ISSUE 21 • JULY 2022 A NEW WORLD KNOWING YOUR ABCS
Africa, Brazil and Canada in the spotlight
Boca Juniors and the world of esports
A costly affair? CRYPTO
A short-lived fad or the future for the US?
Blackhurst CAESARS ENTERTAINMENT
Advocating for change
Let your strategy drive our technology We collaborate with global operators to assemble their ultimate, curated sports betting and iGaming experiences.
Curate The Win
6-11 Lead Interview
• Jan Jones Blackhurst: a leading voice for Las Vegas
12-57 Sports Betting
CONTENTS JULY 2022
• • • • • • • • • • • • •
FSB: curating the win for the US market William Woodhams: taking the Fitzdares experience international Bede Gaming’s Sarah Hitchcock: fully embracing the digital approach Stewart Groumoutis: OpenBet poised to break new ground in Canada James Kilsby: California is set for epic sports betting showdown Hall of Fame: Vinnie Magliulo Cait DeBaun: prioritising player safety in an ever-expanding market Ross Fruin: is F1 the next driving force for betting engagement? On the move: betting and gaming’s movers and shakers Jacob Fortinsky: Removing the vig Continent 8 Technologies: powering the spread of online gaming in the US Douglas Hood: shaping the regulatory future for Ontario igaming Hall of Fame: Sandy Drozd
58-71 Gaming • • • •
Creating a stand-out experience in Arkansas Amanda Brewer - Ontario: this is not a race to the finish line Slot Picks Wazdan: scale of US opportunity needs no introduction
72-78 Latin America
• Boca Juniors Gaming: traditional clubs will conquer esports • Brazilian Gambling: a long story short by Gustavo Guimarães
79-93 Payments • • • •
Eloisa Marchesoni: the evolution of crypto regulation in the US AstroPay: Africa’s ‘fragmented’ but ‘evolving’ digital payments space Affordability: the Gambling Review’s major dilemma Web3: excitement, trepidation and new risks lie ahead
• Shelley White: Ontario’s biggest challenge • Are player acquisition costs becoming unsustainable? • JD McNamara: Better Collective is planting its flag in the Canadian market
• Moving with the times: diversifying lotteries in the US
• Adding some Pittsburgh steel to Nevada’s sportsbooks
The SBC Leaders Magazine is brought to you by SBC - Sports Betting Community: EDITORIAL TEAM: Erin Gallagher, Andrew McCarron, Craig Davies, Ted Menmuir, Joe Streeter, Chris Murphy, James Ross, Lucia Mouriño, Conor Porter, Charlie Horner, Jessie Sale, Mollie Chapman, Fernando Noodt Molins, Callum Williams, Viktor Kayed, Martyn Elliott, Nick Ware, Lucia Gando, Jessica Welman, Ted Orme-Claye SALES TEAM: Rasmus Sojmark, Alyona Gromova, Conall McCabe, Jan Kowalczyk, Richard Deacon, Bob McFarland, Craig Brown, Juan Ospina, John Lederer 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: SBC, Riverbank House, 1 Putney Bridge Approach, London, SW6 3JD TEL.: +44 (0) 161 367 1250 EMAIL: firstname.lastname@example.org WEB: www.sbcgaming.com
INTRO Erin Gallagher
SBC Leaders Editor
elcome to Issue 21 of SBC Leaders Magazine! There was always something about America that fascinated me as a child. Whether that was the films about the glitz and glam of Hollywood, the stories of the hustle and bustle of New York or even the tales of the gold rush and cowboys, this huge continent seemed to have it all. So you can imagine how excited I was when we decided to badge Issue 21 of the magazine as a North American special. We might not be featuring any Wild West duels, but we do have the bright lights of Las Vegas which feature heavily in our lead interview. Kickstarting this edition of the magazine, Jan Jones Blackhurst takes us on the journey of her career - beginning with the dare that led to her becoming Mayor of Las Vegas and the reasons why she has always taken THIS HUGE a people-first approach to CONTINENT leadership. While positioning Las SEEMED TO Vegas as the entertainment HAVE IT ALL capital of the world was a large point of discussion, Jones Blackhurst spends much of her interview discussing the importance of diversity, inclusion and social responsibility, and the reasons why these three values are integral to any business’ success. Continuing the North American theme, FSB’s Bob Akeret and Mike Van Ermen ‘curate the win’ in the US as they discuss expansion across the states and their dynamic duo relationship which has helped shape their leadership strategy. A guest column from VIXIO GamblingCompliance’s Chief Analyst James Kilsby assesses the tumultuous
4 SBC LEADERS • JULY 2022
affair that is the legalisation of sports betting in California - a battle which could prove to be a costly one. In our casino section, Gaming1’s Victor Araneda and Amelco’s Brandon Walker talk us through the growing opportunities in Arkansas and the importance of local partnerships in the Natural State. Meanwhile Andrzej Hyla, Chief Commercial Officer at Wazdan, explains why the scale of the US opportunity ‘needs to introduction’. And we can’t forget Ontario, the province on everyone’s mind it seems. Everyone wants in on the action in the Great White North - Better Collective, Fitzdares, Kindred, and OpenBet are just a few of the companies who plan to break ground in Canada in Issue 21. North America isn’t the only market covered in this edition of the magazine, so have no fear. Our Latin American section kicks off with an interview from Federico Maques, Marketing Manager of Boca Juniors, who speaks about the significance of the football team having a presence in the esports space - a market which he believes holds infinite growth potential. SECAP’s Gustavo Guimarães places Brazil under the microscope, while the growth of digital payments in Africa and the challenges for affordability in the UK are discussed elsewhere. Wherever you’re reading this magazine from, there will be plenty of wonderful content to keep you busy so grab a cup of coffee (or for those Brits among us, a strong cup of tea and a couple of biscuits) and enjoy reading what this industry has to offer. We look forward to seeing you on the show floor in New Jersey!
T H E W O R L D ' S L E A D I N G C R E AT O R O F P R O P R I E T A RY T A B L E G A M E C O N T E N T
O M N I C H A N N E L TA B L E G A M E S E X P E R T S
Breaking the glass ceiling
JAN JONES BLACKHURST: A LEADING VOICE FOR LAS VEGAS FORMER MAYOR OF LAS VEGAS, an educator and a vocal
advocate for diversity and inclusion. To say that Jan Jones Blackhurst has made her mark on the US betting and gaming industry would be an understatement
BY ERIN GALLAGHER
t’s 8:00am on a Tuesday morning, and the familiar dial tone of a Skype call echoes through a near-empty office. Despite testing positive for coronavirus a few days prior, Jan Jones Blackhurst was full of energy as she sat down with SBC Leaders to discuss her time in the betting and gaming industry. Jones Blackhurst moved to the bright lights of Las Vegas back in 1983, and it wasn’t long before she found herself entering the world of politics. Finding a group of likeminded women from both north and south Nevada, they worked together to pass Proposition 7, which incorporated a “woman’s right to choose” in the Nevada constitution. This group of women then encouraged Jones Blackhurst to run for mayor, something which she suggested was a “bit of a dare”.
“In 1991, I began working with a group of women from across northern and southern Nevada; there was an open mayoral seat, and they came and asked me to run for mayor. So we went to all the political insiders in Nevada, which is still the same group that are the political insiders today. This group of political insiders told me that I couldn’t possibly win. “Essentially, I ran for mayor as a dare because I found it so insulting that someone thought I couldn’t do the job. I won in the primary, which was a shock to a lot of people, including myself. I served eight years at a time when Las Vegas was the fastest
ESSENTIALLY, I RAN FOR MAYOR AS A DARE BECAUSE I FOUND IT SO INSULTING THAT SOMEONE THOUGHT I COULDN’T DO THE JOB
growing city in the country, and probably the world. “We went from 50,000 hotel rooms to almost 125,000 and also put $10bn of infrastructure in place. We master planned all of the city and changed the focus to trails, parks and building communities around the city rather than just rebuilding the Las Vegas Strip.” Her election as the first female mayor of Las Vegas has, without a doubt, helped smash the metaphorical glass ceiling of political and corporate governance. However, eight years in office didn’t come without its own set of challenges - the most difficult, she explained, was making sure that she was “taken seriously”. “The last thing that anybody expected was for me to be elected. But ultimately, they had to deal with me because I was the mayor. It was so fascinating to begin to watch the shift in attitudes towards me when they realised I was going to make my own decisions, and I was going to make them based on what I thought was the right thing to do. “As mayor, I was not going to make decisions based on what had been done in the past. I've often said that many people got so used to me being the only woman in the room that pretty soon, they just didn't see me as any different to them. “One of the biggest challenges was that I had to make it very clear that I was going to be taken seriously. In my first meeting at City Hall, all of the departments had prepared these incredibly dense briefing books which detailed all of the work they were doing. I’d be confident in saying that I was the first elected mayor that actually sat down and read every single one! “But during this one particular
6 SBC LEADERS • JULY 2022
Breaking the glass ceiling
meeting, a number of the city’s homeless population marched on City Hall. Everybody told me that I couldn’t go outside, that it was dangerous and that I should stay within the building. But these people were hot, no doubt hungry, and they had no homes to go to. So one of my first major initiatives was to build a comprehensive programme for the homeless which prioritised housing, support and job training. We created a model which could be replicated across the US. “For a number of my male colleagues though, this wasn’t seen as ‘doing something’. They wanted us to be building bridges, developing buildings - creating tangible infrastructure that could be seen. But for me, helping the local community was the ‘raison d’être’ for why I was in office. I have tried to carry this across into my work in every job I have. “I like to think that I was mayor for all the right reasons. I didn't need a title. But the city needed so many services and they needed to be focussed on the people who live there. Yes, downtown Las Vegas needed to be preserved, but we had an opportunity to put people first. That is something that I passionately believed in then and still do to this day.” After her time as mayor, Jones Blackhurst decided to run for Governor but unfortunately, it was not meant to be. This did, however, put her on the path to where she is now. Having become a familiar name among the big names in Las Vegas - working with visionaries such as of Kirk Kerkorian, Steve Wynn, Bill Boyd, Elaine Wynn and Claudine Williams Jones Blackhurst went on to become the Head of all Government, Corporate Communications and Corporate Social Responsibility at Harrah’s Casino. “I worked with Harrah's, which later became Caesars. We acquired Horseshoe. We went from a $1.5bn company, and I think we’re now a $12.5bn company. It’s been quite the ride! Caesars now owns seven casinos on the Las Vegas Strip, and approximately 50 casinos across the United States.” During her time at Caesars, Jones Blackhurst has overseen the introduction of the company’s Corporate Code of Commitment which commits to certain standards for
8 SBC LEADERS • JULY 2022
job quality, responsible gambling and customer service. Among various other achievements, it was clear that Jones Blackhurst was also particularly proud of Caesars’ 50:50 by 2025 strategy - a benchmark for gender equality and inclusion across all levels of the business. To her surprise, and also to mine, the Caesars Executive shared that such a focus on CSR and ESG was uncommon across the US - with only 10% of large corporations having such initiatives in place.
WE ARE IN A VERY PRIVILEGED POSITION, IT IS OUR DUTY TO ENSURE THAT WE ARE UPLIFTING EMPLOYEES “Surprisingly, these initiatives were very forward-thinking when they were introduced. There were many people in the industry who believed that we didn’t need to set those standards, but for me, it was an obvious decision. We are in a very privileged position, it is our duty to ensure that we are uplifting employees. “I really do not understand how anyone running a large organisation does not see the value in investing in your employees, showing them that they matter and promoting their ability to be upwardly mobile. “Employers need to place a focus on equal pay, equal representation, being responsive to customers and letting them know that you’re giving back to the community. Show the people who regulate and legislate you the positive work that you’re doing! That, to me, is pure common sense.” Throughout her career, Jones Blackhurst has made it abundantly clear that she is a strong advocate for both diversity and inclusion - whether that’s gender, race, ethnicity, age and social background. But for equal opportunities and representation to become
commonplace across the industry, companies must do considerably more than just provide “lip service”. “There are clear data trends which show that diverse and inclusive leadership teams perform considerably better on all metrics: sales, return on sales, EBITDA and revenues. That’s just common sense. “You really have to look at who your customers are. When you’re creating
THERE ARE CLEAR DATA TRENDS WHICH SHOW THAT DIVERSE AND INCLUSIVE LEADERSHIP TEAMS PERFORM CONSIDERABLY BETTER ON ALL METRICS
new and innovative solutions, if everybody is looking at it from the same perspective, you're never going to see new perspectives. You’ll just keep doing what you’re doing; sometimes that will work, but it doesn’t necessarily mean that it’s the best you can do. It will never result in true innovation. “So if we know that best business practice is creating diverse and inclusive teams, why don't we do it? Some might think that it’s hard to do. It's really not. If it was evolutionary, it would have already happened. “Some used to argue that there weren't enough people in a
IF WE KNOW THAT BEST BUSINESS PRACTICE IS CREATING DIVERSE AND INCLUSIVE TEAMS, WHY DON'T WE DO IT? minority background to have true representation. But we’re in 2022. We have a big enough pool of educated women and people of colour. There are now more women and POCs with BAs, MBAs and other higher education certifications than ever before. It’s not that companies can’t find them. “It's just easier to tap the person
who looks just like you. I also think there are huge differences when it comes to hiring men and women. Typically, if men fit the criteria for 60% of a job’s requirements, they’ll apply. But more often than not, women will have a tendency to be more conservatives - they will assess their ability and question whether or not to move forward with a job application. “That was something that I always found interesting when I ran for mayor. I'd never been in politics. But I didn't think being mayor was about politics, I thought it was about leadership and community.”
