ISSUE 13 â&#x20AC;¢ FEBRUARY 2021
Laying the foundations for success
Media and betting feed each other
FORCE FOR GOOD
Reinventing gambling sponsorships
Making sense of new measures
5-20 Sports Betting
• Elen Barber: How Kindred has defied Covid challenges • Media and betting businesses in the US feed each other • Why betting cannot underestimate CIS challenges
CONTENTS FEBRUARY 2021
• Will fragmented regulations hinder India’s potential?
22-28 US Market
• Bill Hornbuckle: The change in attitude towards sports betting • SG Digital: The next phase of the US sports betting journey
30-32 LatAm Market
• Wplay helps Playtech find natural home in Colombia
• Microgaming’s Coleman talks Germany, jackpots and CSR • GMA: Achieving balance with the 2005 Gambling Act review • SlotBeats’ Slot of the Week: Winners Review
• A force for good: The chance to reinvent gambling sponsorships • Assaf Dor, Cellxpert: Rewriting standards for iGaming affiliation
• Why US market expansion is a marathon, not a sprint • Vasilije Lekovic, Trustly: What’s new for payments in 2021
• How European Lotteries responded to the Covid pandemic • Jari Vähänen: Making sense of Finland's new gambling legislation
The SBC Leaders Magazine is brought to you by SBC - Sports Betting Community: EDITORIAL TEAM: Luke Massey, Erin Gallagher, Andrew McCarron, Craig Davies, Ted Menmuir, Joe Streeter, Chris Murphy, James Ross, Lucia Mouriño, Conor Porter, Holly Hunt SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Neil Judson, Reece Calderbank, Ross Main, Jan Willem Volbeda, Nancy Bishop DESIGNED & DELIVERED BY Better Mags (bettermags.co.uk) All material is strictly copyrighted and all rights are reserved. No part of this publication may be reproduced in whole or in part without the written permission of Sports Betting Community Ltd. Although every effort has been made to ensure the accuracy of the information contained in this publication, Sports Betting Community Ltd cannot be held responsible for any errors it may contain. Sports Betting Community Ltd cannot be held responsible for the loss or damage of any material, solicited or unsolicited. The views in the publication are not necessarily the views of Sports Betting Community Ltd or those of the advertisers. Produced and published by Sports Betting Community Ltd REGISTERED ADDRESS: Sports Betting Community, 103-105 Brighton Road, Coulsdon, Surrey CR5 2NG, UK TEL.: +44 (0) 161 367 1250 EMAIL: firstname.lastname@example.org WEB: www.sbcgaming.com
2 SBC LEADERS • FEBRUARY 2021
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INTRO Luke Massey Head of SBC Media
tay Alert. Diversity your content. Protect revenues. A lazy attempt at a few likes and shares I made on a LinkedIn post just last month, but it certainly rings true for sports betting operators. And, by default, guides the focus of suppliers to the industry looking to serve up the best selection of content for their partners. As you’d expect, the need for diversification has not escaped Kindred Group’s Elen Barber, the headline interviewee for the first EXPLAINED 2021 edition of the SBC Leaders magazine.
BARBER WHY DIVERSIFICATION SHOULD EXTEND BEYOND UNIQUE SPORTS CONTENT AND GAMBLING VERTICALS TO INVESTMENT IN DIFFERENT MARKETING CHANNELS
Looking in the mirror at my current haircut, it's fair to say I’m long overdue a meeting with a barber of a different kind, but it was still great to catch up with the operator group’s chief marketing officer, who explained why diversification should extend beyond unique sports content and gambling verticals to investment in different marketing channels. The rest of the magazine from a sports betting perspective is geared around places of opportunity for the sector, from the CIS to India, and from new states in the US to Colombia.
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And to some extent this theme continues into our casino section. Microgaming’s John Coleman tells us why entering the re-regulated market in Germany will be well worth the investment, before Gordon Moody Association’s Matthew Hickey offers his take on the impending Gambling Act review, explaining why it can be a vehicle for changing the national conversation surrounding problem gambling. A ban on shirt sponsorships for sports clubs has emerged as a likely outcome of this review, but the revenue shortfall - while significant - should not be seen as the major drawback of such a move. Representatives of 32Red and LV Bet stress that removing the industry from the public’s eye at the very moment when operators are developing effective ways to communicate healthier gambling behaviour would not have the desired effect. And how about a feel good story to finish? A lot of people have been struggling in the past 12 months, but lotteries across Europe and further afield have been doing their best to try and help people cope during these unprecedented times. SBC Leaders runs through just a few examples of the brilliant initiatives made possible by the support of the UK’s National Lottery, Greece’s OPAP and Lotto Bayern in Germany. Stay safe everyone and enjoy this latest edition of SBC Leaders!
Future proofing the company
PRODUCT, PEOPLE AND CUSTOMERS: HOW KINDRED HAS DEFIED COVID CHALLENGES ELEN BARBER, CHIEF MARKETING OFFICER AT KINDRED GROUP, reflects on laying the foundations for its
success in 2020, the growing influence of digital channels in the media mix, and finding the â&#x20AC;&#x2DC;golden pointâ&#x20AC;&#x2122; for marketing spend which balances the need for efficiency with a more diversified approach to investment channels
SBC: Thank you for talking to us, Elen. As a company, Kindred has navigated the challenges of 2020 very well. What have you got right over the last 12 months? EB: I think 2020 was an interesting
experience for all of us. Over the last 12 months, we have learnt to adapt and learnt a lot of new skills and new ways of working - all of which are definitely worth retaining for the future.
When it comes to Kindred specifically, there were multiple factors which contributed to our success such as the diversity of our brand and product portfolio. The mantra of product, people and customers was unwavering throughout the pandemic and will continue to be. If you look at the other side, it is an enormous task to successfully maintain, develop and evolve the extensive product portfolio that we have, made even trickier when you overlay this with the complex regulatory framework in the emerging markets where we operate. 2020 gave us a completely different perspective on these challenges, because it gave
Future proofing the company
us a genuine advantage. We saw our poker and casino products compensate for the temporary loss in sportsbook revenues - not just over the spring period, but for the majority of 2020. In fact, poker has returned to levels it hasn’t reached in years. It’s a product that people had slowly forgotten and found unfashionable, as such companies had placed less of a focus on it. You will have all seen multiple reports on the popularity of esports in 2020, and how a lot of customers had not previously heard of it. The esports product in general is very selective in that it’s only played by a limited number of players.
But in 2020, players wanted to try something different. Once players had tried the product, many of them loved it and continued playing even after ‘real’ sports returned. What I do think is important to mention is that going back to 2019, it was a transformational year for Kindred which played a vital role in the way we operated in 2020. It was a very challenging year in terms of financial performance, but the lessons we learnt that year contributed to our efficient performance in 2020. Obviously, we didn’t expect the pandemic, but we were 100% prepared for anything which came our way. SBC: Are there any clear examples of where you applied learnings from 2019? EB: One of the key examples that I share with my peers is that in 2019,
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we completed the upgrade and transformation of our CS technology stack which facilitated an easy transition from working in the office to working from home without any downtime. Not many organisations managed to do it seamlessly without affecting the customer experience. SBC: Let’s talk more on the marketing side. How important has the way you treat data become to Kindred’s success? EB: Data continues to be central for our business. How we used this information during the pandemic was crucial to our success. If it is processed and interpreted correctly, it can give
WE HAVE CONTINUED TO RELENTLESSLY MONITOR AND IMPLEMENT OUR RESPONSIBLE GAMBLING STANDARDS you insights beyond your wildest imagination As a company, we aim to put the customer at the heart of everything we do. So, when it comes to marketing and communication, even though we were in the midst of a pandemic, we couldn’t compromise on that value. We didn’t want to just send out communications about products that our customers wouldn’t consider relevant. Instead, we looked at our data insights and considered ways in which we could introduce our sports
customers to alternative products they may have looked at previously etc. We wanted to see whether we could cross-sell relevant products, because otherwise, it would have had a negative effect on our database. SBC: Have these data insights thrown up any surprises in terms of customer profiles? EB: There have definitely been new types of customers that we’ve seen coming into the industry and onto our platform. They’re experienced players who know the products. This has been particularly apparent in the markets where offline entities have been closed for some time. An important factor to mention is that throughout this period of time, we have continued to relentlessly monitor and implement our responsible gambling (RG) standards. We haven’t seen any increase in the number of cases. There has been a steady intake of customers, as is shown in our Q3 figures, but an important metric to highlight is that these players were also safe. They played, they enjoyed the products and were kept entertained, and were provided with the tools to gamble responsibly. SBC: Kindred has earned its place as a leader in the RG space. At a time when you’re trying to cross-sell different products, how do you maintain these standards? EB: We’ve got an amazing in-house developed technology which allows us to track customer activity. From that perspective, I think we are very well placed. From an RG perspective, customer communications is extremely important. As I mentioned earlier, we don’t want to push something to the customer that they would consider irrelevant or inappropriate based on their preferences. If we do that, the likelihood is they will switch to another operator else and opt out of our communication. Our database is one of the most important assets that we have. Keeping customers safe is an important part of maintaining that asset. We want to make sure that it’s not just about the revenue. Kindred has always been focused on providing a safe environment for its customers to play and enjoy gambling. But what we
THE LESSONS WE LEARNT IN 2019 CONTRIBUTED TO OUR EFFICIENT PERFORMANCE IN 2020
WE PUT THE CUSTOMER AT THE HEART OF EVERYTHING WE DO
saw in 2020 was that casinos faced massive scrutiny from regulators across multiple jurisdictions. SBC: What did you make of the pandemic-induced casino regulations we saw in 2020? EB: Regulators were saying that they
were trying to protect the customer. But what looks like player protection in the eyes of the regulators is a pain for the operator, and potentially results in a bad experience for the customer. I see this as a massive advantage for the black market. Some of the challenges that we
faced related to things like deposit limits and stake limits, and we were given very limited time to implement any changes. But we get little or no support from the regulator when it comes to interpreting their requirements. We all play a vital role in protecting
Future proofing the company
customers. We must have an active, constructive dialogue with the regulators to make sure that the customer is our top priority and that we’re not simply pushing them towards the black market. SBC: Kindred is one of many companies to have reduced marketing spend in response to last year’s disruption. Could some of the cost cutting almost forced upon you might actually change your longer term thinking? EB: I think that brings us back to some of the things I mentioned earlier about 2019. At that time, we laid a lot of groundwork and spent time preparing ourselves and future proofing. One of the things we did was look into efficiencies and effectiveness, especially when it comes to marketing. We looked at organisational design and how to improve our delivery model. When it comes to talking about marketing investment, it’s so easy to cut marketing straight away. But it’s not going to give you a long-term desired effect because once funds are released back into the media mix, the inefficiencies return. This is what happened for a lot of companies.
ONCE ONE CHANNEL IS REMOVED, IT WILL INEVITABLY HAVE AN EFFECT ON THE ENTIRE MARKETING STRATEGY You can cut it back but there is a golden point where you have to keep spending, and keep on investing, but definitely with a diversified investment into other channels. For example, based on working closely with Gartner; they've seen a wide range of companies who tried to cut their marketing spend at the beginning of the pandemic. However, they realise that there is still a demand for products, so they’re still able to spend this marketing money. So the better response was to diversify and focus more on short and medium term investment channels, really looking into the returns on marketing and the length of return rather than simply cutting the budget. That is exactly what we have done. It was a very clear message, and
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very well communicated with our commercial team that we wanted to keep on investing, but we don’t want to invest in areas where we don’t see a return. SBC: Okay, so a simple follow up here. Where are you seeing these returns? What’s the big marketing strategy for Kindred in 2021? EB: In 2021 and beyond, we’re heavily investing in sponsorships. That’s one of the big, most important channels for us. I think it’s important to mention that the ability to partner with some sports organisation is the bottom line of our strategy - whether it’s football clubs, individual athletes or sports influencers. They provide us with a unique opportunity for growth as both a challenger and market leader depending on the market. This will still be our key focus when it comes to our marketing channel. However, let’s not forget about the digital channels and how they contribute to it because every channel has a role to play in the media mix. Once one channel is removed, it will inevitably have an effect on the entire marketing strategy. Some channels will sit at the top of the conversion funnel and really contribute to your brand awareness and brand consideration, while those at the bottom will still generate brand awareness but - depending on the methodologies and technologies you use - also contribute to conversion. If one channel is taken away, then your puzzle is incomplete and it has an effect down the line. Digital is an effective way of reaching the right target audience. One of the strategies that we’ve used is looking at how YouTube and TV when effectively combined together contribute to a higher share of voice. Again, investing in technology when it comes to marketing is something I can talk endlessly about. MarTech is one hell of a story. It’s been evolving over the last few years. We’re now talking about tens of thousands of small, medium and large companies which constantly pitch about the different benefits that they’re going to bring to your business. So in the next few years, we’re going to heavily invest into technologies within marketing that can help us become even more customer centric.
SBC: You mentioned sponsorship. If we look at the UK, and the potential changes in legislation which could impact sponsorships, is Kindred prepared for this? EB: I think that we are prepared. The impact that this ban might have on Kindred is probably smaller than the effect that it will have on the wider community. I’d actually like to maybe look at this from another perspective though. And that is the highly positive impact gambling sponsorships bring to the community. Smaller communities and smaller clubs are going to miss out if they lose out on this vital investment. During the pandemic, a lot of clubs weren’t able to carry on simply due to the fact that they didn’t have sufficient funds.
