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ISSUE 18 • DECEMBER 2021 FOUR ACES A NEW HAND
The future for disruptive NFTs
Tenlot's secret to success
OUT WITH THE OLD
UK gambling sponsorships placed in the spotlight IN WITH THE NEW
Is Latin America the next global gaming powerhouse?
Bill Miller
AMERICAN GAMING ASSOCIATION
Speaking up for US gaming
5-29 Sports Betting • • • • • •
CONTENTS DECEMBER 2021
ill Miller: Addressing US gaming challenges B James McKay: How Virgin Bet is standing out from the crowd Tim Heath, Yolo Investments: Innovating with Arsenal Virtual Sports: Embracing new opportunities Tackling online abuse: New dimensions of sports integrity Joe Brennan Jr: A new era of US sports betting legislation
30-45 US Market • • • •
J eff Ifrah: What’s next for the US betting industry? Delasport: Expanding globally and facing the US market USAbility: Streamlining the US market entry process Jordan Levin: Reaching a new level of sports betting entertainment
46-55 Latin America
•P uerto Rico: The perfect US entry point for Latin American operators • Yossi Abadi: Four cornerstones of Tenlot Group’s success • The Latin American market: A global force?
56-72 Casino & iGaming • • • • •
ow does the chasing pack challenge the US iGaming standard? H Johnny Avello: From dealing dice to the DraftKings boardroom Aurum Solutions: Why automation is key to driving growth US: The land of the reels and the home of online casino? Latin America: The growing influence of online gaming
73-87 Marketing • • • •
tremepush: Getting ahead of the game X Yury Krasovskiy: Taking Liga Stavok global with the NHL Gambling Act review: The future for gambling shirt sponsorships Yolanda Acuña: Becoming a leading figure in the Las Vegas betting community
88-93 Payments
•T ruist Securities: Assessing US market developments • Blockchain and NFTs: The future for fan engagement?
94-97 Lottery
• Post-COVID: Why lotteries are stronger than before
98-103 Events
• Joe Asher: Leading in the face of adversity • Jimmy Vaccaro: Reflecting on an extraordinary career
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, Ted Orme-Claye, Martyn Elliott, Kelly Kehn, Charlie Horner, Mollie Chapman, Jessie Sale SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Jan Willem Volbeda, Richard Deacon, Bob McFarland, Tom Bullen, Jan Kowalczyk DESIGNED & DELIVERED BY Better Mags (bettermags.co.uk) All material is strictly copyrighted and all rights are reserved. No part of this publication may be reproduced in whole or in part without the written permission of Sports Betting Community Ltd. Although every effort has been made to ensure the accuracy of the information contained in this publication, Sports Betting Community Ltd cannot be held responsible for any errors it may contain. Sports Betting Community Ltd cannot be held responsible for the loss or damage of any material, solicited or unsolicited. The views in the publication are not necessarily the views of Sports Betting Community Ltd or those of the advertisers. Produced and published by Sports Betting Community Ltd REGISTERED ADDRESS: Sports Betting Community, 103-105 Brighton Road, Coulsdon, Surrey CR5 2NG, UK TEL.: +44 (0) 161 367 1250 EMAIL: sales@sbcgaming.com WEB: www.sbcgaming.com
2 SBC LEADERS • DECEMBER 2021
INTRO Luke Massey Head of SBC Media
W
elcome to the 18th edition of SBC Leaders! We’ve reached the end of another year and, for many, it might come as a welcome relief that 2021 is finally over. While the last 12 months have flown by, they most certainly haven’t been the easiest. But as we find ourselves on the cusp of 2022, the betting and gaming industry is readily preparing itself for what comes next. Whether it’s new markets opening up, or older markets tightening their regulatory grip, these next few months will likely shape the future of this sector for years to come. Over in the United States, Bill Miller - President of the American Gaming Association - explained THESE NEXT FEW that while the last two years have been MONTHS WILL incomparable to any LIKELY SHAPE THE others, he has ensured FUTURE OF THE that the betting industry BETTING SECTOR now has a ’seat at the FOR YEARS table’ and will continue TO COME to demonstrate the vital economic role that the industry has to play. In our lead interview, he discusses the ways that the AGA plans to meet the challenges of rebuilding and taking the industry forward, not only in lockstep with stakeholders, but in a way that safeguards the health and wellbeing of their customers. Meanwhile Jeff Ifrah, the Founding Member and Managing Partner of Ifrah Law, looks at why the last two years have changed the industry considerably something he believes has been a positive change nonetheless.
4 SBC LEADERS • DECEMBER 2021
Erin Gallagher
SBC Leaders Editor
The US isn’t the only market on everyone’s agenda, however, as panellists at our SBC Summit Latinoamérica outline their thoughts on why the opening up of new South American markets will help create a global gaming force to rival any mature market. In Europe, more specifically the United Kingdom, betting companies are eagerly awaiting the fallout from the Gambling Act review which is likely to have sweeping effects on the way operators market themselves to the general public. Imogen Moss, a Solicitor and gambling regulation expert at Poppleston Allen, and Dean Akinjobi, CEO of Football Media, share their thoughts on what the governmentled review will likely mean for gambling sponsorships and why the sector as a whole must become ’more creative and smarter’ when interacting with bettors. In addition to interviews with our five new Sports Betting Hall of Fame inductees, we hear from Truist Securities’ Barry Jonas about US market developments and Xtremepush’s Tommy Kearns on the opportunities presented by in-play betting. As you can see, we’re filled to the brim with expert opinions in this edition of SBC Leaders. So wherever you’re reading this from, I hope you enjoy it!
Leadership in the face of adversity
BILL MILLER: MAKING SURE GAMING GETS A SEAT AT THE TABLE THE AMERICAN GAMING ASSOCIATION PRESIDENT AND CEO looks back on his first year in the role, delving
into the ways the industry has not only survived, but thrived, in the months following the pandemic
SPORTS BETTING
BY CHRIS MURPHY
SBC: Just one year into the job and all was going well until the pandemic hit. As President of the association that a whole industry looks to for leadership, how did you address that challenge? BM: I imagined I would face some challenges when I took this job and it goes without saying that 2020 is without comparison. There wasn’t a playbook. But what we’ve endured the last 20 months, that’s why the AGA exists: to advocate for the casino gaming industry and be our uniting voice in Washington. Looking back, we spent my first year at the AGA working to reinvigorate the association’s position on Capitol Hill and build gaming champions, including relaunching the bipartisan Congressional Gaming Caucus. This investment sustained us through the darkest days of the pandemic and paved the way for our tremendous recovery this year.
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Leadership in the face of adversity
It was no easy feat. 9/11, Hurricane Katrina, the Great Recession…in the wake of every one of those disasters, the business community was given support, and every time the gaming industry was specifically carved out. But that changed. We broke through and received fair treatment from the federal government in the CARES Act for the first time ever. What I saw in this process, and why I think it was successful, is that we united around our common interests. We demonstrated the vital economic role we play by creating jobs, generating taxes and giving back to
6 SBC LEADERS • DECEMBER 2021
DESPITE THE ECONOMIC HARDSHIP, WE NEVER STOPPED PUTTING CUSTOMERS AND COMMUNITY FIRST the community. We clearly articulated what gaming needed to navigate unprecedented closures. And now that we have a seat at the table, we’re never giving it back. SBC: How do you think your members have fared during what has been the
toughest period of trading that many can remember? BM: I’ve never been more proud to be part of this industry. To go through what we went through and not only survive, but thrive? That takes grit and resilience. What I’m most impressed with is that despite the economic hardship, we never stopped putting customers and community first. We led on health and safety, opened testing sites and then vaccination clinics and gave back in any way we could. Our incredible recovery shows people trust us, believe in the
SPORTS BETTING
experience we provide, and are ready to come back to our properties. Now after our worst year on record, we’re headed to our best year ever. That’s truly remarkable. SBC: Adversity often drives organisations and their people to become better at what they do. How true is this of the US gaming sector and its response to the COVID-19 crisis? BM: Innovation is core to who we are. Our members are constantly innovating to deliver world-class entertainment and meet our customer’s evolving needs. Throughout the pandemic, operators and suppliers have worked together to reimagine how and where players engage with our products. Look at payments modernisation: when the pandemic expedited the need for contactless payments, we moved the needle because we were ready to engage the regulatory community and educate banks and payments processors. Today, eight states and dozens of tribal properties accept digital
payments on the casino floor, which allows us to better meet customer expectations, advance responsible gaming, and enhance our know your customer and anti-money laundering compliance efforts. More recently, I think about G2E 2021 and what we were able to accomplish as an industry. Bringing thousands of gaming professionals together is no
WE MOVED THE NEEDLE BECAUSE WE WERE READY TO ENGAGE THE REGULATORY COMMUNITY AND EDUCATE BANKS AND PAYMENTS PROCESSORS easy feat in a normal year, let alone in today’s environment. We evolved the show to meet the needs of today’s exhibitors and attendees while putting health and safety first. It was a win for our industry and for the city of Las Vegas. SBC: Focusing more inwardly on the association, it’s evident that there’s
been a move towards a more inclusive organisation with half of its executive roles held by women. What advice would you give to your members to encourage them to strive for equality of opportunity? BM: I’m proud of the team that we have built at the AGA. We’ve made strong hires and advanced key roles to better serve our members and the industry. Across our business, gaming employees do reflect the diverse communities and customers we serve. We want to be an industry that cultivates and grows diverse leadership, levels the playing field, and creates opportunity to join and advance. The AGA has also been very intentional about convening and leading the industry on diversity, equity and inclusion. You saw this at G2E 2021 where we put this topic on the mainstage and focused on diversity across our education program. We are committed to working on it, not just because it’s the right thing to do, but because it’s better for our business.
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Leadership in the face of adversity
Prioritising diversity, addressing inequality of opportunity and promoting inclusion are key to serving our customers, being effective business partners, and being seen as an employer of choice and a leader in the communities where we operate. And that’s certainly true for the association, too. SBC: The sports betting sector has had a transformative impact on the way in which fans interact with sports and wagering. Hopes that that will erode black market operations appear to be bearing fruit. Are you happy with progress on that front - and should we still be wary of the threat from unlicensed operators? BM: I’ve been working in government for a long time, and I haven’t ever seen anything so widely accepted or quickly adopted by lawmakers and regulators as sports betting. Today, 32 states and Washington DC have legalised sports betting. That means 137 million American adults have access to the regulated industry in their home market. The reality is that Americans have bet on sports as long as sports have been around – they just haven’t been
8 SBC LEADERS • DECEMBER 2021
able to do it legally until recently. Look at Connecticut where more than a million transactions happened in the first week of legal betting. That’s not from adults wagering from the first time. It’s because consumers see the benefit of the legal, regulated market with guaranteed payouts, tools for responsible gaming, protections for the integrity of the games, athletes, bets and more.
UNFORTUNATELY, THE ILLEGAL MARKET IS PERVASIVE AND ROOTING IT OUT IS AN ALL-HANDSON-DECK EFFORT Unfortunately, the illegal market is pervasive and rooting it out is an all-hands-on-deck effort. The AGA is focused on consumer education about legal options and collaboration with law enforcement. We’re making significant progress through our Have A Game Plan. Bet Responsibly. campaign. Last month, the FBI announced a renewed effort to crack down on illegal operators, including a PSA that features Have A Game Plan.
SPORTS BETTING
SBC: A resilient gaming industry needs a resilient trade organisation. How well prepared is the AGA to meet the challenges of rebuilding and taking the industry forward, not only in lockstep with stakeholders, but in a way that safeguards the health and wellbeing of their customers? BM: The last two years have proven our resilience. Today’s AGA is more focused than at any time in our association’s history. We have been driving policy wins in Washington; prioritising responsibility as the industry grows; and challenging the status quo to make meaningful progress on things like payment choice. I recognise that the standards are shifting not just for our business, but every business. Policymakers, investors and the public are looking beyond jobs and economic impact to understand social and environmental impact, as well. That’s why the AGA is leading an industry wide effort on ESG to understand our members’ contributions, tell our story and collectively push us forward. The AGA today is stronger than ever before, thanks to a committed and engaged membership and a world class team that works together to protect and enhance our great industry. •
Standing out from the crowd
VIRGIN BET: PUTTING CUSTOMER SERVICE FRONT AND CENTRE JAMES MCKAY, SPORTSBOOK DIRECTOR AT VIRGIN BET, speaks to
SBC Leaders about the importance of customer service and how Virgin Bet Fives is helping the “relatively new player” stand out from the crowd BY ERIN GALLAGHER
SBC: Can you tell us more about Virgin Bet and your role in the industry? How do you ensure that you stand out from the competition? JM: I’m the Sportsbook Director here at Virgin Bet. I’m one of three Directors we have based in Gibraltar and I help oversee customer service, sportsbook product and sports operations, which is essentially the running of the site, from banners to displays and score boards. First starting out in the industry straight from university, I have been working in betting for around 15 years now, having worked at William Hill up until three or four years ago. When it comes to Virgin Bet, we’re still a relatively new player in the sector. Our pillars are largely focused on the customer: the customer experience and customer service. What we’re trying to do is bring an excellent product to the market while also looking at breadth and content to become one of the biggest sportsbooks in the industry. We’ve seen a lot of growth in the last few years by doing exactly that and delivering everything that the customer needs. What you can expect to see from Virgin Bet is extremely good service.
10 SBC LEADERS • DECEMBER 2021
SBC: You mentioned that the last few years have been very busy for you as a company. What would you say have been the key driving forces behind your growth? JM: Firstly, the customer. Everything is focused on their needs and ensuring we are servicing everything that they want, whether that be the product itself, the markets available or the
WHAT YOU CAN EXPECT TO SEE FROM VIRGIN BET IS EXTREMELY GOOD SERVICE features that we have. It also includes the service received as a customer, from all forms of communication and retention.
SPORTS BETTING
On the other side of the coin, it involves resolving any issues, queries or complaints that a customer raises. The customer service we offer is second to none. Virgin Bet has put significant investment in providing several measures to offer customer feedback opportunities. One of which is a Zendesk solution, which is critical in evaluating cases and ensures our highly trained customer feedback team can act as swiftly as possible. The other key thing which has helped drive growth is the product itself. Something which we have been working on with our supplier, DraftKings, is fine tuning and perfecting our sportsbook. We’ve been working incredibly hard to get the product offering to a level where we’re able to compete with some of the largest names in the industry and, so far, we are starting to do just that. I can see a lot of work going towards making that even better. Over the last year, Virgin Bet has sought out increased markets to provide higher quality betting opportunities for customers. We are extremely proud to have the largest
total streaming portfolio of any non-Tier 1 sportsbook. A particular example of the brand’s investment in this space can be seen within horse racing, where we have consistently looked to add value for our customers. Within the past year, the entirety of the US, Australia and New Zealand racing calendars have been added to the platform, which has led to a hugely enhanced offering.
VIRGIN BET HAS SOUGHT OUT INCREASED MARKETS TO PROVIDE HIGHER QUALITY BETTING OPPORTUNITIES FOR CUSTOMERS SBC: How has the return of major events such as Cheltenham Festival and Euro 2020 helped boost the number of bettors choosing Virgin Bet? JM: Even from outside of our industry, everyone has needed these live events to come back. It’s one of the things throughout the pandemic that we have all missed, particularly as a sports fan. The return of large events has been a
massive driver for new accounts. As we’ve seen, everyone has been incredibly excited for the return of sport. At Virgin Bet, something we have seen is that there’s not necessarily been an initial payback. There are many things that bettors haven’t been able to do that they could do before - people have had other things to worry about during the pandemic. But what we've seen is that there's been a marked increase in registered accounts following these events and we have seen people start to bet again. If you look at the pillars that we conform to, then they've been engaging a great deal more. We've then been able to see that growth in the long term. I think Cheltenham has probably been one of the biggest events we can point to as one of our successes. With the horse racing market a significantly strong aspect of Virgin Bet, Cheltenham was an event where we were able to do a lot of good work. SBC: Tell us a little bit about the ‘Virgin Bet Fives’ product. What does it involve? And how has it helped
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Standing out from the crowd
drive additional engagement with bettors? JM: Virgin Bet Fives is a free-to-play game for new and existing customers. Interestingly, I think there are a few drivers for reasons to bet and one of those is the star players that we see performing. Whether it’s in the Premier League, or in other big leagues around the world, we have certain players where everyone knows their names: Cristiano Ronaldo, Lionel Messi, Sergio Aguero. The game is largely based on the idea that customers follow a particular player, and not just a specific team.
SOMETHING IN THE PIPELINE FOR VIRGIN BET FIVES IS ADAPTING INTO OTHER SPORTS AS WELL You are given a team of five players if you log in every single day of the week. If that player then scores at the weekend, you receive a cash denomination in your account. There is then a wheel at the end of the week which shows you just how much you’re going to get. This, I think, helps create an additional sense of mystery while also adding a degree of gamification. I think it gives you something to concentrate on for the whole weekend and means that every single game matters. This is definitely something that we’ve seen with the numbers participating, and our customers have been telling us that they’re enjoying the game too which we’re really pleased with. SBC: How important have Virgin Bet Fives ‘specials’, such as those rolled out for Euro 2020, been when it comes to creating a truly unique proposition? JM: We’ve seen success in the Premier League and it led us to ask, what can we do with the Euros? The hard part for us was that the tournament didn't fall on a week-to-week basis, meaning it required adaptation, but we managed to do it and it worked well. The final of the Euros is a good example. Everyone was watching and everyone was on the edge of their seat and Virgin Bet Five players would have their five players playing in the match, giving more opportunity of winning money.
12 SBC LEADERS • DECEMBER 2021
I do think that these ‘specials’ are important, and something that is in the pipeline for the hugely popular Virgin Bet Fives is adapting into other sports as well. SBC: And finally, can you give us a sneak peek into what’s on the horizon for the company in 2022?
WE’RE CONSTANTLY ASSESSING WHERE THERE ARE GAPS AND WHICH PRODUCTS CAN FILL THEM
JM: There are many things which internally, we are extremely excited about. One of the most important things for us is to continue pushing the product, in terms of both breadth and depth. We’ve now also got many more horse racing tracks and we’re going subcontinental, introducing tracks across Asia and the United States. We’re constantly assessing where there are gaps and which products can fill them, to ensure we’re on par with the leading competition. Our focus is on growth of our offering, while never forgetting the cornerstone that stands us out – the customer. •
A ‘problem-first’ approach to innovation
SPORTS BETTING
YOLO INVESTMENTS: INNOVATING WITH ARSENAL
THE LAUNCH OF THE ARSENAL INNOVATION LAB 2022 will
see Yolo Group support a group of start-ups to improve the experience for football fans. Yolo Investments General Partner Tim Heath discusses the scheme, and why true innovators look at problems, not ideals
BY LUKE MASSEY
A
big part of the thinking behind the recent rebrand of our business to the Yolo Group was finding new ways to drive the type of innovation that has served
us so well over the last few years. For us, innovation is really about empowerment. The rebranding and reorganisation of the Yolo Group was a way to ensure our teams and people had the space and focus required to turn great ideas into reality.
We’re working daily at the cuttingedge of tech, and we’ve always been strong proponents of the benefits of spreading awareness and usage of pioneering technologies that can improve all aspects of people’s lives. We want this spirit to touch every part of our business, including relationships with our partners, such as Arsenal Football Club, which is sponsored by our Sportsbet.io brand.
Introducing the Arsenal Innovation Lab 2022 That’s the thinking behind the recently announced Arsenal Innovation Lab,
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A ‘problem-first’ approach to innovation
powered by Yolo Group, which is looking at how these technologies can improve the experience of Arsenal fans supporting their team around the world. The Arsenal Innovation Lab is a seven-week virtual sprint for tech start-ups to create new opportunities with Arsenal decision makers for fans of the team globally. We’re inviting teams to submit proposals that tackle three key themes where the club sees real potential to disrupt and improve the way fans interact with Arsenal.
Tim Heath, Yolo Investments General Partner
IN ARSENAL, WE’VE BEEN LUCKY TO FIND A PREMIER LEAGUE FOOTBALL CLUB WITH A GENUINE COMMITMENT TO INNOVATION The first of these themes is looking at bringing fans closer to the club. The global pandemic and stadium lockdown brought into focus that the experience of a fan goes well beyond showing up to the Emirates for games. In fact, much of Arsenal’s global fan base are not able to attend matches in person. We’re looking for tech-led solutions which can maximise the experience of these fans. Secondly, we’re looking at ways technology can help Arsenal connect with new fans. Of course, Arsenal is already one of the most wellsupported football clubs in the world. But that does not mean the club is resting on its laurels. We’re using the Arsenal Innovation Lab to find digital solutions to reach new fans internationally. And finally, we want to explore frontier digital and crypto economy technologies that can enhance the fan experience. We’re inviting pitches at https://arsenalinnovationlab.com before 10 December. Those innovators selected from applicants will take part in a sevenweek pilot, culminating in a pitch to Arsenal decision-makers seeking a possible collaboration with the club. There is a £250,000 discretionary investment and prize pool to help businesses develop their solutions. In Arsenal, we’ve been lucky to find a Premier League football club with a
14 SBC LEADERS • DECEMBER 2021
genuine commitment to innovation. “We’re always looking for new and innovative ways to engage with our hundreds of millions of fans around the world and enhance their Arsenal experience,” Arsenal’s chief commercial officer Peter Silverstone said at the time of the announcement.
THE ARSENAL INNOVATION LAB WILL ENABLE US TO EXPLORE NEW WAYS TO ACHIEVE OUR GOALS
“The Arsenal Innovation Lab will enable us to explore new ways to achieve our goals with some of the brightest tech startups in the fan experience space.”
Thinking about real-world innovation We’ve structured the Arsenal Innovation Lab in a way that ensures that innovators are thinking about how new technologies can solve real-world problems. For instance, applicants to the lab may consider questions like: how can
SPORTS BETTING
data be used to better understand the priorities of Arsenal fans in Asia? In what ways should content be adapted to mobile devices and infrastructure in Africa? Or how can we better engage Gen Z fans on the platforms where they feel most at home? At Yolo Group, we’ve enjoyed success taking this ‘problem-first’ approach to innovation. Necessity is the mother of invention and we’ve absolutely found that the best way to innovate is to ask our customers simple questions. What isn't working for you? How would you like to see it improved? This isn’t about abstract ideas and utopian visions. We want to figure out exactly how we can leverage technology to make a material difference to the experience of ordinary
A FREE-FLOW OF IDEAS IS PUSHING ALL OF US TO THINK HARDER ABOUT WHAT COMES NEXT
people across a whole range of fields. For us at Yolo Group, this takes many forms. It means encouraging every member of our team to think creatively about the challenges they face daily. It means finding the best partners to help us along the way, including Arsenal. It also means creating a business structure with the room for innovative ideas to thrive. That was part of the thinking about our recent rebrand to Yolo Group and reorganisation of our core business areas. Our venture capital arm, Yolo Investments, is now invested in more than 50 forward-thinking businesses spanning the worlds of gaming, fintech, blockchain and more, with an AUM in excess of €350 million. We’re benefiting from the network effect of these businesses; a free-flow of ideas is pushing all of us to think harder about what comes next. Underpinning all of this is the question of adoption. We’re innovating for real people, and so thinking carefully about how best to deliver
THIS IS ALL TO SAY THAT DISRUPTION AND INNOVATION CANNOT TAKE PLACE IN A VACUUM next generation products and services in a way that’s accessible is always at the front of our mind. It is the thinking behind projects such as LearnCrypto.com, a free education platform designed to help users easily learn about cryptocurrency, supported by the Yolo Group. This is all to say that disruption and innovation cannot take place in a vacuum. And we hope those start-ups that take on the challenges set out by the Arsenal Innovation Lab keep this in mind. • Interested in applying to the Arsenal Innovation Lab? Find out more details and how to apply ahead of the 10 December deadline by visiting: https://arsenalinnovationlab.com/
sbcmagazine.com 15
Powered by:
YOLO-POWERED ARSENAL INNOVATION LAB LAUNCHES HUNT FOR TECH STARTUPS WITH £250,000 PRIZE POOL Join Arsenal Innovation Lab - a seven-week virtual sprint for technology startups to create new opportunities with Arsenal decision-makers for fans around the world. The Arsenal Innovation Lab is offering a £250,000 investment and prize pool to a team that uses technology to help grow the Arsenal fanbase, brings the fans closer to the club or enhances the experience for Gunners around the world. We are looking for global technology companies with an innovative solution to one of the themes and has been validated by initial market traction. This is a genuine opportunity to change the game!