Breaking the glass ceiling
THE LAS VEGAS KNIGHTS ADDED AN ELEMENT OF THE LAS VEGAS EXPERIENCE TO SPORTS If we were to stretch out a list of Jones Blackhursts’ accomplishments throughout her career, we’d be looking at the length of the Las Vegas Strip twice over. But one which she drew particular attention to, and something which has helped maintain the city’s status as a global entertainment hub, was the development of the Allegiant Stadium. A 71,000 capacity stadium, the Allegiant serves as the home stadium for the NFL’s Las Vegas Raiders as well as a venue for large scale events. While I may have thought that the repeal of PASPA may have helped bring new sports teams to Las Vegas, Jones Blackhurst was very quick to point out that the city became a ‘go to sports destination’ after it was approved for major league sports. As a result, sports teams were able to become a part of the “Las Vegas environment”. “It all started with the Las Vegas Golden Knights. Everybody thought that Las Vegas wouldn’t have the fans or that it wouldn’t have great sports teams. But with the Knights, they added an element of the Las Vegas experience. “They were playing music, it’s a lot of fun when you go to the games. It just so happened that they also turned out to be a great team! Now, we’re seeing more hockey teams looking at ways in which they can make the game day experience much more entertaining. “The other factor that nobody thought about was that people would buy tickets from all over the world because it's a great excuse to come to Las Vegas - we should be able to accommodate these fans too.
I THINK IN THE US THAT REAL INTEGRATED ONLINE GAMING ACROSS STATE LINES IS STILL QUITE A WAY AWAY
“When we got the Raiders, I was part of the group that was helping pass the legislation. At the time, there were a small handful of people that seemed very angry about it all. They wanted this money to be used for education. This money was earmarked for the tourism industry - Las Vegas had never had a 70,000 seat stadium. We
“We have always had sports betting in Las Vegas, but what this did was allow sports teams to be a part of that Las Vegas experience that we all know and love.” To accommodate visitors from all corners of the world, Las Vegas sportsbooks are always trying
10 SBC LEADERS • JULY 2022
had never been able to bring in big bands like The Rolling Stones, or host huge concerts. “We estimated that Allegiant would need to be booked 46 times a year to break even. But the people wanting to come to events are triple that of the capacity! When the Raiders first put season tickets on their site, it almost crashed because of so many people from across the world wanting to come and watch the team.
something new, she continued. Whether that’s a three-floor sportsbook, celebrity brand ambassadors or experience days, it is overwhelmingly clear that the customer service is front and centre. But does this transcend over into the mobile gaming space? “This may be controversial to say, but many of the land-based casinos think that setting up an online offering will cannibalise their business. They don’t mind online, but they want you to go and physically register at a brick and mortar venue. “I think in the US that real integrated online gaming across state lines is still quite a way away. If you look at the data from New Jersey, one of the first states to go live following the repeal of PASPA, what you find is that it doesn't cannibalise your business. “You can actually meet a new customer, give them incentives to come and try a brick and mortar product. In that respect, it grows the market. But as we’ve seen in the past, fact versus opinion is slow moving.” •
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Mike Van Ermen
FSB: CURATING THE WIN FOR THE US MARKET BOB AKERET, VP OF OPERATIONS, AND MIKE VAN ERMEN, VP OF BUSINESS DEVELOPMENT, discuss FSB’s expansion
across the US and the reasons why their experience on the operator side has helped shape their leadership strategy
BY ERIN GALLAGHER
SBC: Thanks for taking the time to chat with us! Can you give us a brief introduction to yourselves? MVE: So I’m the VP of Business Development here at FSB, and I’m based out in Las Vegas. I used to work on the operator side of things, spending several years over at Circa Sports where I helped establish their operations, not
12 SBC LEADERS • JULY 2022
only in Nevada but Colorado as well. I wasn’t a bookmaker by any stretch of the imagination, but I’ve done all the business operations on the operator side. BA: I’m the VP of Operations here at FSB, based out of Atlantic City, New Jersey - born and raised! I’ve been in the industry for a little over 10 years now. Similar to Mike, I also worked on the operator side with Resorts
and Resorts Digital so I’ve got a lot of experience on the retail side of things pre-PASPA. Unlike Mike who comes from Nevada, which had sports betting, I came from a bit of a different background. In Atlantic City, we had the retail casinos - that experience was very instrumental in building a team with Resorts Digital on the operation side. SBC: How did you become involved with FSB? MVE: So both Bob and I started talking to FSB in around Q4 2020. At that point in time they really hadn’t established their foothold in the United States yet. They were really looking for some industry experience to go ahead and lead that US business. Bob and I both received some phone calls, went
through a lengthy interview process this didn’t just involve us interviewing us, but us interviewing them! We really just wanted to make sure that we were aligned with FSB’s vision. With both of us being on the operator side of things, it was very important to us to have a deep understanding of what FSB wanted to achieve. It was a big move for us to jump on to the other side of the counter. We wanted to be a part of a company that shared our vision, and that really leveraged our expertise and our passion for quality and operator-based software in the United States. So we both joined in late 2020 and we’ve been really helping shape the United States strategy ever since. BA: With Dave McDowell and Sam Lawrence’s vision, they could have entered the US market in 2018 as plenty of other people did. As we all know, it was definitely a case of speed to market. But now we’re seeing a lot of frustrations from sportsbooks. So there is a huge opportunity for the switcher market - those operators who are frustrated with their existing technology, many of whom have been promised the world which has been under-delivered really. Both Mike and I have that previous platform experience. We know where platforms have excelled and what hasn’t. David and Sam really gave us a blank piece of paper, if you will, to enter the US and give our expertise. We have been able to say how the platform needs to run, because this is what the end user - namely the sportsbook or casino - is going to experience. MVE: I completely agree! Following on from that, something that I’ve been very excited about and passionate about is that FSB really understands the differences between the markets, right? They know that a European sportsbook is not the same as a US sportsbook. They said we need local boots on the ground to say ”this is how the software needs to work to empower and enable these sportsbook operators who will actually become customers”. BA: Localisation has also been a huge thing - it’s more than just replacing an S with a Z when switching up spellings! FSB are actually taking the time to localise their product to suit North American bettors.
LOCALISATION HAS ALSO BEEN A HUGE THING - IT’S MORE THAN JUST REPLACING AN S WITH A Z WHEN SWITCHING UP SPELLINGS SBC: In your opinion, how have your previous roles shaped your leadership styles when spearheading FSB’s expansion across the North American market? BA: I think we’re both just really passionate about this opportunity. We were both given the keys to drive our business on the operator side. I mean, at least for me in New Jersey, everything was a greenfield opportunity.
We’re building this business from the ground up and it’s almost, you know, we’re mirroring that on the B2B side of things where I at least knew what the pitfalls were. As an operator, you’re passionate and you want to see something succeed. Now, it’s almost come full circle where I’m on the supplier side and we’re now creating this platform to fulfil that need that I had on the operator side. MVE: For me, personally, the operator background is everything that I draw
WE'VE BEEN IN THE OPERATOR’S SHOES AND WE FULLY UNDERSTAND WHAT CAN BE FRUSTRATING
on in order to have success here in North America and shaping this vision for FSB. Just like Bob said, we’ve both been sold platforms before. We’ve both been told about theoretical functionality that we hope will exploit our local operations. And subsequently, we have both been frustrated with some of the representation on the technology side as operators. We really took it as a challenge to say that we can absolutely do better. With our experience, we understand everything that happens before we go live with anybody, we understand what the potential problems may be. So hopefully five years down the road, all of the customers that we go live with will never understand what the problems were pre-2020 or pre-2021
with the industry and sportsbook platforms. That’s really the North Star in the driving light for us. SBC: The North American market is becoming very saturated, very quickly. What is it that makes FSB stand out from the competition? BA: Something that our Head of Marketing, Chris Graham, says is that FSB is ”curating the win”. We’re not taking a product off the shelf, we don’t have an infomercial and it’s not a 1800 number that you can call for some hodgepodge, standard technology. We’re sitting on the other side of the table, we’ve been in the operator’s shoes and we fully understand what can be frustrating you. If you’re new to the market, we can tell you about the things that you
should be looking out for. Take our expertise and our experience, and let that speak for itself. I think that’s something that is setting FSB apart from some of the others out there. MVE: I think the experience and expertise of the team is a big part of it, and that has certainly helped drive our success. But the experience would be nothing without the technology, which is the engine behind it all. The experience is the driver, but the actual engine and the gas pedal is the tech stack that the FSB platform is built upon. I think it’s not too bold to say that for any customer who is looking for a B2B solution, we can accommodate any different type of style - whether that’s an enterprise trading solution or a fully managed trading solution. If a company has their own front ends for their website or their mobile app, or they have their own PAM, we are flexible and dynamic enough. So because we are built on one technology stack, there is no “well, we can’t do this, we don’t provide this level of support, we don’t provide these components of the business”.
14 SBC LEADERS • JULY 2022
We can provide our version of a PAM or our version of a front end, but somebody can always come in and say “I love everything that FSB does, but I’ve already spent a lot of money developing my own front end, I’d like to plug that in”. So no matter who it is, if they are going a B2B route, FSB is a prime candidate. BA: It’s a very modular, flexible platform where we understand that you’re going to want to plug and play and be able to pull levers on your business. We see sports betting exploding across the US, and this is almost the step into finding out whether igaming is going to be introduced across every state and whether operators are going to have to go through a migration process to get into igaming. We have all of this under one roof, where it’s a single back office. It’s a
THE KEY COMPONENT WITH FSB IS THAT YOU WILL BE FUTURE PROOFING YOURSELF
single system, it’s not the case where you have these bolted-on bonusing engines and trading tools where nothing really talks with each other. I think that’s one of the most frustrating things about being an operator - you learn to live by logging into 10 different systems to do 10 different things. Being able to log into a single back office and touch all these different modules is just much more efficient. MVE: I think there’s another component to that. If you look at the sports betting industry from 2018 to now, we’re coming up on the four year anniversary of the first state going live. The industry looks completely different, right? So in the summer of 2026, the industry will also look completely different than what it does now. None of us can exactly tell you what that difference is going to be. The key component with FSB is that you will be future proofing yourself; you’re preventing yourself from having to go through a migration in a few years time. You have the opportunity to grow and carry FSB with you wherever you end up. •
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WILLIAM WOODHAMS: TAKING THE FITZDARES EXPERIENCE INTERNATIONAL THE CEO SHINES A LIGHT ON THE BOOKMAKER’S PLANS
to make its mark in Canada, explaining how the company will deliver a premium, personalised experience to bettors across Ontario
BY ERIN GALLAGHER
ntario - the province that has been on everyone’s lips since it went live back in April. But as betting operators from around the world try to get in on the action, what’s the key to success in this soon-to-be betting powerhouse? For some, it’s bonuses and offers that capture the attention of bettors. For others, it’s stand-out technology. And for Fitzdares, it's a combination of the two mixed with an uber personalised experience for those enjoying a flutter. The Mayfair, London-based bookmaker was among the first cohort
16 SBC LEADERS • JULY 2022
of operators to be granted an iGaming Operator Registration from the Alcohol and Gaming Commission of Ontario, with plans to go live in summer 2022. Similar to its UK and Irish offering, the SBC Racing Sportsbook of the Year 2020 has already set its sights on delivering a luxury experience to gamblers on the other side of the Atlantic. But how, you might ask? In an interview with SBC Leaders, Fitzdares CEO William Woodhams explained that the AGCO licence is a landmark achievement for the business. But with huge competition, Fitzdares is placing customer service at the heart of its Canadian operations. He began: “We are thrilled to be
able to deliver a premium betting experience to the Canadian market. We’ve seen some pretty dire consumer experiences since betting became legal in the market and we hope to offer those looking for a luxury experience a real alternative. “Receiving our AGCO licence is a landmark achievement for the business. There will be huge competition in this newly-regulated market, but we feel our more premium and customer-focused experience will be an ideal fit. “Work is very much underway to ensure that we deliver on our promise – in style. I would like to thank the teams at both the AGCO and iGaming Ontario for supporting us with our application and preparations for launch.” The Ontario market, Woodhams shared, features both attractive licensing conditions as well as a forward-thinking approach to marketing; not to mention a “brilliant” audience of bettors to tap into.
This favourable environment made Ontario an obvious choice for Fitzdares. When pressed on what made this particular market stand out, Woodhams added: “Firstly, it’s the regulator with attractive licensing conditions. Then it’s the audience – well-off, mature in their deep knowledge and understanding of sport and frankly, they’re brilliant people. “Also, being based in the UK, the time zone works for us. But what we really like is the forward-looking marketing restrictions, where it isn’t a race to the bottom with $1,000 sign-up bonuses advertised via affiliates.”