In the UK especially, there has been a lot of talk on the TV about how sport was their only relief during the pandemic, and how being able to meet some people outside had played a vital role in their mental wellbeing. With our Team Talk investment, we help support men with their mental health and how we can use sponsorships in new and innovative ways - for example, pairing up with Wayne Rooney or Carl Frampton - to promote a responsible gambling message. It’s not just about posting our brands on the TV and telling people to bet. There is a much bigger message out there that, if used irresponsibly, could be dangerous. You do need to be careful when betting. But if you’re using the right operators, you’re
choosing the right platforms and the right tools available, then we can help. SBC: And finally, if you had one key goal for 2021, what might that be? EB: That’s difficult, I can’t just name one! I’ll say regulation. We’ve got a few expansions within the EU taking place - the Netherlands is going to be an important market for us. That’s a market where we have been waiting for regulations to be approved for four years now and have been working
WE HELP SUPPORT MEN WITH THEIR MENTAL HEALTH AND HOW WE CAN USE SPONSORSHIPS IN NEW AND INNOVATIVE WAYS
extremely hard to ensure that we’re well prepared. We’re also talking about US expansion. We have a long term ambition to have our platform in the US market too. So that will be a key investment for us. Those are the regulatory goals. Technology wise, the heavy focus for the next strategic cycle is to really focus on the UX, and really place an emphasis on marketing technology to ensure that our architecture is best in class. You can have the best technology, especially for marketing, but you need to know how to use this technology to build your marketing strategy. So nailing down our marketing strategy and maximising the capabilities of the technology that we have in-house will be a big focus for 2021. •
Standing at the intersect
MEDIA AND BETTING BUSINESSES IN THE US FEED EACH OTHER SPORTRADAR CONTINUES TO EXPLORE the intersection
between media and betting in the US market, said Arne Rees, who explained why the foresight it had about the knowledge exchange between both sides of the business means the two now 'feed each other' to build engaged audiences
he new regional CEO for North America also discussed how the rollout of 5G will influence business in the US, where Sportradar expects both mobile and in-play betting to grow +700% over the next 10 years. SBC: Sportradar has consistently been at the forefront of technology. Which technology trends will have the greatest impact on Sportradar’s US business in the near future? AR: As the leading global multivertical data and technology company in sports, Sportradar consistently redefines what’s possible for our customers. Whether it is the speed at which we distribute live odds to betting operators or the speed we deliver compelling insights to media companies, it is critical that we do so precisely and accurately, and in the moments that matter most. If our data is even a nano-second late, our customers risk losing
ONCE SPORTS BETTING BEGAN TO OPEN IN THE US, WE WERE ALREADY WELL-PREPARED TO MAXIMISE THIS OPPORTUNITY ON BOTH SIDES OF OUR BUSINESS
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significant amounts of money and/ or valued consumers who may decide to go elsewhere for the real-time information they desire. We deploy machine-learning and artificial intelligence to ensure that we can keep up with the speed that our customers require and the speed that the modern-day consumer demands. Over time, these technologies have enabled us to deliver on our ambitious vision to our customers. Moving forward, the rollout of 5G, on top of
what we are doing with machinelearning and artificial intelligence, is going to play a significant role for Sportradar’s US business, as we push the limits even further on the real-time sports experience. This applies both on the betting and media sides, as well as instadium and remotely. We are aiming towards a future where our media and betting customers have the data and information they need to keep their audiences fully engaged for longer than ever before. SBC: The media and betting industries have been coming closer together since PASPA fell in May 2018. How has Sportradar adapted its US business to account for this and what can we expect moving forward? AR: Sports entertainment and betting/ gaming are Sportradar’s two main product focuses, and we have created impressive products in each of these areas recently, including our real-time data intelligence product Insights, our in-play player markets for US sports, and our virtual baseball in-play game alongside MLB. Once sports betting began to open in the US market, we were already well-prepared to maximise this opportunity on both sides of our business because we understood that in order to succeed in this market moving forward, media companies would need to consider how they weave betting into their content and betting companies would need to consider their wider consumer-facing media brands. Both sides feed each other and are effective for engaging audiences, so we are fully prepared to help both media and betting businesses as
An offering like this is only possible because of the foresight we had and the knowledge exchange happening between both sides of our business.â&#x20AC;ŻWe are exploring the intersection between media and betting further, and I am confident that we will see more innovation along these lines from the US business in the year ahead. SBC: Covid forced a lot of sports businesses to re-prioritise their focus towards digital offerings like esports. Do you see esports maintaining momentum once fans are allowed back in stadiums en masse? AR: The growth of esports has been bubbling below the surface for some time, and the pandemic played a role in accelerating its existing momentum. Esports, like other popular forms of content today, has the benefit of being always-on, which satisfies the need for instant gratification that consumers gravitate to.
THE GROWTH OF ESPORTS HAS BEEN BUBBLING BELOW THE SURFACE FOR SOME TIME, AND THE PANDEMIC PLAYED A ROLE IN ACCELERATING ITS EXISTING MOMENTUM
they look to evolve their offerings. For example, our media team taps into our betting data, through Insights and the rest of our data products, to offer media customers a new set of storylines for their audiences that are now looking for more betting-centric content. This is still a developing market that requires education, and by combining our betting data with our unmatched
SPORTRADAR IS UNIQUELY POSITIONED TO HELP MEDIA COMPANIES ENGAGE AND GENERATE INTEREST FROM BETTORS storytelling capabilities, Sportradar is uniquely positioned to help media companies engage and generate interest from bettors.
Also, being a digital property, like OTT, there are a number of ways to tap into data to personalise the experience for viewers and engage them effectively. If the pandemic taught us anything, it is that we need to be adaptable and have options that allow us to connect and engage with others through data and technology, so I see the esports trend continuing its current trajectory, both from a viewing and a betting standpoint. With matches around the clock and real-time betting data available, betting on esports is growing at a rapid pace. Given the number of matches taking place daily and the increased betting exposure for both high and lower-profile events, integrity protections and monitoring are more important than ever in this space. Unfortunately, Sportradar observed substantial increases in esports betting-related corruption in 2020,
Standing at the intersect
identifying more than 50 suspicious matches across several different game titles – more than it had in all previous years combined. In addition to partnering with some of the top esports publishers in the world like Riot Games and Activision Blizzard, Sportradar’s Integrity Services unit also supports independent tournament organisers. We monitor betting markets for potential match-fixing and betting corruption through our award-winning Fraud Detection System (FDS) and our global bookmaker and human source networks, and we also provide education sessions to partners, players, and referees, among other stakeholders. With esports, integrity is even more critical given how young the players typically are, how easy it can be to manipulate performance, and most importantly, because there is no global federation that leads the effort against match-fixing – this happens on a caseby-case basis and requires esports publishers and tournament organisers, as well as third parties like Sportradar, to step in and help educate and monitor the ecosystem.
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THERE IS ALSO A LOT OF UNTAPPED POTENTIAL LEFT IN THE MARKET WITH STATES LIKE TEXAS, FLORIDA, AND CALIFORNIA STILL WITHOUT A LEGALISED BETTING FRAMEWORK SBC: Sportradar has more relationships than anyone in the global betting industry. Where do you see the biggest growth opportunities within the US betting market specifically? AR: Sportradar provides sports betting products and services to more than 600 bookmakers worldwide, so we have a clear picture of what is driving demand in betting on a global scale. In the nascent US betting market, two trends that are aligning with how things have developed globally are the popularity of mobile and in-play betting. In fact, according to our forecasts, we expect both mobile and in-
WE EXPECT BOTH MOBILE AND IN-PLAY BETTING TO GROW +700% OVER THE NEXT 10 YEARS IN THIS MARKET
play betting to grow +700% over the next 10 years in this market. As such, we have worked diligently to acquire official data rights from the US sports leagues to fully maximise this opportunity and establish Sportradar as the go-to source for mobile and in-play betting in the US market. While the US betting numbers have been impressive thus far in states like New Jersey and Pennsylvania, we are still early in the process of where this market can end up. Remote mobile betting is currently available in fewer than 15 jurisdictions, with mega states like New York actively considering it. There is also a lot of untapped potential left in the market with states like Texas, Florida, and California still without a legalised betting framework, so Sportradar will keep innovating in this space using its unrivalled data and technology for the benefit of its customers and partners. •
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The unique CIS challenge
WHY BETTING CANNOT UNDERESTIMATE THE CHALLENGES WITHIN THE CIS REGION AS REGULATORY CHANGES
sweep the CIS region, betting companies have been warned about accepting ‘conflicts and contrasts’ when expanding within Europe’s youngest markets. But does the region hold more challenges than meets the eye?
Marinos Shiapanis, CEO & Co-Founder of Campeón Gaming Partners
aving been marked as a year of considerable ‘corporate adjustments’, the unprecedented events of 2020 served as an ample test for operators seeking to expand their businesses within the Commonwealth of Independent States (CIS). With the anticipated launch of Ukraine’s regulated gambling marketplace, followed by Russia and Uzbekistan which have been revising their regulatory frameworks, 2021 will see Europe’s ‘youngest business environment’ come into play. But as growth-hungry investors begin to draft up their CIS agendas, how can the betting industry best approach a region which is full of conflicts and contrasts? The recent SBC Digital Summit CIS offered delegates a range of C-level perspectives on the rapidly changing developments and opportunities across the region as CIS markets begin to remove their ‘grey status’. The region, according to Marinos Shiapanis, CEO & Co-Founder of Campeón Gaming Partners, poses a ‘unique challenge like no other’. When discussing the difficulties
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that await betting companies that are looking to enter a market place full of distinct cultural divides, Shiapanis advised operators to develop a ‘comprehensive business strategy’ and consider the intricacies of the
region; be it in language, consumer behaviours or resources available. The executive warned against operators becoming fixated on the idea of finding a ‘binding CIS approach’. Though many countries
Paris Smith, Pinnacle CEO
across the CIS region share common bonds, Shiapanis emphasised the need for a thorough due diligence process upon entry into each market. “There is no such thing as a binding approach for the CIS region,” he said. “Years back, operators just thought you could secure access by offering their products in Russian language with a payment provider that could process regional payments… they were proven wrong very quickly.” Having recently launched Campeón properties across the CIS region, Shiapanis explained that the firm’s main strategic focus was on ‘customising products and services’. “Each market needs dedicated attention to service differing characteristics with regards to languages, payment providers, and customer service,” Shiapanis added. “The customisation of your platform is also vital, as in each CIS territory players differ widely in what choice of games they want to play. You need to get this right before you start
THE CUSTOMISATION OF YOUR PLATFORM IS ALSO VITAL, AS PLAYERS IN EACH CIS TERRITORY DIFFER WIDELY IN WHAT CHOICE OF GAMES THEY WANT TO PLAY thinking about the local legislation.” It’s safe to say that challenges await those looking to make their entry into the CIS betting market. But despite this, betting leadership has welcomed the positive developments against the common backdrop of Western European markets which have in recent years - tightened their regulations and compliance demands. Closely monitoring the region’s regulatory developments, Marcin Jablonski, Chief Commercial Officer
IT IS A FRESH OPPORTUNITY MIRRORING WHAT WE HAVE SEEN IN LATAM WHERE THERE’S A HUGE TERRITORY WITH DIVERSE APPROACHES TO REGULATING GAMBLING
of LV Bet, noted the region's fresh appeal: “CIS is a fresh opportunity, which - in my opinion - mirrors what we have seen in the LatAm region where there is a huge territory with diverse approaches to regulating gambling,” he said. “For many operators, this will be a new territory. They have seen what has happened in Western Europe which is becoming very challenging, with Italy and Spain banning advertising and Germany producing restrictive legislation for 2021.” Jablonski detailed that LV Bet is monitoring all CIS regulatory developments closely, highlighting that the Ukrainian betting market currently stands out as the company’s main point of entry. “We don’t know specifics yet, and it's an outcome that will be tax
The unique CIS challenge
dependent, but there is one country that stands out and it is Ukraine,” he continued. “We have three million Ukrainians living in Poland, that will help us with resources and localisation.” Slowly but surely, countries across the CIS region are beginning to remove their grey market tags, thereby opening up their doors to foreign operators looking to expand. But the need for a local partner within the region, alongside the localisation of products, was highlighted as a key factor in achieving success within the market by Pinnacle CEO Paris Smith.