GOT WHAT IT TAKES? Find out more and apply at https://arsenalinnovationlab.com The application deadline is 10 December 2021
#arsenalinnovationlab #yologrouplife
Embracing virtual sports
SPORTS BETTING
VIRTUAL SPORTS: DIVERSIFICATION AND ENGAGEMENT TO ADDRESS NEW OPPORTUNITIES
WITH CONSUMERS INCREASINGLY TURNING towards
the online space, the virtual sports sector has had to evolve to capitalise on new opportunities in the Americas and elsewhere BY TED ORME-CLAYE
V
irtual sports (VS) have long been a mainstay of the retail betting and gaming world, with many people who have experience in this sector more than familiar with the virtual
horse racing and greyhound racing products. In recent years, however, with the betting and gaming industry increasingly shifting towards the online vertical. Esports wagering is rising dramatically in popularity and emerging disruptive technologies
such as blockchain based NonFungible Tokens (NFTs) have become more commonplace, presenting new challenges and opportunities for VS titles. Speaking to SBC, three industry experts discussed the sector’s future in the aftermath of the COVID-19 pandemic and the general, longrunning trend which has seen a growing number of bettors embrace the online space. For Martin Wachter, CEO of Golden Race, the shift from retail to online gaming poses very little challenge
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Embracing virtual sports
to the sector due to its omnichannel, flexible nature. “All our virtual sports and games are omnichannel and multi-platform and work perfectly and smoothly for retail, online and mobile,” the CEO remarked. “In fact, we have developed several specific features for our online products, such as combination bets across events and games, the possibility of 100% customisation, and a full suite of Instant Games. “Basketball 3x3, for example, is one of our online virtual sports, and includes innovative features for the industry like an in-play betting option and cash out function.”
Martin Wachter, CEO of Golden Race
UNLIKE CONVENTIONAL SPORTS, VIRTUALS ARE ALWAYS ON AND CAN BE FLEXIBLY PRESSED INTO SERVICE OF ANY OPERATOR’S PROGRAMMING SCHEDULE Diversification of sports available to consumers, the experts pointed out, has contributed heavily to the continued rise of VS offerings. Golden Race’s basketball product is just one example, whilst football has notably become increasingly popular among bettors. Wachter added: “According to the existing virtual markets, football dominates almost all of them. So it is not necessary to have 50 games. You just need to understand what players want and to know their likes, and create or adapt your games for them.” Unlike traditional real-world sports, virtual offerings have one distinct advantage for both consumers and operators in their extreme flexibility - there are no mandated schedules or fixture times and games cannot be cancelled due to poor weather or illness. This was perhaps best exemplified during the COVID-19 pandemic, which saw a huge upsurge in betting attention towards virtual products due to the large-scale cancellation of sporting events. The virtual Grand National in 2019 was one of the most notable and widely covered examples of this. According to Ulf Norder, Chief
18 SBC LEADERS • DECEMBER 2021
Commercial Officer at QTech Games, ’the demand for credible alternatives to mainstream sport shows no sign of abating’ despite the widespread return of traditional sports. “In short, VS has retained a good chunk of its audience who d ́ iscovered’ this new medium during the outbreak,” Norder observed. “Unlike conventional sports, virtuals are always on and can be flexibly pressed into service of any operators’ programming schedule. Their graphics either rival the best video games, or are simply driven by them in the case of esports. They’re also easy to integrate or deploy, and don’t require the onerous risk management of real sports.
IT IS DEBATABLE WHETHER NFTS ARE A FLASH IN THE PAN, BUT THEY CERTAINLY ENCOURAGE THE CREATION OF “NEW” DIGITAL SPORTS
“Naturally, as elite sports continue to limp back from the sidelines, these levels will inevitably recede and stabilise. Nevertheless, the retention levels are there despite the traditional sports betting ‘competition’ which is encouraging to see. Make no mistake then, virtual sports are here to stay. They represent part of a diverse daily diet for worldwide players." Mark Fellows, Business Development Director at Quantum Leap Solutions, shared his opinion on how relationships between operators and suppliers have evolved as the sector returns to a stable trading environment after the COVID-19 pandemic. Fellows explained: “The lockdowns certainly helped QLS, as well as others, accelerate the delivery of VS to operators, and in doing so also meant they were much more visible to a new audience. “Many of these ‘new customers’
SPORTS BETTING
Ulf Norder, Chief Commercial Officer at QTech Games
the US and Canada will entail virtual sports - fantasy sports are already extremely popular among consumers in the region - Wachter pointed out the necessity for developers to tailor their products to the specific sporting tastes of the market. “It is key to adapt products to the likes and backgrounds of different players according to regions, culture and so on,” he explained. “This is why, at Golden Race, we have our Basket 3x3, based on the most played urban sport in the US streets. We are also about to release another North American-focused virtual sport, which will be announced soon.
NFTS HAVE CAPTURED PEOPLE’S IMAGINATION AND IT REPRESENTS BOTH AN OPPORTUNITY AND A THREAT TO BETTING OPERATORS
have continued to enjoy the content post resumption of live sport, and we have seen that operators are still very engaged with our content and are constantly working with us to enhance the product offer.” However, he did note that challenges are still present when cross-selling virtual offerings to traditional sports fans, particularly relating to the fact that sports leagues and authorities are generally more protective of their IP, media rights and content. Although, he noted that the efforts QLS has made to address this hurdle were presented. “It seems to make most sense commercially for these organisations to embrace VS as an opportunity to make their sport more popular as well as to derive revenue from its virtual representation. “Via our partnership with RMG, we have attempted to address this with Legends, one of our flagship virtual products which pits the best horses of the last 50 years against each other in
replicas of the top British races. “However, it remains a shame that current gambling regulations for virtual sports preclude them from being skillbased and, in so doing, ensure the virtual version of a sport lacks the rich tapestry of the real thing.” As virtual sports moves out of the pandemic along with the rest of the betting sector, new markets are emerging. This is most notable in North America, where more and more US states and Canadian provinces are rapidly opening their jurisdictions to regulated online and retail sports betting. As the breakout of sports betting in
IT REMAINS A SHAME THAT CURRENT GAMBLING REGULATIONS FOR VIRTUAL SPORTS PRECLUDE THEM FROM BEING SKILL-BASED
“Our teams are also researching and studying other possibilities to be successful in the US, giving players the sports they like the most with a virtual outcome, and all the advantages of our awardwinning virtual sports: a trustworthy product which is easy for players to understand, not very expensive for retail and very flexible and adaptive online.” Lastly, addressing the topic of NFTs, Fellows discussed the potential impacts that the emerging tokenised products could have not just on virtual betting, but on the gambling industry as whole. “It is debatable whether NFTs are a flash in the pan, but they certainly encourage the creation of 'new' digital sports in which the customer can participate through ownership and the trading of a digital asset, such as a competitor in a virtual game. “That does seem to have captured people’s imagination and it represents both an opportunity and a threat to betting operators. On the one hand, they could facilitate and encourage participation. On the other hand, they could find their user base drifting away from the exciting jeopardy betting represents, towards that encompassed in trading NFTs.” •
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A collaborative approach
TACKLING ONLINE ABUSE: A NEW DIMENSION OF SPORTS INTEGRITY JAKE MARSH, STATS PERFORM’S GLOBAL HEAD OF INTEGRITY, JOINS SIGNIFY CEO JONATHAN HIRSHLER to
outline the multi-layered challenges of tackling online abuse by expanding the remit of sports integrity BY TED MENMUIR
A
nnouncing a headline project this summer, Stats Perform and AI integrity partner Signify pledged to develop a sophisticated monitoring tool to help tackle and tackle social media abuse witnessed across all sports markets. SBC: Stats Perform announced a partnership with Signify and its Threat Matrix service. Why has Stats Perform chosen to tackle the prominent matter of online abuse in the interest of all sports stakeholders? JM: Social media abuse is recognised as one of the most serious problems facing sport, with calls from fans, players, teams, leagues and even governments to take action. At Stats Perform, we recognise that the sports
integrity field needs to expand to include an increased focus on this issue, especially given its impact on sport and the welfare of its participants. As part of our approach to being a responsible sports stakeholder, we are offering a service that assists federations, rights-holders and teams in identifying the nature of the problem they are facing and empowering them to take action against online abusers. We had been speaking with Signify since the start of 2021 and it became clear we shared a common philosophy in taking a proactive approach to tackling sports integrity issues and online abuse in particular. SBC: Can the complexities of identifying online abuse (hate) be simply resolved by an algorithmic
solution? How have Stats Perform and Signify approached the technical boundaries and realities of identifying actual threats? JH: This was almost the exact question we asked ourselves in developing the Threat Matrix in the first instance. Can we use a mixture of AI, machine learning and human intelligence (we call it augmented intelligence) to identify targeted online abuse, with all the contextual and nuanced terms used across different sports and industries? We’ve been working on training, refining, and developing our solution for over two years, and as a result are now able to pick up far more comprehensive results across a broader range of issues that athletes have been asking for help with, than we’ve seen from anyone else, including the platforms. We have a specific focus in highlighting the real issues and identifying abusive account owners. We are driven by getting to the source of the problem and offering a real deterrent. Our secret weapon in this endeavour is an academic Communications Threat Assessment Protocol called CTAP25. Developed by security experts Theseus, CTAP-25 identifies a number of signifiers that help determine where a message or account could become a clear and present danger to an athlete. Our methodology is grounded in thinking like this. It’s allowed us to develop a super smart, always learning approach to identifying targeted online threats. SBC: How does the monitoring of abuse differ to other Stats Perform wider sportstech projects in terms of scope, size and technical remit? JM: Proactive monitoring of social media is a huge task to undertake manually which is why Signify’s Threat Matrix service leverages AI natural language understanding and machine learning to identify targeted abuse at scale.
22 SBC LEADERS • DECEMBER 2021
SPORTS BETTING
Jonathan Hirshler, Signify CEO
Jake Marsh, Stats Perform’s Global Head of Integrity
This is then combined with expert analysis which delivers a meaningsbased assessment of this data, blending the speed and scale of AI with the nuance of human interpretation to produce evidence-based reports and actionable recommendations. In this respect, there are similarities to our other sports tech integrity offerings such as Betting Markets Monitoring and our unique Performance Integrity Analysis (PIA) service. PIA includes video analysis along with the use of advanced models and metrics powered by our Opta database, combining quantitative data with qualitative analysis undertaken by our in-house performance integrity experts. Whilst the offerings may be different the fundamental core of using AI and tech solutions aligned with human analysis is key to these services. SBC: Following high profile events this summer, should online abuse
of athletes be included within the UK government’s proposed Online Harms Bill? JH: The Online Safety Bill (née. Online Harms) has the potential to be worldleading and really set a new bar in terms of how social media companies need to take more responsibility in protecting their own users. If the lawmakers get this right, specifying athletes, or any other type of individual within the Bill shouldn’t matter – we need to ensure that all users across these platforms are protected from the vile abuse that’s been on the rise in recent years. The evidence we developed for the Professional Footballers’ Association was submitted to the Committee that’s scrutinising the Bill, cited by ex-players
WE ARE DRIVEN BY GETTING TO THE SOURCE OF THE PROBLEM AND OFFERING A REAL DETERRENT
like Rio Ferdinand (who really hit home what it feels like to be on the receiving end of online abuse). This was used to underpin our clients’ dialogue with social media platforms, leading to tangible change in how the issues are being addressed. If the Bill is successful, it will provide regulatory bodies like OFCOM with real teeth to hold those who fail to act accountable. This could also provide useful stimulus for other countries and law-makers to take similar action. SBC: For sports does online abuse have a ‘duty of care conundrum’? Which stakeholder carries the duty of monitoring hateful content? JM: We would agree that this has been an ongoing challenge when dealing with online abuse in sport. Both on a macro level, in terms of which organisations should have primacy on the issue, and on a more micro level whereby we have seen confusion over whose remit it should fall under within those organisations.
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A collaborative approach
For example, should responsibility for this sit with a Head of Communications, Player Welfare or perhaps under a Diversity, Equality and Inclusion role? Many sporting bodies are still working this out. Ultimately, all sports industry stakeholders have a degree of duty of care in this area. Whilst in some sports we may see a federation or governing body take the lead, others may instead have a club/team approach which looks at the problem more from an employer’s duty of care perspective. Clearly the social media platforms themselves also have a responsibility to try and counter this abuse. Either way, it’s vital that all bodies work together collaboratively, sharing information, resources and best practices to ensure players and officials are protected from targeted online threat and discriminatory abuse.
continues to challenge the biggest technology firms? JH: With an AI-based service like Threat Matrix, it is possible to monitor the performance of social media platforms in dealing with this issue. Our recent work with the Professional Footballers’ Association is a great example of this. We analysed more than six million
We’ve proven how it’s possible to create a real benchmark, illuminating the size and scale of the problem across any given sport. Once you have this, it’s entirely possible to monitor increases / decreases in recorded targeted abusive messages – alongside the tactics that need to be countered.
tweets targeting professional footballers across the UK during the 2020-21 season, identifying an uptick in targeted racist and discriminatory abuse being sent with fewer discriminatory messages being moderated in the second half of the season versus the first half.
JM & JH: The partnership approach Stats Perform and Signify have developed is based on working with interested stakeholders across the sporting world to help understand the nature of the problem (how bad is it for your sport, really?) and then providing the tools to do something about it. •
WILL WE EVER GET TO A POSITION WHERE THERE IS NO ABUSE AND SOCIAL PLATFORMS ARE 100% SAFE? SBC: Evaluating real-life examples, can open content/dialogue platforms ever be considered ‘safe environments’ for all audiences? JH: Will we ever get to a position where there is no abuse and social platforms are 100% safe? Probably not, but if we can help clients to really hold some of these bad actors to account by taking tangible action – we could see a sea change across sport and social media. It’s also worth pointing out that whilst our initial focus has been on public social media, we’re also seeing problems reported on private social channels. To avoid a situation where abusive account owners simply switch from public messages to direct messages, we’ve developed innovative techniques that identify threatening / abusive messages sent via DMs. We’ve done this sensitively, developing a smart process that protects the privacy of the victim. SBC: Finally, how will Stats Perform and Signify gauge actual progress on minimising online abuse, an issue that
24 SBC LEADERS • DECEMBER 2021
Class of 2021
SPORTS BETTING
SPORTS BETTING HALL OF FAME: JOE BRENNAN JR JOE BRENNAN JR walks
us through his journey from digital marketing to sports betting before explaining why we’re entering a new era of gambling legislation BY ERIN GALLAGHER
SBC: First of all, can you tell us a little bit about your background - how did you first become involved in the betting and gaming industry? JB: In a word, accidentally. I grew up in Philadelphia so I was around sports betting since I was a child. Funnily enough, the first time I ever bet on sports was when I was in the second grade. I bet a quarter - which was my milk money at the time - on the weekly NFL parlay tickets that got passed around there. My career started with digital media, I wound up at AOL in the early 2000s. I was on a team which was looking at the best ways to take AOL’s existing business assets and try to find new opportunities and revenue streams. At that point, online gaming was in its infancy stages. When I left the company in 2005, there was already a growing awareness of ’digital civil liberties’ amongst people who worked in the online industry. The consensus was that for anything that you could legally do in the real world, you should also be able to do so in the online world. Something which piqued our interest was when the state of Michigan considered passing a law to require criminal background checks for people when they went on online dating sites. In response to that, we decided we had to organise. We formed a business association called iMEGA, Interactive Media Entertainment And Gaming Association. We decided to look at legislation like the online dating background checks.
The good thing was that this proposed legislation in Michigan never really went anywhere, but we saw it as an indicator that there were potential legal threats to all sorts of segments of society that had begun operating on the web
THERE WAS ALREADY A GROWING AWARENESS OF ’DIGITAL CIVIL LIBERTIES’ AMONGST PEOPLE WHO WORKED IN THE ONLINE INDUSTRY
From that general beginning of looking at digital civil liberties, we joined the debate after the passage of the 2016 Unlawful Internet Gambling Enforcement Act (UIGEA). We got involved with litigation, and because I was based in Washington DC, I wound up as the person who was the ‘boots on the ground’ when it came to going to the Federal Courts or committee hearings. Eventually, we made our way to New Jersey. At the time, we felt the state was ripe for legislation, and that legislators didn’t want gambling to be illegal, they just wanted it to
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be regulated. It was then that our opponents started to label us ‘the sports betting guys’. But eventually, we began to accept that and grew into that identity. SBC: What would you say are the standout moments of your career? JB: The obvious choice would be to say March 2018, when the US Supreme Court overturned PASPA. That was a big moment. But actually, I would go back to December 2008. That was when we had our first group call with a few folks who were interested in possibly challenging the federal law against sports betting. I remember it well, because I was sitting in my car outside my doctor's office in the pouring rain. We talked about how, if we weren’t successful, we wouldn’t make anything worse. But if we were successful, then that would change everything. We began by reaching out to Ray Lesniak, the New Jersey State Senator, and to build some organisation in the state. It was at that point that we were truly ’at the beginning’, so to see how things are today is great. The other stand-out moment was when we won the statewide vote 10 years ago. That might have been even bigger than the day that the Supreme Court overturned PASPA. Up to that point, Governor Christie wasn't on board with this effort. He had declined to join the original lawsuit that we filed back in March 2009, in which we partnered with his predecessor, Governor Jon Corzine. But finally, two weeks out from the sports betting vote, Governor Christie decided to endorse it.
IT WAS AT THAT POINT THAT WE WERE TRULY ’AT THE BEGINNING’, SO TO SEE HOW THINGS ARE TODAY IS GREAT For me, it felt like handing your child off and hoping the person looking after them would do the right thing. Fast forward to Memorial Day weekend in 2011, I received a call from one of our New Jersey lobbyists and they said ‘I'm here with the governor, he's on the boardwalk in Atlantic City and he just gave a speech saying that
26 SBC LEADERS • DECEMBER 2021
WHEN THE SUPREME COURT AGREED TO HEAR THE LAWSUIT, THE BANDWAGON FOR LEGALISING SPORTS BETTING WAS SUDDENLY FULL New Jersey is going to start taking sports bets from this NFL season’. I was stunned at the idea that New Jersey would start accepting sports bets in three months. Here was the Governor of New Jersey, and the former US Attorney for the Department of Justice in New Jersey, saying he was going to get behind the start of legal betting, and that he was going to bring in Ted Olson to be the lead attorney to challenge the federal law. The movement just grew from there. And I knew we were going to win. I like to tell people how when we got started back in 2008, my wife asked me ‘how long is this going to take?’ And I said 'three years, tops'. I might have been slightly off with my prediction on how long it would take,
but I’m happy we were right about how things would play out in the end. SBC: You played a major role in legalising sports betting and online gaming in New Jersey. When did you start to feel the tide was turning? JB: In the early years, it was really tough because most people thought we were wasting our time. Even some of the Las Vegas bookmakers thought that the law wouldn’t be overturned. For so long, people thought we were crazy - and at times, we really questioned why we were bothering. It wasn't really until the Supreme Court agreed to hear the case. The polarity then seemed to change overnight. When the Supreme Court agreed to hear the lawsuit, the bandwagon for legalising sports betting was suddenly full. It seemed like we were getting knocked off of our own bandwagon. Then there was a sense that once it got to the Supreme Court, opponents became allies. The casino associations and companies that were originally opposing us were now agreeing that sports betting should be legalised.
SPORTS BETTING
SBC: Did you anticipate the US market becoming as big a powerhouse as it is now? JB: The National Gambling Impact Study outlined just how big the potential market was in America. At the time (1997), they were saying sports betting was approaching $300 billion a year in handle in the United States, and it was almost completely unregulated - with the exception of Nevada. In New Jersey, we brought in a local public policy group that had done a lot of economic impact studies for various projects across the state. We asked them to take a look at what they thought the sports betting market would be like. What was amazing was how they got the numbers right on the nose. They believed that it would be a pretty sizeable market and that within a year or two, it would be much larger than the Nevada market, which really was an eye-opener for many people. We
distributed that study freely, making it available to the state legislature and allies. It was so successful and credible - we began to have people quoting our study results back to us. At one point, which was quite early on, I went with our Republican lobbyists, a guy by the name of Dale Florio in New Jersey. to meet the two State Assemblymen from Atlantic City. He was adamant that both of these representatives were not in favour of legalising sports betting. He said their position was that they didn’t want to do anything which would hurt the Atlantic City casinos. 45 minutes later, those same two representatives had become cosponsors of the legislation, because we made the benefits of a legalised market clear to them by saying this isn't going to cannibalise your business. We're not trying to take anything away from the casinos. We’re trying to give them one more tool to be able to compete.
WHEN YOU LOOK AT NEW JERSEY, IT HAD A LOT OF TIME TO GROW ORGANICALLY
SBC: As we head into 2022, what are your key predictions for the market? JB: I think we've had sports betting ’wave 1.0’. The low hanging fruit of states that were likely to pass legislation have done so. Some
IN THE SECOND WAVE OF SPORTS BETTING, POLITICS IS LIKELY GOING TO MAKE THE MARKET EVEN MORE FRAGMENTED perhaps too quickly, as in the case of Arizona, which was less than four months between the law passing and everyone going live on 9 September. That kind of speed has created some rocky patches, though thankfully nothing that hasn’t gotten sorted out. When you look at New Jersey, it had a lot of time to grow organically. We had a lot of really thoughtful people, lawmakers, industry folks come together and craft those laws in a way that made sense for everybody. Now we’re moving into states where, for instance, tribal gaming is the dominant force and those sovereign nations have their own needs. They’re not necessarily going to rush into models where they feel like they are going to cede control over the marketplace that they created and grew. In the second wave of sports betting, politics is likely going to make the market even more fragmented.
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You're going to have people trying very hard to use their compacts or their competitive position to try and maintain competitive advantages and limit those new markets to competition and participation. I don't think that's necessarily a good thing. There's got to be a middle way to do this - to protect people, protect existing gaming interest and existing game compacts, while at the same time opening these markets up in a sensible way. SBC: And finally, what would be your biggest piece of advice for those looking to start out in the industry? JB: I guess it depends on where you're coming from. For the better part of a decade, we were warning Europeans that when you come to America, you're going to do business on American terms. You can spend all the time you want telling us how America should really do things, but it’s pointless. What I would say to those coming from the UK and Europe is, you probably need to ’Americanise’ your offering much more. Right now, I think the market is underperforming because of the
28 SBC LEADERS • DECEMBER 2021
SPORTS BETTING
offerings coming from the UK and in Europe because they've not been localised enough. There's been too much effort at shoehorning the US public into ways of doing business that don’t fit with our experience. Let's face it, mobile and online sports betting has existed in the United States for quite a while - it's just that it was being run from Antigua.
