34 minute read
Casino & iGaming
from SBC Leaders Issue 18
by SBC Global
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
As 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?
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 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
Adam Noble, Co-Founder and Chief Business Development Officer at PlayStar Allan Petrilli, VP of Sales and Growth at Intelitics
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.
“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, 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.”
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 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?
“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.“ •
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
BY MARTYN ELLIOTT
It’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.
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.”
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
BACK AT THAT TIME, I NEVER BELIEVED THAT SPORTS WAGERING WOULD BECOME LEGAL OUTSIDE OF NEVADA. I’M GLAD I WAS WRONG
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 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
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
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 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'M LEARNING FROM THEM. I'M TOTALLY WIDE OPEN TO STILL LEARNING 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.” •
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
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.
BY ERIN GALLAGHER
Automated 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, 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
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
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.
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
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. •
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
As 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 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.
“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
Victor Araneda, Gaming1 Chief Business Officer Henry McLean, 4ThePlayer’s Co-Founder and Commercial and Marketing Director Vladimir Malakchi, CCO at Evoplay
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 -
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.”
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 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.” •
Andreas Koeberl, CEO at BetGames Arcangelo Lonoce, Head of Business Development at Habanero
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
Not 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 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.
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
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.
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 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.
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
Andrea Rossi, Commercial Director, Betsson Group
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
Dmitry Starostenkov, Chief Executive Officer, EvenBet Gaming
ONE OF THE MOST IMPORTANT FACTORS IS HAVING THE KNOWLEDGE ON THE GROUND OF WHAT OPERATORS AND PLAYERS WANT I THINK THAT THE RETAIL EXPERIENCE IS STILL NOT FULLY REPLICABLE ONLINE
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 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,
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. •