Vladislavs Hveckovics, Co-founder at SoftGamings
LOCAL PARTNERSHIPS ARE KEY FOR A REGION SUCH AS THE CIS. YOU NEED A LOCAL PARTNER, AS YOU DON’T WANT TO DROP THE BALL ON LOCALISATION AND MARKETING “Perhaps it’s a tried and tested formula,” Smith said. “But from our previous experience, local partnerships are key for a region such as the CIS. You need a local partner, as you don’t want to drop the ball on localisation and marketing”. Beyond securing localised operations, Smith warned of further market realities, as those newly entering the market will likely to compete against established and wellfinanced domestic operators across CIS markets. Supporting Shiapanis' market observations of CIS offering no easy entry points, Smith cautioned leaders against believing that CIS markets offered an easy entry point. Once localisation costs and resources are accounts, Smith remarked that CIS markets could prove as costly as western counterparts. She added: “The CIS is already very competitive. As a global sportsbook, we are competing against established domestic brands that have a strong foothold. In the long term, we aim for our products and marketing to be king.” Nevertheless, CIS markets are beginning to open against the growing demands from investors for operators to deliver on international
16 SBC LEADERS • FEBRUARY 2021
growth strategies. As the cut-throat realities of betting offers no grace period for operators to settle into a market, will the CIS region simply become another M&A playground for sports betting? Vladislavs Hveckovics, Co-founder at SoftGamings, believes that whilst M&A will play a role in shaping the CIS region, ‘it should not be the dominant discipline’. “CIS has already played an important role in shaping online gambling, with many technology
THE QUESTION FOR THESE ENTRANTS IS WHETHER THEY CAN SERVICE THE WHOLE REGION, NOT JUST ONE OR TWO MARKETS
providers establishing their tech bases in the region to service Western operators,” Hveckovics underlined. “From a technology perspective, we anticipate more competition. But the question for these entrants is whether they can service the whole region, not just one or two markets, as international operators will not want to be locked into a one market that may instantly change its regulations.” Hveckovics believed that M&A activity across the region will be more focused on technology rather than securing market access. He explained: “The CIS region is already very competitive and operators are demanding innovations to drive their consumers whether it be through new games or gamification.” •
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India's untapped potential
WILL FRAGMENTED REGULATIONS HINDER INDIA’S POTENTIAL? Gowree Gokhale, partner at Nishith Desai Associates
BY 2025, THE INDIAN SKILL GAMES and RNG market is
projected to reach $1-1.5 billion, but could concerns over corruption and discrepancies between states' sports betting legislations sway foreign operators away from the market?
ndia has become the market to watch for 2021. With one of the largest populations in the world, alongside the growth in mobile and online gambling, the country has swathes of potential for those looking to expand further afield. However, with new markets come new challenges for operators. And India is no different. The Indian sub-continent operates on a stateby-state basis, with individual state governments influencing whether or not gambling is permitted. Unsurprisingly, the fragmented state regulations across India were a key
18 SBC LEADERS • FEBRUARY 2021
focus at the recent SBC Digital Summit - Barcelona, with Gowree Gokhale, partner at Nishith Desai Associates, noting that the lack of one uniform, federal legislation may pose some challenges for foreign operators. She explained: “Currently, gambling
INDIA BECAME A VERY ATTRACTIVE MARKET FOR A LOT OF INTERNATIONAL GAMING COMPANIES FACING AN INCREASING REGULATION AND TAX BURDEN IN EUROPEAN MARKETS
activity in India is governed by state laws which do not have a statutory application. This means that a foreign operator may not be held liable under the Indian state law because that will mean that the local government is trying to control an activity outside of the country. That is not something that is permissible.” State-by-state legislations are not the only topic of contention when eyeing up new opportunities across, said Gokhale, who added that the country’s Foreign Exchange Limited Law restricts players from depositing funds either offshore or outside of the country for gambling activities. As a result of this regulation, she added, the liability lies with the player and not with the offshore operator: “The liability is on the Indian consumer. With this regulation, they have to comply with the law - and if they believe that they are acting in accordance with the regulation, they can go ahead and accept payments.
PEOPLE WHO WERE NOT COMFORTABLE WITH USING CREDIT OR DEBIT CARDS, OR HAD NOT USED MOBILE WALLETS ON THE INTERNET WERE SUDDENLY LEFT WITH NO OTHER OPTION
Jaydeep Chakravartty, Vice President - Commercials at Markor Technologies
“In the Indian context, operators are currently acting in self-regulatory mode. And for skill gaming, there are three separate bodies which are operating via a self-regulatory model. “The tax authorities have started to send notices to offshore operators, saying that by supplying gambling services in India, they are conducting business in the country and are therefore liable to pay the goods and services tax.” But despite the regulatory challenges, India still appears to have a wealth of untapped opportunities -
India's untapped potential
YOU CANNOT JUST ADD AN INDIAN FLAG ON YOUR WEBSITE, MAKE IT LIVE AND EXPECT PLAYERS TO FLOCK TO YOU - IT’S NOT THAT EASY
Debashish Bhattacharjee, Co-Founder & CMO at Pocket52
made apparent by the uptick in digital technologies. Jaydeep Chakravartty, Vice President - Commercials at Markor Technologies, reflected on the evolution of the digital ecosystem across India and how this has had an effect on consumer behaviours - especially in terms of digital currencies. Back in 2016, all high value banknotes were removed from circulation almost overnight in a bid to weed out counterfeit money and flush out undeclared wealth. As a result, there was a growth in the use of digital currency, which Chakravartty explained was compounded by an increase in broadband usage and smartphones. With more than 300 million English speakers, as well as 750 million smartphones in circulation, the number of players looking to access online gambling is only going to increase: “People who were not comfortable with using credit or debit cards, or had not used mobile wallets on the internet were suddenly left with no other option,” he said. “India became a very attractive market for a lot of offshore gaming companies because they are facing an increasing regulation and tax burden in European markets. Operators therefore see India as a very attractive market where, with the very limited changes, they can grow. “But this isn’t always true. Even brands that are operating in India from an offshore model are having to do a lot of work to be accepted. You cannot just add an Indian flag on your website, make it live and expect players to flock to you. It’s not that easy.” So how does India overcome this issue? Put simply, the implementation of more effective regulations will enhance the potential for growth of the Indian sports betting industry.
20 SBC LEADERS • FEBRUARY 2021
Chakravartty continued: “Regulation is the best solution available. Obviously, India needs a combination of an effective tax and regulatory framework - but regulation really is the best solution. “Self-regulation or relaxed regulations does not work, because at the end of the day you just end up
and changing player behaviours has boosted the prospects for the country’s betting market, concluded Debashish Bhattacharjee, Co-Founder and CMOat Pocket52: “It seems that India itself has a huge potential with the market with the consumer, but sometimes the legalities are slightly improving day by day.
I THINK THAT REGULATION HAS PLAYED A VERY BIG ROLE IN THE DEVELOPMENT OF THE INDUSTRY SO FAR - AND WE SHOULD BE LOOKING TOWARDS GROWING EVEN FURTHER with profit making companies which just want to generate their profit before anything else. I think that regulation has played a very big role in the development of the industry so far - and we should be looking towards growing even further.” This perfect storm of regulation
“I am hoping that the players are able to bet with ease and they can trust the websites, they can trust the operators which support the government when things are legalised. With a legal betting framework, it’s much easier for players to really trust the operators.” •
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Road to recovery
BILL HORNBUCKLE ADDRESSES BETTING ON SPORTS AMERICA - DIGITAL MGM RESORTS CEO BILL HORNBUCKLE opened up on some of the gaming industry’s biggest topics recently, focusing on the attitude of the major leagues towards sports betting, media entrants to the market and Las Vegas’ formidable ability to recover from one of the most adverse years on record 22 SBC LEADERS • FEBRUARY 2021
ill Hornbuckle, CEO of MGM Resorts, was among a host of high-profile industry thought leaders to speak at this year’s SBC Betting on Sports America Digital event which took place in early December. Speaking with ESPN staff writer David Purdum, he covered significant industry ground tackling issues such as the leagues’ relationship with stakeholders and the prospects for in-play betting. Addressing the turnaround in attitude of the major sports leagues towards sports betting, Hornbuckle expressed the view that while they have significant involvement through partnerships with stakeholders, they are unlikely to seek a direct stake in the business, mainly for reasons of integrity. “I don’t believe it would be good for the sport or the industry because obviously it’s still a competition and you do not ever want to intertwine those two,” he told delegates. “I would be hard pressed to believe they would want to cross over that line. I just think it gets a bit difficult for the
commissioners and for the teams to then regulate what does and doesn’t happen.” Purdum turned the questioning to mobile sports betting, specifically seeking Hornbuckle’s view on how he sees it working in conjunction with the terrestrial business and how it might encourage bettors to visit brick and mortar sportsbooks.
WHEN LAS VEGAS WAS BOOMING, A HEALTHY NEW COMPETITOR NEXT DOOR THAT DROVE VISITATION TO THE MARKET PLACE WAS AND IS A GOOD THING He responded: “This is the age-old argument of what do you think about native American casinos. What do you think about riverboats? And I think it’s all great. I think it’s proven itself - it’s lifted the bar. I think particularly when Las Vegas was booming, a healthy new competitor next door that drove visitation to the market place was and is a good thing. I feel the same about this (mobile).
“Tennessee is the example. You could go from Tunica to Mississippi but there’s generally no place to go in Tennessee and so the idea that I could talk to you 365, makes you hopefully understand our brand and our products via the device you have in your hand and put some loyalty opportunity for you to come and motivate that trip, I feel really good about. I have no concern. “In this very sportsbook people will sit in their chair and never have to go to the counter because of their mobile device. Right now with COVID that’s extremely helpful. It keeps people safe, it’s efficient, there’s no long line - they can do a lot real quick. So we’re excited by the mobile environment.” When asked about the current trend for convergence between media and operating companies, Hornbuckle answered: “For the media companies it’s being able to participate in the space without having to do it - if you will - basically as a large scale affiliate for lack of a better definition. So there’s pure economics, there’s exposure, and there’s engagement.
Road to recovery
“That’s what they want - they want eyeballs, they want engagement. They want to keep you on your device longer. For us it’s a way into Yahoo! Fantasy Sports. They’ve got 60 million viewers - they’ve got about five million daily fantasy participants. “Getting access to them - because they obviously enjoy sports, they’re passionate about it - getting them to switch over to live gaming is a pretty easy link. And so that’s how we benefit and ultimately how they benefit but for them it’s all about engagement. It’s about growing their database and giving people more content and more reasons to come back and to stay longer while they’re there.” As for in-play betting, Hornbuckle offered an uncomplicated view. “I think anything that stops - it’s easy,” he advised. “Like baseball’s easy. Golf is easier. The flow of football may be a bit more challenging, the flow of basketball may be even more challenging. Soccer’s a flowing game that doesn’t stop a whole lot but they push the bets out far enough so it’s just about how you propose it - how you serve it up and what the latency concern is around it.” Talk during the session turned to competition from outside of the established business, with Purdum questioning Hornbuckle as to the likelihood of big new entrants to the market. Citing Google and Amazon as prime examples, the MGM CEO acknowledged that it remains a distinct possibility saying that they could devour any industry if they wanted to. “I think there’s a place for media companies over time,” he commented. “If this is a growing business and it does transfer to the eyeballs and the extension of viewership that I think it will for sports, whether it’s streaming or indirect media they might enter the play. Pick your favorite one - it doesn’t really matter. “There will be a race to 2024/2025. We’ll see how the dust clears. We’ll see how the industry is and see what kind of margin there truly is for individuals and then from there I think things may change to a different phase and things come into play on a much larger scale.” Ending the session on a positive note, Purdum prompted Hornbuckle for his predictions for 2021 and, hopefully, a return to full trading.
24 SBC LEADERS • FEBRUARY 2021
BASEBALL’S EASY. GOLF IS EASIER. THE FLOW OF FOOTBALL MAY BE A BIT MORE, THE FLOW OF BASKETBALL MAY BE EVEN MORE CHALLENGING He responded: “We have obviously seen complete closure. We reopened throughout the course of the spring and the summer and we saw instant and amazing demand. “Most of it was drive traffic - Southern California and the surrounding market places. And in our
regional properties we filled them to the capacities we were able to have instantly without a lot of marketing and, frankly, without a whole lot of amenities.” While most of those amenities remain out of bounds, Hornbuckle noted that demand remains high. “People come we’re filling these hotels 70, 80, 90% in some instances without entertainment, without the things that really make our destinations the kind of places that people enjoy. So I’ve every belief as we come out of this - this is such a unique experience that people enjoy that will not go away.” •
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Riding the next wave
ONE FOR THE HISTORY BOOKS: THE US SPORTS BETTING JOURNEY CATHRYN LAI, SVP AND GENERAL MANAGER US AT SG DIGITAL, explains why US betting
legalisation is of great historical significance and how her company is combining ‘best of breed’ technology with experiences of the wider Scientific Games group
ince the repeal of the Professional and Amateur Sports Protection Act (PASPA) back in 2018, the US sports betting market has undergone a series of drastic changes, with the list of states looking to open their doors to a regulated market growing longer by the day. Two and a half years on and the potential for growth within the US seems to be unfathomable - with more operators and suppliers seeking to gain a front-row seat for what is tipped to soon become the largest domestic betting market in the world. Speaking as part of a ‘fireside chat’ with SBC’s Managing Director Andrew McCarron, Lai explained that the journey to establishing a regulated betting market is up there with some of the most exciting moments in history.
26 SBC LEADERS • FEBRUARY 2021
“It is such an exciting time to be a part of the US sports betting market, I feel like this journey is going to be very historical,” she said. “After PASPA was repealed, if you think about how many states have come online in the past two and a half years, it’s pretty phenomenal! “From our perspective, we’re watching all the states regulate - and we’ve got teams which are tracking all of the different rules. It’s all changing on a daily basis - the potential for where this market is heading is pretty significant.”