WE ARE DELIGHTED TO BE AMONG FSB’S FIRST DIGITAL PARTNERS TO GO LIVE IN NORTH AMERICA WHEN WE LAUNCH IN ONTARIO THIS SUMMER favourites may begin to feature much more in its UK offering. “Whilst we’re offering these sports already, they are clearly fairly low turnover … for now,” he told SBC Leaders. “We’re going to be pricing up specials for our Canadian customers
the name of the national sport correct. For those based in the UK, it appears that referring to “ice hockey” is somewhat of a cardinal sin in Canada - a realisation that became very clear to Woodhams after a quiet word from the regulator. “I was scolded by the regulator for saying ‘ice’ and was worried it might even jeopardise our licence. They forgave me in the end, and you’ll never catch anyone calling it ‘ice hockey’ in this business.” The next few months certainly look to be exciting for Fitzdares as it plants its flag in the North American market,
Fitzdares’ first North American launch will be complemented by its exclusive members’ club, The Fitzdares Club, which will open its doors next year. Having already opened up clubs in London’s Mayfair and the Cotswolds in South West England, this new addition aims to bring what Woodhams describes as a “je ne sais quois” to the Canadian betting market. The location of the club, however, is yet to be decided as the bookmaker plans to test out a number of venues with pop-up events before deciding on a permanent home - although, we can reveal that Ottawa and Toronto are looking to be likely candidates. Talk soon turned towards Fitzdares’ European experience and, more specifically, its association with more ‘traditional sports’ such as horse racing, football … sorry, soccer, and rugby. But with Canadians showing much more of a penchant for hockey and lacrosse, pricing such sports can come with its own set of challenges. Woodhams added: “We are a lean business and our core trading in the UK is obviously horse racing. We have hired North American sports experts to assist in our trading strategy, but we have confidence in how our principal technology partner FSB Tech has been building its business to service both Canada and the US. “We are delighted to be among their first digital partners to go live in North America when we launch in Ontario this summer.” So what does this mean for its UK customers? Well, they may want to start getting to grips with some more North American sports as Woodhams explained that these Canadian
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and there’s no reason why we wouldn’t offer them back home in the UK. “We’re also looking at streaming options outside of horse racing and that would provide an obvious gateway into Canadian sports for our customers.” Pricing new sports can come with its own set of challenges, but one of the greatest obstacles that faced the Fitzdares CEO when applying for an AGCO licence was ensuring that he got
YOU’LL NEVER CATCH ANYONE CALLING IT ‘ICE HOCKEY’ IN THIS BUSINESS!
and as we progress further into 2022, the CEO urged SBC Leaders to ‘watch this space’ for more developments. Giving us a sneak peek into what’s to come, Woodhams concluded: “Market access, operations and the cost of sales is very high in the US. If more Canadian provinces or, indeed, US States follow the Ontario model, we’ll be there. “If market access continues to be tethered to bricks and mortar, it’s more likely that we’d partner with a larger operator on the experiential side rather than operate ourselves. This is a hugely exciting time for our business, but we’ll be making our moves carefully.” •
A new era for lotteries
BEDE GAMING’S SARAH HITCHCOCK: FULLY EMBRACING THE DIGITAL APPROACH SARAH HITCHCOCK, EVP BEDE CANADA and
Chief Product Officer, shares her insight into the positive influence that digital technology is wielding on the lottery and gaming sectors BY CHRIS MURPHY
SBC: What is Bede Gaming’s philosophy around driving digital and how does that fit within the collaborative process with a lottery operator like OLG? SH: Bede’s aim, for all its operators, is to support and enable them to deliver upon their strategic plans and objectives. Most of our operators, like OLG, come from the retail market, and so we work hand-in-hand with them to support them in their digital aspirations. The Bede platform is highly flexible so it’s important that we work together to ensure its set up is aligned with their ambitions and target market. Ultimately, operators want to give their customers the most relevant, tailored and exciting product and proposition in all channels, all of the time. We believe that the only true way to do this is through putting digital at the heart of your growth strategy. OLG has fully embraced digital as a complementary channel to its retail arm and is hugely benefiting from this approach. OLG is uniquely positioned and trusted as the only operator that is giving money back directly to the people of Ontario. By leveraging Bede’s Platform, technology and subject matter experts, OLG
A new era for lotteries
can continue to offer its customers and Ontarians an entertaining, exciting, convenient and personalised experience. Other lottery operators can also benefit from this collaborative approach and provide further support to the communities they serve by prioritising a digital strategy. SBC: In what ways do you think that digital is helping push lotteries to become more competitive? SH: The vast majority of customers who play the lottery, are making other day-to-day purchases online. Many of them will also be buying their lottery tickets online. Whilst for some, they have the habit of buying their lottery ticket in their preferred retail location, digital is always going to be a more convenient way of doing this, as Covid has shown us. Once a customer shifts some of their purchasing from retail to digital, evidence shows it's very unlikely they will go back. Whilst lotteries continue to perform well, many are seeing the sales of lottery tickets through retail starting to plateau and in some cases decline; both as a result of customers choosing to focus their entertainment spend elsewhere or by moving their spend from retail to digital. The two critical words for any business are ‘relevance’ and ‘convenience’, and lotteries are no different - how do they remain
20 SBC LEADERS • JULY 2022
relevant and convenient for their customers or potential customers? Digital entertainment brands use their data to offer compelling propositions. It is up to the lottery to provide a better alternative. We are already seeing the leading lotteries embrace digital as the driving force of innovation across their organisations; launching new lottery games, creating new games concepts, enhancing their offering with exciting promotions or loyalty programmes. Digital platforms enable lotteries to expand their offering rapidly, whilst also tailoring their messaging to a customer.
BEDE WORKS ACROSS AFRICA, EUROPE AND NORTH AMERICA; EACH MARKET HAS ITS OWN NEEDS AND IS AT ITS OWN STAGE OF MATURITY We believe that the combination of taking advantage of best-in-class digital tools and products which enable a personalised experience for every customer, with the trust and respect of the lottery brand, is a recipe for success that is very hard to compete with. SBC: What about the player experience? How is Bede Gaming using technology to enhance that
and what are the challenges involved in reacting to changes in player preference? SH: Player experience is integral for any operator to be successful. Bede’s platform and tools have been specifically developed to optimise a player experience no matter the product vertical. The flexibility of the platform means that each client can tailor the available tools to create a truly personalised player experience for each customer - from live chat to real time data to offers, games and safety measures. All of this work together to enforce the trust in the operator’s brand whilst also deepening loyalty as their every whim is catered for. We recommend that lotteries use the Bede platform in combination with enterprise level Content Management Systems (CMS) and Customer Relationship Marketing (CRM) such as Adobe Experience and Adobe Campaign Manager. Bede’s clients, including OLG and Eyas Gaming, have demonstrated how the real time data and power of Bede's technology can enable them to target customers with the right product, right message and right offer at the right time. This allows them to create a great relationship with their customers, and to build an active conversation to ensure they have a fun and rewarding time, every time they play. The key is staying relevant and
part of that is understanding player preference and being able to react in the moment. Legacy technology that requires manual and analogue analysis takes too long; by the time you’ve made an informed decision, the opportunity has passed and the process needs to start again. Best in class software ensures operators have that information, and the means to implement campaigns off the back of that information, at the time it’s needed. SBC: With digital now touching on most aspects of daily life, how do you ensure that it remains a tool to enhance OLG’s offer through intuitive design and entertaining products rather than simply become a superficial function? SH: Whilst most lotteries are the exclusive destination for lottery products, the majority of operators will offer the same range of sports bets, casino games, bingo games or poker. It is the brand, the look and feel, the tone of voice, the experience and critically the relevance of the product and message that differentiate operators. If an operator uses enterprise level Content Management Systems and Customer Relationship Marketing tools in isolation from a best of breed platform then the outcome will be superficial. A cutting edge platform, with real time data, rules engine and dynamic segmentation is the glue that holds the process together and gives the operator the holistic view necessary to ensure an effective entertainment experience. Therefore, if the operator selects a platform which easily integrates into enterprise level tools like Adobe, then this can enable an automated, optimised and personalised experience for each customer, every time they interact with the brand via a digital channel. SBC: Looking ahead to the rest of 2022, what’s in store for Bede Gaming and its partners on the technology front? What developments can we expect to see? SH: Bede works across Africa, Europe and North America; each market has its own needs and is at its own stage of maturity. We will continue to work with our operators to develop their
products, technology and roadmap to enhance their offerings, with a particular focus on customer retention mechanics. The introduction of Colin ColeJohnson as Bede’s new CEO is an exciting time for us. Colin brings with him extensive experience from the operator side, which gives us a unique insight into making further developments to the platform to ensure it continues to support and facilitate the realisation of our clients’ ambitions. In Ontario, the market has just opened up, enabling not just more
ONCE A CUSTOMER SHIFTS SOME OF THEIR PURCHASING FROM RETAIL TO DIGITAL, EVIDENCE SHOWS IT'S VERY UNLIKELY THEY WILL GO BACK
operators, but making it easier for content suppliers to access the Ontario market; Bede is looking forward to further increasing the range of games and products customers will have access to. In Germany, whilst the market is live, casino licences have yet to be issued, and like all newly regulated markets, we can expect a continuous stream of changes. We expect to be doing a lot of work in Germany, building upon Gauselmann’s strong position and heritage. We’re also really excited to see how Eyas does in Germany, having started very strongly in the UK under the Merkur brand. And recently, we saw the prospect of casino slots in the South African market, where we work with Sun Bet, moving a step closer, which is fantastic. So the future of 2022 looks very promising for Bede and our customers. •
STEWART GROUMOUTIS: OPENBET POISED TO BREAK NEW GROUND IN CANADA WITH ONTARIO RECENTLY OPENING its newly regulated market, opportunities
continue to present themselves in Canada. OpenBet’s recently appointed VP Commercials - Canada, Stewart Groumoutis, discusses the challenges he expects to face in his new role, as well as the prospect of pushing OpenBet to even dizzier heights on the world stage
BY ERIN GALLAGHER
SBC: Congratulations on your new role. What were the main factors in your decision to join OpenBet? SG: I have watched OpenBet go through a number of iterations over the years, with different controlling groups and different leadership, but the one thing that has always stayed true is that it is an innovative, progressive organisation. In undertaking this new role, I recognised the opportunity for OpenBet to take that to the next level and to be at the front line of driving online and land-based legalised gambling in North America, as well as worldwide.
IT’S EXCITING TO BE PART OF AN ORGANISATION THAT WANTS TO CREATE THE CHANGE, NOT JUST FOLLOW IT Historically, OpenBet has had some of the biggest customers possible in markets such as the UK – now, as North America, especially the US, continues to expand, I feel that OpenBet is poised to be the sports betting partner of choice. On top of that, I think there will be a lot of innovation in the sports betting space over the next few years and I feel OpenBet will be a huge part of that. It’s exciting to be part of an organisation that wants to create the change, not just follow it.
