 for the company littered with key acquisitions and initiatives taken in support of a safer online betting environment - for the benefit of players, society and all igaming actors SBC: How did you reflect on 2019 for Better Collective? JS: Looking back at 2019, I am pleased to say it was yet another strong year for Better Collective. I am glad that we have been able to successfully proceed with our strategy and steer our business forward, while acquiring new brands and getting our feet on the ground in new markets. In this time, we have also been fortunate to receive some highly prestigious industry awards. I am humbled by the recognition by our peers of the organisation we have built


over these years, and the talented people I am surrounded by on a daily basis. The learnings from the past year are strong indicators that we, meaning all actors within the entire industry, need to do all that is within our capabilities to fight problem gambling and build a safer environment so we together can lift the industry – for the benefit of the players, society and the igaming actors. Lots of initiatives have been taken during the year, which support a safer online betting environment and I look


forward to continuing this journey in 2020. SBC: What were the company's key highlights? And what were the biggest learning points? JS: We have had many highlights during 2019. Among the most prominent I would mention the launch of the new version of our flagship product Many colleagues across Better Collective offices have worked diligently on this project for a long time, and I am pleased to see the site is up and running in a modern fashion, which ensures a top-class user experience that gives us new opportunities from a back-end perspective. Secondly, in 2019 we acquired some leading US sports betting brands such as RotoGrinders, VegasInsider and ScoresAndOdds.

Each of these acquisitions also allowed us to bring extremely skilled personnel with local US market knowledge into our organisation. This has set us in a strong position to scale our business in the US as more and more states begin to regulate online betting. 2019 was also the year we entered into our first media partnerships. With our partners and The Daily Telegraph, we are delivering all of their content for sports betting and casino to educate and empower the New Jersey and UK audience of online bettors. On top of that we became founding members of Responsible Affiliates in Gambling (RAiG) which aims to promote the socially responsible marketing of gambling products and a safer gambling environment for consumers. Plus, in line with our dedication to responsible gambling, we also invested in Mindway AI that specialises in innovative and advanced software solutions for the identification of at-

risk gambling and problem gambling behaviour. I look forward to building on these partnerships in 2020. We have known it for a long time, but again, I think this year proves that for the industry to have a chance to grow in a sustainable way, all actors

THIS HAS SET US IN A STRONG POSITION TO SCALE OUR BUSINESS IN THE US AS MORE AND MORE STATES BEGIN TO REGULATE ONLINE BETTING have to take the work seriously to minimize problem gambling, and we need to be better in communicating about how we are relevant and can bring value to the communities we are active in. SBC: Were you surprised at how the first year unfolded in Sweden? JS: No, I would not say I was surprised. There always will be some

disturbances when new regulations are implemented in a market – we have also seen this happen in other markets previously. That being said, we expect that the market will find a balance and stabilize over time, which will lead to continued growth in the years to come. SBC: Does the current discord between operators and regulators in the country mean that the bigger opportunity lies with the market's affiliates? JS: It is a balance act. Generally, what we have learned is that it is key for legislators to find just the right regulatory balance – if not, channelization will decrease and unlicensed actors will win market share. This is not in the interest of anyone except for the unlicensed players – and this is also not in the interest of affiliates that work seriously in the market. I think the most important thing is to find the right balance between regulation, operators and player 77

2019 in review


BOOTH D16 protection. When this is found, all actors will benefit from a more stable and safe environment. SBC: Are you expecting any big regulatory changes in 2020? For example, might Svenska Spel's voluntary ban bring about wider changes to permitted advertising? JS: One thing we have learned over the years is that it is difficult to predict the future. However, I am quite confident that if the industry does not regulate itself and secures a safer betting environment it will become more regulated by politicians. SBC: On a more general level, what is the state of play for affiliates in 2020? How positive is the outlook both in Europe and the US? JS: In general, I see great potential for affiliates in 2020 – both in Europe and the US. To maximise our potential, it requires that we keep being relevant and bring value to our users. As responsible gambling (for good reasons) continues to be at the top of the agenda affiliates, more than ever

before, need to be compliant across all operations. The affiliates that follow this mantra will be the ones that will gain the largest market shares. With more and more states in the US regulating online betting the size of the overall US market continues to increase, which naturally will lead to more competition among affiliates.

WE HAVE A STRATEGIC AMBITION TO BE THE NUMBER ONE SPORTS BETTING AGGREGATOR IN THE WORLD I believe the regulation of new markets constitutes a great opportunity for affiliates, as affiliates hold the trusted role to educate the bettors to better understand the legislation in the market and how to navigate responsibly among the licensed operators. The affiliates that will become the most successful will be the affiliates that truly understand the market, its local differences, and how to cater to

the players in the most relevant way. SBC: Finally, what are the key objectives for the company in the year ahead? JS: It is a core part of our DNA to always strive to be better, innovate, and conquer the next mountain tops in our journey. We have a strategic ambition to be the number one sports betting aggregator in the world. Our overall task for 2020 is to continue our work to realize this ambition, while providing our users with the best, most relevant, entertaining and engaging experience on our platforms. Internally, we keep focusing on developing our colleagues and leaders both on a personal and professional level to ensure they keep being motivated and dedicated in their jobs. In the end, caring for our employees remains one of the biggest drivers for our success. We have ambitions to keep growing our business organically while also seeking M&A opportunities to strengthen our position in core markets. •

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The SBC Summit is where the world’s leading operators, suppliers, regulators and other industry stakeholders come together to share the latest developments in sports betting and igaming. It is a unique opportunity to reach and network with a global audience of decision-makers, stay updated on the latest developments and be a part of the current discussions in and around the worldwide industry.