THE INDUSTRY NEEDS TO FIND A WAY TO NURTURE NEW ENTRANTS AND TO DEVELOP SOMETHING NEW AND EXCITING One of the reasons why you may still see a significant percentage of bettors out there who are continuing to bet with grey market brands is because they don't see what they want in the current offering. There's an American style of betting that's existed for quite a long time, and generally that is what Americans want. Also when you look at the offerings between the brands we have right
now, it all feels the same. The industry needs to find a way to nurture new entrants and to develop something new and exciting for their consumer. Every once in a while I see something where I think ‘wow, that is a really cool idea’. But the tough thing for start-ups is that it is such a steep climb to just get to market - with all the legal and regulatory barriers - before they can get somebody interested in their idea. We really need some sort of environment where newbies can get educated, can learn to fail and then create a product that can meet the regulatory standards and then find a legitimately new audience. We need an environment where new market entrants aren’t being crushed by the regulatory and compliance costs before they even get to show themselves. Hopefully things will loosen up. I am surprised at how quickly things have expanded. I don't think that we'll be at 48 to 50 states within the next five years, but back in 2018 I certainly wouldn't have expected that this would have gone the way it has. •
ifrahlaw.com ifrahonigaming.com (202)524-4140
Connected. Influential. Knowledgeable.
The leading legal advisory to the Online Gaming and Sports Betting Industries.
What’s next for the US?
JEFF IFRAH: WE’RE STILL WRITING THE U.S. GAMBLING STORY IN AN INTERVIEW WITH SBC LEADERS, the Founding
Member and Managing Partner of Ifrah Law reflects on his career as a renowned litigation attorney before offering his take on what we can expect from the US gaming industry in years to come
BY ERIN GALLAGHER
SBC: Firstly, can you tell us a little bit about your background? How did you become interested in the gaming sector? JI: I was a federal prosecutor in New Jersey before moving to Washington DC in 1997 to join a very highly ranked white collar criminal lawyer group of former Department of Justice attorneys who were partners at the global law firm Paul Hastings. A year later — just as the internet was really starting to take off — an internal email asked if anyone knew anything about New Jersey Gaming Enforcement. Coincidentally, the head of the Department of Gaming Enforcement was someone I served
PUT SIMPLY, THE DOJ WAS ENFORCING AND CHASING OFFSHORE OPERATORS OUT OF THE US, WHILE NEW JERSEY WAS BEGINNING TO WELCOME THEM with in the US Army and who was also previously a federal prosecutor. From then on, I started to deal with the NJDGE for some very early cases where the State was warning European sportsbooks not to solicit customers from New Jersey. Licensing wasn’t available, so I spent the next 10 years litigating the issue of who has jurisdiction and who has the right to enforce their laws. We looked at the
30 SBC LEADERS • DECEMBER 2021
questions of where gaming servers were based and where the activity was occurring. As you can imagine, these weren’t settled questions. By the mid-2000s, we were starting to meet with regulators and legislators in Washington DC, where I'm located. In 2008-09, we started to see some federal legislation being proposed to regulate online poker. That effort failed. But by 2010 and 2011, the DOJ started to become involved with more enforcement efforts. This coincided with some successful traction in New Jersey around gaming legislation
US MARKET
and regulation. Put simply, the DOJ was enforcing and chasing offshore operators out of the US, while New Jersey was beginning to welcome them. I started to represent people looking to get started in gaming
in New Jersey and helping them with licensing and regulation. That, of course, was just on the poker and casino side of things. But at the same time, there were efforts underway to pass sports betting legislation in New Jersey. We then started a trade association called iDEA, which stands for the Internet Development Economic Association. This essentially encouraged operators to become members — to group together to leverage their power to help not just pass regulation, but to also spearhead efforts for responsible gambling. This would also make it easier for them to operate in the US without fear of prosecution from other states or the federal government. Eventually, that legislation on the sports side went to the US Supreme Court in 2018, and the rest is history. I've probably advised every operator supplier and vendor payment processor in the industry at some point, and my firm continues to represent a very large swath of the industry. On top of that, iDEA, the trade
THAT LEGISLATION ON THE SPORTS SIDE WENT TO THE U.S. SUPREME COURT IN 2018, AND THE REST IS HISTORY association, is proud to now have approximately 85% of the industry, both B2B and B2C companies, and the payment processors as members. SBC: And from your experience, what do you anticipate as being the biggest trends across the iGaming and sports betting sectors in 2022? JI: Historically, the land-based casinos were always concerned about the cannibalisation of their revenues, so they weren’t usually helpful in promoting online gaming legislation. That has changed considerably, and in a very good way. For example, in Indiana we're trying to pass online gaming legislation. Indiana previously passed online sports betting regulation, so we already have a lot of clients and iDEA members operating there; but
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What’s next for the US?
online casinos and online poker remain illegal there. We are working alongside the Indiana Casino Association to pass online gaming legislation. That’s really a first. What we're going to see next, and what we're already seeing in Indiana, is stepping up to partner with online operators to pass online legislation, which is really an encouraging sign. This means that the land-based casinos are starting to appreciate that there is revenue to be made from the online space and that the customers playing online are not necessarily the customers who are coming into their land-based casinos.
SBC: Speaking of online legislation, do you think that this growth has been fueled by the pandemic? JI: I'm not someone who believes that COVID-19 helped online gaming. Many think that, because people were at home, they were playing online games more or that states where online gaming was not legal are suddenly going to realise the power and pass online gaming legislation. But personally, I don't think that's true. I think the reason we saw, and we continue to see, more interest in and revenue from online sports gaming is the 2018 Supreme Court decision. No one thought that mobile sports betting was going to peak in 2018-19.
32 SBC LEADERS • DECEMBER 2021
WHAT WE'RE GOING TO SEE NEXT IS CASINOS STEPPING UP TO PARTNER WITH ONLINE OPERATORS TO PASS ONLINE LEGISLATION Everyone expected it wouldn’t be until 2021-22 before all these states passed online gaming legislation. And that's what's happening now. It has nothing to do with the pandemic — it’s just a reflection of the consequences of timing from a Supreme Court decision’s impact on the growth of an industry. I do believe that the online gaming
industry is going to continue growing on the sports side. As far as the casino side, nothing really happened during COVID-19. We only had Michigan that came online toward the end of the pandemic. No other state passed legislation. And so there is still a lot of growth to be had for both sports and casino online gaming. In New Jersey and Nevada, we see crazy numbers. The revenue that's being reported now is in the billions of dollars in both states; it's pretty evenly split between online casino and online sports. So when you think about states that only have sports, and are reporting strong revenue numbers, imagine what they can do
when they add casino and poker. That's all for the future. But there’s certainly nothing about the pandemic that suggests this has peaked in any way. Following the pandemic, legislators will want the employees who work in those casinos to return, and they want the industry to generate revenue. The pandemic might actually slow down the growth of the online gaming industry because local legislators need to first make sure that the land-based revenues get back to where they were before. They want employees back at work. They're not focused on passing new legislation, but they will be soon enough. But there is a tremendously bright future for the industry post pandemic. SBC: What do you think lies ahead for the US sports betting industry as we enter a new year? Is the sector yet to realise its full revenue potential? JI: We must remember that the two biggest markets in the US have not even opened yet: namely California and Texas, where no legislation is on the horizon. To put this into perspective, California is the fifth biggest economy in the world, and California and Texas together represent 50% of the US sports market. When these two states pass sports betting and iGaming legislation, everyone's going to truly step up to the plate to distinguish themselves as the market leaders. There is still so much room to do that too — this isn't going to be something that's just going to be the exclusive domain of having one or two operators, or one or two platform providers, or one or two oddsmakers. There is also so much creativity in this industry and we're going to continue to see that. Everyone knows how big this could be, but we haven’t seen anything in terms of how big this market can get. No way. SBC: As more states introduce legalised sports betting, how important is it that gaming companies and state regulators place responsible gambling at the forefront of any legislative efforts? What lessons can the US learn from other,
US MARKET
more mature gaming markets when it comes to social responsibility? JI: A couple of weeks ago, the NFL started partnering with business operators on a responsible gaming plan. The American Gaming Association also announced a responsible gaming plan. We at iDEA also announced one. Obviously, this is an incredibly important topic right now. The industry really cannot afford any type of scandal or bad news. Sports betting must stay a form of entertainment and not a source of problems for consumers. If there were more stories about individuals being taken advantage of, that would be terrible for the industry — and operators know that, which is why they're so focused on responsible gaming. A lot of these operators are also
WE MUST REMEMBER THAT THE TWO BIGGEST MARKETS IN THE US HAVE NOT EVEN OPENED YET: NAMELY CALIFORNIA AND TEXAS
very conscious of problems in the UK, and what the UK Gambling Commission has done to rein in credit card fraud and other issues that have raised concerns. Combatting this is all part of a responsible gaming program. The UK has raised those concerns and operators in the US know that. The most important thing right now is to have a strong, robust, aggressive responsible gaming program so that this continues to be a form of entertainment and not harm consumers. SBC: And finally, consumer awareness and education can be to the detriment of unregulated states - can you talk us through this? JI: The basic problem in both unregulated states and newly opening states is this: Offshore books (meaning illegal and unregulated betting sites) have been advertising to the consumers in those states for years. If consumers in any state — regulated or unregulated — search ‘legal sports bets’ or ‘where can I place a bet?’ on Google, a number of the top 10 search results are going to
SPORTS BETTING MUST STAY A FORM OF ENTERTAINMENT be offshore sites. There are sites that falsely say they are legal for sports betting. If a state decides that it will not regulate sports betting, it is essentially saying that consumers should continue to bet on offshore sites. On the internet, consumers can’t tell if a site is legal or illegal because it's just not easy to figure out. When a state legalises gaming, it allows the operator to come in and start educating consumers about what's legal and not legal, which a legal operator is motivated to do. Until state legislators act to regulate sports betting and allow legal operators in, no one is going to teach consumers that they are really betting on illegal offshore books. With legalisation and education, consumers will bet on sites that are regulated and safer. And that's really what every legislator should want for his or her constituents. •
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Fuelling US expansion
US MARKET
DELASPORT: EXPANDING GLOBALLY AND FACING THE US MARKET DELASPORT CEO OREN COHEN SHWARTZ tells us more
about the company’s strategy to expand globally and deliver its comprehensive mobile sports betting and iGaming solutions in the US
BY LUKE MASSEY
SBC: Thank you for talking to SBC Leaders. Can you just start by telling us about Delasport’s interest in the mobile sports betting and iGaming market in the US? OCS: Delasport is fully equipped to deliver a one-stop-shop solution to its partners in the US. We have one of the most comprehensive sports betting products in the industry, and the US is predominantly a sports market. We are expanding globally, and the US market is part of it. The US online gaming market is one of the fastest growing markets in the world; it has grown in popularity over the last year, increasing its customers base and it is valued at $2.5 billion. Scalability is an essential factor in the
US market. Delasport is one of the world's fastest digital sportsbook and casino platforms in the market, and it offers true horizontal scalability. The micro-services technology allows us to tailor the solutions to the partner and market needs. As regulation requirements differ from state to state, we have the technology advantage to accommodate each market's needs quickly. For sports coverage, the product covers all the required sports and betting options for the US market. We offer 70,000 monthly prematch events, 40,000 monthly live events, 2000+
markets, 125+ sports coverage, including esports and virtual sports. SBC: What are the main reasons for this growth, and what is Delasport’s unique value in the market? OCS: The main reasons will be accessibility and offers. Mobile sports betting availability is 24x7, players enjoy richer betting options, welcome and activity-based bonuses, and it is easy to access through mobile devices. The pandemic put the entire online industry on steroids. The online gaming market is expected to grow and reach $8.5 billion GGR by 2025, representing a CAGR of over 15%. It is estimated
WE ARE EXPANDING GLOBALLY, AND THE US MARKET IS PART OF IT that the portion of the online gaming revenues from the total gambling revenues in the US is now 20%, predicted to double by 2023 on account of additional skins going live, an enlarged customer’s base and new states legalising online gaming. Delasport’s unique value proposition is built on five pillars; first is our robust technology, it is the core infrastructure of our business and everything else is built on top of it. Delasport’s solution is cloud-based and it is built out of microservice using the most modern technologies. The system allows horizontal scalability that can support any load; we use real time monitoring and automation of various processes, in-house smart risk management tools and unique features like a personal trader (ability to chat with a trader), quick bet suggestion,
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Fuelling US expansion
personalised UX with events offering based on past betting activities and geo-location. Second is our ability to deliver a comprehensive, fully managed solution and run a skin operation from A to Z. Third is our vast experience in all online gaming aspects including acquisition, retention, payment and risk management. Fourth is our capacity to tailor our solution to partner and market needs, and the final point is that our flexible business model allows us to accommodate different deal structures from turnkey, white-label and joint ventures.
36 SBC LEADERS • DECEMBER 2021
SBC: What are the challenges landbased establishments face with going mobile, and how can Dealsport assist them? OCS: There are several challenges like lack of knowledge, assimilation, and picking the right technology and service partner. The 12 years between the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and the supreme court ruling in NJ in 2018 have created an online gaming knowledge gap that US gambling professionals are steadily catching up to by self-learning or M&A with European technology companies
that already have the know-how. The Black Friday in 2011 has left a strong impression that things are different now and being compliant is crucial. Land-based establishments that wish to go online are required to close knowledge gaps regarding online gaming products, technologies that are different in many ways from land-based ones. Other areas are complying with regulatory framework requirements of each state, payment processing, player acquisition and retention techniques etc. In Europe, new services, products and functionalities were introduced to the market over the last decade, and operators and players had the time to adopt them over the years. In the US, many new functionalities are introduced in a short period, which brings assimilation challenges by itself. Running an iGaming or sports betting operation is a complex task. Some land-based casinos are familiar with only running a slot and table games business. With only five states legalising online casinos, the know-how of sports betting is critical, therefore partnering with the right sports betting and casino partner like Delasport is critical. Choosing the right partner can put land-based organisations in the best position to capitalise on the opportunities regulated casino and sports betting hold. While the potential is clear, the road to success is not without hurdles. Starting from skin licensing, liquidity allocation and financing. One crucial challenge on hand is to identify the right provider to partner with. Some casino owners will look for complete control over the new B2C operation, while others may be reluctant to obtain the know-how and like to hand the operation to a trusted and experienced 3rd party to run it for them or to ‘sell’ one of their skins, where multiple skins are allowed. Some states allow just one skin per licence, while others do not specify a limit. For instance, PGCB in Pennsylvania offers unlimited skins for iGaming licences but only one for sports betting licences. The multi-skin approach is crucial to maintain variety and healthy competition. Delasport brings to the table the right ingredients to support the local brick-and-mortar establishments. We
US MARKET
own our technology, and that allows us full control over the products. Over the years, we have acquired vast experience in running successful online sports betting and casino operations from the ground up. We support both strategies of turnkey solutions allowing operators to run their brand operation and fully managed solutions where we run the day-to-day operation. We see technology as a critical ingredient that allows our partners to grow and thrive. Our microservices architecture enables us to tailor our solution and adapt it to partner and regulation requirements needs. On top of this foundation, we build our products and on top of that, our various managed services. SBC: And finally looking to the years ahead, what are the trends to look out for? OCS: According to the American Gaming Association, players in 26 states plus Washington DC will be able to legally wager, with as many as five more states potentially permitting such wagers before the season ends
in February with the Super Bowl. Enjoying the political support giving additional state tax revenues from GGR and licensing, increase in-state employment, and a decrease in illegal betting through a regulated framework, the online gaming market will continue to thrive.
ONLINE GAMING HOLDS A BROADER POTENTIAL THAT IS LARGER THAN THE IMMEDIATE MARKET OPERATORS AND PROVIDERS Online gaming holds a broader potential that is larger than the immediate market operators and providers. There is an entire ecosystem of providers in many fields like KYC automation, anti-fraud and AML systems, AI and machine learning systems, CRM, BI, gamification tools and payment processors. This, in turn, means more indirect taxation and more job creation. Seeing the potential, operators can also take advantage of the growing interest
of venture capital organisations and investment banks that have started to invest their time, effort, and money in the industry. With the exclusion of Tennessee, the regulator gave an advantage to the brick-and-mortar establishments. This, in turn, should remove some of the fear of losing revenues. While online regulation will cannibalise land-based establishment revenues, mostly from the younger demographic (below 50 years old), going online is a necessity, and not doing so simply means that potential online customer will seek to do business elsewhere. The potential of land-based establishments to boost online gaming revenues comes from the fact that online availability is 24x7, it is easier to access through mobile devices, and it extends the customers base of the entire state. We will see more leagues like the NFL and media companies like Fox and Sports Illustrated asking to take a piece of the action, and operators seeking ways to acquire the technology to control their own destiny. •
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A US journey
USABILITY: STREAMLINING THE US MARKET ENTRY PROCESS AVI HOWARD, SEAN CARROLL AND ROB HENDERSON
discuss how USAbility is helping companies set up a compliant, scalable and future-proof business in the US
BY ERIN GALLAGHER
T
hree years have passed since the Professional and Amateur Sports Protection Act (PASPA) was repealed, and the US has since become a global sports betting powerhouse as more sportsbooks look to get in on the action. But with more and more states opening up to legalised betting, operators must err on the side of caution when it comes to setting up shop in the US - ensuring that they understand the colossal task ahead of them. This is where USAbility comes in.
38 SBC LEADERS • DECEMBER 2021
With its market-leading compliance and business transformation consultancy, USAbility offers an end-to-end solution for planning and delivering complex regulatory compliance and product integration projects - ensuring that sportsbooks and iGaming businesses eyeing up the
FUNDAMENTALLY, WE OFFER TWO MAIN TYPES OF PROJECTS. ONE IS ANALYSIS, AND THE SECOND IS DELIVERY
US market get through the process with ease and confidence and set up a compliant, scalable and future-proof business. The brainchild of Avi Howard, Sean Carroll and Rob Henderson, USAbility specialises in two key areas: analysis and delivery. This laser focus, according to CEO Howard, is what gives USAbility the edge. Speaking to SBC Leaders, Howard walked us through the typical process that takes place when working with a partner - highlighting that USAbility can help companies identify all of the areas which must be adapted to the US market from a regulatory and competitiveness standpoint. He said: “Fundamentally, we offer two main types of projects. One is analysis, and the second is delivery. “It can take approximately two
US MARKET
Avi Howard
months to carry out a complete Gap Analysis on a single US state - but that analysis isn’t just looking at the regulatory aspects of that state, it’s assessing the organisation readiness as a whole too. We conduct deep assessments of the client’s capabilities and readiness for multi-state operation in business areas such as HR, finance, legal, compliance and other sports betting and iGaming operations units. “Our benchmark to carry out an assessment is up to two months, which is us approaching the company without any prior knowledge of their business, very quickly educating our team about the client and their ecosystem and then being able to give them a very deep assessment of how to meet and exceed the regulatory bar in each state they have access to. It will take internal teams of any company much longer to achieve the same results and guarantee 100% strict adherence to the legislation to start their compliance journey smoothly. “With the delivery side of things, what we’re after is for a business that lacks the market experience and bandwidth to trust us and ‘give us the keys’ to temporarily drive the implementation project for them while we support the setup or scaling up of their Stateside business. We don’t drive it alone, of course. “We put a multi-disciplinary program team in place, all with prior and recent US experience to deliver the client’s requirements while working shoulder
Sean Carroll
to shoulder with their team and mentor them. Essentially, we consolidate and centralise the market-entry effort to ensure efficiency, strict adherence to the regulations, and minimal disruption to clients operations during this period of rapid change and intense corporate effort. “If a client would like to deliver their solution into one state, let’s take New Jersey for example, we would expect to have that company ready for market entry within 12 months from the start of our Gap Analysis exercise. That would be a good benchmark.
A DATA MIGRATION PROCESS CAN LAST UP TO SIX MONTHS TO MAKE SURE IT MEETS A REGULATOR’S EXPECTATIONS “As you can imagine, though, for some companies that haven't prepared for the US at all, that process can take up to 18 months. We can cut such timelines short with our experienced team and create a higher quality product as we’ve been working in this market from day one of post-PASPA repeal.” Drawing upon his own experience in the banking sector and project management, Henderson described the USAbility team as “delivery experts, project managers at heart”, specialising in a niche part of the gaming industry sector.
Rob Henderson
During his time as a consultant, two key areas which he identified as being wholly underestimated by prospective US sportsbooks are data migration and operational readiness. By using the team’s knowledge of the gaming sector, USAbility can help its partners to navigate the complexities associated with data and platform migration by setting up, and executing, thorough plans to make the whole process both less risky and less costly. “Re-platforming projects, which quite a few operators in the industry are going through at the moment, and specifically the data migration element of that is an incredibly challenging thing to do to ensure zero impact to patrons,” Henderson cautioned. “A company will usually complete a data migration and then throw away everything they’ve learned from the process. But fortunately for us, we have a team of real experts that can repeat the process. “A data migration process can last up to six months to make sure the migration will meet a regulator’s expectations. That process can span more than 18 months if an inexperienced team tries to go it alone. “Everyone seems to think it’s a case of picking out data and inputting it into another database; it’s not that simple. Offering that service to help facilitate a data migration is one of our USPs. Our team has been running such
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A US journey projects in the industry for the last 10+ years. “Another area often underestimated by US market entrants is the readiness of the non-tech and non-product units. While tech and product teams are naturally designed to self-organise and work in an agile way, business units such as legal, compliance, HR and finance find it hard to self-manage a complex project involving every part of the organisation and often a very long chain of external suppliers. “These units need to be managed closely by a team that sees the entire process clearly and ensures that outputs from these units get to the right party at the right time to ensure a healthy and productive cadence.
“Our Business Readiness Practice supports the design and implementation of the Target Operating Model for a stateside compliant and scalable business, provides talent-hiring lists that tackle first the requirements of each regulator, map out the legal and compliance work and breaks down the licence application process in each state into manageable pieces of work.” For Carroll, one of the core components which makes USAbility unique is treating US market entry as a textbook change and transformation exercise. This, he said, was an interest sparked by his experience in the telecoms and banking industries, as well as his time working in government programmes and over 10 years on some of the largest projects in the gambling industry.
40 SBC LEADERS • DECEMBER 2021
US MARKET ANOTHER AREA OFTEN UNDERESTIMATED BY US MARKET ENTRANTS IS THE READINESS OF THE NON-TECH AND NON-PRODUCT UNITS “At USAbility, we can expedite change,” he noted. “People in this industry are adaptable and flexible and have experience in a fast-paced regulatory environment - but to enter the US market, companies must fully understand the scale of the task ahead of them. It is not ʻjust another market’. There are specific, complex parts of compliance - particularly the
IT DOESN’T HAVE TO BE A COSTLY, LENGTHY, UPHILL STRUGGLE TO MAKE YOUR WAY INTO THE US Wire Act - which will prohibit them from launching in a way they originally envisioned. “The US regulators are interested in compliant companies and tax revenues generated in a compliant way. While some state regulations are stricter than others, all regulators want to ensure that their licensees are not just implementing statutes in a literal way but demonstrating a deep understanding of the regulations and creating a safe environment for their patrons. “Compliance is of the utmost
importance. That is the focus of our engagements with our clients - let’s get them live in the US as quickly as possible, but let’s also ensure that they are fully compliant with every bit of legislation set out by the regulator and help them create differentiation in the market. We see very little innovation in the marketplace currently as the constant race of operators and suppliers alike to prepare their teams and their products to each market/state and just meet the regulatory bar leaves little to no time for product innovation. “The struggle is real. However, we are changing that very fast as we quickly remedy the multi-state compliance challenge and free up the product teams of our clients to create the products they want while we are there to support them and ensure that their ideas will be compliant.” Carroll disclosed that as more states begin to open up, the battle for market share in some of the ‘larger’ states is becoming much more difficult, not to mention costly. For USAbility, however, the aim is to make sure that its partners can gain a market advantage. He added: “What we’ve found is that across the US, there are some states which may be more attractive from a statute perspective. Nobody wants to go to the US to enter just one state. It’s costly to enter just one state and will never justify the effort. That’s why multi-state considerations are at the heart of the advice we are providing our clients with. “We analyse the differences and commonalities across the states they have market access for and provide hundreds of recommendations for every part of the organisation on creating a compliant, scalable and competitive business that will satisfy all the state regulators they work with. “The number of multi-state projects we are running in the US gives us a very wide view of the latest trends and best practices and a constant flow of real-life lessons learnt from projects on the dos and don'ts of US market entry. “What we say is simple: it doesn’t have to be a costly, lengthy, uphill struggle to make your way into the US There is another way. We do it, one project at a time.” •
ARE YOU BUSINESS READY TO ENTER THE U.S. GAMBLING MARKETPLACE? Regulatory requirements of every state differ and are open to interpretation. Inexperience with product launches in the U.S. increases delivery timelines, risk and costs significantly. An experienced Product team will look beyond the Minimum Licensable Product and create a bespoke and competitive solution that stands out from the crowd.