SBC: In what ways will the experience from your time with British Columbia Lottery Corporation and the lottery industry benefit the way you approach your new career at OpenBet? SG: I’ve been in the online gambling space for close to 20 years, first with a private entity and then with a government run organisation, and I’ve been in a number of different scenarios in that time. The BCLC was a pioneer in the online gambling space when it came to government regulated gambling in North America and continues to be the top performer in a lot of categories in North American gambling. Working in this environment allowed me to observe what works and how success can be achieved, while being a customer on the OpenBet platform gave me unique insight into how customers best utilise the technology and retail sports capabilities of the company, as well as how to work effectively with OpenBet as a partner. Now, stepping into my new career, all of that experience and knowhow is channelled into meeting the customer’s needs before they recognise them, and make sure
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WE’RE SERVING OPERATORS THE WAY THEY WANT TO BE SERVED OpenBet is responsive and proactive in serving customers the way they need to be served to be successful in the North America market. SBC: What is your immediate focus as VP Commercials – Canada at OpenBet? SG: The first focus is to ensure that our customers in Canada and North America at large are well positioned for success. Beyond that, the opportunity that presents itself is for OpenBet to help shape and guide the way North America builds up
BEING A CUSTOMER ON THE OPENBET PLATFORM GAVE ME UNIQUE INSIGHT INTO HOW CUSTOMERS BEST UTILISE THE TECHNOLOGY AND RETAIL SPORTS CAPABILITIES OF THE COMPANY
sports betting. We need to recognise that sports betting is still quite an immature industry in North America, with leagues and customers just starting to adopt sports betting and recognising how much it can add to their viewing entertainment. By moving to quickly understand the nuances of North America in comparison to markets like the UK, we can ensure that we’re serving operators the way they want to be served. This means making sure our technology, content and services are delivered in a personalised way that meets their exact needs. This is especially important when you consider the top sports for bettors in North America, such as baseball and basketball, which would differ from a market like the UK. Differences in sport and live betting, and the way that plays out, are extremely important for us. SBC: Since Ontario introduced an open and legalised online sports betting on April 4, how has the market performed? SG: Early reports are that it’s performing extremely well. There has been a lot of transition of players into those regulated options. It is a unique
ULTIMATELY, PROFIT IS THE CONTRIBUTING FACTOR AS TO WHETHER IT IS CONSIDERED A SUCCESS situation where a significant number of those operators were already present in the previous grey market, and now have just made a conversion. In some cases, the customers themselves haven’t changed anything about their behaviour, but the bets they now make fall legally under the Canadian criminal code. I think it will be very interesting to see how the top line revenue in the province translates to bottom line profit, as that will be the key indicator of success or failure to the Ontario government. Ultimately, profit is the contributing factor as to whether it is considered a success. SBC: Does a grey market still exist in Ontario? How can industry stakeholders ensure bettors are directed to legalised betting apps? SG: There is still very much a present and strong grey market in Ontario. They have done a great job of creating a very open and accessible
market to those who want to receive a licence, although they still have not addressed any sort of punishment or reasons for the grey market to leave. There is also the consideration of how those operators that are licensed in Ontario expose themselves to customers across Canada. While the licence provides them with a legal stance to provide gambling to Ontario residents, it is still against the law to provide online gambling to the other jurisdictions in Canada. It will be interesting to see how that plays out and how those customers fare if they have to remove themselves from certain provinces as part of their licence. SBC: What’s next for sports betting in Canada, is it a waiting game to see how Ontario unfolds? SG It is key to recognise that the Ontario government will be watching very closely to see how the top line revenue transitions into profit. The other provinces will also be paying
OPENBET IS WELL POISED TO PARTICIPATE IN THE NEW LICENCE REGIME IN ONTARIO
attention to the level of performance displayed: how much of the market is captured by the legalised, licensed model, but also attempting to quantify how much remains in the grey market. This will determine whether they make their own in-roads into regulation. SBC: Finally, what are OpenBet’s plans for Canada? SG: OpenBet has a very strong historic presence in Canada, primarily with BCLC and also LotoQuébec. As pioneers in the space, we brought some of the first online sports betting into the country for those operators. We also work with the Atlantic Lottery Corporation, and we need to explore more opportunities to work with the other jurisdictions as well. OpenBet is well poised to participate in the new licence regime in Ontario so capitalising on opportunities to bring some of our open market sports capabilities to those different operators will be key. Generally, we will continue to observe how the market develops, in Canada and across North America, to make sure that OpenBet is ready to serve and help operators become extremely successful in their jurisdictions. •
An expensive ballot battle
JAMES KILSBY: CALIFORNIA IS SET FOR EPIC SPORTS BETTING SHOWDOWN WITH SEVERAL MONTHS UNTIL REFERENDUM DAY,
VIXIO GamblingCompliance’s Chief Analyst takes a look at why the road to legalising sports betting in California may not be so straightforward
BY JAMES KILSBY
y now, November 8, 2022 will be firmly marked on the calendars of all stakeholders in the US sports betting market as the date when California is set to hold two separate referendums to legalise retail and online sports wagering in the largest potential market in that nation. The two California initiatives are already on track to become the most expensive ballot campaign in US history - in any state, on any subject and are an entirely different ball game to previous state ballot measures related to sports wagering. Eight states have previously held state-wide or local referendums to authorise sports wagering, according to VIXIO GamblingCompliance research. In 2019, sports betting proponents only eked out a narrow victory in Colorado, but it was much smoother sailing as Maryland, South Dakota and most of Louisiana approved sports wagering a year later. The only ballot measures to fail so far were a low key 2021 referendum to expand college betting in New Jersey and a handful of local elections for retail sportsbook facilities in New Hampshire towns and cities. Nowhere, however, has there been
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the level of well-organised and deeppocketed opposition that confronts the two competing initiatives in California. On one side is a coalition of 46 California Indian tribes supporting a ballot measure first unveiled in 2019 to authorise retail-only sports wagering at tribal casinos and state-licensed racetracks.
THE TWO CALIFORNIA INITIATIVES ARE ALREADY ON TRACK TO BECOME THE MOST EXPENSIVE BALLOT CAMPAIGN IN US HISTORY On the other is an alliance of Bally's, BetMGM, DraftKings, Fanatics, FanDuel, Penn National Gaming and Wynn Interactive that has collected more than 1.6 million voter signatures in favour of its proposed constitutional amendment to authorise state-wide mobile sports wagering through partnerships of leading commercial operators and California
tribes, with tax revenue going to homelessness and mental health causes. The two initiatives technically are not in conflict with one another and both would be able to become law should they each be approved by a majority of California voters. The FanDuel, DraftKings et al initiative was even written to dovetail with the tribes’ retail measure, with several provisions clearly designed to appeal to tribal governments, including the requirement for online operators to have a market-access partnership with a tribe in order to apply for a licence, and lower upfront fees for tribes seeking to launch their own online sportsbook brands. Nevertheless, the online measure is being vehemently opposed by California tribes who have formed a political action committee called the Coalition for Safe, Responsible Gaming with the aim of passing their own ballot initiative, while simultaneously defeating the rival proposal.
the legal precedent it would set for expanded Class III gaming beyond Indian lands. Further, even if online sports betting in California is perhaps inevitable given how fast it has spread elsewhere in America, then most tribes believe that Native American governments should be the ones to shepherd in the mobile market, rather than out-of-state companies with so much less already invested in the Golden State.
Another group of three California tribes - led by the San Manuel Band of Mission Indians and Rincon Band of Luiseño Indians - is mobilising against the online measure while gathering signatures for a third ballot initiative to authorise retail and mobile sports betting operated exclusively by tribes that is being lined up for the November 2024 ballot on the premise that the FanDuel/DraftKings measure can be defeated this year. A California market that includes mobile sports betting would undeniably be more lucrative than one limited to retail sportsbooks. According to VIXIO GamblingCompliance forecasts, sportsbooks at tribal casinos and racetracks would generate approximately $262m in gross revenue by year five of operations. But a market that also includes state-wide online sports
betting would be worth $2.45bn by year five. With so much more money to be made online, why, then, are tribes not on board? While a campaign website launched by the California tribal coalition raises concerns of underage play and addiction, the opposition to the online initiative also reflects a desire among tribes to take a cautious approach to online gambling in general given
As of June 1, the Coalition for Safe, Responsible Gaming sponsored by California Indian Tribes had raised $45.5m in support of its campaign, while the separate committee supported by the San Manuel and Rincon tribes had raised more than $35m. On the other side, the coalition of FanDuel, DraftKings, BetMGM and others had raised just over $100m. On top of that, two further campaign committees supported by California cardrooms had raised almost $34m to oppose the tribal retail sports betting measure, which also includes provisions to enable California citizens to bring private actions against cardroom venues suspected of offering illegal card games. The most expensive state ballot initiative in US history came in 2020 when Uber, Lyft and others outspent opponents 10-1 on a $224m referendum campaign to ensure their Californian workers could remain as contractors, rather than full employees. That eclipsed the $154m spent on a 2008 ballot campaign to ratify compact amendments enabling four California tribes to expand their existing tribal casinos. In total, state campaign finance records show $214m already raised as of June 1 for California’s 2022 sports betting ballot battles, with the likelihood of many millions more being committed in the run-up to November as campaigning heats up. With several months until Election Day, it might be too early to confidently predict the outcome of the ballot measures. But it seems a safe bet that California’s ballot battle will go down in history as the most expensive ever. •
Hall of Fame
BRINGING BROOKLYN CHARM TO LAS VEGAS SPORTSBOOKS FROM GAMBLING WITH NUNS to running the
Caesars Palace and Wynn Las Vegas sportsbooks, there’s not much that Sports Betting Hall of Fame inductee Vincent Magliulo hasn’t seen during a lifetime in an industry he loves
BY MARTYN ELLIOTT
incent Magliulo is definitely one of life’s natural raconteurs. Over the course of a onehour Zoom call, the anecdotes flow easily from the current Vice President of the Las Vegas Dissemination Company and Sportsbook Director at Gaughan Gaming. Some are surprising and laugh-out-loud funny, while others reveal the background to some key developments in the history of sports betting. Together they tell the story of a remarkable life. Perhaps the most eyebrow-raising of the stories is how this Brooklyn native came to book the ‘Miracle of 69’ World Series. You may think there’s nothing unusual about a bookmaker taking bets on a major sporting event, but in this case the bookie in question was just 12 years old. And the bettors were the nuns who taught at his Catholic school! “The nuns were from just outside Baltimore and they were talking about how bad the Orioles were going to win, how dominant they were going to be and how the Mets were a fluke,” Magliulo recalled. “So I took the liberty of making a
Hall of Fame
deal with the Sisters. I would volunteer for detention on Fridays for a month if the Orioles won the World Series, but if the Mets won, I would get free milk with my lunch for the ensuing month. “Well game one goes by and the Orioles win 4-1, and I’m on the playground the next morning and the Principal of all people was funny, saying ‘Oh, Mr Magliulo, it looks like it’s going to be a long fall for you young man’. Can you imagine? I’m a student and here’s a nun talking trash to me. She’s really pressing me, so I did the only thing I could think of, and said ‘Well Sister, how about we press and make it two months?’ She replied, ‘what language, I can’t believe you; you’re on!‘. “History tells us that the Mets came back and won the next four games, and young Vinny Magliulo drank a lot of milk in the autumn of 1969. But I still got detention for gambling on campus!” If his school experiences and
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boyhood trips to New York’s racetracks with his uncles hadn’t already made Magliulo's mind up about his career choice, then a visit to Las Vegas to see his godfather in 1971 certainly did. “It was a wonderful experience. I fell in love with the city and everything it had to offer,” he said.
BEING A 21-YEAR-OLD OPENING A CASINO ON LAS VEGAS BOULEVARD WAS JUST A GREAT EXPERIENCE In 1978, he moved to Las Vegas and trained to be a dice dealer at Michael Gaughan and Frank Toti’s dealing school, before taking a job with them at the Royal Inn Casino. Four months later, he was transferred to Gaughan’s new casino hotel, the Barbary Coast, where he learned the building blocks of what would become his career. “The Barbary Coast opened in March of 1979, which is a career highlight, as
being a 21-year-old opening a casino on Las Vegas Boulevard was just a great experience,” he recalled. “The greatest part of the experience was that Michael Gaughan really had what I consider to be the first crosstraining programme in Las Vegas. It was quite basic and worked like this, ‘make sure you're good at what I hired you for and go learn what you want throughout the property’. “So on most of my breaks, I was in the race and sportsbook with my fellow Hall of Famers, Jimmy Vaccaro, Chris Andrews and Art Manteris. And that's where I met Johnny Avello, who was also a dice dealer at the time.” The skills Magliulo developed at the Barbary Coast resulted in a job offer to join Jim Mastroianni and Lou D’Amico at Caesars Palace, as they looked to develop a successful sportsbook operation. He moved there in 1986 as supervisor and stayed until 2000, by which time he was Vice President of Race & Sports Operations.
As a boxing fan, his tenure at Caesars Palace could hardly have been better timed, as it coincided with the property hosting such classics as Sugar Ray Leonard v Marvin Hagler, Leonard v Tommy Hearns II, and Riddick Bowe vs. Evander Holyfield II. “We had some of the most legendary boxing events in history,” Magliulo said. “The energy and excitement not only permeated the property, but the fights transcended the entire city. Wherever you went in Vegas - taxis, restaurants, other casinos - those fights were the talk of the town.” The sportsbook saw plenty of action on those big fights, but the lasting legacy from Magliulo’s spell at Caesars is the development of NFL prop betting. Super Bowl prop betting first came to prominence in 1986 when Art Manteris offered odds on whether William ‘The Refrigerator’ Perry would score a touchdown against the New England Patriots, only to incur a six-figure loss when the super-sized Chicago Bear bludgeoned his way into the end zone from a yard out.
THE LASTING LEGACY FROM MAGLIULO’S SPELL AT CAESARS IS THE DEVELOPMENT OF NFL PROP BETTING Magliulo loved the idea of the prop bet though, reasoning that during the three hours of an NFL match, there were scores of “games within the game” that fans would want to bet on. Within a couple of years, he was offering a dozen football props and by 1994, Caesars was able to offer a then record of 80 props for Super Bowl XXVIII. “I gathered the staff and said, ‘I want us to put together wagers that you would want to bet on, so put yourself in the customers’ shoes and formulate the bets they want but have never been able to make on the Super Bowl’,” Magliulo said. “To my staff’s credit, we wound up putting up about 80 different wagers on that Super Bowl. I encourage operators today to get their staff involved because they have good opinions, good ideas.
The most magnificent and memorable moments from Vincent Magliulo’s career The Barbary Coast opening “Opening the Barbary Coast as a 21-year-old was extremely exciting. Then it just gave me a great stepping stone to further my career working for Michael Gaughan at that time.”
Wynn Las Vegas opening “The Wynn Las Vegas project is actually a milestone. It was just a phenomenal experience. The attention to detail that Steve Wynn and Elaine Wynn (at the time) had is legendary and it's all true, there's no question about it. It was done to the greatest detail you can imagine.”
Sugar Ray Leonard v Marvin Hagler, Caesars Palace 1987 “Sugar Ray Leonard was making another comeback and he was the underdog in the fight, as Marvin Hagler was undefeated. It was a very pro Leonard crowd, chanting ‘Sugar, Sugar’ in a tremendous way. Now, Leonard’s strategy was to do the majority of his fighting in the last 30 seconds of each round and he winds up getting the decision. It was one of the most exciting nights, but Hagler did not agree with the decision and retired after the fight.”
Sugar Ray Leonard v Tommy Hearns, Caesars Palace 1989 “This was a rematch, eight years after Leonard won their first fight. Everyone in the world was on Tommy Hearns to get his revenge and he knocked Ray Leonard down twice in this fight. I thought Leonard had lost the fight and called the sportsbook to tell them to get ready to pay out, but then it was announced as a draw. The crowd had a pretty vocal reaction to that result - you can hear chants of ‘BS’ from 16,000 people. We had the draw posted as a proposition bet, but nobody bet the draw for this fight.”