IT IS SUCH AN EXCITING TIME TO BE A PART OF THE US SPORTS BETTING MARKET, I FEEL LIKE THIS JOURNEY IS GOING TO BE VERY HISTORICAL
In the latter stages of 2020 alone, Lai explained that three individual states included ‘some kind of sports legislation’ on their ballots, something she believes is a sign of things to come as more states mull over whether or not to introduce a legalised betting framework. So which states does the SVP predict will go live next? Well, Michigan was high on the list as the Wolverine State was preparing to introduce both online betting and iGaming by the end of 2020. But for Lai, South Dakota, Maryland and Louisiana are also high on the list. “The most exciting thing is that by the end of the year, we know that Michigan is going to add digital sports to the market, and we’re so excited to be a part of that from day one,” she explained. “They’re also adding igaming too which is a bonus for us.” “If you think about it all from a landscape perspective, in November there were three states with some form of sports betting legislation on their ballots. So, I think the next wave of what people will be looking at is whether all three of those states will pass sports betting legislation. “South Dakota, Maryland and Louisiana - those are three markets which we feel pretty confident about opening up in 2021. What we can see though is that every year, the number of states opening up is going to be more and more. It’s a very exciting time, especially for us from a technology perspective.” From a social point of view, it can be expected that sports betting preferences will differ among players and operators across the country. But
when pressed on what these variances may be, Lai explained that the ‘subtle differences’ will lie within the way in which sports is consumed. She continued: “I think in general, if you think about the US, the way that sports is consumed is very unique from the rest of the world. There’s much more of a passion over sports in your hometown, and your hometown team. I definitely think that this subtle difference is going to make the evolution of sports betting in the US a very, very unique process. “When you look at state by state regulatory differences, that is one
IT’S ALL CHANGING ON A DAILY BASIS - THE POTENTIAL FOR WHERE THIS MARKET IS HEADING IS PRETTY SIGNIFICANT thing that at SG we’re trying to navigate. This is why we want to be at the forefront of understanding what the regulations are going to be. There are several questions we have to ask: is it going to be mobile? Is it going to be retail? Will it be both? “And then there are the more intricate elements like KYC and
legislation which is tied to responsible gaming. Those are all things that from a technology perspective, we continue to track and make sure we’re acting in accordance with those requirements.” For SG, the expansion into the US market has been eased as a result of its ‘extensive knowledge’ of stateby-state regulations - information which has been learned through the experiences of the wider Scientific Games group, and the availability of both its gaming and lottery products. By combining this wealth of knowledge with SG’s ‘best of breed technology’, Lai explained that SG
Riding the next wave
has managed to gain a ‘competitive advantage’ within the US market. “At SG, we have this experience on the sports betting side, having already taken products into multiple jurisdictions with a range of different regulatory requirements. That, for us, is our core competency. We also have this experience with some of the major players in the market - we have this technology which has been utilised in some of the biggest markets in the world. “I think there is a value in having technology in these international markets that are more mature on the sports betting side of things, because it has gone through all these trials and utilisation scenarios which we can then use in our US operations.” “So if you look at our experience on the brick and mortar side, we know the operators, we know the regulators, we know the individual legislations for each state and we know how to get things through with the regulator. That’s the kind of experience that I feel like we can bring to the table in understanding the players and understanding how the operators want to brand things. “I think all of this gives us a really strong competitive advantage because we have the best of both worlds: a proven technology that has been successful in multiple mature sports
28 SBC LEADERS • FEBRUARY 2021
WE KNOW THE OPERATORS, WE KNOW THE REGULATORS, WE KNOW THE INDIVIDUAL LEGISLATIONS FOR EACH STATE AND WE KNOW HOW TO GET THINGS THROUGH WITH THE REGULATOR betting markets, and then the wealth of knowledge for the US market.” Dusting off her crystal ball, Lai looked forward to what a post-COVID world could look like for the US sports betting industry, and how the pandemic has forced legislators to put their foot on the gas when it comes to approving a legalised betting framework. One part of the industry which has undergone significant transformation over the last few months is the digital space - something which has highlighted the need for more jurisdictions to adopt legislation which encompasses the growing online betting activity. “I think when we look back at COVID in general, and we fast forward by a few months, we’ll see just how everything has changed,” Lai noted.
IN A FEW MONTHS TIME WHEN WE LOOK BACK AT COVID IN GENERAL, WE’LL SEE JUST HOW MUCH EVERYTHING HAS CHANGED
“I think that one thing we’ve found is that there’s been a lot of acceleration of trends which we always thought were going to happen. “For instance in the retail space, I’m not sure if as many people are going to return to retail betting like they did before the pandemic. People are now quite comfortable shopping online, and the uptake in online activity has been accelerated by COVID. “When you look at the gaming sector, it’s no different. In fact, it’s probably more apparent. I think that when a lot of the casinos in the US shut down, we saw a spike on our igaming platforms because a lot of players wanted to gamble via the online route. For the months without sports, it definitely had a significant impact. “As sports returned with a vengeance, what we saw was a higher percentage of players on the mobile side. From a regulatory standpoint, I think we’ve definitely seen an acceleration of legislation being passed because mobile and online sports betting is definitely a viable revenue stream. All of this has been accelerated by COVID.” •
LatAm stepping stone
HOW WPLAY HAS HELPED PLAYTECH FIND “A NATURAL HOME AND AUDIENCE IN COLOMBIA” THIS YEAR HAS SEEN THE LATIN AMERICAN MARKET
undergo vast regulatory changes. For Playtech, a partnership with Wplay has allowed the supplier to cement its place within the Colombian betting market 30 SBC LEADERS • FEBRUARY 2021
hile some consider Buenos Aires and Brazil to be the markets with the biggest long-term potential in Latin America, with Mexico
and Peru also seen as major players, we must remember that gambling in the region would not be possible if it wasn’t for Colombia. Having gone live just over three years ago, the Colombian market has become the ‘one to follow’ in the region, especially for those who aim to primarily want to compete on a regional level. Its flexible and innovative regulations, which were initially inspired by those in Spain, have led the industry giants to put their interest in Latin America. Such is the case of Playtech, who signed a strategic partnership in 2019 with Wplay, a leading retail brand in Colombia, and also happens to be the first recipient of an official Colombian online gambling licence. The strategic partnership has allowed Playtech to increase its market share in a country which serves as a stepping stone to expand into other Latin American jurisdictions. What began in June 2019 as an agreement to integrate Playtech’s technology, will - in the coming weeks - be strengthened with the integration of its IMS platform across Wplay’s entire retail and online portfolio. By using Playtech technology, the new Wplay.co platform will give users a speedier betting experience as well as easier navigation of the site. It will also allow players to place more bets in less time, with data, possible earnings and the novelty of personalising the preferences of each user. In an exclusive interview with SBC Noticias, Uri Levy, VP Business Development at Playtech, and Fernanda Sainz, CMO Latin America at Wplay, disclosed that the mutually beneficial alliance will support Wplay in “improving the user experience in sports betting, online casino” while also establishing Playtech’s position in Latin America. According to Levy, “Wplay chose Playtech as its strategic technology partner to deliver its omnichannel platform and marketing services across the leading brand’s retail and online operations”, adding that the strength and quality of the Wplay brand combined with Playtech’s 20 years of technology leadership in the industry “will see the duo drive the growth of the online market in Colombia”. To succeed in Latin America, experts agree that betting companies cannot
COLOMBIA IS A HIGHLY SOPHISTICATED MARKET FOR GAMBLING; THE PLAYERS HAVE A LOVE OF SPORTS AND ALL CASINO AND GAMING LEISURE ACTIVITIES simply replicate their offerings from other territories, such as Europe. Rather content must be localised, while strategies must be adapted to meet the needs of local players and regulations. With this launch, Wplay believes that it has solidified its position as the brand with the biggest market share and innovations thanks to a platform
“Alongside this, the Colombian players expect a highly sophisticated digital product and this is why it is such an important market to Playtech. Our industry leading software has a natural home and audience in Colombia.” Sainz echoed these thoughts and assured that the South American country can keep up with other
Fernanda Sainz, CMO Latin America at Wplay
“fully compliant with new regulation” to offer leading products and services “in a compliant and sustainable way”. “This launch means Wplay has the most complete and advanced product and services offerings Colombia,” Levy continued. “Colombia is a highly sophisticated market for gambling; the players have a love of sports and all casino and gaming leisure activities.
GAMBLING BRINGS IMPORTANT ECONOMIC DEVELOPMENT TO THE COUNTRY AND, ABOVE ALL, PROTECTS RESPONSIBLE GAMBLING PRACTICES
international regulated markets, especially because of its economic and social impact. “Gambling brings important economic development to the country and, above all, protects responsible gambling practices,” she said.
Future projects in the region Looking beyond Colombia’s borders, Playtech has already made its foray into the Mexican market, having gone live with Caliente in 2015. In the five years since, it has become one of Playtech’s largest markets. “Based on the KPIs we have seen since the launch of games with Wplay, we believe that the market in Colombia can follow a similar trajectory and
LatAm stepping stone
even outgrow the market in Mexico,” explained Levy. Moving away from Mexico, Playtech has also launched strategic partnerships in Costa Rica and Guatemala. However, for Levy the greatest expectations rest on Brazil, where “the expected implementation of sports betting could provide an interesting opportunity for Playtech given the population and its access to the mobile channel”. Peru and individual provinces of Argentina have also been pinpointed for future expansion, where governments are lining up licences as regulation develops in the region, which could also represent an opportunity for Playtech in the coming years.
North American plans Playtech has previously outlined its plans to focus on the US market, with the company drawing upon its proven track record of partnering with and investing in the leading brands in newly regulated and fast growing markets. Levy continued: “We believe that the market in the US will develop state by state and be led primarily by sports
32 SBC LEADERS • FEBRUARY 2021
and also retail presence. Playtech can offer omni-channel technology that can grow as the market grows and we believe that we offer advantages many other partners cannot. “Our strategic focus over the last 20 years on developing industry leading digital first products, intelligent data driven services and channel agnostic technology has placed us in an exceptionally strong position to benefit from the impact that COVID-19 has had on the industry.”
WE CAN ACCELERATE MANY OF OUR EXISTING PLANS TO CAPTURE THE OPPORTUNITIES THAT HAVE BEEN CREATED Just like in Latin America, the online industry in the US is also undergoing a series of regulatory changes. While the shift from retail to online had already started to happen in the latter stages of 2019, the pandemic has accelerated the demand for digital products. “This is having a twofold impact,” said Levy. “Not only is there increased
demand for our digital products that can function at scale, moreover the growth in digital demand requires intelligent data led software and player monitoring tools. “Thanks to our strong reaction to the pandemic and strong balance sheet we can accelerate many of our existing plans in order to capture the opportunities that have been created. The sophisticated consumers expect omni-channel functionality as a minimum.” However, he did admit that in a fractured state by state regulatory system, this is hard to achieve as it requires “technology with scale and proven omnichannel capabilities”. “IMS is a GLI-19 Certified Platform - the de facto standard respected by a majority of US regulators,” Levy shared. “[It is] integrated with all leading US and International Content Providers, including Scientific Games, IGT, NetEnt and others. “It’s geolocation and KYC-ready for all state regulatory requirements, through integrations with Geocomply and others, and has out of the box support for major payment methods used across the regulated US states.” •
New German directives
MICROGAMING’S COLEMAN TALKS GERMANY, JACKPOTS AND CSR THE GERMAN GAMBLING MARKET is “brimming with
opportunity and potential”, says Microgaming CEO John Coleman, who is of “no doubt” that the region will be well worth the time and money required to meet the standards set
oleman, who has held a senior leadership role at Microgaming since joining the business in 2004, made the comments in a wide-ranging sit-down with SBC Leaders where he tackled the ‘Tolerance Policy,’ the integral role of jackpots, and continually strengthened focus upon corporate social responsibility. Last year, Germany’s 16 federal states confirmed that they had approved a
34 SBC LEADERS • FEBRUARY 2021
transitional tolerance policy for the period ahead of the implementation of the Interstate Treaty 2021. The new rules will officially come into effect in July 2021, after which the relevant licences can be issued. But in the meantime, operators were permitted to engage with the market provided they adopt the new regulatory measures. Those that ignore the new regulations were warned that they could face exclusion from the future official licensing procedure.
The new directives included reality check functionality, max win, fivesecond spin intervals, monthly deposit caps, and maximum stake limits coupled with the removal of autoplay and progressive jackpots, which is said to have been introduced to further promote social responsibility and minimise gambling-related harm. Subsequently, Microgaming, which also unveiled a renewed poker commitment in 2020 following the closure of its MPN poker network months earlier, became one of a multitude of firms facing the race against time to become compliant with the new regime. Outlining plans to make more than 150 of its games available to customers in the market, the supplier emphasised that “as a socially responsible
business” it broadly supported the regulatory changes in the country. This is a stance very much backedup by Coleman. “We embraced the regulations and were able to meet the requirements due to our unrivalled experience of operating in regulated markets around the world,” he said. “As a business, we have the maturity required to be able to adapt to regulatory changes at short notice, and Germany is no exception. “I’m in no doubt that Germany is well worth the effort and investment required to meet the standards set. The new regulations coming into force this year may seem restrictive to many operators, especially considering the exclusion of table games, live casino and progressive jackpots, but this is a market brimming with opportunity and potential.” Alongside its Germany focus and renewed poker vigour, Microgaming is anticipating a year crammed with new games, features, collaborations and innovations, as well as continuing to make significant headway with its aforementioned CSR efforts. “Nobody could have predicted the challenges that 2020 would present, and as lockdown conditions
continue in our main operational hubs, one of the biggest lessons I’ve learned is never to underestimate the resilience, flexibility and unwavering determination of your people,” Coleman continued. “In particular, I am proud of how my team has adapted to working from home, adopting new processes and overcoming all kinds of challenges
AS A BUSINESS, WE HAVE THE MATURITY REQUIRED TO BE ABLE TO ADAPT TO REGULATORY CHANGES AT SHORT NOTICE, AND GERMANY IS NO EXCEPTION to ensure the smooth running of our global business. “Showing kindness and compassion to others is so important, and our people at Microgaming and across the wider business continue to lead by example, always ready to provide support where needed, often getting involved directly to assist their local communities in ways large and small. “That same approach and mentality extends into our operational activities, and it is a testament to
the creativity and agility of my team that we have been able to constantly adapt to circumstances which are as changeable today as they were a year ago.“ On this theme, Coleman spoke with his usual sense of pride about the company’s PlayItForward initiative, assuring that the scheme is constantly evolving and that “we will always endeavour to respond to the greatest needs where we can make a material impact”. Touching upon the importance of such issues, especially amid a time of struggle for so many, as well as how the group plans to ramp up group-wide CSR endeavours, Coleman explained: “We are always looking to strengthen our CSR activities and make them more relevant. “In 2020, we continued our policy of donating to individuals, organisations and charities which our own members of staff highlighted for support, and moving forwards we will strive to make an even greater difference in our global communities. “This means continuing to take a hands-on approach and understanding the local needs of communities and charities, in order to ensure the
New German directives
support we provide makes a real difference. Of course, we will continue to work with the diverse portfolio of charities we already support, not least those championing safer gambling, mental health and environmental causes. “Green initiatives are particularly important to us, and we’ll continue to make strides in this area, having achieved ISO 14001 certification for our environmental management system in May last year.”