What can USAbility deliver for you? Strategic advisory on market entry, helping you understand the costs, process, duration and feasibility Comprehensive Regulatory and Product gap analysis for every state in the U.S. to ensure competitiveness and strict adherence to the regulatory requirements U.S. market-specific Sports and iGaming product development advice Leading the Compliance process to successful Certification Business and Operational Readiness assurance Target Operating Model Design and implementation Multi-State, compliant and scalable Solution Architecture design Trading advisory: Strategy, Risk Management and implementation
Contact us today for more information on how USAbility can help you be business-ready to launch in the U.S.
www.usabilitydigital.com
hello@usabilitydigital.com
A new Endeavour
JORDAN LEVIN: ENDEAVOR ALLOWS OPENBET TO REACH A NEW LEVEL OF SPORTS BETTING ENTERTAINMENT CEO JORDAN LEVIN talks us through a transformed
OpenBet and the company's aspiration to drive a new wave of sports betting experiences BY CONOR PORTER
I
n October, Scientific Games announced the company had reached an agreement to sell its sports betting business to Endeavor Group Holdings for $1.2 billion. The move resulted in the rebirth of the OpenBet brand. The sports betting landscape will change once again with one of the industry’s leading providers set to define the future of sports betting entertainment. SBC: Scientific Games has reached a definitive agreement to sell its sports betting business OpenBet to Endeavor Group Holdings Inc in a cash and stock transaction worth $1.2bn. Why was Endeavor the perfect candidate to purchase OpenBet? JL: Under the Endeavor banner, there will be enormous scope to keep transforming and reimagining what’s possible. We will soon have access to unparalleled sports rights, content and data across the Endeavor portfolio, which will take our own offering to a new level and define the future of
THERE WILL BE ENORMOUS SCOPE TO KEEP TRANSFORMING AND REIMAGINING WHAT’S POSSIBLE
42 SBC LEADERS • DECEMBER 2021
sports betting entertainment. I spent one of my most enjoyable weeks at G2E in back-to-back conversations with customers talking about the art of the possible. They’re expecting us to be even more agile with access to cutting edge content that redefines the sports betting experience for their players. Joining Endeavor is exciting news for our teams and demonstrates the value of our transformed services, content and technology that span the entire value chain. None of our customers want standard, indistinguishable, old hat, cookie-cutter technology. Their
primary focus is to find new ways to engage and retain their players. The old game of commoditised betting experiences is well and truly over. Just look at how sports content, media and betting experiences are beginning to blend and merge. OpenBet kick-started the original online betting wave in 1997. It was a services focused business for many years, but in 2018 when I sat down with our teams we looked at the broader technology trends that were set to shape our industry in the years
NONE OF OUR CUSTOMERS WANT STANDARD, INDISTINGUISHABLE, OLD HAT, COOKIE-CUTTER TECHNOLOGY
US MARKET
you think about OpenBet, the first words that spring to customers’ minds are trustworthy, scalable, robust and responsible. That’s what our product offering is known for and will always remain part of our value proposition. But it’s not enough these days. With the continuous transformation journey and bolt on acquisitions like DonBest and SportCast, we have re-engineered the old and reimagined the new. OpenBet is celebrating its 25-year anniversary this year, and what better way to mark the milestone than by laying the foundations for its future. We have ambitious expansion plans for our product portfolio that will enable us to capture market share through a relentless focus on these new experiences.
WE HAVE SPORTS EMBEDDED IN OUR DNA. WE LIVE IT. WE BREATHE IT.
ahead. Bespoke services were, and still are, a key pillar for us. But we knew back then that players wanted more and operators needed us to deliver. As seamless ecommerce journeys and digital media evolved, we saw a sharp uptick in player expectations. We all experienced it as digital consumers. The bar keeps on getting raised. No longer were we competing with our industry peers – we had to rapidly develop productised technology and layer in content and experiences to match what was happening outside our industry. In partnership with Endeavor we will be more than ready for the
next generation of sports betting entertainment. SBC: What was the thinking behind introducing a new brand look for OpenBet? JL: OpenBet has a heritage of powering the world’s leading sports betting operators and the strength of its brand still resonates in terms of awareness and perception. When
WE HAVE RE-ENGINEERED THE OLD AND REIMAGINED THE NEW
SBC: Does this agreement mark a shift in perception of sports betting as a form of entertainment? JL: We have sports embedded in our DNA. We live it. We breathe it and most importantly, our performance is evaluated every second of the day by the biggest operators in the world. We never take that for granted. Our modular technology, content and services power the likes of FanDuel, William Hill, Sky Bet, Wynn, BetMGM, DraftKings, theScore Bet and many more. That doesn’t happen by accident or on a whim. There’s a lot at stake and our customers like a safe bet. We’re betting on a new game too. It’s about reliable, immersive experiences, with layers of cutting edge content that defines our category. SBC: What can we expect from the new OpenBet? Will there be any changes to your operations? JL: Operators know what they’re getting when they partner with OpenBet. It’s a clearly defined, proven product offering split across three key areas: technology, content and services. Operators trust our tech stack to produce a robust performance that delivers on every occasion, at peak times, at
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A new Endeavour
the biggest sporting events, when it matters most. OpenBet was the only platform in the industry with zero downtime during this year’s Super Bowl, and supports the largest sporting and racing events in the world with unflappable quality. Falling over at these pivotal moments when operators have invested heavily in brand awareness, activation and acquisition completely erodes their reputation and their return on marketing investment. Tried and tested foundations enable our teams to innovate with confidence too. Operators can execute bold campaigns, CEOs sleep well at night and shareholders remain bullish. There’s a story about NASA that I was told by one of our engineers a while back. NASA’s highly sophisticated computer hardware setup onboard the Orion spacecraft includes two IBM PowerPC 750X single-core processors. These dinosaur chips have been in use since 2002, and they are no faster than modern smartphones.
TRIED AND TESTED FOUNDATIONS ENABLE OUR TEAMS TO INNOVATE WITH CONFIDENCE TOO But despite this, NASA uses them, and it’s not because of budget constraints or a lack of modern alternatives. They’re just utterly reliable, and that matters when you’re building out the future. They’re a tiny part of the overall system and this is our ethos too. We don’t compromise the trust placed in us by switching out tiny parts of our system for vanity reasons. We surround our reliable foundations with state of the art technology and services that never fail. It’s created an insatiable demand from operators. But we never settle. In the new game you can’t settle. The old game with sports betting technology was a take it or leave it game. The new OpenBet portfolio is fully modular and operators select what they need to take their game forward. Some have front-end capabilities, some don’t. Some have player accounts, some don’t. What we have today at OpenBet is the perfect
44 SBC LEADERS • DECEMBER 2021
US MARKET
solution. It’s been engineered by the best in the industry and designed for the new world. SBC: What new developments are on the horizon for OpenBet? Can we expect further expansion within the US market? JL: Right out of the gate, we’ll soon have OpenBet’s market leading ecosystem combined with access to unparalleled sports rights, content and data across the Endeavor portfolio. All the ingredients we need to define the future of sports betting entertainment are at our disposal. Of course, the US market remains an important focus for us but we are also focused on continuing to extend our reach across the globe. We have plans to expand our teams but quality and culture fit really matters to us, particularly as demand for our products continues to grow. As we enter more markets and expand our operations, securing the right talent is hugely important. When you’re engineering new experiences, it takes deep expertise and steadfast resilience. Nothing ground breaking or industry defining ever happens the first time. We are actively looking for like minded
PUSHING BOUNDARIES AND PROVIDING CONNECTED EXPERIENCES IS THE ONLY WAY TO PLAY THIS NEW ENTERTAINMENT GAME
individuals who are passionate about technology, who thrive on challenges and want to develop their careers in a fast-paced environment. We recently opened up a new trading hub in Tampa, Florida, which will dramatically enhance our trading capabilities. The hub provides us with greater time zone coverage across the US and complements our existing trading operations in Las Vegas and Athens. We’re looking for experienced traders who are keen to work with new technology and play a leading role in our full risk and liability management service powered by DonBest. We’ve talked a lot about our tech but our teams at OpenBet operate with the focus and precision of F1 pit crews. They’re highly skilled and take enormous pride in the quality of their work. In every corner of the globe they support our customers 24/7/365. They’re available and dialled in at every stage of the race because our objective is to help customers take podium positions. Like any technology and product provider reshaping their category, we’re eager to grow our crew. We’re eager to invest in the right people and we’re actively recruiting across every major continent we operate in. We challenge everyone at OpenBet to reimagine the status quo. To feel safe in the pursuit of greatness. Pushing boundaries and providing connected experiences is the only way to play this new entertainment game and who better to join forces with than Endeavor. •
NOV 30 - DEC 2, 2021 MEADOWLANDS EXPOSITION CENTER, NEW JERSEY
THE LEADING
SPORTS BETTING & IGAMING EVENT IN NORTH AMERICA 2,500+ Delegates
200
Speakers
50
Exhibitors
SPEAKER PREVIEW
BILL MILLER President & CEO AGA
SOO KIM Chairman of the Board of Directors Bally’s Interactive
MATTHEW METCALF Sportsbook Director Circa Sports
SARAH OLIPHAN CRENNAN VP & Head of Content Yahoo Sports
JEFF FERNANDEZ Vice President Business Development + Ventures New York Jets
RICHARD SCHWARTZ CEO Rush Street Interactive
MATT PREVOST Chief Revenue Officer BetMGM
JAN JONES BLACKHURST Member Caesars Board of Directors
JOHNNY AVELLO DAVIS CATLIN Director of Race & Senior Managing Director Sportsbook Operations Las Vegas Sands Corp DraftKings
LAILA MINTAS CEO PlayUp
JON KAPLOWITZ Head of Penn Interactive Penn National Gaming
#SBCSUMMITNORTHAMERICA
FOR MORE INFORMATION PLEASE VISIT SBCEVENTS.COM
New opportunities
PUERTO RICO: THE PERFECT US ENTRY POINT FOR LATIN AMERICAN OPERATORS AT THE INAUGURAL EDITION OF SBC SUMMIT LATINOAMÉRICA, panellists examined why Puerto Rico is
an obvious choice for operators looking to enter the US
BY LUCIA MOURIÑO
T
he vast majority of Latin American territories have one thing in common: they’re Hispanic. Based on this fact, people often believe that they all share the same traditions, even though the differences are significant. One of the clearest examples and
46 SBC LEADERS • DECEMBER 2021
most interesting countries could be Puerto Rico, which is somewhere in between being a Latin American country and a US jurisdiction. “Puerto Rico is an American territory, the citizens are American, the official currency is the US dollar, and despite being a Latin American country, it’s subject to the federal laws of the United States,” said the Executive Director of
the Puerto Rican Gambling Commission, Orlando Rivera Carrión, who kicked off the panel The Duality of Puerto Rico How to approach this emerging sports betting market. The launch of the sports betting market in Puerto Rico is just around the corner and, despite having the potential to attract the largest operators of the continent, it’s not usually part of the conversation when discussing future dominant markets. Why? Is it seen as a US state rather than a Latin American country? Is it because of US laws and regulations, which are completely different from the ones adopted in
LATAM
Orlando Rivera Carrión, Executive Director of the Puerto Rican Gambling Commission
other Latin American countries? What’s the true potential of this multifaceted market? As seen in other territories in the region, the last few weeks of December 2020 experienced major regulatory developments. Former Puerto Rican Governor Wanda Vázquez signed Senate Bill 1534, which led to the development of an industry that is expected to contribute more than $40 million to local coffers. Puerto Rico already has the approval of the local Fiscal Board and went through a 30-day period, which finished on 20 November, to wait for the Secretary of State to sign the documents that will finally allow the regulator to start accepting sports betting applications. According to Rivera Carrión, this will lead to the market being operational by the second week of February, when the Super Bowl takes place. The Executive Director said: “We’re a jurisdiction that, thanks to the casinos, has a strong industry. We were basically the second one in casinos in the US after Nevada. In fact, Atlantic City imitated Puerto Rico’s framework to regulate its market. Therefore,
although we have US regulations, we have the advantage of being a Latin American country, that we speak the same language.” Fellow panelist José Carlos Figueroa, Head of Puerto Rico at GLI, echoed this statement and highlighted the gambling and betting culture of the island, which has been regulated since the 30s and 40s, making it a highly established market. He said: “At the same time, it’s an important territory in the Caribbean, we have all the technological infrastructure to meet what this market requires now. We have not only seen it in other experiences, but also in the companies
that have approached GLI to ask us how they can enter Puerto Rico, what the standards are and more.” Additionally, he assured that the Government has established guidelines and conditions that go hand in hand with the best industry practices. “They not only focused on active or established markets, they also saw the use of technology to be able to complete many of the tasks so there’s not a need to rely so much on human resources, which could delay some processes.” Jorge Morales, Sales Director for LatAm and USA, Continent 8, agreed with Figueroa on how the large companies established in the US are approaching the Puerto Rican market. “I see the language as a possible disadvantage for Latin American operators. We know very well it’s not the same in different countries,” he said, when asked how the US companies will adapt their websites and themselves and if they will strike partnerships with local companies. Moderator Miguel Bernal, Partner at Estudio Legal Bernal, delved into this question and stated that often it’s important to forge local relationships rather than starting entirely from
WE HAVE THE TECHNOLOGICAL INFRASTRUCTURE FOR WHAT THIS MARKET REQUIRES
José Carlos Figueroa, Head of Puerto Rico at GLI
DESPITE BEING A LATIN AMERICAN COUNTRY, PUERTO RICO IS SUBJECT TO THE FEDERAL LAWS OF THE UNITED STATES
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New opportunities
ENTER PUERTO RICO BECAUSE IT WILL BE THE DOOR FOR THOSE INTERESTED IN ENTERING THE US
Jorge Morales, Sales Director for LatAm and USA, Continent 8
scratch in a new territory. Figueroa assured that “many companies see Puerto Rico as an entry point to the United States”, and that “we’re seeing the interest of companies not only from the US, but also at a global level, from Latin America, Europe, they’re willing to compete”. According to the GLI executive, Puerto Rico will provide a versatility that other US markets don’t have.
The industry is ready to start operations The director of the regulator mentioned DraftKings, FanDuel, BetMGM, Betsson, Betcris, Cirsa and Sportium as some of the companies that have already shown interest in Puerto Rico. He also confirmed that IGT has already signed an agreement to enter the local market, and that he expects online gambling to follow sports betting in the next three years, as these industries contribute to the growth of the local economy. Morales added: “We’re ready. At Continent 8 we’ve already signed agreements, we’ve already talked to operators that are in other jurisdictions with us. We’re discussing how to implement their technologies in the country. Everything is ready. “Another benefit from Puerto Rico
meaning that “the investment has to come from preparing to enter the country".
The relationship between the regulator and operators When entering a new market, one of the great challenges for operators is getting the right information and help from regulators. When it comes to the Puerto Rico Gambling Commission, the authorities have made themselves available to the public to guide interested parties. “I’m proud to tell the Latin American industry that Puerto Rico is ready,” said Rivera Carrión. “Enter Puerto Rico because it will be the door for those interested in entering the US. It’s the
PUERTO RICO WANTS THAT THE LATIN AMERICAN MARKET TO KNOW WE HAVE OUR DOORS OPEN TO GIVE THEM THE OPPORTUNITY TO ENTER THE US is that it operates in US dollars, so we know very well that it’s not the same to have operations or bank accounts in solid and dollarized banks than in a currency with a high fluctuation. That’s an incredible benefit for anyone who wants to enter and operate in Puerto Rico.” In regards to developing business, the GLI official explained that one of the advantages that Puerto Rico has over other jurisdictions is that “bringing a platform doesn’t require more than a transfer if the company is already in a regulated market or additional tests”,
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entry point for those who have never done business in the US, they can use Puerto Rico to do so.” Furthermore, he assured that they have strong regulations, such as those of Nevada, Atlantic City and New York, and that people “have a friend in the regulator” to explore these opportunities. “Puerto Rico wants them to enter, they want that interested Latin American market to know that we have our doors open to give them the opportunity to enter the US.” To conclude, Figueroa highlighted
“the accessibility of the regulator” in terms of communication and flexibility, since this “makes all the difference in Puerto Rico, in looking for groups that want to invest and ask questions to protect their investments”. He said: “That accessibility exists and is part of the success that Puerto Rico has.” •
Miguel Bernal, Partner at Estudio Legal Bernal
Four aces
LATAM
YOSSI ABADI: THE CORNERSTONES OF TENLOT GROUP’S SUCCESS THE COMPANY’S CEO
outlines the four cornerstones of Tenlot Group and how they have helped lead to further growth across the gaming industry BY ERIN GALLAGHER
Tenlot's "four aces" of operations Social responsibility, transparency, technology and track record. These were the “four aces” of Tenlot’s successful growth in the gaming industry, particularly in Latin America and Africa, according to Yossi Abadi, CEO. The cornerstones, he believes, offer a suitable explanation as to why Tenlot was shortlisted for two SBC Latin America awards this year: “Rising Star of the Year” and “Bingo & Lottery Operator of the Year” for its operations in Costa Rica, El Salvador and Guatemala. “If you are surprised to see social responsibility as one of the company’s “aces”, don’t be. What began as a reflection of the values of our executive leadership has proven to be as mutually rewarding economically as socially within a very short time.”
Social responsibility is also a "t" word Speaking to SBC Leaders, Abadi reflected on the journey of Tenlot and how its founding principles have helped shape the way the company operates today. The CEO explained that core ideas introduced by co-founder Jacob Engel - a self-made billionaire philanthropist and industrialist who has taken a portion of the profits made in
IF YOU ARE SURPRISED TO SEE SOCIAL RESPONSIBILITY AS ONE OF THE COMPANY’S “ACES”, DON’T BE
developing countries and invested in the people and communities where he operates - have helped create a safer, more productive work environment. “Engel’s investments in education, infrastructure, healthcare, etc.
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Four aces
improved quality of life for local workers and their families, while also providing a safer, more productive work environment. “His model has proven valuable for Tenlot in the gaming sector, where consistently earmarking a portion of the profits to community needs has strengthened our relationships in its numerous jurisdictions. “This has forged trust…the fourth ‘T’. Tenlot has sponsored the construction of community centres, youth sports programs, olympic athletes, educational programs and disaster relief efforts. “Our initial motivation was to give back to the communities where Tenlot has operations – helping fulfill unmet needs and investing in the youth. Soon, we found our business partners sharing our vision and promoting our community engagement as an integral part of their branding. “Customers, too, express pride and appreciation at the correlation between their entertainment and the tangible investments in buildings, programs and services in their own communities.”
Tenlot's advanced gaming platform The next pillar of Tenlot Group’s growth is technological leadership something which has helped fuel the
50 SBC LEADERS • DECEMBER 2021
Jacob Engel, co-founder
company’s expansion across South America and Africa. “Our proprietary gaming platform, Tenlot 360°, has developed significantly since its first release, incorporating more automated AI and analytics capabilities, cyber-security and reporting functions,” Abadi said. “Tenlot’s slogan is ‘Technology for Growth’, and at this stage in our technology’s maturity, our Tenlot 360° platform offers a rapidly implemented and a cost-effective solution to gaming operators.”
He told SBC Leaders that Tenlot’s platform supports hundreds of online games and lotteries, including industry blockbusters, as well as the necessary reward mechanisms, loyalty programs and automated life-cycle management systems. Its robust, easy-to-use back office, the CEO highlighted, provides “comprehensive management, marketing and CRM capabilities, with real-time performance analytics” and has “proven itself in different and sometimes highly challenging market
LATAM
environments, with vastly different technical and regulatory requirements”. He clarified: “And just in case you are wondering, the mechanism for allocating a percentage of the profits is built in to the platform. This way, Tenlot will continue to promote social responsibility through other operators which value Tenlot’s social vision.”
Media recognition highlights CSR focus “We were both honoured and humbled to appear in Forbes Central America twice this year,” Abadi disclosed. The first article addressed ‘leveraging Tenlot’s gaming operations to support social responsibility’ (June), and the second article told how the company is ‘promoting entrepreneurial success in Latin America’ (September). A prominent concern of many gaming companies is the topic of responsible gaming, the recognition that the industry must take measures to ensure policies are in place and regulations followed to provide users with a safe experience and to prevent
WE WOULD LIKE TO THINK THAT OUR STANDARDS FOR RESPONSIBLE GAMING ARE AMONG THE HIGHEST IN THE INDUSTRY
TENLOT WILL CONTINUE TO PROMOTE SOCIAL RESPONSIBILITY THROUGH OTHER OPERATORS WHICH VALUE OUR SOCIAL VISION abuse of the system. “Tenlot’s operation takes these concerns into account by incorporating the necessary safeguards under ‘transparency’, not CSR,” Abadi shared. “While many gaming and lottery organisations engage in charitable giving in some form or other, I am particularly proud that Tenlot includes community support as part of its business model and values. “I hope the media attention Tenlot has received will serve as a call-toaction to gaming companies to do the same. A lot of good has been done and there is much left to do!”
Responsible play as a priority During the discussion, Abadi revisited the topic of responsible play, which is both an industry standard, and a competitive differentiator at Tenlot, he said. As a gaming operator, he believes that the firm sets the bar very high for compliance, with a long list of policies and procedures, which are conveyed to all new hires and to all employees
on an annual basis. As a platform developer, Tenlot incorporates technological safeguards that prevent misuse, abuse and addiction, as well as hacking and financial fraud. “We would like to think that our standards for responsible gaming are among the highest in the industry, as a result of the investment we make in these areas,” said Abadi, with a nod to the company’s ongoing investment in technology.
Credentials and credibility Talk turned finally towards Abadi’s leadership of Tenlot - whereby he expressed his gratitude at being at the helm of its incredible global team and, particularly, having the benefit of the guidance of Jacob Engel, Chairman of Tenlot. “For more than four decades, Jacob has cultivated valuable relationships, delivered successful projects and contributed in meaningful ways to local communities. His business model has been my guide in building Tenlot’s credentials and credibility in the LatAm market, while expanding the group’s territories. “In a new and rapidly evolving industry like ours, I am proud of Tenlot’s stellar reputation as a global business leader, innovator and model corporate citizen.” •
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SBC Summit Latinoamérica
NEW LATIN AMERICAN MARKETS WILL HELP THE REGION BECOME A GLOBAL FORCE THE PANDEMIC HAS BEEN A CLEAR TURNING POINT for a
number of industries, including gaming. In some cases, it has also worked as a trigger to update systems, focus on issues that weren’t seen as priorities and find new sources of revenue BY LUCIA MOURIÑO
W
hile some markets, such as Colombia, managed to continue developing their regulations by approving live casino operations, there
52 SBC LEADERS • DECEMBER 2021
are others that have used the last two years to work on their regulations to develop an online gambling industry and, in some cases, open their markets. In Costa Rica’s case, the Social Protection Board (JPS) embarked on
the search for a digital transformation, aiming to guarantee revenue and maximise contributions to social programs. To achieve this goal, the local gambling regulator asked interested parties to submit offers to market products online, including sports betting, lottery games and electronic lottery. Esmeralda Britton, President of JPS, who participated in the SBC Summit Latinoamérica panel, Preparing New Markets, explained the process and expectations around the market. She assured that it was “a very interesting
LATAM
WE TRY TO CALL THE OPERATORS AND PROVIDERS, SO WE CAN BUILD A REGULATION TOGETHER
process, as Costa Rica had never been part of something like that”. In order to access the online gambling world, the Costa Rican regulator focused on developing a platform to carry out the process, in which “around 25 local and international operators” participated, and five presented their offers. Moreover, she explained that the local industry is subject to the budget approval of the Office of the Comptroller General, and the latter
THE LOTERÍA DE LA CIUDAD FOCUSED ON THE EUROPEAN EXPERIENCE AND COLOMBIA’S PRACTICES objected to certain aspects that ended up stopping the process. “At this moment, we’re reviewing how it could be carried out, since it was necessary to change the process,” she said. In addition to online gambling, the Costa Rican regulator was one of the fastest to adapt to the need to expand the sales network, since in the second quarter of 2020 it launched its first digital lottery channel. The moderator Rodrigo Cigliutti, Executive Director of Cibelae, commented that these developments highlight the intention of the Latin American country to regulate its industry and formalise modalities that take place illegally. Britton said: “This puts Costa Rica on the global map and it says that it has a regulation and that operators are welcome, but they have to adapt to the current rules. These types of processes make companies see new business opportunities.”