Riddick Bowe v Evander Holyfield, Caesars Palace 1993 “Bowe and Holyfield had three memorable fights in Las Vegas,
but certainly the most memorable moment came in this second encounter when the Fan Man crashed the fight. In the seventh round, a guy named James Miller crashed his homemade paraglider into the ring - you had this great fight, then just an unbelievable event. I happened to be standing ringside and saw this guy just literally crash into the ropes in the ring and saw both fighters respond and the crowd. Security immediately got a handle on the situation and got him out of there. The fight was delayed for 20 minutes and Holyfield eventually won a majority decision.”
The Great Refund “For Super Bowl XXXI, the Packers and the Patriots, the point spread was Green Bay Packers by 14. The game ended 35-21 to Green Bay and I call it the Great Refund. Even with the props and everything associated with the game, there was a line from the sportsbook out to the casino for over 24 hours just refunding tickets. So what I thought of was to put up next year’s Super Bowl. We had the future book and people could pick whichever team, but I put up the NFC-AFC proposition and as people were cashing their tickets to get a refund, I said ‘don't forget, it's not too early to bet next year’s Super Bowl’. We wound up writing over $100,000 in tickets on the next Super Bowl and folks didn't even know which teams were in it.”
The creation of VSiN “Another career highlight was working with the Musburger family on the creation and launch of the Vegas Stats & Information Network (VSiN) in 2017.
Professor Magliulo “Being asked by legendary oddsmaker Michael ‘Roxy’ Roxborough to teach the UNLV class on Race & Sportsbook Management was an honour.”
Hall of Fame
“It just took off from there and, with the creativity in the industry, you see some places with anywhere from 350 to 500 different wagers on the Super Bowl. There’s probably more talk about the proposition bets than the game itself now, as they can account for 60 per cent of the handle.” One other important change he helped to bring about during his time with Caesars was the introduction of pari-mutuel wagering in Nevada in 1991. He was part of a group of industry professionals who, along with the Nevada Resort Association, crafted the legislation that allowed bets to be commingled across the country. “At that time, we were booking horse races, like we were booking sports. But I can tell you that there were some races that had far bigger decisions than some NFL football games,” Magliulo explained. “So bets were capped - we paid full track odds up to a certain amount, depending on the property, but there was no real extreme exotic wagering, like pick sixes and things like that. “So the addition of pari-mutuel
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wagering allowed patrons to wager and be paid as though they were actually at the racetracks.” After leaving Caesars Palace for John Gaughan’s Las Vegas Dissemination Company, Magliulo received an invitation to consult on the design of the sportsbook at the new Wynn Las Vegas development on the site of the old Desert Inn. A subsequent meeting with Steve Wynn turned into the briefest of job interviews, when the casino mogul asked him what he thought about the project.
north end of the strip’. And Steve Wynn said, ‘I already know all of that. Tell me what you really think’. “I said, ‘well, you probably need a bookie from Brooklyn to run your race and sportsbook’. He said, ‘I love that’ and hired me the next day.” Magliulo oversaw the design of the resort's sportsbook, its opening in 2005 and operations for the first 12 months of trading, before returning to the Las Vegas Dissemination Company and Gaughan Gaming, where he remains to this day.
IT'S GOING TO SET THE NEW STANDARD AND RESURRECT THE ENTIRE NORTH END OF THE STRIP
Pleasingly, he now also has a media outlet to share his anecdotes and insights, after helping Brian Musburger to found the specialist sports wagering broadcast network VSiN. With so many stories to tell and an almost unrivalled knowledge of sports betting, it’s unlikely that there’s much dead air on his shows. Magliulo credits his wife and children as the major supporters of his long career. “They’ve endured more sporting events and the betting associated with them than most operators. They are my true blessings.” •
Magliulo recalled: “Steve Wynn asked me what I thought of the project. I said, ‘well, sir, I think that this is certainly going to be a project that not only raises the bar, as you've done in the past with with the Mirage and Bellagio, but it's going to set the new standard and resurrect the entire
Unlimited Creativity. Endless Data. Innovate Your Sportsbook. SPORTS DATA
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A growing responsibility
CAIT DEBAUN: PRIORITISING PLAYER SAFETY IN AN EVER-EXPANDING MARKET SPEAKING TO SBC LEADERS, the American Gaming
Association’s VP of Strategic Communications & Responsibility explains why the nascent US sports betting market expands the scope for the Have A Game Plan initiative BY CHARLIE HORNER
ports betting is seemingly an ever-expanding market especially in the US. At the time of writing, 35 states have already legalised sports wagering. With legislation being debated in several other states, the rise of sports betting is set to continue well into 2023 and beyond. As with most business expansions, such growth poses almost as many challenges as it does opportunities. In the case of gambling, particularly in the online space, the primary
34 SBC LEADERS • JULY 2022
challenge is that of player safety. Due to greater accessibility and ease of use of apps, responsible gambling charities have raised concerns over the potential risk to problem gamblers. Overseeing the US gambling industry is the American Gaming Association, which in 2019 launched its Have a Game Plan Campaign to
IN 2019, THE AGA LAUNCHED ITS HAVE A GAME PLAN CAMPAIGN TO PROMOTE SAFER GAMBLING TOOLS TO PLAYERS
promote safer gambling tools to players via operator partnerships and bettor education. So as more states introduce legal sports betting, DeBaun acknowledged that the AGA’s remit to responsible gambling is forever expanding, with the campaign educating players on safer gambling measures. “Thinking back to the 2018 decision around PASPA, the AGA recognised that responsible gaming and our responsibility broadly is something we've done for decades. It's not new to the industry. It's something we've built in the brick and mortar space. As you know, our remit was expanding as we grew a legal market state by state. Responsibility was our top priority.” Have A Game Plan, DeBaun outlined, is a multi-faceted campaign that looks outwardly at consumers, operators and other key stakeholders to encourage responsible gambling. Sports leagues, teams and media all
limits through education rather than be forced through mandatory hard checks. She continued: “We saw an opportunity and it's in part consumer education and partly to bolster the reputation and show that everyone here is taking responsible gaming seriously. It's not just the right thing to do. It's a business obligation that our players and fans engage responsibly; this is entertainment for adults and we want to make sure that, as new fans are exposed to sports betting or igaming, they're doing so in a responsible way because our goal is to build a long term sustainable market.” Paramount to implementing effective RG measures is the research that underpins all policy decisions. DeBaun asserted that research is key to all the AGA’s Have A Game Plan decision making process, with funding and grants provided to institutions dedicated to RG academia.
bear ‘responsibility for responsibility’, she advised. “We're nearing 30 partners that have reflected those various groups and the way that Have A Game Plan reaches customers is through our partners' channels,” DeBaun added. “They know their customers and their fans the best so we wanted to empower them with a responsible gaming message that they could deliver in a compelling way that was authentic for their brands and voices.” The Association’s Comms lead detailed that RG measures are woven
into the fabric of the industry to build a long term, sustainable market on top of key priorities such as player safety. US industry leaders are constantly looking towards more mature markets, particularly in Europe, to seek long term sustainability. But DeBaun asserted that players should be ‘empowered’ and trusted to set safety
OUR REMIT WAS EXPANDING AS WE GREW A LEGAL MARKET STATE BY STATE
In November last year, the International Centre for Responsible Gaming - an organisation born out of the AGA - awarded a three-year grant of over $400,000 to Bowling Green State University to conduct a nationwide study into the behavioural patterns of sports bettors in the US. One key aim of the study is to ‘identify risk factors for problematic sportswagering behaviours’. DeBaun noted that the AGA and its partners welcome the ICRC's work to ensure the best standard of research in the field, adding: “Our role as an industry is to test our products, understand our market and our players and we want to leave that research on effectiveness and impact to those who are better suited in terms of academic rigour to research.” Central to many plans around responsible gaming strategies is the monitoring and scrutiny of operators’ marketing output. Advertising is often cited as a key stimulant of problem gambling and an area for improvement with regard to RG. The National Council on Problem Gambling even ensured that advertising limitations were inked into the sports betting legislation in Kansas, with advertisers mandated to avoid adverts targeting minors, limiting
A growing responsibility
the form, content, quantity, timing and location of advertisements and providing toll-free problem gambling helplines. Mirroring these views, DeBaun acknowledged that advertising poses significant threats to players, especially during busy periods of the sporting year such as the NFL kickoff; however, she underscored the importance of advertising in bringing players to the legal markets. “We're very conscious of questions around advertising saturation, and a big part of that for us is getting players to the legal market. In the US, there is a rampant offshore sports betting market and advertising plays a key role in bringing customers into the legal market. “We're currently planning what that's going to look like in terms of Have A Game Plan activation, but we want to make sure that along with the advertising for your favourite sportsbook, you're also getting some education around what is sports betting and how to do so responsibly.” Moving the conversation towards specific RG measures, the topic of harder checks in terms of player affordability has been at the centre of debate in the UK. Whilst finding such measures ‘interesting’, the AGA maintains that its recommendations and consumer education are born out of research findings rather than ‘arbitrary measures that sound good on paper’. DeBaun insisted that all safety measures come from research and market needs, developed by how players interact and engage with different wagering products, whether it is casino, igaming or sports betting.
BROADLY FOR HAVE A GAME PLAN, IT'S A RISING TIDE THAT LIFTS ALL BOATS
what tools work best and providing customers with resources to create a healthy, entertaining experience with sports betting, igaming or any kind of casino gambling. I think that we want to see how our players are interacting with our product and involve evolving and evolving that based on the market needs.”
THERE IS A RAMPANT OFFSHORE SPORTS BETTING MARKET AND ADVERTISING PLAYS A KEY ROLE IN BRINGING CUSTOMERS INTO THE LEGAL MARKET “Something that’s interesting is that a lot of it is unclear as to what's effective and what's not. So if you think of the casino experience, the ATM is placed a certain distance away from the casino floor, but there's no evidence to say that's why we do this. It just sounded like a good idea on the regulatory front. “We're interested in understanding
36 SBC LEADERS • JULY 2022
Ostensibly, Have A Game Plan’s key purpose is to educate players on the key methods to avoid negative wagering habits and the tools available to provide support. As well as providing year-round resources on setting budgets, being aware of odds and encouraging fun play in the legal market, the AGA also engages in more broad campaigns such as Responsible
Gaming Education Month. RGEM takes place in September this year - coinciding with the NFL kickoff - and was expanded from a week to a month to reinforce AGA and its partners’ commitment to responsibility. The month makes up just one part of the AGA’s plans for the rest of 2022, which aims to raise the standards of RG across the US to ensure that players are equipped with the tools to avoid slipping into problem gambling. Summarising some of the AGA and the Have A Game Plan campaign’s plans and aims for the rest of 2022, DeBaun concluded: “Broadly for Have A Game Plan, it's a rising tide that lifts all boats, so we want to continue to expand the partners we have engaged with the campaign so we can reach more fans about responsible gaming education. We are evolving the tools and resources we have available for our partners.” •
Hitting top gear
ROSS FRUIN: IS F1 THE NEXT DRIVING FORCE FOR BETTING ENGAGEMENT? FORMULA 1 HAS CULTIVATED a new youthful
audience in the United States, but motorsport remains undervalued as a betting commodity, writes GridRivel CEO and Founder Ross Fruin BY TED ORME-CLAYE
ix years ago, the world’s most popular motorsport series found itself at a low ebb. After dominating on a global scale
since the 1950s, Formula 1 lost 40% of its global viewership between 2008 and 2016 (per Statista). Many factors led to the downturn in fortunes for the open-wheel racing behemoth. It downgraded its engines from high-revving V8s to less appealing V6 hybrids, the dominance of Red Bull and Mercedes made the championship title race a procession, and the series failed to embrace the opportunities that social media presented in attracting a new user base. As a result, 200 million fans worldwide switched off. At that point, Liberty Media, operated by US cable TV mogul John Malone, stepped in and acquired Formula 1 for $8bn. Liberty Media’s
mission was to hit the gas pedal on a sport that had been riding the clutch for far too long. Thanks to key changes made on and off the track, the sport is hitting top gear once again. In a bid to make the on-track product more appealing, changes to cars have been made to encourage overtaking. With seven races of the 2022 season completed at the time of writing, there have already been three different race winners and four different drivers on pole. Identifying former owner Bernie Ecclestone’s reticence to attract a younger audience, Liberty focused on bringing the sport into the digital age. Just as the NBA employed a
Hitting top gear
liberal attitude to sharing highlights on social media, Formula 1 relaxed its tight grip on its footage to encourage engagement. As a result, Formula 1 experienced 99% growth in year-on-year social engagement between 2019 and 2020 (per The Financial Times). In the same period, the Premier League — the biggest league in the world’s most popular sport — achieved just 3% growth. Formula 1 further widened its appeal in 2018 with the launch of the Netflix documentary series Drive To Survive. The hit series, initially met with resistance by some teams, has, according to The Guardian, featured in Netflix’s Top 10 lists in 56 different countries. It is widely credited with bringing a new level of attention to the sport and recently earned a commission for two further seasons. Liberty’s biggest success, however,
38 SBC LEADERS • JULY 2022
has arguably been its expansion into new markets — specifically, the United States. The world’s most lucrative sports market was given a second race on the calendar in 2022, with a starstudded event at the inaugural Miami Grand Prix. Next season, a third US race will be added to the calendar in Las Vegas, marking the series’ return to the Nevada desert for the first time since 1982 (and representing a timely opportunity for synergy with sports betting). New York mayor Eric Adams, meanwhile, has made it clear he wishes to add a fourth US race to the schedule in the Big Apple. The Miami Grand Prix, broadcast on
NEXT YEAR, THE UNITED STATES WILL BOAST MORE FORMULA 1 RACES THAN ANY OTHER NATION
ABC’s main cable channel, achieved an average viewership of 2.6 million, marking the sport’s biggest-ever US broadcast (per Sports Pro Media). The average viewership for the series in the United States has doubled in the last five years. Next year, the United States will boast more Formula 1 races than any other nation and, despite the financial hit of the pandemic and the cancellation of the Russian Grand Prix, Liberty Media has created a tremendous return on its investment. The burgeoning US gaming industry has a tremendous opportunity to capitalise on this growth, and the platform to put motorsports at the forefront of sports betting. In May, Maine became the 34th state to legalise sports betting; it is easy to see the strong correlation between the rise of motorsports and the gaming gold rush in the United States.