TO CONTINUE TO LEAD, WE MUST CONTINUE TO DEVELOP AND INNOVATE starting seed of €2m, whereas the latter included a series of new game launches and debuted exclusively with the Kindred Group. “We were the first to market with progressive jackpots back in 1999 and have been leading the industry in this area ever since,” said Coleman. “To
As the conversation drew to a close, talk inevitably turned to the year ahead as the calendar ticks over to the start of another 12-month cycle. “We kicked off the new year with a series of Megaways slots – our first, Shamrock Holmes Megaways, launched earlier this month,” Coleman concludes, as he begins to dissect what the industry can expect across the board from Microgaming during the coming months. “We have more than 100 new exclusive studio games in the pipeline for release over the next 12 months, featuring innovative and unique mechanics. Emerald Gold, a high volatility slot which includes the same great features as Western Gold, one of our previous blockbusters, is one of many to watch out for over the next few months. “Jackpots will continue to be a key focus, too. New progressive titles such as Juicy Joker: Mega Moolah and Sherlock & Moriarty: WowPot will land in operator game lobbies this quarter, and we have some innovative new poker products in the works for our casino vertical – these follow on from our release of Hold’em Poker late last year.
WE WILL ENDEAVOUR TO MAKE A POSITIVE DIFFERENCE TO OUR LOCAL COMMUNITIES WORLDWIDE
Continuing down the avenue of 2021’s hopes and expectations, Coleman touched upon a pair of jackpot-based developments in the form of a WowPot introduction and Mega Moolah refresh. The former, which he said boasts “unlimited growth potential”, is a revamped four-tiered online progressive jackpot that offers a top
36 SBC LEADERS • FEBRUARY 2021
continue to lead, we must continue to develop and innovate. “Our progressive jackpots continue to grow in popularity, and last year they paid out more than €190m (currency equivalent) across the network – that’s at a rate of well over 11,000 jackpot wins a day – with lifetime payouts exceeding €1.3bn.”
“We also remain committed to building on our exclusive and thirdparty studio strategy whilst also looking to bolster our position within new and emerging markets such as Latin America. “Aside from the many operational and commercial developments you’d expect to see from Microgaming, which include leading the way in emerging markets and supplying brilliant new games from our exclusive independent studios and content partners, we will continue to focus on our extensive staff-driven CSR activities. “This is at the heart of what we stand for as a business and culture, and we will endeavour to make a positive difference to our local communities worldwide. I don’t think this has ever been more important.” •
Changing the conversation
GMA: ACHIEVING A ‘BALANCE’ WITH THE 2005 GAMBLING ACT REVIEW WITH GAMBLING LEGISLATION set to undergo the biggest
reforms since the Blair administration, Matthew Hickey - Chief Executive Officer of Gordon Moody Association (GMA) - offers his views on why the impending review can be a vehicle for changing the national conversation surrounding problem gambling
ast your eyes back to 2019, and Boris Johnson had made a pledge to bring the betting and gaming industry into the digital age by carrying out a crossparliamentary review into the 2005 Gambling Act. While the review - for some - has been somewhat overdue, the eyes of many across the gambling industry have been firmly fixed on the changes which could come into play. High on the agenda in some quarters will be enhanced player protection measures, affordability checks and ID verification. Gordon Moody Association feels that there are other
vital areas the review will need to focus on to reduce gambling harm and addiction . SBC: What are your initial thoughts on the upcoming 2005 Gambling Act review? MH: A lot of the initial ask for evidence in the review of the 2005 Gambling Act focuses on the regulation of the
IT IS POSITIVE TO SEE IT FOCUSING ON AREAS SUCH AS GAMBLING HARM, BUT THERE IS A GAP ON THE ISSUE OF AFFECTED OTHERS
gambling industry and how to address technological changes that have had a huge impact since 2005. Gordon Moody Association recognises the importance of tackling these issues, but at the same time we know that our core purpose is to provide treatment and support for those most severely affected by gambling addiction. GMA will be doing our best to influence as much as we can, where we can, and we very much welcome the review and look forward to submitting evidence and seeing how the review unfolds. It is positive to see it focusing on areas such as gambling harm but there is a gap on the issue of “affected others” and we would have liked to have seen more there. With GMA celebrating 50 years of treatment support this year, the decades of experience we have accumulated in GMA and Gambling Therapy (GT), then we feel we are in a good position to offer an expert opinion in the areas of treatment and gambling harm. In the wider regulatory environment then we are quite open to change - that’s the purpose of the review after all - but our starting point will be to keep an open mind, review the evidence and data, and see how that impacts in the areas we operate in. SBC: As a gambling-harm minimisation and treatment charity, what would you say are the key areas which need to be addressed when it comes to reviewing current legislation? MH: Last year we suggested on several occasions in the media that we needed to start a national conversation aimed at removing the stigma around addiction and mental health – particularly relating to gambling. I feel we are starting to make headway and this review can offer a great opportunity to progress that conversation further.
38 SBC LEADERS • FEBRUARY 2021
lawmakers to shape what technical changes are needed from Industry. Much of our traffic at Gambling Therapy is regarding dispute resolution which can be resolved by multilingual sites (we offer the ability to speak in over 160 languages) and clearer routes to sorting problems. So enhanced and consistent communication is essential in a global market with companies taking ownership of clients gambling online many thousands of miles away. Continual training and professional development of frontline staff to deliver excellence in support and signposting (something that we are actively promoting) is something that needs to be considered - the benchmarks of quality we need to get consistency in. After what we have gone through with Covid and related mental health issues, then we have to realise that it is increasingly complex dealing with the severity of issues being presented. At GT this happens in different languages, and further emphasises the need for more resources, more training, more effective signposting and triaging for people who desperately need help.
Looking ahead, however, it feels there is a huge tidal wave of a challenge around mental health and its impact on society heading our way. Our work at GMA with severely addicted gamblers very much focuses on helping improve people’s mental health and outlook through giving them the skills to cope with life's challenges, which are severely acute for addicted gamblers, their friends and family. This is an area we believe is key ensuring severe gambling addiction is tackled in a holistic, therapeutic way as a matter of public health provision. And, there may be things in the wider regulatory environment that can impact on that where we'll
review carefully the ‘expert opinion’ submitted to the review. SBC: From a consumer standpoint, what visible changes will the review of the Gambling Act bring in terms of bonuses, incentives and challenging disputes? MH: Again, it would be important to see what evidence emerges on this and ultimately it is a matter for the
THIS REVIEW OFFERS A GREAT OPPORTUNITY TO PROGRESS THE NATIONAL CONVERSATION ON PROBLEM GAMBLING FURTHER
SBC: How is GMA supporting the government in its evidence collection ahead of the review? MH: We are particularly looking to inform and influence an enhanced public health approach, by making the case for an expansion of resources to fund more residential treatment capacity. We've already set out our stall for 2021 by announcing that we will set up a woman's residential treatment centre this coming year. There was a lot of media interest in that story, but we realise that this step forward is only the tip of the iceberg. Our plans for 2021 and further into the future have growing our capacity and the quality of treatment very much to the fore. We also recognised that the impact of the Covid pandemic will be with us for years to come, even with the hope of the vaccine. So, we will be arguing for a joined-up public health approach to gambling addiction that allows more people to get treatment – and for them to get the right treatment at the right time. We are embracing innovative change and we
Changing the conversation
plan to ensure that our expertise is shared and built upon in as extensive and helpful way as possible in wider society. SBC: Do you think that the review needs to place more of a focus on pre-emptive education to combat problem gambling? MH: This question doesn’t appear to be directly addressed in the call for evidence. Education is a vital part of any treatment programme and is an important at any stage of the gambling continuum. This includes front-line staff working at call centres as clients move along the continuum due to circumstances. It is really important to understand where someone is located due to their life stressors. Pre-emptive education is often presumed to be aimed at a younger generation and we feel there is great
THIS REVIEW IS UNDOUBTEDLY A POSITIVE OPPORTUNITY TO STRIKE A NEW AND HEALTHY BALANCE FOR ALL SIDES
40 SBC LEADERS • FEBRUARY 2021
benefit in ongoing psycho-educative programmes for anyone who has not travelled far enough along the continuum to be considered a problem gambler. At GT we are investigating the benefits of Single Session Counselling (Dryden, 2019), which is solution-based and has a large education component moving the client to find their plan of recovery – an approach that dates back to Freud. Our Retreat and Counselling programme at GMA is delivered across 12 weeks with the problem gambler only in attendance for the first and last weekend. There are obvious benefits for people who work, have children or are just not able to make the commitment of a 14-week residential programme. This has a very large psycho-educative component reinforced by therapists each week. It has been a natural fit to go online in these Covid times. SBC: Can we ever achieve a balance in legislation which benefits the gambling industry but also minimises problem gambling? MH: GMA has never taken a judgmental
EDUCATION IS A VITAL PART OF ANY TREATMENT PROGRAMME AND IS AN IMPORTANT AT ANY STAGE OF THE GAMBLING CONTINUUM approach on gamblers or the gambling industry. We recognise that for the majority of people gambling is fun and not harmful. But we also recognise there are sections of society that need protection and balance is the key word here. Get it wrong and the possibility of either a black market growing on the one side or harm not being rectified on the other are possibilities. This review is undoubtedly a positive opportunity to strike a new and healthy balance for all sides. The one thing we need to keep focused on is that - whatever the new environment looks like - there will still be severely addicted gamblers and more has to be done to provide for their treatment and recovery to achieve freedom from gambling addiction. •
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44 SBC LEADERS • FEBRUARY 2021
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Shifting sponsorship perceptions
‘A FORCE FOR GOOD’: HOW CAN THE INDUSTRY REINVENT GAMBLING SPONSORSHIPS? WITH THE GOVERNMENT’S REVIEW into the 2005
Gambling Act now underway, the future for betting sponsorships remains uncertain. But can operators use their sponsorship agreements as a force for good?