Esmeralda Britton, President of JPS
Institute of Lotteries and Casinos (IPLyC) - concentrates 60% of the country’s gaming market. “Argentina is a federal country but very centralised. In other words, the rest of the provinces don’t have a competent market when compared to these two jurisdictions,” he clarified. In 2018, the City began its process
and was eventually approved by the legislature, allowing the regulator to introduce gambling legislations. In order to establish the best possible regulations, the Lotería de la Ciudad focused on the European experience as well as Colombia’s practices where it sought to “replicate them and learn from their mistakes and successes”, although Vivot admitted that the goal was to also have its own perspective. Vivot highlighted a characteristic of the City that makes it different from the rest of the Argentinian jurisdictions: gambling cannot be exploited only by the State. Although the stipulated timing indicated that LOTBA was expected to launch its online market more than two years ago, online operations are yet to launch due to the different situations that happened in Argentina, including a presidential election. “We’re in the last process,” Vivot said. Currently, seven companies are already authorised to operate in the City, although it is expected that by the time the market opens - which should happen “imminently” - there will be eight. In addition, there are seven other operators waiting to obtain a permit. In regards to the number of permits,
Sebastián Vivot, Manager of Modernisation and Information Technologies of the LOTBA
LOTBA’s modernisation process Sebastián Vivot, Manager of Modernisation and Information Technologies of the Lotería de la Ciudad de Buenos Aires (LOTBA), was one of the people in charge of leading a similar process to Costa Rica’s, with the difference being that it’s only just a jurisdiction within a country in which each province has its own rules. The Argentinian capital, along with the market of the Province of Buenos Aires - regulated by the Provincial
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SBC Summit Latinoamérica
and unlike the neighboring jurisdiction - the Province of Buenos Aires - the City imposed an antitrust policy that required at least three permit holders. However, it decided not to limit the number of permits, so the market “is open” for interested parties that meet the requirements. “We’re not flexible in the City, but we try to attract the private sector that knows about this. We try to call the operators, providers, so we can build a regulation together,” Vivot said, before warning that LOTBA does that without “losing the prerogatives of what they want to regulate since they understand that it has to be a sustainable business”.
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Karen Sierra-Hughes, Vice President of Latin America & Caribbean at GLI
The perspective from the private sector Juan Barrachina, Sales Director at Kambi, said that “the Argentinian market will be huge” - although he warned that the devalued local currency is a disadvantage. He added: “After having seen the success of Colombia and Mexico, Argentina is going to be practically the same, a large market, even though it’s fragmented and it’s complex to develop a strategy.” Karen Sierra-Hughes, Vice President of Latin America & Caribbean at GLI, stressed that one of the main issues during the pandemic was education and highlighted Cibelae’s work to help spread the word about regulations and the control processes to “break the paradigms around online gambling operations”. When it comes to certification and technical compliance, the VP assured that online gambling is not anonymous, but that there are tools to identify players, which leads to better protection and prevention. “It all depends on the regulator’s
Juan Barrachina, Sales Director at Kambi
information about their gambling behaviour, their money movements, winnings and more. If the regulator doesn’t establish the type of information that the online gambling platform needs to record and if it doesn’t supervise processes, that
THERE ARE REGULATORS WHO MAKE THE REGISTRATION PROCESS SO DIFFICULT THAT IT’S ALSO A COMMERCIAL INCONVENIENCE. THEY NEED TO FIND A BALANCE work to establish the requirements. But they have to make sense, because there are regulators who make the registration process so difficult that it’s also a commercial inconvenience. They need to find a balance. “After identifying players, companies can save specific
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data is useless. That’s what the certification processes are for.” Furthermore, she highlighted the games verification process in the City of Buenos Aires, which allows companies to check if the games generate addictive behaviour. She added that some European countries
focus on that verification process, but regulators don’t usually dedicate their efforts to complete this step.
Future markets Rounding off the panel, Barrachina said that there’s a need for at least five or six leaders, mentioning Betsson, Grupo Caliente and BetPlay as the most relevant operators currently. He also said that the regulation seen in the region will make it more complex for small companies to operate, “unless they’re given exclusive permits and in a monopoly”. He concluded: “The Latin American map will probably change by 2023/2025 and we’ll see five great regional leaders. The locals will remain, but there will be regional leaders.” •
Preserving a trend-setter status
HOW DOES THE CHASING PACK CHALLENGE THE US IGAMING STANDARD? NEW JERSEY, WHOSE ONLINE CASINO ECOSYSTEM
continues to go from strength to strength, is often considered the benchmark for other states to follow both in terms of its regulatory framework and the scale and scope of the market BY CRAIG DAVIES
A
s more and more states begin to open up, should the Garden State, the catalyst for the repeal of PASPA, be taking fleeting glances over its shoulder? And as others play catch-up in terms of the number of active operators and the revenues being generated, is New Jersey’s position as standard setter coming under threat from regions that have learned lessons from its mistakes and potentially created a better environment for the sector to thrive?
Adam Noble, Co-Founder and Chief Business Development Officer at PlayStar
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To delve into the debate, SBC Leaders spoke to Adam Noble, Co-Founder and Chief Business Development Officer of online casino brand PlayStar, and Allan Petrilli, VP of Sales and Growth at marketing analytics platform provider Intelitics. Following New Jersey setting yet more records through September as
THE TWO SIGNIFICANT EVENTS THAT CHANGED THAT WERE THE REPEAL OF PASPA AND COVID
Allan Petrilli, VP of Sales and Growth at Intelitics
its iGaming environment produced a $122.6 million high in gross gaming revenue, Noble and Petrilli began by examining the state’s position as the ‘standard’ or ‘blueprint’ for others to potentially follow. The former, although acknowledging that New Jersey ’has been a benchmark for iGaming in the US for many yearsʼ, suggested that it’s ʼnot to say it has been a super successful benchmark for all of that timeʼ. Noble said that it’s ʼeasyʼ to get carried away with the numbers witnessed through recent months, and pointed to an iGaming market that was ’small in comparison’ just two years earlier despite being live since 2013. “The two significant events that changed that were the repeal of PASPA and COVID, and it has certainly been on a tear ever since,” he explained. “From a regulatory perspective, most certainly it's been a benchmark and arguably set some of the highest entry
CASINO & iGAMING
requirements for licensing the world over, and so it should. “There is a famous saying that is attributed to a little town across the water from New Jersey, but it certainly applies here, and that is if you can make it in New Jersey, you can make it anywhere. “The main reason behind this is most definitely the first mover advantage. New Jersey was a market where iGaming was in existence for several years prior to the repeal and people were familiar with gambling online.
GROWTH IS SUSTAINABLE AND THAT IS WHY NEW JERSEY REMAINS THE BENCHMARK FOR OTHER STATES TO MEET “That put it in a leading position and since then it has taken full advantage of this head start. This proved hugely beneficial during the COVID-19 pandemic when land-based casinos were forced to close.” Petrilli addressed a market that is ’undoubtedly’ going to be the standard for others to follow, citing longevity as well as ’incredible success’ in terms of adoption and life-time value operators are extracting from players. “The numbers also give confidence that even with new brands entering the market, liquidity continues to grow for all rather than being distributed and weakened for the operators already live,” he commented. “In the past 12 months, the New Jersey online casino market has skyrocketed from a revenue perspective and there are signs this is not solely based on the COVID bump that the industry experienced. Growth is sustainable and that is why New Jersey remains the benchmark for other states to meet.” Following the differing perspectives offered when looking at the influence the pandemic has had on the area’s online uptick, attention turned towards looking at those which are bidding to join the country’s online casino gold rush. While numerous other regions bid to join the legalised ecosystem, what could they learn from New Jersey?
And, alternatively, are there any aspects that they should be looking to avoid? Petrilli argued that it goes back to the age-old question of whether you prefer a large share of a small pie or a small share of a large pie. “The multi-skin model adopted by New Jersey is something that other states are looking at and will likely roll-out when they go online. It allows for much faster market access,
IN NEW JERSEY, IT COULD BE ARGUED THE LOWER TAX RATE IS HELPING TO ACCELERATE GROWTH
more competition, better choice for consumers but also more tax revenue for the state. “Competition fosters innovation and this ultimately helps drive the market forwards with new products, improved user experiences and smart marketing tactics. Other states will undoubtedly want to see this in their borders. “Lawmakers and regulators in other states will also want to weigh up the pros and cons of different tax rates, such as those in New Jersey (15%) and Pennsylvania (54%). “In New Jersey, it could be argued the lower tax rate is helping to accelerate growth which in turn is generating additional taxes for the state. Over taxation can have the opposite effect.”
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Preserving a trend-setter status
Continuing down this avenue, Noble confidently asserts that the lessons which are being learned from the New Jersey model are evidently being utilised and implemented elsewhere. “There are examples of other states using New Jersey’s regulatory framework as the blueprint for theirs and others that are taking a hybrid approach where the regulatory framework is implemented and the technical standards set, with certified independent testing houses then responsible for ensuring that operators and suppliers meet these requirements. “There are also commercial learnings to be taken from the Garden State. While it seems that markets like Pennsylvania and Michigan have been an overnight success, these states have been able to monitor how New Jersey’s online casino market has played out and use its failures and successes to guide their approach. The impact this has had on the early success of these states should not be underestimated.” Despite the pace being set in New Jersey, the chasing pack are certainly
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not resting on their laurels after entering the legalised ecosystem, with - at the time of writing - Michigan recently joining the Garden State and Pennsylvania as the only three states to ever produce $100 million in iGaming revenue over the course of a month. With this in mind, and looking at states that are currently legalised, or are well down the road to being, which could, or will, eventually move on par and beyond those currently leading the way?
UNTIL MORE STATES EMBRACE ONLINE CASINO, NEW JERSEY, PENNSYLVANIA, MICHIGAN, ETC WILL CONTINUE TO LEAD THE WAY “Taking a glimpse at the success of New Jersey it would be reasonable to assume that in order to emulate its achievements, an iGaming market requires a good size population, a reasonably high GDP and a sensible tax rate on GGR,” said Noble.
“However, shortly after Pennsylvania went live, the tax rate assumption was dispelled and similarly in Michigan regarding GDP. “Given the fact there are only two live iGaming markets that are in the top 12 for the population of US states, it is almost certain (regulation pending) that many of these larger states will be on par and/or overtake the existing live markets by a long way in the coming years.” Petrilli echoed the sentiments of his fellow interviewee, suggesting that the ultimate size and success of a market will come down to its total population and the regulations that are put in place. “Obviously, if a state the size of New York regulates online casino it is going to be a massive market,” he concluded. “But the issue right now is the slowness of new markets coming online – many states are focused on sports betting but are ignoring online casino. Until more states embrace online casino, New Jersey, Pennsylvania, Michigan, etc will continue to lead the way.“ •
Class of 2021
CASINO & iGAMING
BY MARTYN ELLIOTT
I
t’s only 6:30am, but DraftKings’ Director of Race & Sportsbook Operations, Johnny Avello, is full of energy, despite already having been at work for an hour. During that time he has recorded a show for VSiN, the DraftKingsowned sports betting broadcasting network. The appearance is perhaps an appropriate way to encapsulate Avello’s long and storied career, as it bestrides both his standing as one of the big personalities of the Vegas sportsbook world and his role at the vanguard of the mobile betting revolution in the US. But a national reputation, a senior job with one of the world’s fastest-growing gambling brands, and induction to the Sports Betting Hall of Fame would have seemed an unlikely outcome to the young Avello, as he learned how to deal table games at a New York management school in the late 1970s.
IT WOULD BE FIVE YEARS BEFORE HE GOT A BREAK INTO THE WORLD OF RACE AND SPORTS
SPORTS BETTING HALL OF FAME: JOHNNY AVELLO FROM DEALING DICE to the DraftKings boardroom, Johnny Avello reflects on his career and how legal mobile sports betting took off in the US
On finding that New Jersey’s casinos were unwilling to employ anyone who’d trained in New York, he headed to Las Vegas in January 1979 for a job dealing dice for $12 a day plus tips. It would be five years before he got a break into the world of race and sports by securing a role as a ticket writer at the Las Vegas Hilton. There would be no looking back. A move to Bally’s as an oddsmaker followed and, in 1995, he stepped up to Director of Race & Sports Operations, before moving to the same role at Wynn Las Vegas in 2005 and becoming one of the best-known bookmakers on The Strip. Fast forward to 2018 and there was to be a twist in the tale of Avello’s career. “At the time I was thinking about retiring and doing some outside consultancy work,” he recalled. “But one of the owners at DraftKings, Matt Kalish, over three or four conversations convinced me that DraftKings was the place to be.”
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Class of 2021
Three years on and the move still feels like the right decision. Avello joined DraftKings just two months after it launched its first mobile sportsbook in New Jersey, and it has since enjoyed substantial growth as new regulated markets opened up across the US. “I came on board on 1 October, 2018 and there were only four Vegas staff at the time. Now the Vegas staff is over 400 and projected to be over 1,000, so we've come a long way,” he said. While DraftKings represented a major change in business culture and
operational practices, the idea of mobile betting apps was not entirely new to Avello. He had been a relatively early adopter of mobile technology when he was involved in the launch of the Wynn Las Vegas Race & Sports Book app in 2016. “Wynn caters to a very high-end clientele, but we also had a lot of locals that wanted to bet with us because we put up the first line on football and a lot of other sports. And, you know, we did things a little bit differently at Wynn. We didn’t follow the market, when we put up our own odds, we kind of stayed with our numbers. We thought that local
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BACK AT THAT TIME, I NEVER BELIEVED THAT SPORTS WAGERING WOULD BECOME LEGAL OUTSIDE OF NEVADA. I’M GLAD I WAS WRONG business was business we needed to pick up,” explained Avello. “The other reason for doing it was that on big days, like the NCAA tournament or the Super Bowl, the place was super crowded. We thought the app would be an easier way for
WE DID THINGS A LITTLE BIT DIFFERENTLY AT WYNN. WE DIDN’T FOLLOW THE MARKET the customer to be able to bet without having to come to the counter. They could be at the restaurant or in the spa and still be able to bet. “Mobile wagering was still difficult for the player, because they had to come to the property to fill out the paperwork to open an account, add or withdraw funds. But once they had downloaded the app, it was a little
bit easier for customers because they could bet from the comfort of their home or anywhere within the Nevada boundaries, as long as they had their account funded. That worked well for us.” One thing Avello did not foresee at that point was how legal mobile sports betting would take off in the US. “To be honest with you, back at that time, I never believed that sports wagering would become legal outside of Nevada. I thought it would be a real struggle for anybody to be able to get that adopted, but I was wrong. And I'm glad I was wrong,” he reflected. “Nevada had a stranglehold on this for forever, so if you wanted to make a sports bet, you either had to come to Nevada or you had to bet offshore. The great part about it now is that we've taken a lot of the money that's been leaving the country and going to illegal bookies. We’re now keeping it here and some of the states are benefiting from the taxes.” Avello certainly seems to be enjoying the new post-PASPA freedoms and his role at DraftKings, even though his work life is very different to the Vegas casino sportsbook set-up that he was so familiar with. “The volume for us is so big. When you have a standalone property in Las Vegas like Wynn, you only have a certain amount of volume and you have some big players, and those big players could make or break your day. But with DraftKings we have so much volume being in 15 different states,” he said. “Our expansive offering takes a large staff. DraftKings now has over 3,000 employees, and the trading team between the US and overseas is around 300 people.” Not that Avello is predicting that the competition from out-of-state mobile betting operators will cause the imminent demise of the big personality bookmakers at the Vegas sportsbooks he loves. “Well, some of the personalities are still around, people like Jimmy Vaccaro. They’re still doing business the way they've always done it and they're still very successful,” he said. The freedom to offer odds on a greater number of non-mainstream
CASINO & iGAMING
markets is now allowing Avello to build on his reputation as a pioneer of entertainment betting. “I love entertainment, first of all, and I love to make entertainment odds. I made odds on this Survivor show back in 2000. It was really a popular show and I think that was the first time any reality show odds were ever made. This guy from TV Guide loved them and he wrote an article about it in the magazine, and the idea became real popular. I was on The Today show talking about the odds for the final four, predicting who would win it. “That's kind of when those types of odds started in reality shows. But through the years I've done the Tonys, the Emmys, Dancing With The Stars, the Hot Dog Eating Contest - I was the first to do that and we take bets on that now at DraftKings.” He continued: “I would get calls from Us magazine. They would ask me to
I'M LEARNING FROM THEM. I'M TOTALLY WIDE OPEN TO STILL LEARNING
make odds on a dating couple and the chances of them getting married, or a couple that just got married, what are the odds that it’ll last two and a half years. Rolling Stone magazine used to call me every year wanting to know what the Grammy odds were for certain categories. So I've been doing that for many, many years and have just absolutely enjoyed it.” One other great passion for Avello is Oscars odds, something that he picked up from Lenny Del Genio 25 years ago. He has talked a lot about them over the years, but has only been allowed to fully bring them to life since joining DraftKings. “I've been doing Oscars odds since 1995, but never took a bet on them. In Nevada we were never able to get it approved to take a bet, so I was doing it just for entertainment purposes. Now at DraftKings, I'm able to take actual bets on the Oscars,” he said. “They’re coming up again soon and we will be putting up odds on all 24 categories. And we will be taking bets in various states. So I'm looking forward to doing that again.”
I LOVE ENTERTAINMENT, FIRST OF ALL, AND I LOVE TO MAKE ENTERTAINMENT ODDS It’s unlikely that 2022 will be the last Academy Awards that Avello makes odds for. He remains eager for more new experiences and new records (he took his largest ever bet this year - a cool $3.4 million on Tampa Bay Buccaneers to win the Super Bowl), and enthused about the prospect of the new types of wagering and innovative technology that he knows will come into the industry. Those thoughts of retirement from three years ago are now banished. “I'm adaptable to change. The great part about DraftKings is I come on board and bring my years of experience to the company, but the company also has a lot of younger people who have good ideas and I'm learning from them. I'm totally wide open to still learning. My ways aren't always the best ways to do things now, so we learn from each other.” •
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Eliminating human error
AURUM SOLUTIONS: WHY AUTOMATION IS KEY TO DRIVING GROWTH VASCO VAZ RODRIGUES, Marketing & Communications Manager at Aurum Solutions, and TIAGO VEIGA, UK &
International Sales lead, walk us through the role of automation in payment reconciliations BY ERIN GALLAGHER
A
utomated payment reconciliations can help remove human error and mitigate key-person risk something which Vasco Vaz Rodrigues and Tiago Veiga believe is key as more countries begin to embrace online gaming. Speaking to SBC Leaders, Rodrigues and Veiga shed some light on Aurum Solutions’ plans for 2022 before highlighting the growing opportunities - and some of the challenges - present in the burgeoning US market. SBC: Can you tell us a little bit about Aurum Solutions? R&V: Aurum Solutions is a software provider. We're working with a number of different industries, including fintechs, banking, and obviously the gaming sector. We provide reconciliation software to help companies manage all their payment methods and their current money regulations. SBC: How has Aurum Solutions tailored its solutions to meet the needs of the gaming industry? R&V: The growth in online gaming has led to increasingly complex regulations around client money segregation. Effective compliance requires accurate reporting and a strong audit trail. Customers worldwide expect a choice of payment options. This leads to vast volumes of transactions – often in varying currencies – through channels with different fees; if you reconcile several brands under one organisation,
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the complexity increases. Our solution automates end-to-end reconciliations, whether you are a new operator or an industry leader. We can automatically import data from multiple PSPs, payment gateways, aggregators, and gaming platforms. Our platform checks fees at a transactional level and converts currencies before running rapid reconciliations. Three-way reconciliation takes the process to the next level, so that you receive an accurate daily snapshot of your finances. This enables you to confidently comply with regulations thanks to a well-defined audit trail. SBC: How can automating reconciliations help ‘improve accuracy and compliance’? R&V: Automation is key to eliminating human error and mitigating keyperson risk. When it comes to data matching, a robust and fully audited
reconciliation platform can more efficiently find mistakes and compare high volumes of data. Finance teams can then spend their time investigating real exceptions, identifying and preventing fraud, therefore optimising compliance. SBC: What would you say are the main issues facing gaming operators when it comes to payments and reconciliations? R&V: It’s quite a well known issue across the industry - the more that these different iGaming companies expand, the more payment methods they have to offer across their different platforms. At the end of the day, there's not much difference between a gaming operator and the bank or a finance company; they all handle large volumes of money. Gaming operators need to make sure it's handled correctly because there is a lot of pressure from regulators. That's what we have to do - we help them control their payment offering. SBC: And how does globalisation affect this? R&V: Ultimately, globalisation means that the industry is growing. There
CASINO & iGAMING
are more markets opening up to regulation, and more companies are targeting these new jurisdictions as they look to expand their businesses into new parts of the world. All of this means more challenges, more payment methods, more integrations and more of a focus on security. We have to make sure that if we are operating in all of these new markets, all the money is where it should be and that our clients' money is safe. With a platform like ours, we try to make everything easier, and that our solutions are integrated and accessible from a single source. SBC: With the US opening up rapidly, how do you plan to bring Aurum’s products and technologies to market? R&V: Next year our company goal is to significantly increase our market share in the US iGaming market. We are already the number one reconciliation solution provider in Europe. We therefore know and understand the needs of global operators in this market and are working to bring our expertise and best practice to the other side of the Atlantic.
THE KEY CHALLENGES IN PAYMENTS WITHIN THE US OR ANY OTHER PART OF THE WORLD, ARE REGULATION, AVAILABILITY, AND COST improve and open the market with more operator friendly legislations, we are now finding a financial industry adjusting and starting to offer local solutions that satisfy the operator’s needs. With more Fintech solutions appearing, pricing will become more competitive, and gateways will have a very big part to play there. With our 17 years of experience in the industry, we are here to support operators with their complex
payments ecosystems. We provide a single platform to reconcile, control and audit all payment solutions and gaming platforms. SBC: What can we expect from Aurum Solutions in 2022? R&V: Technology is at the heart of what we do. As a long-standing company in this industry, our clients and new partners can expect the same level of service, innovation, and support. With technology evolving, so will our product, offering more and better solutions to satisfy every requirement. Considering our exponential growth in 2021, we are working to conquer our outstanding results by increasing our presence in the US and across the globe. •
SBC: In your opinion, what are the key challenges facing US operators in terms of payments? And how can these issues be resolved? R&V: The key challenges in payments within the US or any other part of the world, are regulation, availability, and cost. As we are seeing regulators
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A future powerhouse
US: THE LAND OF THE REELS AND THE HOME OF ONLINE CASINO? VARIOUS STATES ACROSS THE US have embraced
online gambling in the last 12 months, allowing players to experience iGaming from the comfort of their own homes BY JAMES ROSS
A
s it currently stands, Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia all permit online gambling in some form or another. Meanwhile, the industry as a whole has experienced an influx in iGaming developers and operators entering each state. So as the market begins to open up even further, are we seeing the beginning of the future powerhouse of online gambling? One supplier that has ventured to
Victor Araneda, Gaming1 Chief Business Officer
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the land of opportunity is Gaming1 with its Chief Business Officer, Victor Araneda, predicting that we will see a ‘real surge in popularity’ in the near future for the US online sector. He noted: “There’s plenty being said about the revenue projections for sports betting, which are indeed breaking records. But as more states approve enabling legislation for online casino, I believe we’re going to see a real surge in popularity, just like we’ve seen recently with Michigan’s excellent start. “States with regulatory frameworks that fully embrace the strength of the casino vertical will offer the highest potential upside in terms of shareholder value, as well as customer experience.