It must also be noted that many other racing series have started to adopt and adapt F1's digital-first playbook to engage a new generation of fans. NASCAR, Indycar, MotoGP and Formula E each attract millions of viewers and are poised to go through similar growth in the coming years. However, most motorsports series remain tremendously undervalued betting commodities in the US — and with the exception of NASCAR, the race series themselves have not sufficiently addressed the opportunity. Around the time of the Formula 1 takeover deal, Liberty Media CEO and President Greg Maffei acknowledged that motorsport fans are not adequately catered for in terms of sports betting. “There’s an enormous amount of video feed and data about the races that we are already capturing that we are not in any way processing incrementally for the dedicated fan, or opportunities around things like gambling,” said Maffei in an interview with Reuters. Despite this acknowledgement, much of the sport’s proprietary data remains under wraps. This limits the amount of betting markets that traders can produce and hinders the bettor in making more informed choices. The demands of modelling motorsport data sets and gamifying them is more complex and nuanced than for most sports, not to mention the variables of format changes which take place season-by-season, necessitating regular adjustments to these models. A typical soccer game will boast dozens of markets on any given operator, from goalscorers to the amount of corners being taken. Conversely, many of the major betting sites provide a much more limited offering around a Formula 1 event, with most markets restricted to outrights on qualifying and race winner, coupled to restrictive podium-place terms. (The rapper Drake reportedly lost $230,000 by backing a driver who failed to top the podium at the Spanish Grand Prix last month. Perhaps he would have exercised more nuance with a greater amount of market options?) In 2018, Liberty Media agreed a $100m deal with data rights partner Interregional Sports Group (ISG) to
enable the development of live inplay betting at Grands Prix. Formula 1 has subsequently brokered betting partnership deals in Europe and Asia, but in-play betting and gaming opportunities remain absent in the United States. Currently, the lack of an existing large handle appears to make operators hesitant to prioritise motorsport at the level necessary to create engaging markets and promote them to the racing community. With more trackside sponsorship in the United States, a pursuit of customers through digital and social channels, and a full exploitation of the data-rights deal with ISG, it is possible
uniquely on racing, was founded in response to the lack of opportunities in the market for motorsports fans. It has already attracted a user base of around 200,000 for its season-long leagues product and plans to parlay this success into its first real-money gaming product this summer. The growth gives credence to the notion that race fans are looking for something authentic to the sports they admire most. With global viewership surpassing one billion each year, the potential betting appeal for motorsports is palpable. Based on GridRival user data, over half of motorsports fans consider themselves either mostly or
IT IS IMPERATIVE THAT THE BETTING INDUSTRY TRACKS THE SPORT’S GROWTH, AND THAT THE RACING LEAGUES THEMSELVES HELP ASSIST WITH THIS PROCESS that the US could redress the balance with more mature markets. The incredible rise of Formula 1 under the stewardship of Liberty Media is a case study in the successful revival of a brand. The targeted manner in which it has sought a younger audience also speaks to a robust and long-term market for bookmakers. It is imperative, therefore, that the betting industry tracks the sport’s growth, and that the racing leagues themselves help assist with this process. GridRival, a gaming startup focused
exclusively race fans. This unique level of loyalty and engagement presents its own opportunities and emphasises the need for a motorsports-exclusive product. Furthermore, nearly a quarter of the Formula 1 calendar now takes place in North America, with the aforementioned extra race to be added next season. The growth opportunities in the United States are clear, and it is incumbent upon the motorsports series to work closely with the betting industry to fully address this potential. •
ON THE MOVE: BETTING AND GAMING’S MOVERS AND SHAKERS WITH COMINGS AND GOINGS commonplace across the
betting and gaming industry, we take a look at some of the movers and shakers over the last few months. Strive Gaming Andrew Holmes has been named as the new Chief Operating Officer of North American igaming platform Strive Gaming. Joining from TwinSpires, where he served as Vice President of Product, Holmes will be tasked with playing a key role in developing Strive’s real money online casino platform while preparing for future regulatory changes across the US and Canada. Max Meltzer, CEO of Strive Gaming, said: “Andrew’s blend of experience across multiple industries such as gaming and finance – where he has worked on everything from unicornlarge business to small and mid-level business – plus his involvement in
40 SBC LEADERS • JULY 2022
product and operations roles at C-level has convinced me he’ll be an ideal fit for this role.”
Boom Entertainment Boom Entertainment has strengthened its C-level leadership team after confirming the appointment of Zack Messer as Chief Financial Officer. In his new role, Messer will elevate the financial performance of the firm as it looks to exploit fresh
THE GROWTH OPPORTUNITIES AT BOOM ARE UNPRECEDENTED
opportunities in the US’ online gambling and daily fantasy sports markets. “The growth opportunities at Boom are unprecedented and it’s the right time to bring in a seasoned financial strategist,” noted Stephen Murphy, Co-Founder and CEO of Boom Entertainment. “Zack fits the CFO role perfectly, having spent 14 years in gaming and holding a variety of strategic finance roles at IGT, Pinnacle Entertainment and most recently Scientific Games as its Head of Finance for gaming operations.”
Game Play Network Ian Smith has been appointed as Chief Technology Officer at Games Play Network, as the Los Angelesbased real money gaming platform aims to reach its “next ambitious stage”. In this role, Smith will be charged with driving product expansion,
technological innovation and platform scalability to support GPN’s integration of its patented technology within its B2B customer network. “We are excited to welcome Ian to the GPN team,” said Russell Fine, President of GPN. “He is an experienced igaming innovator that is perfectly positioned to take GPN’s first-of-its-kind igaming platform into its next stage of commercialisation. “Ian’s leadership will accelerate growth, expand the company’s footprint and create exciting new player experiences.”
Kindbridge Brianne Doura-Schawohl, Eric Kussin, and Seth Young all joined gambling harm teletherapy support specialist Kindbridge as its three new board members. Kindbridge is on a mission to become “an integral part of the consumer protection system for gambling,” and the appointments of Doura-Schawohl, Kussin, and Young – who are all experienced in mental health and combating gambling addiction – support that goal. Doura-Schawohl said: “This is a
THIS IS A VERY EXCITING OPPORTUNITY TO MAKE A BIG IMPACT very exciting opportunity to make a big impact on a space that has been calling out for support for years. A telehealth solution that organises care and access that works with largescale corporations and distribution partners to get the message out there about the necessity to manage mental health in the gambling space is a huge victory that is long overdue.” •
Disrupting the market
JACOB FORTINSKY: REMOVING THE VIG NOVIG, AN AMBITIOUS BETTING EXCHANGE STARTUP, has its sights
set firmly on disrupting the sports betting arena. After receiving the backing of Y Combinator, SBC Leaders sat down with CEO Jacob Fortinsky to discover how its commission-free offer will change the playing field BY ERIN GALLAGHER
SBC: Congratulations on receiving the backing of Y Combinator, a prestigious startup accelerator program. How important is joining this program in the overall development of Novig? JF: We’re very excited to have the backing of such a renowned startup incubator which has a wealth of experience scaling startups into unicorns like Airbnb, Coinbase, Doordash, Dropbox and many more. They share our vision for transforming the sports betting industry, and they’ll help us accelerate turning the vision into a reality. By joining the program, we receive many benefits, such as access to their pool of top Silicon Valley talent, mentorship from some of the most successful investors and technologists and participation in a cohort with founders of other high-growth startups. SBC: Talk us through the product offering, what can we expect from your betting exchange? JF: Our core product offering is our high frequency sports trading exchange that lets users bet directly against friends or the market in a peer-to-peer network. This will make the sports betting experience a lot
Disrupting the market
more engaging, more efficient, and most importantly, more profitable. As our name suggests, we are eliminating the vig that sportsbooks traditionally take as a profit, allowing us to guarantee that our platform will consistently offer the best lines. SBC: Could you give us an insight into why Novig was established and your overall aspirations? JF: My cofounder Kelechi and I started Novig with the conviction that the exploitative and outdated sports betting industry will eventually
converge toward the more efficient exchange model. I used to be an avid sports bettor before I grew dissatisfied by the discriminatory practices, inefficiency, and staleness of the traditional sports betting experience. Kelechi saw the blatant inefficiencies of the industry from a purely technical perspective, coming from professional experience at some top quant shops. As it stands today, there are effectively no casual sports bettors who are long-run profitable. Traditional sportsbooks skim an average of 7-8% of their total betting volume, making it
44 SBC LEADERS • JULY 2022
KELECHI SAW THE BLATANT INEFFICIENCIES OF THE INDUSTRY FROM A PURELY TECHNICAL PERSPECTIVE virtually impossible to find any edge. For those who are skilled enough to make money betting, they inevitably face strict limits, are removed from sportsbooks, or are even refused payouts. Given our experience not only as sports bettors, but also as professionals in fintech and quant trading, we thought we could
AS OUR NAME SUGGESTS, WE ARE ELIMINATING THE VIG THAT SPORTSBOOKS TRADITIONALLY TAKE AS A PROFIT develop a market-based solution to deliver the first commission-free sports betting platform. I think the public perception of sports betting will slowly evolve to be more like poker, as people begin to treat it more a game of
skill than chance. As the American market matures and becomes more competitive, we envision ourselves emerging as the dominant venue for all liquidity in the sports betting space. We believe that our platform can offer the best lines in all markets — from money lines and spreads to in-game betting and futures markets. SBC: What is Novig’s target audience, and why do you feel these kinds of bettors will resonate with your core offering? JF: Broadly speaking, I think there are two categories of bettors that have something to gain from Novig’s unique model. There’s the casual bettor who seeks better lines and a novel in-game betting experience that combines traditional gaming and real-time trading. They want to play a game that isn’t rigged against them, and they’re rightfully fed up with the exploitative nature of the traditional betting model where the house always wins. And then there’s the sharp bettor, who plays game theory optimal poker, trades stocks and crypto, and isn’t afraid to crunch some numbers to find an edge. These are the players who shop lines across different books and might even use sophisticated hedging and arbing strategies. There’s no platform for these players to make their own markets or deploy their own trading strategies without being restricted or blacklisted by the books. Ultimately, that’s exactly what we’re offering: a level playing field for casuals and sharps alike, where the house doesn’t play and it’s anyone’s game. SBC: What makes Novig’s proposition unique compared to other exchanges that are looking to launch in the US? JF: We’ll be the only exchange to offer commission-free betting. For the average bettor, we won’t take a cent of their bets, which cannot be said for any of the competitors as far as I’m aware. We believe there will be a race to the bottom in terms of the vig that sportsbooks are charging, but we’re starting at zero, allowing us to undercut our competitors. As a result, we will attract the most liquidity because we will be the platform with the most competitive markets and highest concentration of profitable users. We’re traders at our core who know how to build a product
to serve the needs of casual sports bettors and sharp algo traders alike. We’re confident that Novig will stand out for both its unique model and technical innovation. SBC: We are yet to see a betting exchange go live in the US, why is this the case? How is regulation progressing to accommodate more exchange launches? JF: It’s a complicated marketplace. Since the repeal of PASPA, mobile sports betting is now legal in half of the states, but states are currently only regulating traditional sportsbooks, which are simpler to regulate than exchanges. Consequently, to get approved in a given state, we have to educate the regulators as to how our innovative product functions and work alongside them while they develop a
THE COMPANIES WITH THE SIMPLEST VALUE PROPOSITION HAVE THE EASIEST MARKETING STRATEGY
regulatory framework for exchanges, which takes time. Unlike traditional sportsbooks who trade against their users, we do not have any action in the underlying sports events. Users’ bets are filled by other users on the exchange, who can be casual sports bettors or financial institutions. We also don’t fix lines in the way that traditional sportsbooks do, but rather we let the market determine the fair odds. These are just two of the unique regulatory questions that arise with the introduction of betting exchanges. There are a couple of commissionbased betting exchanges that are looking to launch in New Jersey imminently, and we’re rooting for them. If their launch is seamless and successful, it would only accelerate adoption by other states once they realise the tremendous benefits of approving exchanges. Over the next few years, we anticipate that exchanges will dominate the sports betting landscape. Customer acquisition costs of traditional sportsbooks are skyrocketing at a rate that is simply unsustainable. The primary reason
THAT’S EXACTLY WHAT WE’RE OFFERING: A LEVEL PLAYING FIELD FOR CASUALS AND SHARPS ALIKE why these costs are so high is that sportsbooks are not offering any differentiation, and therefore have to spend millions on sign-up offers and promos. Our product is innovative and will be strictly better for all sports bettors, which will allow us to acquire customers a lot more easily. SBC: Can you give us an indication of your marketing strategy and how you will attract new customers? JF: The companies with the simplest value proposition have the easiest marketing strategy. Our message is clear: we will offer the best lines with zero commission – no catch. We won’t have to rely on over-the-top media blitzes and silly gimmicks. The message of “we want you to win, they want you to lose” is something we are confident will resonate with both existing and prospective sports bettors. •
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North American opportunities
NICK NALLY: POWERING THE SPREAD OF ONLINE GAMING IN THE US
THE MANAGING DIRECTOR FOR AMERICAS outlines the
reasons why Continent 8 Technologies is so committed to the US before shedding some light on the company’s plans for the post-PASPA market in 2022
BY ERIN GALLAGHER
SBC: Your plans for the North American market are clearly ambitious. Can you tell us more about them and why you are so committed to the region? NN: North America is undoubtedly one of the largest regulated online gambling markets in the world. Over the past 12 months alone, we have
seen a wave of states embrace regulation and roll out their own regulatory frameworks. This is not only in the US but also in Canada where provinces like Ontario have made the headlines with their recent launch of a regulated igaming market. Due to the scale and scope of the market, it is high on the agenda of the vast majority of our customers. As the leading provider of managed hosting,
North American opportunities
connectivity, cloud and security solutions to the global igaming industry, we wanted to ensure that we could support our operators from day one of any state or province opening. This first-to-market approach has seen us be chosen by a vast majority of the biggest names in the US online sports betting and igaming market. In fact, we now serve well over 80% of the top 20 biggest and most dominant operators in the US market (according to the EGR US Power Rankings). SBC: How are you helping operators and suppliers enter US states as and when they open their doors to legal online gambling? NN: It starts with ensuring that Continent 8 has the necessary
WE NOW SERVE WELL OVER 80% OF THE TOP 20 BIGGEST AND MOST DOMINANT OPERATORS IN THE US MARKET approvals to launch in each state that goes live. To date, we are up and running in 24 US regulated markets with more set to go live over the coming months. To do this, we take a proactive role with regulators from a very early stage to not only understand the requirements they will likely require us to meet, but to also share our understanding and experience from an infrastructure perspective to help guide their frameworks. This has allowed us to
offer unrivalled levels of support to our customers. Take New Jersey, for example. Our Atlantic City data centre – housed in the Atlantic City Convention Centre – offers a unique, independent hosting site, compliant with international security standards with multi-state connectivity across the US and directly into a global, private network of 85+ locations around the world. Not only that, but it is fully compliant with DGE regulations and is the only licensed facility that can house gaming infrastructure outside of a licensed casino. We are now in the final stages of completing the stage three expansion of this site, adding 30% more capacity. Of course, we are also taking steps to position Continent 8 as a leader in other US states such as Pennsylvania where we have recently been given the green light by the Pennsylvania Gaming Control Board to launch our Public Gaming Cloud; the first regulated offering of its kind in the state. SBC: Can you tell us more about your cloud solution? NN: Our Public Cloud platform offers customers a multi-tenanted, scalable and resilient IaaS platform that allows them to host infrastructure as virtual machines. Key features of the platform include a self-service portal with template-based provisioning, feature-rich Edge devices, the ability to integrate with Continent 8’s Co-Location, MPLS network and Cloud Connect services, plus DDoS protection and other cyber security safeguards.