ver the course of 2020 or more specifically, the last few months - much of the focus surrounding sports sponsorship has been on the detrimental effect that clubs and leagues partnering with betting operators can have on audiences and customers, and young people especially. The government review into the Gambling Act has sparked widespread
46 SBC LEADERS • FEBRUARY 2021
debate across the betting industry, which is under heightened political scrutiny as a result of the review. Whilst clubs, leagues and federations await a decision, the gambling sector has demonstrated how it can make a difference within sport. The way that sponsorships are activated may sway the government’s decision on the issue. Most notably, earlier this year, Kindred Group’s
casino brand 32Red - which has agreements in place with three EFL Championship clubs and Scottish giants Rangers - re-invested in Derby County’s mental health programme, ‘Team Talk’, after vowing to ‘reinvent sponsorship’ within sport and football. Mental health in sport is now more topical than ever. In September, the Professional Footballers’ Association reported that 464 of its members had received counselling from the Sporting Chance clinic to date this year, compared to 563 for the whole of 2019. With the figure for 2020 rapidly closing in, 32Red injected tens of thousands of pounds into the mental health campaign, overseen by the Derby County Community Trust. And the parent company’s General Manager Neil Banbury insinuated that a ban on betting operators partnering with sports clubs could have a profound on social responsibility initiatives, such as Derby’s Team Talk. “Sponsors and clubs are also in a unique position to do more to make sponsorship truly benefit the whole community of a football club, and promote healthier, safer gambling through our activation,” he explained. “A ban on an industry that supports the sport in such a strong way would clearly have a huge impact – both in terms of initiatives we support but also the broader football pyramid. As the EFL have recently said, the significant contribution betting companies make to the ongoing financial sustainability of professional football at all levels is as important now as it has ever been due to the COVID-19 pandemic.” He continued: “It would also not have the desired effect that those who support it wish for. It would remove the industry from the public’s eye at the very moment that responsible operators like Kindred are developing innovative and effective ways to communicate healthier gambling behaviour to adult audiences.” Similarly, the National League’s official betting partner LV Bet pledged its support to the division’s mental health initiative through exclusive social and digital content, including interviews with managers and players as part of the contract which encompasses 68 teams across three divisions. Marcin Jablonski, LV Bet’s Chief
Neil Banbury, General Manager UK, Kindred Group
Commercial Officer, said: “A key initiative was to promote responsible gambling and positive mental health which was covered throughout our campaign. “We also worked with key influencers in the National League across digital and fan groups who worked well with us and we will repeat this during the coming season. We are also delivering content with Managers of National League teams and sharing with the engaged audience we connect with. This season we have further plans to have a strong dialogue.” As of late, a handful of professional athletes have opened up about their struggles with depression and anxiety, with stars such as Newcastle United’s Michael Chopra opening up discussions about his mental health. The 36-year-old sat down with GamCare, GamBan and GamStop to discuss how he overcame his compulsive habits, as part of the TalkStopBan campaign, an initiative which seeks to provide support for problem gamblers over the festive
Marcin Jablonski, LV Bet’s Chief Commercial Officer
period when they may find their mental wellbeing deteriorating whilst in isolation. Neill Simpson, Brand Director at Mr Green, suggested that betting operators need to play an active role in joint agreements, during the SBC Summit Barcelona - Digital event. He concurred: “In my experience a lot of operators I’ve seen make the mistake of thinking that if an
A BAN ON AN INDUSTRY THAT SUPPORTS THE SPORT IN SUCH A STRONG WAY WOULD CLEARLY HAVE A HUGE IMPACT investment is ‘x’ million, then that’s the sponsorship done and dusted. Whereas actually, your level of investment outside of that is almost more important than the sponsorship money itself.” North of the border, Paddy Power raised awareness of the Missing People charity by filling a stand at Motherwell FC with ‘missing’ fans
in the summer. Although the Irish bookmaker has become synonymous with some of its well documented and widely publicised PR stunts, this particular campaign had a real purpose - setting out to reunite missing people across the UK with their loved ones. Meanwhile, Safer Gambling Week 2020 saw a handful of Premier League and EFL clubs make a commitment to promoting the nationwide issue of problem gambling. Southampton Football Club launched ‘Listen to the Saint in you’ - a new initiative in collaboration with Sportsbet.io to raise awareness of responsible gambling practices. Through its sponsorship, the club also encouraged supporters to download the RecoverMe mobile application, which offers problem gamblers discrete support helplines. Elsewhere, Football Index also donated its shirt sponsorship of Championship duo Nottingham Forest and Queens Park Rangers to YGAM, in aid of the cross-industry initiative. Along with special edition jerseys, the
Shifting sponsorship perceptions
gambling platform made a significant £5,000 donation to the charity in the hope that the message of responsible gambling will resonate with football fans who tune in to watch their teams. Speaking on the ‘Unpicking the Terms of the UK Gambling Act Review’ webinar panel, hosted by SBC, Chair of the Betting and Gaming Council (BGC) Brigid Simmonds highlighted a ‘perception issue’ surrounding betting operators and gambling brands’ partnerships with sporting clubs and federations. “I’m someone who has worked in sport for many years and is absolutely passionate about what sport can do for people through life, but we’ve got to make sure money is available for grassroots sport,” she explained.
IT’S REALLY IMPORTANT THAT MONEY FROM SPONSORSHIPS IS USED IN LOCAL COMMUNITIES AND FOR EDUCATION “We’ve got £350 million that goes into racing from the industry, £30 to £40 million that goes into other sports, whether it be rugby league, darts, boxing or obviously football. It’s really important that money is used in local communities and it’s used in education. I think when at the heart of all those agreements is safer gambling, it’s absolutely fine.” One such example of operators backing grassroots projects is Entain Plc’s ‘Pitching In’ investment programme. In December, the betting company launched the ‘Trident Community Foundation’ in conjunction with regional non-league football partners of The Isthmian, Northern Premier and Southern Leagues. As the founding partner of the Trident Community Foundation, Entain’s Pitching In programme has donated £150,000 to establish the ‘TCF fund’. The sum will help to distribute community funds for the remainder of the 2020/21 season, with many amateur clubs and organisations struggling to mitigate the financial impact of the COVID-19 crisis, having had core hospitality and ticketing revenue streams turned off. A blanket ban on sports
48 SBC LEADERS • FEBRUARY 2021
sponsorships would also have a profound impact on the English Football League, which is largely dependent on the £40 million per season that its principal partner Sky Bet contributes to Championship, League One and League Two sides - a sum which has been marked as crucial funding for ‘clubs living on a financial knife-edge’. In late October, the governing body maintained that betting advertising across its leagues and competitions
I THINK WHEN SAFER GAMBLING IS AT THE HEART OF ALL THOSE SPONSORSHIP AGREEMENTS, IT’S ABSOLUTELY FINE
had been undertaken responsibly - players and clubs across its three tiers raise awareness of and educate the public about safer gambling protocols on a weekly basis, with 70% of betting’s matchday inventory dedicated to responsible messaging. While proposals to ban gambling sponsorships in the UK are similar to those introduced in Spain earlier this year, the long-term effects of such measures are yet to be fully thought out. Without the backing of betting operators, responsible gambling and social initiatives may not be financially feasible. If the sports industry was forced to cut ties with the gambling sector, the effect of stripping funding from clubs and leagues could be untold. •
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ASSAF DOR, CELLXPERT: REWRITING STANDARDS FOR IGAMING AFFILIATION
BC Leaders caught up with Cellxpert CEO and Founder Assaf Dor, who took us through some of the key changes to compliance, before explaining why legacy affiliate programmes will lose affiliates if they don’t react to the blocking of third party cookies by Google Chrome browsers. We concluded by discussing how Cellxpert has navigated the disruption of 2020 before Dor dusted off his crystal ball to predict where the company might be in five years time. SBC: Can you tell our readers a little bit about Cellxpert? AD: So Cellxpert is a 12 year old company. Essentially, what we do is we create the digital marketing partnership stack. We allow operators on any scale to run their affiliate programmes and other marketing partnership channels, thereby facilitating all of the steps of the ecosystem. So from the media distribution side, this includes ad serving, click routing, onboarding of affiliates and other types of partners as well as compensation, payouts, accounting, various API's and other technical aspects such as postback and pixel management. In short, we offer an entire 360 degree solution for operators. SBC: So what is it that makes Cellxpert stand out from the competition? AD: First of all, we offer a very technologically advanced product. Our infrastructure is built over a serverless stack rather than cellular architecture, meaning that it is very reliable for our customers. We also place a significant focus on being very much in tune with what the market needs. With that in mind, we release a new version of our product every month to ensure
50 SBC LEADERS • FEBRUARY 2021
THE NEED TO PROVIDE more transparent data for affiliates and a stronger management layer for operators to mitigate new regulatory requirements drives the vision that Cellxpert has for the ‘industry standard’ of affiliate marketing that it is meeting the demands of our customers. In addition, we provide realtime tracking - something which none of our competitors do. We handle postbacks at a level which is unparalleled to any of the other companies in our industry.
WE RELEASE A NEW VERSION OF OUR PRODUCT EVERY MONTH TO ENSURE THAT IT IS MEETING THE DEMANDS OF OUR CUSTOMERS We are very much a service oriented company in the sense that we are very motivated towards supporting our customers and making sure that they start off on the right foot.
To do this, we put a substantial amount of effort into making sure that everything within our operation radiates trust and transparency between us and our clients, and between our clients and their affiliates. That’s something that they all recognise very well and are happy to speak about. While we’re not a young company anymore, we’ve managed to gain the trust of our clients, global companies and publicly listed enterprises from various different sectors. We work with major financial services companies and online services which are using our products. We think that we bring a lot of knowhow, both in the technology and operational aspects of the industry, but also in the space of regulatory compliance, which has become a key area for focus in the gaming space
THERE HAS BEEN MORE CONSOLIDATION IN THE MARKET BECAUSE PEOPLE THAT DEAL WITH THIS TYPE OF REGULATION CAN USUALLY AFFORD TO HANDLE ALL OF THE REQUIREMENTS
- especially in terms of marketing practices. For our clients, we handle a lot of the heavy lifting in terms of enforcing regulatory requirements and customising profiles based on each individual jurisdiction. SBC: In your 12 years of operation, what would you say have been the biggest changes from an iGaming affiliate perspective? Is it more of a focus on compliance? AD: I definitely think that compliance is a significant component. It’s been a big deal in the last few years, especially because operators have started to suffer liability aspects from the actions of affiliates - this has basically shifted the paradigm. To sum it up, I think that there has been more consolidation in the market because people that deal with this type of regulation can usually afford to handle all of the requirements. Usually, these companies - and their affiliates are also much more structured. For the more reputable organisations, it’s become essential to have some kind of management layer which audits their affiliate channel. We’ve seen companies, such as Sky Bet, make some sudden moves - such as shutting down their affiliate programmes.
So from our perspective, this all plays well to our strengths because we’ve been mitigating the effects of regulatory requirements from dozens of jurisdictions for years. We are confident in the sense that we can deliver on that for the iGaming markets. So I’d have to say that these are definitely some of the biggest changes that have taken place. Secondly, from a consolidated
which will affect online marketing channels, especially affiliates, in terms of pixel tracking. HTML pixel tracking was not very reliable to start off with. But within a few months, it’ll be dismantled and disabled by the browser. In order to support active and inaccurate campaigns, operators are going to have to implement robust postback layers so that they can report back to
WE HANDLE A LOT OF THE HEAVY LIFTING IN TERMS OF ENFORCING REGULATORY REQUIREMENTS AND CUSTOMISING PROFILES BASED ON EACH INDIVIDUAL JURISDICTION perspective, we’re seeing a lot of bigger affiliates, and much more sophisticated affiliates which require more transparency. They want to know more about the company, and to know that they’re essentially partnering up with the business. They also require more visibility into the activity of the players. Now, we’re basically rewriting the new standards for affiliation in terms of transparency. Thirdly, there have been changes from the deprecation of third party cookies. In the coming year, there’s going to be a number of changes
all of their associated partners. This is the layer that we've been perfecting now for over 10 years. It covers all the esoteric use cases, and all of the necessary functions which allow operators to use the layer without actually requiring technical supervision. SBC: Given these changes to the landscape, are we moving towards a situation where operators just want to work with bigger affiliates? Or is that not the case? AD: I think the changes in landscape
stem from the regulatory aspect, at least that’s what I’m seeing. So for a lot of the smaller affiliates, having to disclose information about their activity wasn’t received very well. But for a more structured corporation, it’s much more straightforward to provide legal documents and disclose all of their activity. If they want to keep on working, in that sense, that’s the shockwave that we said has hit a lot of areas in the market. There was also a consolidation wave stemming from acquisitions. So a lot of the more popular sites, and their affiliates, have been acquired by other significant players in the market. That, in turn, consolidates the power for them. As a whole, though, even though there was significant consolidation of the market, there is still room for the smaller affiliates in the regulated environments. We are seeing that markets are gradually adapting to
EVERYONE OPERATING WITH A LEGACY AFFILIATE PROGRAMME IS GOING TO COME UNDER FIRE AND LOSE THEIR AFFILIATES UNLESS THEY ACT this too. So both the operators and affiliates have found a middle ground to work alongside one another. Because of this, we’re seeing more customised commission models and much more careful work. SBC: You mention the wave of consolidation; does this influence what you do? AD: It influences our operations in regards to stronger affiliates requiring more information. They are essentially educating the operators about working with them much more closely. Because they have more power, they require much more transparency.
This is a win-win situation because it means that the more transparent operators are, the higher the chances of them generating more traffic from the right sources. SBC: Coming back to the changes for third party cookies, do you think this is one of the key challenges looking into 2021? AD: Absolutely. I think that everyone operating with a legacy affiliate programme is going to come under fire and lose their affiliates unless they act. We’ve been migrating clients from these kind of legacy affiliate platforms for exactly that reason, and due to a lack of support. SBC: Do you want to just explain exactly what the changes are? AD: In short, what’s going to happen is that by default, Google Chrome browsers will block third party cookies. This means that if someone clicks on your website, and that link triggers an affiliate, let's say they sign up or make a deposit. Even if your website reports a trigger and a bit of HTML code which would have reported back to the affiliate tracking software, this software will now not have access to the cookie that was planted on the user journey. This will mean that the conversion will not be properly tracked, making it very difficult for affiliates to attribute conversions to specific traffic sources. They will solely have to rely on the reporting done by the operator. As you can imagine, this is going to be very problematic.
MAKING SURE THAT YOU HAVE A STRONG POST BACK LAYER THAT’S RELIABLE AND CORRELATES WELL WITH YOUR BUSINESS KPIS IS KEY So making sure that you have a strong post back layer that’s reliable and correlates well with your business KPIs is key. It will allow you to investigate everything which can allow you to provide information to the relevant stakeholders - and will become fundamental for how affiliation is done.
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SBC: So this affects the smaller affiliates more because they will be relying on the operator to be more transparent? AD: That’s exactly right, and this is what we’re trying to facilitate. We also want to be the most user-friendly affiliate programme. In that sense, our reporting and our interface is helping affiliates to optimise on their work. We’re trying to give the affiliates better reports - even if they don’t use post back - to allow them to optimise on their own affiliate campaigns. We know that the larger affiliates will use their own tracking platforms. We will allow the operators to deliver accurate data to those affiliates via an API or via post back. But for the smaller affiliates, we want to give them access to the reporting tools which will give them as much information as possible to optimise their work. SBC: 2020 has obviously been a difficult year for everyone. How has this year panned out for Cellxpert? AD: It’s been a rollercoaster ride. We've had to change a lot throughout the year. There have been some very
significant plans which have had to change abruptly, like setting up shop in multiple locations in Europe. Then obviously, all of the conferences that have been cancelled throughout the year. SBC: Have the conferences traditionally been a key place for you to create new business? AD: Traditionally, yes they have been. We - like everyone - have had to adapt to those events being cancelled. But in spite of that, we are
For everyone, I think we were all very used to the one-to-one face time at these conferences. But this new reality has been a significant change for us all and we’ve managed to adapt. As you know, we operate in the online space, so that has seen some substantial growth this year. SBC: And finally, where do you see Cellxpert in five years time? AD: I think you’re going to see Cellxpert as the new igaming industry standard for affiliate marketing.