AS MORE STATES APPROVE LEGISLATION FOR ONLINE CASINO, I BELIEVE WE’RE GOING TO SEE A REAL SURGE IN POPULARITY
Henry McLean, 4ThePlayer’s Co-Founder and Commercial and Marketing Director
“After all, the US legacy for casinos on the land-based side is legendary, and I believe that as players discover the excellent entertainment that online casinos have to offer, we’ll see a new dawn for digital gaming stateside.” Another company which has recently taken the leap into the US is UKbased supplier 4ThePlayer, following its alliance with Gaming Realms to integrate its content into the latter’s platform for distribution across North America. Highlighting the advantages of stateside expansion, 4ThePlayer’s Co-Founder and Commercial and Marketing Director, Henry McLean, hailed the country’s ‘untapped online potential’, and claimed it will become ‘the biggest new market we will see for many years’. “The advantage to being in this market early is that we won’t be up against as many other content suppliers as in other markets - you have to go through the process of obtaining a licence, so the barrier to
Vladimir Malakchi, CCO at Evoplay
CASINO & iGAMING
entry is high,” McLean expressed. “At 4ThePlayer.com, we made the decision to apply for licences in all the appropriate states simultaneously to maximise the opportunity and hopefully get into multiple states much faster. “An advantage we have is that our founding team has a lot of experience in gaming and we know what players want online. The online space is very different to retail/offline, which I think the US market knows and has driven the digital M&A drive. We appreciate the American market is different to the markets we have been in, but we can bring a lot of our learnings and decades of online/digital experience into the market.” Whilst the US is seen as the promised land within iGaming by some, for others - such as Evoplay - the online gambling market is ‘not limited to the United States’ with many regions around the globe ‘worth keeping in mind and focusing on’. Whilst noting it would be ‘unwise’ to say the US market ‘shouldn’t be a priority’, and pinpointing its $2.3 billion in revenue for the first two quarters of 2021, Vladimir Malakchi, CCO at Evoplay, accepted that the US ‘holds a wealth of opportunity and is no doubt
going to be a gold rush for years to come’. For Evoplay, he noted that the company is currently ‘taking its time and evaluating the right opportunities carefully’. When pressed on what alternative markets have more potential than the US, Malakchi stated: “It depends on what to consider under the potential of the market. If you’re looking at
THERE ARE SEVERAL MARKETS THAT OFFER JUST AS GOOD AN OPPORTUNITY, AND ARE EVEN MORE PROFITABLE THAN THE US the market's volume and potential profitability, then the United States is the undisputed leader. “However, if you’re looking at the market from the business point of view - assessing the cost of entering the market with the money and time spent the licensing process, as well as the inherent risks of what the company receives at the exit - i.e. net profit, there are several markets that offer just as good an opportunity, and in some respects even more profitable
than the United States. “Where else is looking key for us? We are talking about Italy, Germany, and the UK, which in their current state offer a reasonable market size and, at the same time, a pleasant ‘cost’ of functioning in the market. “Moreover, with the current GGR of online gambling, which stands at £1.22 billion in Italy, £5.7 billion in the UK, and £3.3 billion to be achieved in 2024 in Germany, there is much to achieve outside the US.” Echoing Malakchi’s views on alternative market opportunities aside from the US, Andreas Koeberl, CEO at BetGames, revealed that due to the company’s recent ‘biggest transformation ever’ - along with US players being ‘highly demanding’ the decision to enter the post-PASPA market in will only occur when ‘we can really make our mark’. Instead, Koeberl noted that BetGames sees plenty of opportunity in alternative markets, such as the UK and Canada which offer ‘a wealth of opportunity’ for products like live dealer and lottery. Moreover, the CEO stated that due to its historically strong presence in South Africa, it would keep a ‘strong focus’ on the entire African continent -
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A future powerhouse
an area which Koeberl believes shows ‘more and more momentum outside South Africa’. He added: “We all know the hype surrounding the US, but I believe it is a case of right place and right time, and for this moment – we’ll continue to capitalise on the locations where we’re already hugely well known with our players.”
IT’S ALL ABOUT TIMING AND UNDERSTANDING HOW BEST TO GET INTO THE MARKET Arcangelo Lonoce, Head of Business Development at Habanero, explained that through experience the company knows ‘that land-based doesn’t necessarily translate to online’ resulting in the US providing a ‘blank canvas’ to shape player preference. But what is making Habanero hesitant about entering the US market? For Lonoce, it’s not necessarily a case of holding back, joking that ‘just as one can say about Italy - Rome wasn’t built in a day!’ He concluded: “The US requires
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Andreas Koeberl, CEO at BetGames
Arcangelo Lonoce, Head of Business Development at Habanero
due-diligence and careful research – as well as constant evaluation of data and analytics to make sure your entrance can be perfect. If there’s one thing we’ve learned from Europe and Latin America, it’s all about timing and understanding how best to get
into the market. “Multi-state frameworks means that licensing processes across such territories take time, and we’re carefully evaluating a number of opportunities at this moment to decide the best way to make our entrance.” •
Is online the future?
CASINO & iGAMING
digital transformation in South and Latin American gaming. Only three years ago, most landbased operators were sceptical about going online. Now they are adopting a multi-channel approach in droves, using online to become attractive to new audiences.
WE ARE JUST AT THE BEGINNING OF THE DIGITAL TRANSFORMATION IN SOUTH AND LATIN AMERICAN GAMING
LATIN AMERICA: RIDING A WAVE OF DIGITAL TRANSFORMATION THE REGION HAS CAPTURED the attention of many across
the betting industry, but what lies ahead for Latin America as more players begin to embrace mobile gaming? BY MOLLIE CHAPMAN
N
ot to state the obvious, but mobile gaming and online betting has witnessed explosive growth in the last few years; spearheaded by improvements in technology, increasing accessibility to handheld devices and the introduction of favourable gambling legislation. LatAm has been no exception to this trend. But is the shift towards online betting all it’s cracked up to be? In a
roundtable discussion for SBC Leaders, we quizzed industry luminaries about Latin America’s regulatory landscape, the scepticism associated with shifting towards online and how digital marketing is essential to success in the region. SBC: How essential is digital marketing when it comes to reaching new players across LatAm? Dmitry Starostenkov, Chief Executive Officer, EvenBet Gaming: I’m sure that we are just at the beginning of the
With extremely high mobile internet access penetration, a huge proportion of players would rarely go to a retail shop but are ready to spend hours playing on their smartphones. These players are the future. Andrea Rossi, Commercial Director, Betsson Group: I do believe that digital is the way forward. As an effect of the pandemic, we have seen a number of land-based operators moving to the digital world and the way forward for them seems to be omnichannel – so whilst they still keep their brick-and-mortar presence, they will also focus on growing their online business. This can also open some M&A opportunities as retail operators will be on the lookout for online operators who can support their online operations through their know-how and experience. I think digital marketing was predominantly used by online operators. However, now that land-based casinos started moving to the online space, they’ll slowly but surely kick-off their digital marketing activities too so one shall expect an increase in digital marketing activity. Mario Benito, Chief Commercial Officer, R. Franco Digital: It is clear that for these sectors to succeed in the future, digital marketing has to be a primary action and a central pillar of their strategy. The way that people all over the world consume media has changed forever and millions will
THE WAY FORWARD SEEMS TO BE OMNICHANNEL
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Is online the future?
now never encounter traditional TV advertising again, for example. Following the old traditional ways of marketing is a recipe for obsolescence when relatively new channels such as Twitch and YouTube enjoy such widespread popularity.
FOLLOWING THE OLD TRADITIONAL WAYS OF MARKETING IS A RECIPE FOR OBSOLESCENCE For casino suppliers, while a great deal of care should be taken over the selection of appropriate partners, this is no time for hesitancy. Streamers and influencers on new media channels attract huge audiences and cannot be ignored in favour of campaigns in traditional media. SBC: Has the pandemic presented new opportunities for people to learn about, and embrace, online gambling? Mario Benito: The market in LatAm is currently booming and shows no sign of slowing down. The pandemic has given many people the opportunity to learn about online gambling – not least the many operators in the region who have moved into the digital world for the first time. At this stage of the COVID pandemic, we have reached the point where governments in many countries are looking at new ways to bring in tax revenues and that can only be beneficial to those who wish to see an increase in the number of regulated markets. We are already seeing a widespread increase in online activity and revenues across LatAm and along with the rest of the industry, await development in Brazil in particular with great interest. Andrea Rossi: Along with the US, LatAm is by far one of the most dynamic regions when it comes to online gaming. We’re seeing a lot of things happening in terms of regulation. In Argentina, for example, after regulation in the Province of Buenos Aires, the City is now about to start issuing licences. Other provinces are also following suit. At Betsson, we have already been granted a licence by
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Andrea Rossi, Commercial Director, Betsson Group
the Province and we’re waiting for a concession by the City. Besides Argentina, we’re also seeing positive developments in other markets. In Colombia, for example, we are seeing the market growing at a very fast pace, and we are seeing an increasing number of international operators coming in. We’re very excited to be part of this market with our brand Colbet.
LATAM IS BY FAR ONE OF THE MOST DYNAMIC REGIONS WHEN IT COMES TO ONLINE GAMING Similarly, we’re seeing growth in Peru (where we have recently added to our brand portfolio with InkaBet) and we’re really excited to launch in Mexico. We are closely following the progress with the regulation of sports betting in Brazil, which can potentially become the biggest regulated market in the world. LatAm has a very strong retail and land-based casino setup. We’re now seeing a marked change in the level of digitalisation in the whole region which was primarily sparked by the pandemic. This led to the online market gaining momentum and
increasing market share. The challenge now is to retain those customers who moved online. Dmitry Starostenkov: The countries where legislative processes started before or during the crisis, including Colombia, Peru and Argentina, will see immense growth in their online sectors. Due to the influx of former retail players, many local operators have received a unique opportunity to grow, diversify their offerings and provide more quality services. Markets are becoming structured and are changing in almost every aspect. Software is becoming more professional in response to this. Payment processing is slowly moving to online and mobile payment systems and KYC procedures are becoming increasingly important. SBC: How do you envisage the market evolving? Andrea Rossi: LatAm has always been a market with a strong penetration of land-based and in the past 18 months we have seen behaviour shifting more to online. Now that things are returning to normal, I expect retail to get back to where it was before. The experience between online and retail is different and those who were more used to the retail
CASINO & iGAMING
Dmitry Starostenkov, Chief Executive Officer, EvenBet Gaming
our end to cement our leadership in the market. And we’re not finished – we’re still very much interested in other opportunities in the region. We believe that the right thing to do is to look for local partners. We know that we have robust technology and solid online gaming know-how,
I THINK THAT THE RETAIL EXPERIENCE IS STILL NOT FULLY REPLICABLE ONLINE
ONE OF THE MOST IMPORTANT FACTORS IS HAVING THE KNOWLEDGE ON THE GROUND OF WHAT OPERATORS AND PLAYERS WANT
Mario Benito, Chief Commercial Officer, R. Franco Digital
environment will probably go back to that. The customer experience is different and despite the tremendous advancements in technology, UX and UI, and other innovations, I still think that the retail experience is still not fully replicable online. It’s simply a
different experience. However, those customers who experienced online and understood how to engage with online gaming might stay online too. As online operators, we have the ability and the responsibility to provide customers with a safer gaming experience. We have developed a multitude of tools and features to control gaming behaviour. We provide self-exclusion tools, spending budget tools, session controls, and much more so in my opinion, the online space offers a more comprehensive suite of tools for customers to play responsibly. As Betsson Group, we keep our focus towards executing our strategy in LatAm and in the past months, we have opened a new LatAm Hub in Bogota, Colombia, from where we will cover regional customer service, operations, finance, HR, and legal functions. Moreover, we acquired Inkabet in Peru, which is a strategic move from
but we need local partners with local expertise who can help us understand the local landscape and customer behaviour better and thus allow us to provide a much more localised offering. We are always on the lookout for more opportunities, and we’re thrilled at the very fast pace that the region is growing. Dmitry Starostenkov: I expect to see further growth in regulated operations, with a steady decrease in black and grey market gambling. The mobile predominance will continue. As for game preference, the main drivers are sports betting and lotteries, but we are sure that online casino and poker will grow. Likely, more global brands will try to set foot in America: operators, vendors and service providers, through both expansion and local partnership deals. Mario Benito: The growth of a market is always a positive sign and much more so when it occurs in the manner of LatAm. As in any growth market, multiple opportunities will arise that the entire sector will have to know how to take advantage of. One of the most important factors here is having the knowledge on the ground of what operators and players want. This will inevitably vary from country to country in a region as large and diverse as LatAm, but one constant remains: players want high-quality products that offer an immersive, enjoyable experience. We are part of the entertainment business and are competing for online attention with the likes of the major streaming services and must continue to give players compelling reasons to play. •
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Getting ahead of the game
MARKETING
XTREMEPUSH: BRINGING IN-PLAY BETS TO THE FORE TOMMY KEARNS SHEDS SOME LIGHT on the opportunities
presented by in-play betting and why a robust customer journey is essential for player engagement
motion when a device is in use or when a specific event has been triggered when half-time starts, for example, or a quarter of the game ends. With in-play betting, live odds are offered and bets are wagered on games already underway,” explained Tommy Kearns, CEO of Xtremepush. In-play betting can be an especially powerful engagement tool, because it helps fans to feel involved in the game - testing out their hunches and gut-feelings as the game progresses. The result, Kearns believes, is a very stimulating customer experience
In-play betting opportunities BY ERIN GALLAGHER
I
n-play betting and real-time engagement are fast becoming critical tools for sports betting leaders in the US. Both are vital for retaining players and growing revenues in an increasingly competitive market. So, what do you need to know about this fast-growing player retention technology and where’s the best place to start?
Firstly, it’s important to understand the difference between in-play betting and real-time engagement. “Real-time campaigns are set in
IT’S IMPORTANT TO UNDERSTAND THE DIFFERENCE BETWEEN IN-PLAY BETTING AND REAL-TIME ENGAGEMENT
Operators can use a number of inplay betting options depending on the game. For NFL and NBA games, for example, most bets are placed at half-time by fans betting that the losing team will make a comeback in the second half. For National Hockey League games, fans typically place bets between periods. For Major League Baseball games, meanwhile, bets are generally placed between innings. “You can send offers out to customers
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Getting ahead of the game
ABOUT XTREMEPUSH Headquartered in Dublin, Ireland, Xtremepush is a worldleading customer engagement, personalisation and data company established in 2014 by CEO Tommy Kearns and CTO Dr Kevin Collins. The company owns its entire technology, end-to-end, supporting a single customer view, and offers deep data capabilities, helping brands to acquire new customers and communicate more effectively with existing ones through automated, real-time, relevant messaging. Xtremepush is scaling globally following a recent $33 million cash raise including equity funding from Grafton Capital, a London-based growth investor in leading European technology companies. Xtremepush opened its US headquarters in New York last December led by Paul Severini, Vice President of Sales for North America. For US queries, please email paul.severini@xtremepush.com
during unscheduled stoppages, such as timeouts, but these typically only last for 30 seconds, so most bets are placed when there is an actual stoppage like half-time, period ends, or inning ends,” Kearns added. “This gives you, the vendor, more than enough time to calculate the odds on a particular market, send them to the player via different channels on or off-platform and take the bet before play resumes.” Major sports in the US are perfectly structured for this kind of in-play betting activity, because they feature regular breaks of predetermined lengths. Sending offers out while the game is in-play can be more challenging. Kearns said: “This makes the betting process more complicated and limits the kinds of markets you can offer. Then you have the discrepancy between the
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real-time ‘on-the-field’ action and the TV coverage viewers are watching.” Real-time data transfer and segmentation capabilities are vital here from a tech point-of-view, because vendors need to be able to pull in live odds and get them out to the right player fast. To do this, they need a rapid and reliable flow of data from multiple sources, enabling instant data-streaming.
“At Xtremepush, we use high-speed data-streaming platforms like Apache Kafka so our clients can deliver the most accurate odds to their players,” Kearns continued. “Our real-time triggers mean you can send messages to players as soon as a particular in-play event occurs.” During an NFL match, for example, a vendor might send messages at halftime or before the 4th quarter, after a
MARKETING
WHY XTREMEPUSH? Xtremepush is the complete multichannel digital engagement platform, empowering brands to deliver personalised messages across email, web browser, mobile app, sms and social messengers. We help online sportsbooks and casinos to deliver exceptional, individually relevant player experiences through real-time, automated messaging. We provide the tools and behavioural insight to nudge players through the acquisition funnel, increase their average bet-spend and bet-frequency, and foster brand loyalty. Our platform is completely modular and combines enterprise-grade analytics with a full suite of campaign and automation tools. We work with a global portfolio of sports betting and gaming clients including Piping Rock, Oregon State Lottery, Penn International Gaming, PlayUp and more in the US. For more, see xtremepush.com
touchdown has been scored or even when a team is on the goal-line. The Xtremepush CEO noted: “You need powerful technology to be able to respond to each of these events immediately. Without the right tech, the opportunity doesn’t exist.”
Dynamic content Dynamic content plays an equally important role, ensuring each message is personalised and relevant to the recipient. This can include real-time odds, match statistics and even details from the player’s CRM profile. “Intelligent segmentation is a priority for Xtremepush,” according to Kearns. “We work with sportsbooks to develop detailed customer segments, based on key attributes like a player’s typical bet-type, spend and frequency. We also help track their preferred engagement channel.” This level of advanced targeting leads to higher engagement rates and better return on investment. A robust player journey will also help users get acclimated to your sports betting app throughout the lifecycle stage. “Let’s say your player is using multiple apps. The app that is consistently speaking to them is going to have the ‘leg up’ when it comes to in-play betting. “After they complete the verification process, your player has to deposit. Then, they can live bet. There are a multitude of variables before a live bet can be placed. Having the kind of lifecycle
automation offered by Xtremepush means you will be ahead of the game when you launch your offering.”
Cross promotion Xtremepush offers a number of engagement tools to help operators cross-promote additional bets relevant to individual players, helping to drive revenues. “Our platform allows you to send
THE PLAYERS MOST LIKELY TO PLACE AN IN-PLAY BET ARE THOSE THAT HAVE ALREADY SHOWN INTEREST IN THE GAME
real-time messages to players currently active on one of your betting platforms,” Kearns shared. “Over time, as you build up more comprehensive player profiles, you can start to get really intelligent with the odds and games you cross-sell to individual players — all the while driving additional revenue.” Another option open to operators is offering in-play betting odds on the next scorer. Kearns concluded: “This is where we see intelligent segmentation and automation really come to the fore, because the success of these campaigns lies in intelligently targeting users instead of blast-messaging. “By segmenting users based on actual bets placed or particular odds viewed, the vendor can make sure the odds you share are relevant to each individual recipient. “This is important because, naturally, the players most likely to place an in-play bet are those that have already shown interest in the game. “You can increase your wallet-share from winning players by targeting customers who are on the crest of a wave following a winning bet, and this can be a nice opportunity to cross-sell your casino games too.” If you are looking to deliver real-time and in-play betting odds and offers to your players then get in touch with Xtremepush today to schedule a platform demo contact Brandon Asgeirson at brandon.asgeirsson@xtremepush.com
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The worlds leading Multi-Channel Experience and Engagement Marketing Platform
Player Engagement & Retention Real-time Delivery Modular Platform Core Solution Intergrations
Going global
LIGA STAVOK: BECOMING THE NHL’S FIRST RUSSIAN SPONSOR CEO YURY KRASOVSKIY dives into the details of Liga
time. Liga Stavok became the NHL's official bookmaker in Russia and the CIS countries, with the deal starting at the beginning of the 2021 season. This oneof-a-kind, three-year deal with a Russian betting company is the first of its kind in NHL and North American sports history.
YK: We have an integral metric system that covers fundamental metrics such as enhancing the NHL’s awareness through the combination with Liga Stavok. We intend to expand it in the future through a variety of events and promotional campaigns. The second metric is, of course, the immediate effect on business. More consumers equals more bets. A rise in TV viewership is the third basic metric. We can influence this in some indirect ways. The overall number of consumers we have in the hockey cluster is the fourth metric.
SBC: What are your expectations from this agreement?
SBC: What benefits will the NHL partnership bring to efforts to
Stavok's historic agreeement with the National Hockey League and why this will help bring the sport ‘into the hearts and minds of the fans’ BY ERIN GALLAGHER
SBC: Can you tell us about the nature of the collaboration between Liga Stavok and the NHL? YK: We have signed an agreement that is unparalleled not just in our industry, but for the entire global sports sponsorship market. The NHL has a Russian sponsor for the first
78 SBC LEADERS • DECEMBER 2021
MARKETING
popularise hockey amongst sports bettors? YK: Ice hockey has already gained widespread popularity among our customers. The activities planned for the Russian-speaking audience as part of the NHL agreement will make watching games more entertaining and exciting. Consequently, they will bring even more attention to world hockey. Currently, Russian and international hockey bets are about 50/50 split. During the regular season, more bets are put on Russian hockey, but once the Stanley Cup begins, the focus shifts to the NHL. Overseas hockey, on the other hand, has one important advantage: there are night-time broadcasts. Indeed, there is no reason to compete with other sports during these hours, as the NHL receives virtually all bets. And with the introduction of our activities, this amount is expected to grow even more. SBC: When the agreement with the NHL was signed, Liga Stavok stated that it would invest significant funds in the development of hockey both in Russia and around the world. Could you elaborate on that? What can we expect? YK: Well, I am not sure I can tell you the exact numbers right now as they are confidential. Let me point out by saying that Liga Stavok has not just sponsored Russian ice hockey for many years, but has taken an active part in fostering its growth and making it increasingly popular. Our goal is to bring hockey back into the minds and hearts of the fans, and we are doing a great job there. We are now part of the global movement and expect amazing things to happen! To do this, we will draw on all of our previous experience and knowledge. It feels so pleasant and honourable to be a stakeholder in this process. The NHL puts its Russian viewership at 9.5 million people; Russian users are among the most active users on social media outside of North America. Our partnership will help the NHL expand more actively its fan pool among Russian-speaking audiences. There are a large number of Russian players in the NHL. No one can deny that some of our biggest names play
there. That is why our collaboration with the NHL is just another way for us to assist Russian hockey. Liga Stavok is always cheering for our players! We support the Russian national team when they compete in World Championships and the Olympics. So now we have the chance to cheer them on as they play for their NHL clubs, where they showcase the greatest level of Russian hockey school, hone their skills, and rejoin the national team as stronger players. There are also plans in the works to encourage Russian children's and youth hockey with the help of our NHL players. Master classes and charity training camps come to mind.