WE ARE ALSO TAKING STEPS TO POSITION CONTINENT 8 AS A LEADER IN OTHER US STATES SUCH AS PENNSYLVANIA A key benefit to customers using the cloud is that it removes the need for ongoing hardware investment which in turn provides the flexibility to pay for resources based on consumption. We also fully manage the cloud environment, removing the need for customers to maintain and support
48 SBC LEADERS • JULY 2022
infrastructure. Instead, they can focus on growing their business. SBC: You recently launched your Public Cloud in Ontario. Do you believe that Canada offers just as much potential as the US when it comes to regulated online gambling? NN: Canada certainly forms a very important part of our plans for North America and again we are taking a first-to-market approach here. In terms of potential, you just have to look at the reaction to Ontario opening its doors to see that there is a huge appetite among operators and suppliers to get in on the action as Ontario will likely be a catalyst for other provinces doing the same – as we saw in the US with New Jersey. To meet this demand for market entry, we recently launched our Public Cloud solution in Ontario. SBC: You mentioned that you would be launching in additional US states this year. Where is next and how do you determine which states to enter and when? NN: We have an aggressive roadmap and we closely monitor which markets are set to regulate next. We recently
ONTARIO WILL LIKELY BE A CATALYST FOR OTHER PROVINCES DOING THE SAME – AS WE SAW IN THE US WITH NEW JERSEY went live in Ohio and Kansas and our intentions are to launch in Florida, Massachusetts, Nevada and North Carolina in the coming months. In addition, we have been busy setting up disaster recovery locations across a number of US states. Our first-to-market approach is an ambitious one but we know that it’s important for our customers to be ready for launch when a state or province goes live. They know that in Continent 8 they have an infrastructure partner that can support them in any location they need. It’s because of our flexible and agile nature that we can facilitate this rapid and evolving landscape.
IT PROVIDES UNRIVALLED LEVELS OF SECURITY BY BEING OUT OF THE REACH OF DDOS ATTACKS
SBC: Continent 8 recently made the headlines with the launch of its innovative Gaming Exchange. What is it and how does it benefit operators and suppliers? NN: The Continent 8 Gaming Exchange is a powerful private internet and an exclusive community exchange for igaming businesses. It allows our customers to connect faster and more securely than over the standard internet, but also directly to one another. This is done via a VPN across our backbone network. It provides unrivalled levels of security by being out of the reach of DDoS attacks. That it can be accessed without the need for additional configuration is another big upside. In addition, customers connected via the Gaming Exchange will gain access to a Premium Portal, an analytical dashboard that allows them to view and monitor traffic flows within and outside of Continent 8 to other gaming partners. We will be showcasing the Gaming Exchange alongside our full suite of solutions at the SBC Summit North America next month so make sure to stop by Booth 221 to meet our team and learn more. •
A regulator’s view
AGCO’S DOUG HOOD: SHAPING THE REGULATORY FUTURE FOR ONTARIO IGAMING WITH THE WRAPS BARELY OFF THE ONTARIO MARKET, we
get the views of one of its senior regulatory figures on the role that the Alcohol And Gaming Commission Of Ontario (AGCO) will play in creating a sector that is accessible, fair and safe for all
BY CHRIS MURPHY
n a bid to get a ‘regulator’s eye view’ of the nascent Ontario sports betting and igaming market, SBC Leaders spoke with Doug Hood, Sports Betting Project Director at the Alcohol And Gaming Commission Of Ontario (AGCO). A lawyer by training, Hood is responsible for developing and setting
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the overall strategic approach and implementation plan for the AGCO’s expanded sports betting mandate and regulatory framework. He has also worked previously with the AGCO Board to create the vision and set the foundation for a new subsidiary that will deliver an innovative approach to the conduct and management of a competitive and
regulated internet gaming market in Ontario. Opening up on the topic of all things Ontario and gaming, Hood stated: “Thanks for the chance to discuss what has been an exciting year for the regulated sports betting industry in Ontario, both online and in the landbased world. “With the passage of Bill C-218 and the legalisation of single-event sports betting in the summer of 2021, combined with the launch of the regulated internet gaming market on April 4, 2022, a large new menu of sports betting offerings have been unlocked for Ontario players and their introduction to Ontario accelerated. “As the regulator for all areas of gaming in Ontario, the AGCO has an
A brief introduction
ood is the Project Director for Sports Betting at the Alcohol and Gaming Commission of Ontario (AGCO), an arm’s length regulatory agency overseeing the province’s gaming, alcohol and horse racing industries. In this role, he is responsible for developing and setting the overall strategic approach and implementation plan for the AGCO’s expanded sports betting mandate and regulatory framework. Since joining the AGCO, he has served in a number of diverse and escalating roles including in Strategy and Policy, Legal Services, Operations, Corporate Services, and Communications and Corporate Affairs. He coled the successful merger of the Ontario Racing Commission with the AGCO, has played a key role in the AGCO’s transition towards risk-based, outcomes-based, and compliance-focused regulation, and led the establishment of the policy development, strategic planning and data analytics capacities at the AGCO. Hood received his Bachelor of Laws from the University of Western Ontario, graduating with distinction, and his Honours Bachelor of Arts in Political Science (minor in History) from Wilfrid Laurier University.
important role to play in the regulation of these new sports betting offerings as they become available in the province, whether through traditional channels, such as casinos or lottery products, or within the new internet gaming market.” While it is still a case of relatively early days for Ontario, Hood believes that the jurisdiction has already made significant progress in migrating players towards regulated products. “The recent launch of Ontario’s internet gaming market has clearly been a success to date, including the sports betting component,” he said. “One of the key objectives behind the new igaming market is to bring sites Ontario players are already gambling on under regulation so that
they can be held to high standards of responsible gambling, player protection and game integrity. “From a sports betting perspective, this meant creating a broad and outcomes-based framework that would capture the products that are important to Ontario players, including
simultaneously created the need to establish specific sports betting standards which require effective responsible gaming protections. In turn, he said, these help to ensure the integrity of the betting markets against activities such as insider betting or game manipulation.
AS THE REGULATOR FOR ALL AREAS OF GAMING IN ONTARIO, THE AGCO HAS AN IMPORTANT ROLE TO PLAY IN THE REGULATION OF THESE NEW SPORTS BETTING OFFERING traditional sports, esports, novelty, betting exchange, and fantasy sports products and cover various bet types, including in-game, pool, parlay and exchange bets.” That, advised Hood, has
According to Hood, there are four main tenets that operators must respect. The first of those is a requirement to actively monitor the betting markets for suspicious betting activity. Secondly, they should engage
A regulator’s view
independent integrity monitors (IIMs) who receive, assess and distribute unusual/suspicious betting alerts in accordance with the registrar’s standards. Third on that list is the prohibition of insiders, including coaches, athletes and referees, from betting on certain events. Lastly, operators should be ensuring that sport and event offerings meet acceptable betting criteria and are not objectionable.
WHERE REGULATORY EXPECTATIONS ARE NOT MET, THE AGCO MAY USE A FULL SPECTRUM OF COMPLIANCE RESPONSES TO ACHIEVE THOSE GOALS He explained: “The same basic framework for regulating sports betting established for internet gaming has been mirrored in the casino and lottery sectors, with some minor modifications made to reflect sector realities, and this overall framework has been wellreceived both by industry and sports integrity advocates alike. “For example, the International Betting Integrity Association has indicated that they would like to see the Ontario model applied in other jurisdictions moving forward.” According to Hood, however, for this approach to be effective in practice, the AGCO needs to ensure that operators and suppliers are meeting its standards through effective compliance oversight. While the AGCO aims to operate as an ‘arm’s length regulatory agency’, the Project Director is unambiguous about its capacity to act with apropriate force when necessary. “Our compliance approach involves working collaboratively with industry to maintain or, if necessary, re-establish compliance. “Where regulatory expectations are not met, the AGCO may use a full spectrum of compliance responses to achieve those goals, including education, warnings, financial penalties, suspensions, and, in the most serious cases, revocations. “In cases where severe incidents occur, the AGCO will act
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proportionately to ensure the public is protected. For example, the AGCO has recently issued notices of monetary penalties to online operators in relation to certain advertisements.” On a more conciliatory note, he added: “That said – this is a brand new market – the first of its kind in Canada. We are, therefore, prepared to be nimble and are actively listening to feedback from a broad range of stakeholders.”