WE’RE LOOKING AT THE US AS A STRONG MARKET, JUST LIKE THE REST OF THE INDUSTRY, AND SO WE’RE FOCUSING ON THIS NEW POTENTIAL FOR BUSINESS closing a very strong year, where we have seen substantial growth across all of our sectors. Adapting to changes has been a significant challenge for us, but I think that’s a challenge we’re meeting very well in order to structure an environment for new businesses without these traditional industry conferences which were previously considered to be quite instrumental.
That’s what I think, and we’re actively looking to play that role too. You will see us expand, and grow stronger, as we look to gain a greater foothold in more jurisdictions. We’re looking at the US as a strong market, just like the rest of the industry, and so we’re focusing on this new potential for business. We’re also looking at new possibilities within the Asian market. •
Pursuing the American dream
WHY US MARKET EXPANSION IS A MARATHON, NOT A SPRINT SPEAKING AT THE RECENT Betting on Sports America -
Digital, Kamran Hedjri, CEO of PXP Financial, reflected on the company’s growth stateside
s the US sports wagering market continues to evolve and open up further, expansion into new states becomes an increasingly alluring prospect for betting operators and payment merchants. Nonetheless, the complexities of new states, adapting to different sets of regulations and engaging new consumers remains a challenge which requires meticulous strategies. But for PXP Financial, drawing upon its strong footprint within the European market has allowed the
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company to bolster the growth of gambling operators when it comes to maximising engagement in the US. Speaking on a track entitled ‘Sports Betting 101’, Hedjri disclosed that the pandemic posed a series of challenges in 2020 - and the individual regulations across the post-PASPA market did not make things any easier. Sharing his insight on the differences between Europe and the US, he said: “I think one of the things in the US as we touched upon is the different regulations and the
number of the payment options in Europe there are more varieties of the alternative payments options to the US. “The US has got maybe a card and a wallet and a few others that we have on the horizon, that’s something that is picking up and there is going to be
IT’S NOT GOING TO BE A SPRINT, IT’S GOING TO BE A MARATHON SO YOU NEED TO BE PREPARED TO INVEST SIGNIFICANT TIME
IT IS DOWN TO PICKING THE RIGHT PARTNER, ONE WHICH CAN GIVE YOU THE RIGHT FUNCTIONALITY AND APPROACH TO THE MARKET
more. The other one is actually the issue around the conversion rates on the card processing and the rejections of the cards.” Having first expanded into the US back in 2013, New Jersey was the first stop on PXP Financial’s US journey. As more states began to open their doors to legalised betting, the US continues to hold much potential. Hedjri continued: “We started back in 2013, as online gaming began to be regulated in a few states. One of those states that we entered when we started was New Jersey - it was
exciting for us, back then it was one of the things that were all new and exciting. We expanded into the state and our approval meant we had the first dipping of toes into the water and that we could begin to gather experience in the US market. “It was a natural move for us as the regulations opened up as PXP has a great deal of gaming experience. As the regulations in the states started to open up, we spent around six years processing with nothing really much happening, before the regulatory market picked up and we experienced
that this is the right time to go all in.” As many firms look to replicate the success of PXP in terms of growth into US states, Hedjri pinpointed the key lessons the group would take from the journey of PXP. “Obviously, it’s crucial that you have enough resources - it’s going to be a resource-intensive expansion,” he said. “It’s not going to be a sprint, it’s going to be a marathon so you need to be prepared to invest significant time. It is not a short term entry, it needs to be a long and sustainable plan over a
Pursuing the American dream
number of years. “It is vital that this is in the mindset of anyone planning on embarking on this journey so that they are prepared for the type of game they are going into. Then it is down to picking the right partner, one which can give you the right functionality and approach to the market.” Further emphasising the importance of selecting the right partnerships, Hedjri cited a quality over quantity approach as being the best way to get the most out of collaborations. “You want to have the right partners, whether it’s risk management services, KYC offering or functionality, there are few correct partners in a big market,” he added. “As well as this, you should have your redundancy setup, so you’re not too reliant on one single partner.” For domestic firms seeking expansion in the US, regulatory understanding was a factor that the PXP US CEO defined as being imperative in growth across states. In terms of the gaming market in the US specifically, building the omnichannel journey is something that he believes will be at the forefront of
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innovation within the industry: He explained: “Payment across multiple channels is going to be key for us in gaming over the next year, providing payment with no matter which device you are using is going to be key, providing the same level of experience no matter where you are sitting.
DIGITALISATION BROUGHT ON BY COVID HAS CHANGED THE WAY WE ARE WORKING, SO THAT IS GOING TO HAVE A SHIFT ON HOW WE INTERACT WITH ONE ANOTHER “The customer journey being secure and seamless is key, because you don’t want to have an ecommerce experience then a point of sale experience, or a mobile pad experience, whichever it is, you don’t want a different experience for customers, you want a seamless experience for your customers. This frictionless approach is critical for everyone involved in the process.” The digital shift of the industry will
also play a big role in the evolution of the market, something that Hedjri stated has been accelerated substantially by the pandemic. He continued: “I think Covid has changed the way we are behaving, I know that everybody thought at the beginning this would be a short thing and it has lasted longer than anybody could have expected it to and this is also going to change the market. “The push to esports, VR and other digital activities is going to be big even post-Covid when things are back to normal, these are still a big part of the gaming industry. I think digitalisation will also be pushed forward and the online experience will be increased more and more. “Digitalisation brought on by Covid has changed the way we are working, so that is going to have a shift on cost company structures, how they spend their money and how we are interacting with each other.” Evaluating the market, he concluded: “It is exciting and be prepared because it is going to explode in the coming years, it’s going to get really big. But if you’re entering, don’t expect it to be big from the get-go.” •
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Online banking payments
VASILIJE LEKOVIC, TRUSTLY: WHAT’S NEW IN 2021? NEW MARKETS, NEW FEATURES and a whole lot of new players are on the horizon for Trustly in 2021, writes Director of Gaming Vasilije Lekovic. Here’s a preview of the key developments you can expect to see in the next 12 months PSD2 will bring more people to Open Banking payments PSD2 regulation is now in full effect, requiring two-factor authentication for all online payments in the EU and the UK. This means players who want to use debit cards to deposit will need both their card and authentication device (such as their phone) at hand. Rather than typing in card numbers, Open Banking gives players a modern
OPEN BANKING GIVES PLAYERS A MODERN EXPERIENCE BY AUTHENTICATING WITH FINGERPRINT OR FACE ID BIOMETRICS ON THEIR MOBILE DEVICES
experience by authenticating with fingerprint or face ID biometrics on their mobile devices. Open Banking payments provide the seamless experience and instant gratification that meets the demands of digital-native players. Once they experience this frictionless payment method, repeat usage and player loyalty will soar in the coming months.
We’re building awareness and trust around Open Banking Admittedly, getting players to try Open Banking payments is a challenge in markets like the UK, where consumer knowledge is relatively low and the experience is novel. However, as we have seen in other markets, once a player experiences the speed and convenience of Trustly,
a stickiness effect is created and they become our loyal customers. We are confident players in the UK will pick Trustly as their payment method of choice and that our user numbers will continue to grow. Moreover, our research tells us that when a consumer decides to try a new payment method, security and regulatory oversight are two of their biggest concerns. Players who want to try Open Banking will look for a trustworthy solution, which is where Trustly stands out. Working with the major banks in the UK, Trustly offers bank-level security backed up by the Swedish FSA. Present in the UK since 2016, with some of the key market leaders offering Trustly to their players in the UK for several years now, we are also recognised by the governmentsanctioned UK Open Banking Implementation Entity (OBIE).
WHEN A CONSUMER DECIDES TO TRY A NEW PAYMENT METHOD, SECURITY AND REGULATORY OVERSIGHT ARE TWO OF THEIR BIGGEST CONCERNS We’re working hard to build consumer awareness in transforming markets and to let players know that Trustly has a proven track record that they can place their faith in.
In-banner Pay N Play is in the works In-Banner Pay N Play and In-Banner Betting are two innovative solutions that we are actively exploring in 2021. This functionality will allow affiliate websites to improve conversion and reduce drop-offs by optimising registration, bet placement and overall playing experience. The use case we’re most excited about is In-Banner Betting. By utilising the capabilities of our Pay N Play product, operators will be able to offer their sports betting users a seamless experience. They can deposit, register and verify, and place a wager all in one go from the dynamic odds banners on affiliate websites.
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IN-BANNER PAY N PLAY WILL ALLOW PLAYERS TO DEPOSIT, REGISTER AND VERIFY, AND PLACE A WAGER ALL IN ONE GO FROM THE DYNAMIC ODDS BANNERS ON AFFILIATE WEBSITES
Online banking payments
We’re helping operators automate compliance and offer instant payouts Over the nearly 13 years that Trustly has been in business, we have built an extensive network of bank integrations across Europe and the US, allowing us to offer the fastest rails to process payments in multiple markets. Our coverage and integration with some of the biggest banking networks in many markets is second to none. This brings additional value to our clients by allowing them to utilise our
ONCE OPERATORS BEGAN OFFERING PAY N PLAY, THEY SOON SAW THAT THE UNBEATABLE CUSTOMER EXPERIENCE, RAPIDLY INCREASED PLAYER CONVERSION AND LOYALTY across multiple markets. We are continuously following the changes in local regulations and aim to develop new product features and functionalities to help our clients with payment process optimisation, and with improving their compliance processes.
increased player conversion and loyalty. Given the success of Pay N Play in our currently live markets, as well as the improvements in user experience that PSD2 and Open Banking are bringing to other markets across Europe, which will inevitably make bank payments more widely adopted in those markets, we are actively exploring the possibility to introduce new Pay N Play markets in 2021.
Broadening our horizons As you know, Trustly is currently present in multiple markets across Europe, as well as in the US. Moreover, we recently launched our verification product in Australia and Canada and we are exploring the possibility to continue our expansion outside of Europe. I hope that we will be able to share some exciting news this year about our global expansion.
Scan N Play will drive cashless retail and casino gaming
instant payout product – which is in greater demand than ever by both players and operators. Similarly, we’re able to help operators manage multi-market compliance. In parallel with launching Pay N Play across multiple markets, we’ve developed stand-alone solutions that help operators automate compliance. Leading operators are using our Lean KYC, Name Verify, and Age Verify products, which allow the optimisation and automation of verification processes and support operators in meeting regulatory requirements
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Pay N Play will be available in more European markets Today, Pay N Play is live with nearly 200 brands across Europe. Once operators began offering Pay N Play a few years ago, they soon saw that the unbeatable customer experience rapidly
OUR SCAN N PLAY SOLUTION IS MAKING IT POSSIBLE FOR LAND-BASED OPERATORS TO OFFER THEIR PLAYERS A LEADING-EDGE CASHLESS EXPERIENCE
Our Scan N Play solution is making it possible for land-based operators to offer their players a leading-edge cashless experience. There are no speed bumps on the path to user adoption because there’s no download or account sign-up required. The player just needs their mobile phone, a connection to the internet and access to their bank account. To make a deposit, the player scans a QR code which is displayed at cashier points, the cage, gaming terminals or at table games.
There’s more to come Trustly has been at the forefront of Online Banking Payments for nearly 13 years now. As regulatory changes drive consumer adoption, we’re ready to support operators who want to meet that market demand. Based on our proven track record, it is clear that Trustly offers the expertise, size and stability to support operators as they strive to improve efficiency and player experience. In 2021, we will continue to focus on innovation that delivers even more value to our customers. Stay tuned! •
The premium payment experience Give your players instant registration, rapid withdrawals and frictionless gaming with Pay N PlayÂŽ.
HOW EUROPEAN LOTTERIES RESPONDED TO THE COVID-19 PANDEMIC IN 2020 THE SUPPORT SHOWN by the likes of the UK National
Lottery, OPAP and German lotteries has been vital for communities in the fight against COVID-19
he year 2020 has hit everyone hard in one way or another thanks to the COVID-19 pandemic. A lot of people have been struggling as a result in the past 12 months, but lotteries across Europe and further afield have been doing their best to try and help people cope during this difficult and unprecedented time. Since the beginning of the first lockdowns in March 2020, lotteries across the continent have played a major part in supporting their local communities, upholding the value many lotteries have of helping and being a benefit to society, especially during times of need. Whether that be offering relief, funding medical equipment, or creating emergency funds and welfare aid, national lotteries have assisted those that needed it most, demonstrating they can be a force for good. The support by lotteries has helped keep communities going through the challenging times of the pandemic, and it is this work that will continue long into the new year where there will be a fresh set of challenges as we enter a post-COVID world. It is therefore important to highlight some of the fantastic efforts that have been done by lotteries to help out
LOTTERIES ACROSS THE CONTINENT HAVE PLAYED A MAJOR PART IN SUPPORTING THEIR LOCAL COMMUNITIES
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their communities in their respective countries over the past year during the pandemic. Here are just a few examples of the brilliant work that has been done.