I believe the guys will back them up since they have been through it all and understand how vital it is for a young child to interact with a celebrity. SBC: What methods do you have in mind for reaching NHL fans in Russia with your promotional efforts? YK: Everything has gone digital, and we will, of course, communicate primarily through digital channels, such as our website and social media. We have multiple joint activations planned for hockey fans, including prediction contests, fantasy hockey and more. Plans exist to integrate a full-fledged Liga Betting line on the NHL's website and mobile app.
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Going global
The upcoming season will see for the first time the use of virtual boards for broadcasting to Russia. During the Stanley Cup Playoffs broadcasts they will have Liga Stavok advertising on them. In addition, the company will be able to combine club emblems and official NHL symbols in its creative and promotional activities. A colourful, lively image is vital for today's viewers, with tie-ins, highlights, graphics, and anything else that mixes sports and visual components. In this regard, the NHL performs at an exceptionally high level. This type of content will appeal to Russian viewers. Besides, we intend to develop a lot of high-quality materials about Russians in the NHL, including behind-
THIS IS A HUGE RESPONSIBILITY FOR US – TO EXPAND OUR INVOLVEMENT IN THE DEVELOPMENT OF HOCKEY AT A GLOBAL LEVEL the-scenes and off-ice information. It should be a very interesting and educational experience! SBC: How will this help foster the Liga Stavok brand's on the global scale? YK: Going global is part of Liga Stavok's business strategy. We have already taken the first step by becoming a five-year sponsor of the World Hockey Championship this
season. As a team we started working together in May in Riga, where the FIFA World Cup 2021 was a huge success despite all the existing restrictions. I would like to mention that Liga Stavok is also collaborating with one of the NHL's brightest and most promising players. Kirill Kaprizov was appointed as our ambassador this year. The NHL agreement is another historic milestone in this regard to indicate that we will keep doing what we are doing. We are thankful to our partners for recognition of our business potential and reputation as Russia's leading sports bookmaker. This is a huge responsibility for us – to expand our involvement in the development of hockey at a global level. •
191
13
12
32
20
670
191
160
million National Hockey League fans in Russia
million unique visitors to the Russianlanguage NHL website
million viewers watching NHL games for the 2021 season.
teams playing in the NHL
countries are represented by players of NHL teams 2021/22
million fans watching NHL games on arenas, on national TV and radio
million fans to connect to the online broadcasts on the NHL's official website
countries broadcast NHL games
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Regulatory fallout
MARKETING
ESSENTIAL PREPARATION FOR STAKEHOLDERS: THE IMPACTS OF A GAMBLING SHIRT BAN WITH TALKS OF BANNING GAMBLING COMPANIES
from Premier League football shirts, operators are becoming increasingly aware of the repercussions that look certain to follow the current 2005 Gambling Act review BY JESSIE SALE
A
s speculation shifts to inevitability, experts claim that stakeholders should be prepared for a ‘probable change’ when it comes to gambling sponsorships. It has also been reported that pitchside and television advertising is also under consideration. Dean Akinjobi, CEO of Football Media, and Imogen Moss, a Solicitor and gambling regulation expert at Poppleston Allen, shared their views on the implications surrounding the upcoming changes of the future of these companies. Beginning discussions, Akinjobi remarked that betting businesses should have been preparing for this scenario ‘years ago’, as part of their sponsorship contingency plans. He argued that regardless of the timing of the impending judgment, prudent actions should be taking place within gambling companies and football clubs, with such a ‘key decision on horizon’ that could have an impact on two major industries. For a survival of business, Akinjobi stated: “Stakeholders within football
clubs should be exploring other category sponsorship opportunities, whilst also working with existing
STAKEHOLDERS WITHIN FOOTBALL CLUBS SHOULD BE EXPLORING OTHER SPONSORSHIP OPPORTUNITIES
gambling sponsors on partnership strategies that will enable them to reach audiences in new and emerging markets, using marketing and advertising assets outside of the UK.” Given that many clubs will be looking to fill the financial void left by these sponsorship deals, and taking into account the growing number of teams releasing fan tokens on cryptocurrency sites, this may produce
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a possible influx of financial and crypto trading sponsors - many of which are not subject to regulation. Akinjobi sees crypto as one of the biggest opportunities for football due to a global adoption which, along with the growth of non-fungible tokens (NFT's), creates a ‘very strong stable environment’ for these companies to expand their marketing into club sponsorships, to increase and develop market share.
Dean Akinjobi, CEO of Football Media
IT IS THE PERFECT TARGET MARKET FOR THE TRAVEL AND TOURISM INDUSTRY TO USE FOOTBALL SHIRT SPONSORSHIPS Additionally, he highlighted ‘travel and tourism’ as a potential key territory, adding: “Now that we are seeing world travel open up postCOVID, there are millions of people around the world, often with excess cash who are desperate to travel abroad due to 18 months of global travel restrictions. This creates the perfect target market for the travel and tourism industry to use global football shirt sponsorships as a compelling marketing channel at this moment in time.” Moss, however, stated that any of these non–gambling company sponsors would need to act in accordance with any relevant codes of practice issued by the ASA and comply with their own industry advertising codes where relevant. This, she added, may not be as strict as those measures in place for the gambling industry. She underlined the issue that a ban on gambling shirt sponsorships will not be the solution to reducing the exposure of younger people from such advertising, claiming that this will always be a ‘work in progress’. This extends to a ‘wider sphere’ outside of just football shirt sponsors, and there are different approaches needed by different areas of the gambling industry, both online and land-based. Moss added: “It’s important to note that there are already strict rules regarding advertising and marketing that apply to the gambling business that include making sure
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that advertisements and marketing material are not of particular appeal to children or young people, such as being associated with youth culture, particularly if the advert/marketing is freely accessible. “So, imagery using certain colours and cartoons are not permitted, for example, and this also applies to
NEW COMMERCIAL BETTING DEALS WOULD RESULT IN A SCALED DOWN VERSION OF CURRENT GLOBAL BETTING SPONSORSHIP REVENUE sponsorships. Responsible gambling groups have raised concerns regarding under 18’s exposure to ambient gambling via general advertising and marketing campaigns and how this is controlled.” In March 2021, English Football League (EFL) Chairman Rick Parry argued against a blanket ban on gambling sponsorships. Given the difficult year that sports had
in 2020/21, concerns have arisen regarding damages to clubs following the potential ban, with an estimated £1.6 billion of revenue already lost due to COVID. Akinjobi explained that the English Football League’s deal with Sky Bet is estimated to be worth £40 million per year, which is why we can understand chairman Rick Parry's concerns. However, with the potential impending ruling having been on the horizon for a long time, he suggests that clubs and governing bodies should have contingency plans in place around gambling sponsorships. “This includes exploring other sponsorship categories, through to working on strategies with existing betting sponsors on how they can help them to reach audiences using clubs' channels that are targeted to emerging betting markets, such as Africa, India, LatAm and the US. “These types of new commercial betting deals would result in a scaled down version of current global betting
MARKETING
OTHERS ARGUE THAT GAMBLING COMPANIES ALREADY PROVIDE SIGNIFICANT REVENUE TO FOOTBALL AND A MANDATORY LEVY WOULD BE A TAX ON THE GAMBLING INDUSTRY
Imogen Moss, a Solicitor and gambling regulation expert at Poppleston Allen
sponsorship revenue, due to potential regulations in the UK, but would also enable clubs to retain relationships and revenues from long term betting partners in some way or form going forward.” With this in mind, the Gambling Act 2005 Terms of Reference and Call for Evidence - published on 8 December 2020 - highlights that the government is “seeking evidence on the positive and negative outcomes” of the relationship between sports and gambling “to make sure we can strike an appropriate balance in developing policy”.
advertising, and Akinjobi explained that ”If betting companies are genuinely serious about CSR, and the causes that their business and or employees are passionate about supporting, then CSR should be looked at in isolation rather than as part of a wider commercial sponsorship or advertising deal”.
CSR SHOULD BE LOOKED AT IN ISOLATION RATHER THAN AS PART OF A WIDER COMMERCIAL SPONSORSHIP OR ADVERTISING DEAL
Moss remains optimistic that a balanced approach can be achieved, commenting: “There are many types of gambling advertising and a blanket approach by the Government would seem out of balance with the issues that they have highlighted, also any decisions made would need to have their foundations in robust evidence.” This gives hope of a continuing CSR relationship with football clubs irrespective of sponsorship or
In giving examples of where betting companies can and are helping local and international communities, the CEO explained that from homelessness and mental health, to grassroots and education there are ways in which these companies can be implemented whilst avoiding being very brand or advertising-focused. “The focus has been around supporting these causes in ways that
make a difference, first and foremost, be that financially or operationally, which is where the real value of CSR is, as the actual causes themselves, when individually observed, can have a major impact regardless of a sponsorship or advertising relationship,” he remarked. Moss agreed that this would ultimately depend on what the government decides, which may only be limited to direct sponsorship and potential marketing campaigns. She claimed: “There are large gambling groups that provide help to fund grassroots football for example, which is of huge importance to the game. “There has been commentary about the prospect of introducing a gambling levy in order to fund grassroots football, but this has been met with a lot of criticism, with some suggesting this would make the links between gambling and football too close. “Others argue that gambling companies already provide significant revenue to the game and a mandatory levy would be a tax on the gambling industry.” One area of the review less touched upon is match day betting, and the effects that the ban will have on betting within the ground. Akinjobi expects that this will experience a ‘major change’, and claims betting companies will have to become more creative and smarter about how they reach customers in and around grounds. He suggested that this can be done in a number of ways: “Using technology and digital advertising, such as inApp location based messaging and digital advertising across football fans and news sites, targeting audiences within specific locations, using stadium postcodes as a target audience advertising radius.” •
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SPORTS BETTING HALL OF FAME: YOLANDA ACUÑA STARTING OUT IN THE RACE AND SPORTS BOOK at the
Club Cal Neva in Reno, Nevada, Yolanda Acuña has risen through the ranks of the “boys club” to become a leading figure in the Las Vegas betting community. And looking back at her career, it’s clear to see why she has been inducted into the SBC Hall of Fame
BY ERIN GALLAGHER
S
beyond.
peaking to SBC Leaders, Acuña takes us on the journey from her first job in the sector to her roles at The Mirage and
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SBC: First of all, congratulations on your induction into the hall of fame! Can you tell us a little bit about how you first started out in the betting industry? What was it that first attracted you to the sector? YA: So I had an uncle who worked at
the Club Cal Neva in Reno, Nevada, and he told me and my then-husband to move up to Reno. He believed that we’d have a better opportunity for work and raising our kids. I initially had no intention of working, but when we arrived in Reno, our bills were considerably more expensive than I expected! I had to get a job. So I went to my uncle and asked if he had any jobs in the cage - but he thought I’d be bored doing that. He told me that they had just opened a horse room upstairs and that would be a better fit for me. I went upstairs to see what was going on - and I can say now that it was love at first sight. That feeling then lasted for my entire career. I loved what I was doing - experiencing that high of events like the Super Bowl and March Madness. It was unbelievable. Every day was a different day and each brought with it a sense of excitement. There were times when the job was tricky, or something unexpected happened - but that’s the challenge of the job. SBC: What have been some of the standout moments for you in your career?
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YA: The first thing that stands out to me, which has been a constant in my career, is that I have had great mentors who have subsequently become my lifelong friends. That has been truly amazing! I was a part of the opening of the Las Vegas Hilton SuperBook, the first state-of-the-art race and sportsbook of its kind, alongside Art Manteris. He actually hired me over lunch after I was recommended by Chris Andrews! This sportsbook was monumental at the time - so I felt incredibly privileged to be a part of that and grateful to Art Manteris for that opportunity.
EVERY DAY WAS A DIFFERENT DAY AND EACH BROUGHT WITH IT A SENSE OF EXCITEMENT Then, of course, was the opening of the Mirage under Jimmy Vaccaro - who I truly believe is the most generous bookmaker in town as far as treating his employees the best he can. He wasn’t afraid to take some of the biggest bets in the city either. The Mirage changed the landscape on the Las Vegas Strip, and will always be super special to me. The company grew so much during the time I was working there, and alongside the opening of all the sportsbooks at each of the Las Vegas properties, it was an incredibly exciting time. We truly remained a major hub. I was also a part of the Nevada Pari-Mutuel Association which was very rewarding for me. We negotiated contracts for the various racetracks across the US and internationally. I was also privileged enough to go to the Kentucky Derby and many Breeders' Cups and visit some of the most beautiful racetracks in the US. I can’t quite explain just how amazing these experiences were. Another experience I consider to be a high in my career is time under another great leader Robert Walker. I worked closely with Robert, my boss
I HAVE HAD GREAT MENTORS WHO HAVE SUBSEQUENTLY BECOME MY LIFELONG FRIENDS
at The Mirage and other executives and programmers to develop an IVR system to take sports wagers. It was called Tele-Bet, which is quite funny to think about now that we all have such advanced mobile phones. Essentially the system allowed bettors to get a beeper which would enable them to access the system. They could then place their wagers for example, press one to bet on the Las Vegas Golden Knights, two for the Raiders. At the time, it was a great product and advancement. SBC: Why was it so important for you to lobby alongside the Nevada congressional delegation to persuade
THE NEVADA SPORTSBOOKS WERE, AND STILL ARE, THE GOLD STANDARD FOR COMPLIANCE AND REGULATORY STANDARDS the country’s lawmakers not to impose a ban on college sports betting? YA: The Nevada sportsbooks were, and still are, the gold standard for compliance and regulatory standards. Of course, we did not want to lose the revenue it generated, but it was a totally slippery slope if they pushed to ban college sports betting, which was
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something that Washington lobbyists strongly urged. What would have been next? They wanted sportsbooks to ban college sports betting. We obviously had lobbyists in Nevada who were working towards stopping such a ban. I was fortunate to be part of a group who went to Washington DC to present that argument to Senators. We were able to talk them through all the processes and safeguards we had in place. Eventually, the bill died. Something that I feel very privileged to have been involved in was being a part of the book of operators which tipped off regulators about cheating scandals. Looking back at it all, I’m not sure I can really say I was lucky in my career because I worked incredibly hard. I never gave up and worked alongside my colleagues and regulators and prided myself on perfection - to make sure everything was done right. SBC: From your experience, what would be your biggest piece of advice for those looking to start out in the betting industry? YA: What I would say is that if you’re running a brick and mortar venue, my number one piece of advice would be to become a ticket writer so that you can learn what happens on the frontline.
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MARKETING
SOMETHING I HAVEN’T TAKEN FOR GRANTED WAS THAT I WAS ONE OF THE ONLY WOMEN IN THE INDUSTRY wouldn’t make any silly mistakes. That combination of customer service and a knowledge in regulations meant that the sky was the limit. Something I haven’t taken for granted was that I was one of the only women in the industry. Making sure I had that respect from my colleagues and, when I spoke, they listened. That was amazing and I was very fortunate in that respect.
One of the main goals of your books is to offer a standout customer experience - that includes a wide range of betting options, issuing comps, providing amenities for your customers and following the guidelines set out by the gaming regulators. While customer service was incredibly important to me, I also became very fluent in gaming regulations to make sure that we
SBC: And finally, what are your plans for 2022? YA: For 2022, as sports betting becomes more prominent, I will be taking on some consulting clients for various companies and sharing my expertise and knowledge. And of course, I’ll be spending a lot of my time with my children and grandchildren. 2021 was the most devastating year of my life because I lost my daughter to a rare disease, amyloidosis. So these next few months will be spending time with my family and those close to me. •
What’s next for the US?
TRUIST SECURITIES: ASSESSING US MARKET DEVELOPMENTS BARRY JONAS, MANAGING DIRECTOR AT TRUIST SECURITIES, delves into the US market’s evolution and
the underappreciated risks of the post-PASPA market
BY ERIN GALLAGHER
T
he US sports betting industry has boomed in recent years, with operators all over the world looking for a slice of the action as more states begin to open up. In the three years since sports betting was legalised, the market has entered a period of hyper growth
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- something which Barry Jonas, Managing Director at Truist Securities, believes is showing no signs of slowing down. Jonas began by shedding some light on Truist Securities’ role within the gaming industry. He said: “Truist Securities is the investment banking arm of Truist Financial Corporation. Truist was formed in 2019 with the
merger of SunTrust and BB&T. “Today we are the seventh largest commercial bank in the United States. The bank is deeply committed to the gaming industry, having a longstanding relationship lending and advising the wider sector - mostly with a North American focus. “My group focuses almost exclusively on US-listed gaming companies, which aligns with the bank’s current focus. While we provide our clients detailed quantitative and qualitative analysis into the many companies we follow, we also seek to stay on top of worldwide gaming industry trends - drawing on our deep industry rolodex.”
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Having first started out in the gaming space back in 2003, Jonas has become well-versed in the challenges and opportunities that face operators and suppliers. But while many of us are excited to see what the future holds, Jonas disclosed that there are still many risks within the industry which are not appreciated. One of these, he explained, is the consolidation of the market as more companies flood into the US betting space. He highlighted that too many companies could have unintended social responsibility consequences a risk which he considers to be well worth watching.
THERE’S A VIEW THAT FIRST MOVER ADVANTAGE IS EVERYTHING AND THE MARKET WILL SETTLE ON A FEW WINNERS “The market is in hyper growth mode now with little focus on nearterm profitability as companies seek out new customers with strong bonuses. There’s a view that first mover advantage is everything and the market will settle on a few winners with the bulk of market share followed by second tier players fighting for scraps. “I personally think it’s too soon to say how the US will evolve - namely how concentrated market shares will be in the long-run, and how easy and quick it will be for companies to pivot to profitability. There are limited switching costs today and I expect the time to set up a new account on a new app will continue to dwindle, as will any differences between the quality of offerings. “But even if the market will ultimately settle with a limited number of winners - perhaps driven by M&A, a large factor we think some investors don’t fully appreciate is the regulatory oversight seen across gaming on a state-by-state basis. “It’s a unique industry where too much accessibility, too much success can have unintended social consequences which ultimately drives more regulation that can impede market growth. Ultimately gaming is a privilege, not a right.
“While there’s real momentum for sports betting now (and to a lesser extent iGaming), tax revenues that states are currently seeing are less meaningful than many would think. I think the smarter operators understand the dynamics here and are committed to responsible gaming, but it’s a real risk worth watching.” Discussions soon turned towards the current trends that have emerged since the repeal of PASPA and how this has led to an explosion of both sports betting and iGaming. He highlighted a shift in the approach towards sports betting, particularly from land-based operators, as the introduction of legislation has led to “direct profitability” for physical casinos. “Land-based operator views on sports betting have shifted
dramatically since PASPA's repeal,” Jonas shared. “It wasn’t too long ago that CEOs were highlighting the marginal business sports betting did in Nevada, while they thought the benefits of further state legalisation would mostly be a visitation driver to physical casinos. Little if anything was expected for direct profitability.
I PERSONALLY THINK IT’S TOO SOON TO SAY HOW THE US WILL EVOLVE “I think you could trace the shifting view to DraftKings' successful SPAC merger with a valuation multiple not seen in the more mature US gaming industry. This was driven by a new type of investor to the space - the internet/growth investor.
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What’s next for the US?
TAKING OMNICHANNEL ONE STEP FURTHER IS THE BLURRING OF LINES BETWEEN SPORTS MEDIA AND GAMING releasing the same game content across multiple channels and mediums, while some companies are even developing their brands in new, nongaming verticals. “Taking omni-channel one step further is the blurring of lines between sports media and gaming. Several media and gaming companies are working on integrating broadcasting with sports betting and even more broadly defined gamification, from a play-for-fun perspective.”
“At the same time historical barriers from media and leagues shifted to support wagering, with the need for additional revenue sources and consumer safety a catalyst for the wider development of interactive sports betting and gaming.” “Today there’s a widely held view that the market for sports betting and iGaming will be pervasive and meaningful at maturity, while EBITDA margins will be comparable to landbased gaming.” With 28 states now live, and more in the pipeline to legalise in the coming year, we pressed Jonas on his views for what the biggest trends are across the industry to which he highlighted the shift towards cashless gaming, omni-channel and media convergence. “Key themes we see today are ‘cashless gaming’, ‘omnichannel’ and ‘media convergence’ - which are somewhat interrelated,” Jonas replied. “Of course online wagering and gaming are done cashless on your phone, we’re now seeing that concept
KEY THEMES WE SEE TODAY ARE ‘CASHLESS GAMING’, ‘OMNICHANNEL’ AND ‘MEDIA CONVERGENCE’
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in physical casino environments. Much like how you pay for coffee on your mobile wallet, pretty soon you’ll fund slot and table game play through your phone, as well as your meal and spa experience. “The next phase is integrating that wallet between the physical and virtual worlds in one ecosystem. Omnichannel encapsulates this trend, but also has more content split between the physical and virtual world. “B2B players are developing and
By sponsoring the SBC Summit North America in New Jersey, Jonas hopes to gain further understanding into what comes next for the betting and gaming industry. “We’re attracted to the depth of relationships SBC has across the gaming universe. This conference will be one of the first in-person conferences since COVID to have real global participation. “As the US is shaping to take the mantle of the largest interactive gaming market in the world, we think the many perspectives at this conference are invaluable as we seek to better understand what comes next.” •
From stadiums to online
PAYMENTS
BLOCKCHAIN AND NFTS: A NEW ERA OF FAN ENGAGEMENT IN SPORTS CHARGED WITH CHANGING CULTURE in the new digital
age, what does the future hold for NFTs? And how has the latest evolution in blockchain tech become a key part of the fan experience? BY JOE STREETER
T
hroughout the pandemic, the whole fan engagement journey evolved rapidly as empty stadiums and new consumer habits shifted fandom into a new digital space. As alternative forms of fan engagement became thrust into the mainstream, the link between blockchain and sports clubs intensified
and grew to be deeper than just sponsorship deals. Blockchain and digital currency provided a fresh avenue to exalted fan engagement expanding their online audience and maximising their link with a new younger fanbase. At the forefront of this was tokenisation and the rapid expansion of non-fungible tokens, otherwise known as NFTs. As they have become a more
mainstream offering within the sporting sector, clarity has also increased, with it now relatively common knowledge that they are a digital asset that can be owned by a fan or consumer. Marking the next evolution of blockchain technology, NFTs digitally immortalise legendary sporting moments, matches, or even athletes, enabling a new generation of sporting followers to celebrate sporting moments in a modernised way. For supporters, NFTs went from an unknown quantity to an essential affirmation of their loyalty to their club - as Paris Saint Germain, Barcelona, Arsenal and Inter Milan were among an abundance of footballing giants that embraced the new opportunity.
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From stadiums to online
In terms of club collaborations, the Nerazzurri was perhaps the most significant as the platform became the front-of-shirt partner for the Italian champions, in a link that also led to the formation of the Inter fan token. It underlined that clubs embracing NFTs and digital currency partnerships aren’t merely entering into fruitful sponsorships but are enabling their entrance to a whole new sector for fan engagement, ushering their fans into a space that is growing and providing a new space. Following the announcement of the Inter Milan link with Chiliz, the trend was perhaps exemplified by CEO Alexandre Dreyfus, remarking: “This is a special event. It’s the first time in more than a quarter of a century that the name on the front of the club’s shirt has changed. We’re very proud to be taking that privileged space to promote the launch of the $INTER Fan Token. “This announcement is the start of a new era for millions of Inter fans around the world, who will be able to join a thriving digital community on Socios.com, enjoying countless
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opportunities to engage with the team, influence key decisions and be rewarded by the club they love through $INTER Fan Tokens.” Furthermore, the step into tokenisation and the adoption of a new era of fan engagement wasn’t merely taken by clubs, it was also taken by organisations and leagues as
Pet Berisha, Head of Cryptomedia at COPA90
they too navigated a tricky period and adjusted to a new normal. One of the world’s biggest football leagues, the Spanish LaLiga, emphasised through stepping into NFTs that it was ‘ready to embrace a new era of fan engagement’. Furthermore, the slew of major partnerships which show major sporting brands embracing NFTs and blockchain highlight the new digital space is anything but temporary and marks a permanent fixture in merchandising, the matchday experience and generally how fans interact with the club they love. In a recent interview with PaymentExpert, Pet Berisha, the new Head of Cryptomedia at COPA90, detailed his insight on how he thinks tokenisation will change the football world and bring a new audience to souvenirs. “There’s going to be a lot of loyalty features. I wouldn’t be surprised if in two or three years time from a club card and loyalty card perspective NFTs disrupt that, and how is that going to look from a footballing perspective? “There are a few interesting models
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around ticketing, for example there are a lot of ethereum based projects – this isn’t NFT specific but it could be – where you can have a situation where you sell a ticket for say a 1,000 person event and everyone buys in ethereum, if only 900 people turn up then the money that is made from those 100 people is distributed among the 900 who turned up. “There’s a big incentive to actually turn up because otherwise you don’t get what you pay for, and if other people do turn up there is this community distribution effect, which is quite interesting.” As a leading football media outlet, which has always sought to take a unique angle to coverage, he added his aim to immerse COPA90 in the new wave of digital sports engagement - becoming a ‘centrifugal point for what is going to be a very different future digital word that is going to encompass football’.
since we were humans 30,000 years ago is the ability to create culture, whether that is through art, music or through collecting stones. We are taking all that primal instinct to want to collect and create culture and taking it online and making it digital. “Now, blockchain technology is being used to allow that and to enable the ownership of digital assets. Looking at where NFTs can go and what they can do, the most interesting thing I think
Sorare was recently pushed to detail its status as a non-gambling product, following the UK Gambling Commission stating it was evaluating the company’s fantasy football game and digital collectables platform with regards to whether the business was required to maintain a licence. Nonetheless, the firm emphasised its position as a digital collectables offering, further thrusting it into a fan engagement market.
WE ARE TAKING ALL THAT PRIMAL INSTINCT TO WANT TO COLLECT AND CREATE CULTURE AND TAKING IT ONLINE AND MAKING IT DIGITAL
Although its growth has been rapid, Berisha pointed out that it’s still in its relative infancy, and how the evolved digital space which unites sports, blockchain and tokenisation could take a completely different shape to how it is now.
NFTS ARE THE GREATEST DISRUPTOR TO CULTURE WE HAVE SEEN SINCE THE INTERNET As adoption accelerates and the products cement their place within the diet of sports consumption, the future for NFTs is simply fascinating. If the digital products can expand across the full demographic of sports fans they can significantly develop and enlarge the digital presence of sports clubs and organisations - something that has been a foremost priority for football clubs in modern times. Berisha commented: “I like to look at the bigger picture. The way I like to think about NFTs is what bitcoin did to finance and the way people think about money, NFTs are going to do to everything else - they are the greatest disruptor to culture we have seen since the internet and they are like a new form of social communication. “The one thing we have kept with us
is when we start to see interoperable things happen - so where you have a game where you mint NFTs on and use them on another, whether that’s owning a Ronaldo on PES and using him on FIFA and then being able to maybe use that asset to go to a game for example.” Furthermore, the regulatory framework that encompasses NFTs will also adapt to their rapid growth, especially as they become more deeply intertwined with fantasy football and esports.
The group stated: “We are very confident Sorare does not offer any forms of regulated gambling. This has been confirmed by expert legal opinions at every stage since the company was founded, including during a number of fundraising rounds. “We will always engage and have an open dialogue with authorities who reach out to us to learn more about our game. We believe this is the responsible way to grow our game and community globally.” •
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Stronger than before
HOW THE LOTTERY INDUSTRY IS BOUNCING BACK FROM COVID-19 COVID-19 HAS CAUSED COUNTLESS ISSUES for several
industries since the majority of the world was plunged into lockdown in March 2020. But how have lotteries bounced back? BY CHARLIE HORNER
T
o this day, the effects of the pandemic can still be felt as both small and big businesses battle almost a year of lost revenue struggling to meet fixed costs. But throughout 2021, many US lotteries are posting record financial results against a backdrop of adverse trading conditions. As Q2 results from lotteries were published, it was becoming clear that the impact of the pandemic was fading away, though many CEOs warned of further disruption to follow in a statement of cautious optimism. Sports betting and iGaming are, undoubtedly, witnessing a meteoric boom in the US marketplace. Nonetheless, it cannot be forgotten that the lottery industry is experiencing a considerable period of growth in a time where many industries globally are struggling to fight back against the pitfall of the pandemic. What techniques has the industry deployed to stem this growth at a time when costs must be managed carefully? Do consumer habits in relation to leisure activities during a time of boredom have an impact on the bottom line of US lotteries balance sheets?
AS Q2 RESULTS FROM LOTTERIES WERE PUBLISHED, IT WAS BECOMING CLEAR THAT THE IMPACT OF THE PANDEMIC WAS FADING AWAY
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Lotteries exist to provide funds to local communities for education, infrastructure and other good causes. In a time when communities have struggled the most since the Second World War, it is essential to examine how lotteries have managed to produce historic levels of growth to support those in need.
Digital growth and participation Modernisation is a key factor in driving the growth of lotteries both during and post the pandemic, given the emphasis on limiting social contact. The need of the industry to move away from paper-based tickets to digital tickets as well as provide
players with digital games on mobile devices has amplified since March 2020, though with the rise of iGaming, it was becoming a necessity regardless of the pandemic. Jackpocket, the online app which allows lottery players from 10 US states to buy lottery tickets, published its ‘state of digital lottery play’ report for Q3 of FY2021 recently. It revealed an increase of 21% in players choosing to play the lottery via digital channels across the 10 US states where it is operational. CEO Peter Sullivan said that it was a sign of things to come as the industry continues to modernise: “As we experience high jackpot moments moving forward, I believe that we can use Q3 2021 as an indicator of what’s to come, with digital lottery growing over 21% since last quarter alone. “Every day, consumers are opting for mobile solutions where they might not have existed previously, like the lottery.” With mobile apps becoming ubiquitous in the gaming industry, it is only befitting that lotteries follow suit. Increasingly, lotteries are successfully implementing ilottery games for users to play on mobile apps and more companies are entering the marketplace to supply the games. NeoPollard Interactive (NPi) has emerged as one of the key players in the ilottery sector and has contributed to the enormous growth of its clients in the past year. The gaming supplier congratulated its partners at the New Hampshire Lottery following its record-breaking growth, catalysed by ilottery sales. Since launching its online lottery offering during FY2019, the Granite State’s lottery has seen its GGR increase by 332%, with NPi praising its trailblazing efforts in ‘establishing the viability of modernising lottery offerings through the ilottery channel’.
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Liz Siver, General Manager of NeoPollard Interactive, commented: “The New Hampshire Lottery has proven to be a leader in the ilottery space since launching its ilottery program in partnership with NPi over three years ago. “We are extremely proud of our successful partnership with the New Hampshire Lottery, and we remain dedicated to delivering cutting edge technology, engaging game content, and value-added support through our Power Suite of ilottery services.” Furthermore, new entrants are penetrating the ilottery market in an attempt to take advantage of the growth seen elsewhere. Inspired recently announced it would be launching an ilottery portfolio, with the first edition being supported by LotoQuebec. “Inspired’s online casino content has proven popular with our customers and we are glad to be their first customer in the ilottery market,” said Anne-Marie Voyer, Director of Lottery Products & Development at LotoQuébec. The Canadian corporation is another
MODERNISATION IS A KEY FACTOR IN DRIVING THE GROWTH OF LOTTERIES BOTH DURING AND AFTER THE PANDEMIC example of a lottery fighting back post-COVID with strong results. The firm’s total revenue for Q1 of FY2021/22 improved by 154.9% year-on-year up to $401.3 million, whilst total net income increased by 404.5% up to $195.7 million. Online lotteries are increasingly turning to digital channels and, with technological advancements coming at the same time as the pandemic striking, it has proven to be an essential lifeline to navigate away from financial woe.
Consumer habits With households forced to quarantine, lockdown boredom became prevalent as people quickly became tired of remaining indoors. Many had watched most of Netflix’s catalogue within a few weeks but the thirst for entertainment
wasn’t quite quenched as their work and colleges remained closed. Fortunately, with the rise of ilotteries and the availability of scratch games at local convenience stores open for essential items, consumers turned towards lotteries for their entertainment during lockdown. Multiple lotteries which broke records for sales or profits during or just after the lockdown have cited their functions as a ‘safe form of entertainment’. During FY2021, the Iowa Lottery broke its sales record, with an increase of 22% from the previous year up to $452.6 million. The lottery’s CEO, Matt Strawn, attributed the sales hike to the pandemic as players turned to gaming to defeat boredom: “The Iowa Lottery delivered on its promise of responsibly generating revenue for important Iowa causes, even amidst an enormously challenging period. “Iowans found lottery tickets a safe, local entertainment option as they spent more time at home while navigating a global pandemic.” The hike in scratch-off game sales
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Stronger than before
contributed to its success, so much so that the lottery expects sales to drop in FY2022, regarding the lockdown sales as an anomaly. Meanwhile, the North Carolina Education Lottery made record transfers to the state’s education fund after attributing its $936 million profits to lockdown boredom sales. “Just like other sales and marketing brands, we faced multiple challenges during these unusual times,” Executive Director Mark Michalko said. “We succeeded thanks to the loyalty of lottery players, the support of our retailers all across our state, and a tremendous effort by the lottery staff to find ways to safely complete our mission in raising money for education.” As a result of individual state lotteries’ positive performance, the giant lottery providers have also experienced a period of growth in the past six months. Earlier this year, Scientific Games CEO Barry Cottle praised its lottery division for its successful financial contribution during FY2021, explaining to investors: “The instant lottery business continued its strong run, with US calendar year-todate instant game sales up 21% over last year, and up 30% versus 2019.
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LOTTERY
“Internationally, our Italy instant product JV achieved record performance, up over 20% year-todate versus last year, which was the previous best year-to-date sales ever.” Since then, SG has offloaded its lottery division in a $6.05 billion sale to Brookfield Business Partners, which lauded the work SG had done with the division to position it as a ‘leading business, which has innovated its industry’.
What next? Vaccination rollouts across the western world have been relatively successful, with over 58% of the US population receiving two doses of a shot. Several world leaders have referred to a ‘new phase of the pandemic’ as individuals and businesses adjust to the reopening of society. As such, new challenges have arisen in the lottery industry to ensure that
NEW CHALLENGES HAVE ARISEN TO ENSURE THAT THE GROWTH IN THE LAST FISCAL YEAR ISN’T JUST AN ANOMALY
the growth in the last fiscal year is not just an anomaly. Iowa’s Strawn has already conceded that the beginning of FY2022 has not brought the same levels of growth as last year, but that the lottery remains in a strong financial position compared to its budget projections. “And that really is what we are seeing in the marketplace as we start the next fiscal year, starting out July 1,” the lottery CEO told Radio Iowa. “While we are no longer seeing those year-over-year double digit increases — I am pleased to report to the board this morning that lottery sales remain strong.” Whilst there is certainly room for cautiousness, as there is in any business or industry, the lottery industry, particularly in the US, has bounced back from the pandemic in relatively good shape, unscathed in comparison to many other businesses. As SG’s Cottle summarised: “With lottery’s long-term customer relationships, its strong recurring cash flows, a demonstrated resilience in down markets, and with multiple growth drivers ahead, lottery is a truly unique business, poised to deliver outsized returns for many years to come.” •
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YOU JUST HAD NO IDEA HOW LONG THIS WAS GOING TO LAST
SPORTS BETTING HALL OF FAME: JOE ASHER WHEN YOU THINK ABOUT THE QUALITIES of the
corporate world, generosity of spirit and action are probably not the first traits that spring to mind. However, the peculiar circumstances of the pandemic brought out the best in many companies and people, including William Hill US and its then CEO Joe Asher
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BY MARTYN ELLIOTT
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fter COVID restrictions resulted in the closure of Las Vegas casinos, the company was forced to furlough hundreds of employees. It responded by establishing the William Hill USA Charitable Foundation to support colleagues at risk of hardship and Asher contributed 100% of his salary to it. Now President of Sports Betting at IGT after leaving William Hill following its acquisition by Caesars Entertainment, Asher is reluctant to take credit for his personal contribution to looking after staff
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faced by difficult circumstances, instead preferring to praise other team members for their response to the ’unprecedented times’. “So many people worked in the sportsbooks inside casinos, which were now closed across the country. All those people were furloughed, they were out of work, there was just nothing for them to do. You just had no idea how long this was going to last and from a corporate standpoint, there was obviously the importance of trying to conserve resources to have the money to get through whatever the closure was going to be,” he recalled. “It was also readily apparent to me that, given the sheer magnitude of the number of people suddenly out of work, the unemployment system was not going to be able to immediately meet the demand. The system wasn't designed to process several hundred thousand applications in, for instance, Nevada all at once with all these people being put out of work.
acted to support staff who found themselves out of a job due to the unforeseen circumstances. “There were other companies in Nevada in the gaming industry that set up similar sorts of charitable foundations, whether on their own or if they happened to hear about what we were doing and that motivated them. Whatever the reason, they stepped up and helped their employees as well, which was terrific,” he said. This act of generosity is, of course, only one small part of the story of Asher’s stellar track record in the industry, which has resulted in his
induction to the Sports Betting Hall of Fame. The Wilmington, Delaware native can trace his interest in gambling back to his early childhood and his father’s love of the racetrack and card games, so it was perhaps inevitable that a career in the industry beckoned. His first job was in the publicity department at Brandywine Raceway at the age of 16 and he became the youngest race caller in the US a year later. College and law school followed, which eventually led to him joining
SO WE STARTED THE WILLIAM HILL CHARITABLE FOUNDATION TO MEET THE IMMEDIATE FINANCIAL NEEDS OF PEOPLE WHO WERE BEING FURLOUGHED, AND I DONATED MY SALARY TO IT “And on a personal level, I didn't feel comfortable continuing to get paid while so many of my colleagues were being put out of work. So we started the William Hill Charitable Foundation to meet the immediate financial needs of people who were being furloughed, and I donated my salary to it. “So many of our colleagues supported the Foundation and chose to donate, either fixed sums or a portion of their salary. Even the lady working on reception at the front desk donated what she could afford. It was very moving seeing the number of people who donated and, due to the generosity of the team, we wound up having more than enough money to meet the needs of everybody.” As well as colleagues, Asher is quick to pay tribute to the competitors that
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Skadden, Arps, Slate, Meagher & Flom in New York City. It was there that he did some work for a client that had an interest in the gambling industry and realised where his career path was meant to lead. “Practising law was ok, but I didn't really have a passion for it. I was much more interested in the gaming business,” Asher recalled. “I went to work for the client and that ultimately led to me moving to Las Vegas.”
PRACTISING LAW WAS OK, BUT I DIDN'T REALLY HAVE A PASSION FOR IT. I WAS MUCH MORE INTERESTED IN THE GAMING BUSINESS By 2007, he was ready to branch out on his own and started working on what became Brandywine Bookmaking, a sports betting business based in Nevada that operated as Lucky's Race & Sportsbooks. It proved a success and by 2011 it had attracted a takeover offer from William Hill, which Asher accepted and the deal closed the following year. It was not the end of the road for Asher at the business he started, as he was asked by then William Hill CEO Ralph Topping to stay on and take charge of the company’s American operation. This was not the type of short-term arrangement that so often follows an acquisition, and Asher went on to oversee an impressive period of growth at William Hill US. “When the deal was done, I told Ralph ’Look, I will stay for a respectful period of time and beyond that, let's just see how it goes. I'll stay as long as you want me or as long as I'm happy’. I had no idea at the time whether that meant one year or more, but I never envisioned it meaning nine years,” he said. While Asher’s time with William Hill was undoubtedly a success, he did discover some cultural differences during his early days with the company. But they were less to do with the move from running a business steeped in the unique world of The Strip to working for a London-listed corporation, and more to do with the old adage of two nations divided by a common language. “It was really enjoyable working with
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Ralph (Topping),” Asher enthused. “But it took a while to understand everything he was saying with the Scottish accent. There would frequently be times when he would drop references to something and
AMERICANS TEND TO BE MUCH MORE DIRECT IN BUSINESS, WHEREAS THE BRITISH ARE A BIT MORE SUBTLE IN COMMUNICATING THINGS
then after the call, I'd have to go on to Google and try to figure out what obscure reference from the 1600s he was talking about. “One of the other early cultural differences was that Americans tend to be much more direct in business, whereas the British are a bit more subtle in communicating things. I remember having to tell James Henderson, who subsequently became the CEO, ‘I don't get subtlety, just be direct, just say it’.” Asher’s eventual departure came
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after Caesars Entertainment acquired William Hill in a near $4 billion transaction earlier this year. It was a deal that came about in part because of the service level that Asher and his team had delivered to the eventual buyer. He explained: “At William Hill we put a real focus on providing a really, really great service to our partners. The attitude was always ‘do right by your partners and that'll be good for us as well’. “That's really how the Caesars deal happened. We started by running one sportsbook for Eldorado Resorts in Reno and then went to running, or having the right to run, all the sport books for Caesars and ultimately, the acquisition. It all flowed from that partnership ethos.” While sorry to reach the end of what Asher describes as his “tremendous run” at William Hill, the timing of his exit had the benefit of allowing him to spend a relaxed summer with his family in Del Mar, California - a town with the twin attractions of beaches and a racetrack. But it was to prove a
brief rest, as he joined IGT as President of Sports Betting in October. The role will keep him as closely involved with Strip casinos and their commercial and tribal counterparts across the country, as he was when working on the B2B side of the William Hill US operation. The familiar casino sportsbook industry is one that Asher believes will thrive, despite increasing competition from mobile betting operators.
WHAT YOU'RE SEEING IS THE DEVELOPMENT OF THESE PLACES WHERE YES, YOU CAN BET, BUT THE ENVIRONMENT YOU'RE IN IS MUCH MORE ABOUT A BROADER EXPERIENCE “Retail sportsbooks are all about the experience and there's still an important place for them. It's about coming together to watch an event in a fun place to be, rather than just the transactional aspect of making the wager. The focus on
customer experience is where there continues to be a big opportunity,” he explained. “We've seen a lot of investments in brick-and-mortar sportsbooks, often being coupled with really nice restaurants, for instance, and great viewing displays. So I think that really the future of the sportsbook is experiential. “There's a beautiful new sportsbook over at Resorts World, the newest property that's just opened in Las Vegas. At the Sahara, the sportsbook is now inside a Chickie’s & Pete’s restaurant. If you look outside Nevada to the Capital One Arena in Washington DC, where there's that beautiful sportsbook that's been built with really great food to go with it. “What you're seeing is the development of these places where yes, you can bet, but the environment you're in is much more about a broader experience than simply getting your bet on for tonight's game. I think that's how we'll see sportsbooks evolve, in Las Vegas and elsewhere across the country.”
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for more than 40 years. The Trafford, Pennsylvania native moved to Vegas in 1975 and found work as a blackjack dealer at the Royal Inn, where he became friends with owner Michael Gaughan. And when Gaughan wanted to launch a sportsbook, he turned to Vaccaro for help. It was a process the pair repeated when, after the sale of the Royal Inn, Gaughan opened the Barbary Coast Hotel & Casino in 1979. Vaccaro recalled: "Michael looked at me and said, ‘Do you know how to run a sportsbook?’ “I said, ‘No.’ So Michael said, ‘Neither do I. We’ll start it together.’
VACCARO HAS BEEN ONE OF THE BEST KNOWN AND MOST QUOTABLE BOOKMAKERS IN NEVADA FOR MORE THAN 40 YEARS
SPORTS BETTING HALL OF FAME: JIMMY VACCARO NOT MANY PEOPLE CAN CLAIM to have starred in a spin-
off from The Simpsons and to have inspired the title of an ESPN documentary, but then not many people have enjoyed a career as extraordinary as Jimmy Vaccaro’s
BY MARTYN ELLIOTT
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f course, TV appearances are not the reason that Vaccaro is part of the Sports Betting Hall of Fame Class of 2021. Rather it is his
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standing as one of the legends of the Las Vegas sportsbook world that has earned him the honour. Now the Sports Marketing Director at South Point Hotel & Casino, Vaccaro has been one of the best known and most quotable bookmakers in Nevada
“I knew about betting sports. I didn’t know how to run a book. We built a little hole in the wall at the Royal Inn. It was a turning point in my life. I’ve been fortunate because I was in the right place at the right time. “I knew when I was at the Barbary Coast, this sports stuff is going to go crazy. I love this. I raised two kids and supported two ex-wives, so it’s not that bad." Those early days were not all plain sailing and there were costly nights, as Vaccaro told VSiN. "Super Bowl XIII was the most memorable one I booked,” he said. “I was at the Royal Inn in January 1979 and the line opened as low as Pittsburgh minus-2½, and we were as high as 5. The Steelers beat the Cowboys 35-31. It was an absolute bonanza for the wiseguys. We lost $185,000. The Stardust blew about $1.4 million, and they lost the most. Every book in the country lost. But after two days, everything went back to normal.” But there were also very profitable nights, including that of the WBC heavyweight title fight between Larry Holmes and Muhammad Ali at Caesars Palace in October 1980. “I was running the Barbary Coast book. There wasn’t a break in the line
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from 8 o’clock in the morning until the last hour before the fight,” Vaccaro said. “We opened Holmes as a 3-1 favorite, and closed it minus-140. For every 10 tickets, eight were on Ali and two were on Holmes. We won like $300,000 at a little joint with handwritten tickets. I enjoyed that fight the most." With the experience of those two launches under his belt, Vaccaro quickly became one of the most indemand bookmakers in Vegas and went on to run the MGM and Golden Nugget sportsbooks in the 1980s. In 1989, he helped Steve Wynn to open The Mirage sportsbook where, just three months later, another big fight helped to further build his reputation. When the undefeated, undisputed heavyweight champion of the world Mike Tyson defended his title against Buster Douglas in February 1990, the Baddest Man on the Planet was expected to win so easily that most sportsbooks refused to offer odds on the result. Instead, they only gave fans the chance to bet on which round Tyson would knock out the outsider. The Mirage sportsbook was different and under Vaccaro’s guidance opened at 27-1 for a Douglas win. He took some $20 bets, but the serious money all went on Tyson and the price soon
drifted out to 42-1. Douglas, of course, produced the biggest shock in boxing history - a shock that was presumably particularly keenly felt by the bettor who staked $168,000 on a Tyson victory in the expectation of winning just $4,000. The Mirage won about $300,000 on the fight, but the publicity generated
THE MIRAGE SPORTSBOOK WAS DIFFERENT AND UNDER VACCARO’S GUIDANCE OPENED AT 27-1 FOR A DOUGLAS WIN
by the line was much more valuable and it really put the new resort on the map. Vaccaro, meanwhile, went on to be immortalised in the ESPN ‘30 for 30’ episode about the fight, which the documentary makers titled ‘42 to 1’. It was also during his time at The Mirage that Vaccaro found himself appearing in The Simpsons spin-off ‘Springfield’s Most Wanted’, which aired in 1995. A parody of ‘America’s Most Wanted’, it featured the bookmaker talking about the market on who shot Mr Burns. As 26 years is probably too far in the past for anyone to complain about spoilers, it’s safe to reveal that the unlikely shooter Maggie Simpson was a 70-1 outsider. After The Mirage, Vaccaro spent time at the Atlantis in the Bahamas and worked for the Leroy’s and Lucky’s sportsbook operations in Nevada, before rejoining Gaughan at the South Point in August 2013. A move to his home state with Rivers Casino Pittsburgh followed in 2019, but he soon returned to his spiritual home in Vegas at the South Point. One of the biggest personalities in the world of sports betting, Vaccaro can now be found talking about the odds on VSiN or tweeting about the high rollers at the South Point. •
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