UK National Lottery Back in April, the UK’s National Lottery announced a £600m support package
THE UK’S NATIONAL LOTTERY ANNOUNCED A £600M SUPPORT PACKAGE FOR CHARITIES AND ORGANISATIONS IMPACTED BY THE PANDEMIC
for the charities and organisations which were impacted by the pandemic. This funding was used for initiatives that focused on combatting loneliness and isolation, providing care for the elderly and offering support for physical and mental health. It also provided support for organisations and projects across the arts, community and charity, heritage, education, environment and sporting sectors - many of which were exempt from government support. ‘Innovations in Dementia’, a National Lottery funded programme, worked with people living with dementia to design a guide for volunteers who are supporting those with the disease throughout the UK lockdown. The National Lottery Heritage Fund created a £50m emergency fund to help British heritage sites after almost 50% said they would not survive beyond six months if
the virus shutdown continued, while Arts Council England announced a £160m emergency support package to support the cultural sector. Sport England, funded by the UK Government and the lottery, also made up to £195m of funding available to help the sports sector throughout the pandemic. The lottery has been following a funding plan in response to COVID-19, offering grant holders an element of flexibility so that they can focus on supporting their local communities as well as making all funding decisions (up to £300m of lottery funding) devoted to addressing the current crisis and accelerating the cash part of the funding as much as possible. Moreover, the National Lottery Community Fund recently announced that it has distributed more than £650m to communities across the UK throughout 2020 (January 1 to November 25), largely due to National Lottery player spend.
Greece’s OPAP Throughout the pandemic, OPAP has actively supported Greece’s public health system and has helped
develop new initiatives. This has included support for the renovation of paediatric hospitals, the modernisation of the Ophthalmology and ENT Nursing Unit of the Panagiotis and Aglaia Kyriakou hospital as well as the Cardiology Unit of Aghia Sophia hospital.
OPAP HAS HELPED GREECE’S PUBLIC HEALTH SYSTEM BY SUPPORTING THE RENOVATION OF PAEDIATRIC HOSPITALS The lottery also donated 500,000 masks for the healthcare personnel in three referral public hospitals, on top of donating hemodynamic monitors to the Panagiotis & Aglaia Kyriacou hospital for the monitoring of vital body parts. In addition, the lottery also supplied as one vital parameters monitor for use in intensive care units, surgeries and hospital wards among other facilities. During the first lockdown and in the context of the health prevention ‘OPAP in the Neighborhood’ programme,
OPAP - in collaboration with The Smile of the Child (a non-governmental organisation) - offered the use of its programmes to the health system. When coronavirus cases increased during the pandemic’s second wave, the lottery also gave urgent medical equipment to the Ippokrateio - Hospital of Thessaloniki, which included a mobile radiological unit, three mobile ventilators, two defibrillators, a mobile ultrasound machine and eight hi-flow nasal cannulas for intubation. OPAP donated hygiene material to cover the needs of the Municipality of Thessaloniki and Thessaloniki Police Force, a city that has been significantly affected during the pandemic. In the business world, OPAP offered its support to the small and medium companies that participate in the ‘OPAP Forward’ programme to address COVID-related challenges. It also recruited companies that have helped the public health system through their actions. Developing the ‘Sport Academies Online’ platform, the Greek lottery opened channels of communication for parents and children to speak with
LOTTO BAYERN PROVIDED AN AID PACKAGE OF €3.5M FOR OPERATORS THAT RAN INTO DIFFICULTIES DUE TO THE PANDEMIC
a team of psychologists, nutritionists, paediatricians, coaches and trainers.
German Lotteries Shining a light on Germany’s various lotteries, Lotto Bayern provided an aid package of €3.5m for its operators which had run into difficulties due to the pandemic. This funding has been used to help them better withstand the difficult economic conditions. Lotto Brandenburg supported ‘Hilfe für Familien in Not’ (Help for families in need) - a foundation, which the lottery has sponsored for many years, that specialises in financial support to families in need and expectant mothers with a donation of €5,000. Aid was delivered to 17 non-profit associations affected by COVID-19 by Lotto-Toto GMBH Sachsen-Anhalt, with more than 160 companies applying for help within a month of the €1m fund being available. Westdeutsche Lotterie gave 40% of all wins to sports clubs and gyms in North Rhine-Westphalia which organised online exercise classes during the pandemic. It also backed the North Rhine-Westphalia Red Cross
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in its campaign to promote the use of protective masks. Moving away from sport, the lottery also supported artists by asking professional cultural workers based in North Rhine-Westphalia to produce an exclusive clip for a fee, which will be made available to the public via their social media platforms. The majority of the featured clips included a reference to the pandemic, either in the selection or in the implementation of the theme. It aimed to support the artists as well as contribute to the preservation of the vibrant art and cultural landscape in the state.
Analysis Many more lotteries across Europe, and around the world, have done extraordinary work to support their communities during the pandemic. Yet, just from the three countries listed, it is clear to see that lotteries are providing vital support for many communities as they fight against COVID, and they will continue to do so as we enter 2021. The variety of support being provided is remarkable as well. From medical aid to health facility
renovations, exercise classes and appreciation of heritage, culture and the environment, lotteries in 2020 made sure no one was left behind in what has been a very challenging year. With the unknown challenges to come in a post-COVID world, many countries, and lotteries alike, will be keeping their fingers crossed
EVEN IF A VACCINE IS SUCCESSFUL AT CONTROLLING COVID, THE SUPPORT OF LOTTERIES WILL STILL BE NEEDED BY COMMUNITIES that vaccines will help control - and eventually stop - the spread of COVID, allowing communities to return to some form of normality. However, even if a vaccine is successful at controlling COVID, the support of lotteries will still be needed by communities way beyond the day the pandemic is declared over by medical authorities, to help them get back onto their feet. •
The regulatory Finnish line
JARI VÄHÄNEN: MAKING SENSE OF FINLAND'S NEW GAMBLING LEGISLATION JARI VÄHÄNEN, PARTNER AT THE FINNISH GAMBLING CONSULTANTS OY, dissects
the proposed gambling legislation in Finland as he tries to comprehend what he describes as nonsensical measures
n early January, the Ministry of the Interior Affairs published its proposal for Finland's new gambling legislation. The preparatory work, which was carried out by officials, took almost a year to complete. Personally, I think they did a great job as Covid-19 certainly made the process significantly more complicated. Nevertheless, the work was done on time. The outcome of the work was also excellent, given the mammoth task. Officials are not responsible for the fact that the political mandate of the work was anything but sensible.
THE PROPOSAL FOR NEW GAMBLING LEGISLATION IS A HUGE DISAPPOINTMENT
The aim of Finland's current Government Programme is to secure Veikkaus' monopoly and operating conditions. In addition to this, it seeks to combat gambling problems and to channel gambling to Veikkaus' responsible and controlled offering. It also states that other gambling companies' marketing will be addressed, and ways will be sought to restrict gambling to other gambling operators' sites. Based on the gambling policy guidelines set out in the Government Programme, the Ministry of the Interior Affairs set up a working group in early 2020 to prepare the groundwork for Finland's new gambling legislation. The starting point for the legal reform was that the Finnish gambling system
The regulatory Finnish line
would continue to be based on a monopoly system. As a result, the working group did not have the opportunity to carry out such proper preparatory work to find the best possible solution as a basis for the Finnish gambling system. The mandate stated unequivocally that the preparation should be based on a monopoly model. Therefore, wellfunctioning licence-based models in other countries were not even studied. On many occasions, I have stated that I am - in principle - opposed to monopolies. On the other hand, during my Veikkaus years, I understood that there are business areas where competition should be limited. Gambling is definitely an activity that states must regulate because of potential gambling problems. However, this does not mean that a monopoly is automatically the best solution. It is lousy preparation if not all possible alternative business models are analysed. On what grounds can the Finnish Government claim that, in preparing the matter, it has promoted the interests of its citizens in the
66 SBC LEADERS â&#x20AC;˘ FEBRUARY 2021
ON MANY OCCASIONS, I HAVE STATED THAT I AM - IN PRINCIPLE OPPOSED TO MONOPOLIES best possible way by prohibiting the examination of possible better alternatives? As a whole, the proposal for new gambling legislation is a huge disappointment. Maybe I expected too much when I hoped to see things change. Now I feel that just a few changes are promised, and they are taking some things in the wrong direction.
THE CORE ISSUE WITH THE FINNISH GAMBLING POLICY IS THE DISCREPANCY BETWEEN BUSINESS PROFIT EXPECTATIONS AND THE RESPONSIBILITY REQUIREMENTS SET AT THE SAME TIME
Hopefully there is progression when it comes to mitigating the effects of problem gamblers. The rates of gambling addiction in Finland has changed incomprehensibly little during the 21st century, especially when compared to the fact that gambling has increased significantly. The proportion of Finns suffering from gambling problems has been at the level of about 3 percent from year to year. Instead, the number of people suffering from serious gambling problems has increased somewhat, and I hope that the new legislation will help this unfortunate development. The core issue with the Finnish gambling policy is the discrepancy between business profit expectations and the responsibility requirements set at the same time. The Finnish state has not been able to decide which issue it considers to be more important. Therefore Veikkaus, the monopoly operator, has had challenges in understanding what the owner wants from it. Revenue expectations have been high, but at the same time,
instruments to respond to competition are not allowed to be used. It now seems evident that responsibility is increasing. On a positive note, the choice has finally been made, but I think it is far too late and no longer enough to save the situation at hand. Now there is a significant risk that the rate of problem gambling will not be heading in the right direction. At the same time, gambling profits will collapse, and, above all, Veikkaus will permanently lose its future competitiveness. Included in the proposed legislation is the mandatory identification of players - a measure which has already been introduced for land-based slot machines. The requirement to register for other gambling products will come into effect over the next few years. In terms of responsible gambling, this is
THIS SHOWS THAT DECISION MAKERS HAVE NO UNDERSTANDING OF WHAT CAN BE DONE WITH CUSTOMER DATA a good reform. But it is also something which will drastically impact gambling revenues. The potential positive impact of identified gambling on business is based on the utilisation of customer data. However, it seems that Veikkaus' ability to use data as a modern business company will be restricted, or even denied. This shows that decision makers have no understanding of what can be done with customer data. Using it is not automatically the same thing as adding gambling problems. It seems that the Finnish state no longer wants Veikkaus to even operate as a profitable business. At most, it seems like they want the company to just put its products on offer, as was the case in the 1980s. I'm sorry on behalf of Veikkaus' knowledgeable and skillful employees because they do not get to do the job properly. However, there have been significant changes in slot machine operations over the past year. Veikkaus voluntarily decided to reduce the number of those machines across its land-based venues. However, the number of slot
machine locations did not decrease in almost the same proportion. The change that has now come into force, making slot machine play only possible for registered customers. This can only be a good thing. The explanatory memorandum to
the new law states that slot machines' placement should aim for solutions that minimise the risks of problem gambling. However, many would like to see slot machines removed from public open spaces completely. I donâ&#x20AC;&#x2122;t feel that this should be the case.
ONE OF THE MOST POSITIVE REFORMS OF THE PROPOSED LEGISLATION IS THE CLARIFICATION OVER MARKETING STRATEGIES
Personally, I have never understood why slot machines can be kept in entirely open spaces in Finland. Slot machines are an integral part of gambling, but I think the machines' correct location would be mainly in arcades and other age-restricted
The regulatory Finnish line
areas, following the Danish model. But even after new gambling legislation, this still wonâ&#x20AC;&#x2122;t be the case in Finland. One of the most positive reforms of the proposed legislation is the clarification over marketing strategies. The premise is that marketing should be moderated and be focused on games that don't pose a high risk to players. The weakness of the current legislation in force has been the definition of marketing and product information provision. Several years ago, I was among those who planned the current gambling marketing policies, and I am ready to raise my hand and admit a mistake. I am glad that from the new legislation, the possibility to share product information is removed. Appropriate legislation should contain as few interpretations as possible, and the situation now seems to be improving. The introduction of payment blocking will cause my blood pressure to rise. It could be the best solution for everyone. However, it is enough to say that this reform makes no sense. The reform's economic impact is entirely
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non-existent, and this will not reduce gambling problems, so why is such nonsense done? In light of Norway's experience, the blockings may restrict banks and major payment companies' activities. Still, they will be replaced very soon by new service providers beyond their control.
THE REFORM'S ECONOMIC IMPACT IS ENTIRELY NON-EXISTENT AND WILL NOT REDUCE RATES OF PROBLEM GAMBLING Personally, the most exciting reform proposal is the opportunity for Veikkaus, or its subsidiary, to start a new type of business. I was the CEO of that kind of subsidiary, Veikkaus Solutions Ltd, and most recently, my job was to prepare for re-starting a new business. Now it seems that Veikkaus would again have the opportunity to establish a subsidiary for non-gambling activities. The intention is for the subsidiary to provide gambling products and services to other operators and
not engage in consumer gambling activities. This is an excellent thing in the long run. Sales contracts for gambling products and services today are based almost exclusively on the revenue share model. The compensation received by the selling company is based on how much the customers of the buying company end up buying those products. Hopefully, the Finnish authorities will not interpret such sales for gambling purposes. A massive opportunity for Veikkaus, which is still one of the best lotteries globally, would be to start international B2C gambling operations. Selling gambling products directly to customers in other countries would generate significantly more revenue than trading among gambling companies. However, B2C operations are not possible under the Finnish monopoly system. It would have been one additional primary reason for moving to a licence-based system. This reform, as a whole, makes no sense. I consider it a much better option to omit this proposed change altogether and move on to the licence-based system's preparation.
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