BEYOND COMPLIANCE, PROTECTING THE SPORTS BETTING MARKETS WILL REQUIRE US TO WORK GLOBALLY AND DEVELOP STRONG RELATIONSHIPS WITH OTHER REGULATORS
At the time of going to press, Hood was in final preparation for a panel appearance at this year’s Canadian Gaming Summit in Toronto where he was scheduled to discuss the AGCO’s regulatory approach and some of the lessons to be learned from other parts of the world. He noted: “Beyond compliance, protecting the sports betting markets will require us to work globally and develop strong relationships with other regulators, law enforcement and sports integrity advocates so that we can share best practices and learn from each other. In the end, such discussions may lead us to refine our sports betting regulatory framework but, for the time being, we feel like we have landed in a good place here in Ontario.” •
Hall of Fame
WHY PHOTOGRAPHY’S LOSS HAS BEEN SPORTS BETTING’S GAIN AS SHE PREPARES TO BE INDUCTED into the Sports
Betting Hall of Fame, Sandy Drozd reflects on an “interesting career” that started with a part-time job during college and grew into her becoming one of the industry’s leading technology experts
BY MARTYN ELLIOTT
hile most people who choose a career in sports betting are motivated by their love of sports, the story of how Sandy Drozd started is very different. During more than 30 years in the industry, she has travelled the world and helped to implement a host of important technological changes, but the wagering business was not originally in her plans. “It's been an unexpected career choice. The truth is I was an art major, art and communications, and I had no intention of going into this industry at all. I wanted to be a photographer,” recalled Drozd, now VP Special
Projects for Elys Game Technology’s USBookmaking operation. “I was at University here in Las Vegas and, as soon as I turned 21, I took a job working in a sportsbook doing auditing. It was just a part-time thing, but I had a knack for it and I just seemed to really blend with my co-workers and really enjoyed what I was doing.” Given how quickly Drozd’s career took off and the industry-changing projects she was soon trusted to manage, the phrase “had a knack
I HAD NO INTENTION OF GOING INTO THIS INDUSTRY AT ALL. I WANTED TO BE A PHOTOGRAPHER
for it” is an understatement. The first of those major projects was the introduction of computerised sports wagering at the Marina Hotel & Casino. “I was only 22 and they asked me to come over, set up their audit department and then help them bring the system through the approval regulatory process. And that's really how it all started,” she recalled. “I jumped right in from an auditing perspective and, as a result of that, I had to really drill into the technology, the reporting and the regulatory process. “I also had to work closely with the platform provider, which was Autotote, a totaliser system providing software to all of the race tracks. What they wanted to do was convert it to sports betting and, as a result, it took over a year. But I was able to really connect with regulators, learn the industry, get an introduction into technology and successfully get the system approved. “From there, while still going to school, I moved on to Caesars Palace, which wanted to do the same thing. That's really how I started, by setting up audit divisions, bringing these systems through the regulators, and then moving on to the next property.” After graduating, Drozd opted not to pursue her chosen major and instead focused on a career that “sort of fell in my lap” and “just snowballed”. A series of consultancy roles for Nevada and Mexico-based sportsbooks and racetracks followed, during which time she met such industry stalwarts as fellow Hall of Famers Roxy Roxborough and Vic Salerno. In 1997, the connection with Salerno led to a job with American Wagering and the opportunity to work on projects that changed the face of the industry, helping to move it towards mobile betting and in-person selfservice solutions.
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'm very passionate about animals and was able to put that to good use when I was working in consulting for a company that was out of El Paso. They had this horse and dog track in Juarez, Mexico. Unfortunately, when the greyhounds were racing there, they were either at the beginning or the end of their careers. And when they were at the end of their career, quite often they would be put down rather than adopted. It was quite cruel how they were treating them and once I became aware of that, I worked with the Greyhound Association in Arizona to create a process where those dogs would be adopted, as opposed to being put down. Although they were treated fine in the kennels, the thought that they were coming there to be put down because of whatever business dealings were happening was awful. I was able to save the lives of many, many dogs and put them out for adoption. That, to me, was a huge, huge thing - I feel really good about that. In addition to that, we organised a hot air balloon festival at the racetrack in Juarez to raise funds for the greyhounds. The event was quite amazing and we had a real carnival atmosphere for all the families that came, at the same time as raising money to save animals. That’s probably the biggest highlight of my career.
“Vic was such a visionary at that time. He was way beyond where technology in the industry really was,” Drozd explained. “We provided software to every book in Las Vegas - the Mirage, Caesars, all of the big main locations, in addition to our own - but sometimes there was resistance to change and to new things. It was hard sometimes to push people to the next level to say, ‘Hey, this is going to be really great. This is the way of the future’.” At a time when remote betting involved a phone call to the sportsbook and a room full of ticket writers taking wagers, the idea of
mobile betting seemed far-fetched to many. However, the American Wagering team, with Drozd directly involved in product development, eventually managed to convince its customers and the Nevada Gaming Control Board of its benefits.
THE CONNECTION WITH SALERNO LED TO A JOB WITH AMERICAN WAGERING AND THE OPPORTUNITY TO WORK ON PROJECTS THAT CHANGED THE FACE OF THE INDUSTRY
The available technology functioned very differently to the slick systems of today, with the earliest incarnation running on a BlackBerry and requiring a five-minute log-in process that involved a series of camera flashes and phone vibrations to help verify that the user was in Nevada. The system later evolved to work on iPhones and Android devices, and mobile wagering was born. Drozd said: “That was really big for us because nobody was offering sports betting on a mobile device at that time, so it was quite revolutionary. I was really happy to be part of that and to be working with the tech
Hall of Fame
team to develop the product’s user experience, understand what the technology could do for us and how we could take it to the next level.” She was also instrumental in the introduction of self-service betting terminals at casino sportsbooks. Again, the first iterations were far removed from what bettors see today, with huge kiosks that employed early facial recognition technology to allow account holders to log-in.
IT’S IMPORTANT TO HAVE PROCESSES IN PLACE EVEN THOUGH, AT TIMES, THEY CAN FEEL LIKE BLOCKERS TO PROGRESS “One of the kiosks we had was so big and clunky that when we were trying to sell it to the Mirage, (the casino’s Director of Administration and Hall of Fame member) Yolanda Acuña used to refer to it as Rosie because it reminded her of the robotic housekeeper in The Jetsons,” said Drozd. The objections were not merely about aesthetics though, as casino employees worried that they would lose their jobs to the new technology. Eventually, American Wagering was able to persuade people that the kiosks were an enhancement for sportsbooks rather than a way of cutting payroll costs, and they became widely adopted. Once American Wagering had been acquired by William Hill in 2012, Drozd focused on product development and honing delivery methodology. Her skillset was hugely important to the company once PASPA was overturned and companies raced to be first to launch in new states as they opened up legal sports betting. “I worked very closely with (former William Hill US CEO and Hall of Famer) Joe Asher and we were among the first to market in New Jersey,” she recalled. “From there, we just moved from state to state, always doing the regulatory piece and product at the same time, which was so exciting as I never thought that sports betting would ever go outside of Nevada.” That “regulatory piece” has often
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involved seeking approval for new products, something that Drozd has consistently achieved throughout her career. She attributes this success to an ability to form strong relationships with regulators’ technology chiefs, from Travis Foley and Jim Barbee in Nevada to managers in newer jurisdictions as they went live. “It’s important to have processes in place even though, at times, they can feel like blockers to progress. But
IN THE END, WE ALL WANT THE SAME THING - A SAFE MARKET FOR OUR CUSTOMERS THAT GENERATES REVENUE FOR STATES
establishing open and transparent relationships with regulators is the way forward, as in the end, we all want the same thing - a safe market for our customers that generates revenue for states,” said Drozd. In 2019, Drozd joined Wynn Resorts and played a key role in the launch of WynnBET in seven states, before linking up again with Salerno at USBookmaking earlier this year. So 30 years into a storied career in an industry she fell into, is Drozd thinking about finally getting that photography job? “I don't think so right now. I've missed it but I'm not sure it would have been as exciting as the sports betting industry has been for me.” •
A homegrown approach
CREATING A STAND-OUT EXPERIENCE IN ARKANSAS AS MORE STATES CONTINUE
to legalise sports betting, we shine a spotlight on Arkansas and how local partnerships can help pave the way for growth in this market BY CRAIG DAVIES
ack in March, Arkansas was one of the latest states to join the legal sports betting club. So as more companies eye up new opportunities in the Natural State, what can operators and suppliers do to stand
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out from the competition? Speaking to SBC Leaders, Brandon Walker, Head of Amelco USA, and Victor Araneda, Chief Business Development Officer of GAMING1, discuss the competitive opportunities and regulatory challenges within Arkansas before highlighting the importance of local partnerships. SBC: How would you assess the licensing structure within the Arkansas market? What competitive advantages, or disadvantages, does it possess when compared to other states? BW: Arkansas has taken a unique homegrown approach and it will certainly create an innovative playing field for their casinos. As of now, there are currently three casinos in the state of Arkansas, with one more being built.
In theory, each of these casinos have been granted two licences – allowing for eight joint ventures of their choice with online platform and sportsbook suppliers to power their operations. I suspect, however, that not all these casinos will be making use of their second licence as they’d like to keep the first for market share. When it comes to competitive advantage, this means that we have the ability to flex our muscles when it comes to what we
ARKANSAS HAS TAKEN A UNIQUE HOMEGROWN APPROACH AND IT WILL CERTAINLY CREATE AN INNOVATIVE PLAYING FIELD FOR THEIR CASINOS
Brandon Walker, Head of Amelco USA
Victor Araneda, Chief Business Development Officer of GAMING1
have to offer. In this structure there is a massive advantage for the local brands’ exposure – where they can take the initiative in providing online sports betting for the state. By partnering with us, this means that Saracen, a local casino, can get the best of a big-brand sportsbook that services the likes of Fubo and Hard Rock elsewhere – and now deliver it in a way that can really provide an advantage to the local community. When it comes to disadvantages, Iowa and Tennessee could draw interesting comparisons here. In contrast, their licensing models are open to far more applications. Inevitably, this can result in a lot of deadwood with average products and systems. I believe less can be more and, in the case of Arkansas, this could really be an advantage when it comes to providing a top local playing experience. VA: GAMING1 has been the preeminent proponent of this type of licensing system at an international level for well over a decade. We know from experience how crucial it is for the long-term viability of brick-and-mortar operators to be allowed to expand their operations to an interactive environment.
INEVITABLY, THIS CAN RESULT IN A LOT OF DEADWOOD WITH AVERAGE PRODUCTS AND SYSTEMS This is something we’ve seen in our own land-based markets transitioning from pure retail in Belgium, France and Switzerland, as well as with several of our international partners. Without the ability to transition, traditional casinos face an existential threat. The key advantage this structure provides to lawmakers, regulators and patrons, is that traditional operators tend to have strong ties, sometimes decades long, to the communities they serve. In most cases, operators like Southland have spent significant amounts in creating the infrastructure, brand recognition and best practices, not to mention their function as job generators. Allowing fly-by-night operators, many of which were in operation before regulations were in
A homegrown approach
place, is a mistake that can be easily avoided by approving frameworks similar to Arkansas. SBC: With only a select number of operators anticipated to enter Arkansas’ sports betting arena, how do you propose to stay ahead of the competition? Do you believe this approach will benefit the market in the long term? BW: Yes, this approach will benefit the market long term. When you break it down you get a perfectly specialised offering homegrown book, local brand, with the revenue being re-invested in the community. Saracen will be a great boost to the local economy if we ensure we provide them with the best betting app in the state. If we can do a great job providing the tech, they’ll have serious market
ONE MAJOR BLIP OR DOWNTIME DURING YOUR FIRST FEW DAYS REALLY CAN MAKE OR BREAK YOUR BRAND’S SUCCESS
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share as players will have no need to look elsewhere. To do that, it’s all about consistently delivering the best in new technology, features and customer support. Key to the early days of going live for any operator is to listen to initial customer feedback in real-time and enhance your product accordingly. The first days of delivering your player UX cannot be understated – you can look at social media to see why. One major blip or downtime during your first few days really can make or break your brand’s success. In such a college sports heavy market as Arkansas, we also need to ensure we provide more content, events and games than our competition. So much so, that we’ve actually launched a league and market-specific trading team to work with Saracen Casino. This means that our trading team is manually creating its own new markets with Saracen to cater to localised demand for college sports. VA: Just like regulators have a responsibility toward safeguarding the long-term viability of local businesses, so do operators towards their patrons.
WE BELIEVE THAT GENERATING OMNICHANNEL EXPERIENCES WITH OUR CASINO PARTNER IS KEY TO THAT SUCCESS This is more so the case where players only have a handful of options. We believe that generating omnichannel experiences with our casino partner is key to that success. This type of transformational change requires significant work and commitment from all team members. It starts with the right choice of partner, surrounding your operation with time-tested principles and practices, and continues with stepping up operational capability and having a collaborative mindset toward product development. We trust our partners' understanding of their market, and we know our tech leads can deliver a product that fits the needs of the local player base. We know Southland’s importance to their community of Arkansas and we are thrilled to be on this journey together. •
A long journey ahead
ONTARIO: THIS IS NOT A RACE TO THE FINISH LINE AMANDA BREWER, Country Manager Canada at Kindred
Group, explains the reasons why Ontario would do well to learn from the US markets and self-regulate their spend and promotional activities for profitability
BY JAMES ROSS
hannelisation is key for the success of any locally regulated market and to be successful, licensed operators must be given the right framework to operate in a competitive way. Speaking a few months after the launch of the Ontario igaming market, Brewer delved into the
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province’s transitioning period of licensing, what the market has experienced - and learned - in the months since opening up, challenges that have appeared, home market
I COULDN’T BE PROUDER OF ONTARIO FOR LAUNCHING NORTH AMERICA’S MOST OPEN IGAMING MARKET
advantage and the future of Ontario. SBC: Why is Ontario so unique when compared to other model jurisdictions? AB: I couldn’t be prouder of Ontario for launching North America’s most open igaming market. With approximately 40% of Canada’s economy and 37% of the national GDP, Ontario offers an open licence model (no tethering) and the ability for operators to provide both sports betting and igaming, including DFS and esports. The province is home to a strong digital technology sector, a highly skilled and multilingual workforce, strong capital markets, and a competitive tax climate - all key
measures that make Ontario an attractive location. SBC: Since the launch in April, what have you learned about the market? AB: There is room for healthy competition and most of the leading operators in the world have already launched in the market. While the volume of advertising has risen noticeably, it feels responsible. Offering bonuses or inducements anywhere but an operator’s landing page or through direct customer marketing is prohibited, which means you won’t be driving downtown Toronto or Ottawa and see billboards with bonus or sign up offers. I think this has helped launch the market in Ontario more smoothly. SBC: A transitioning period of licensing is currently tolerated through the application process. But does this just transition from grey to black? And what damage, if any, does this cause? AB: The short answer is you only have two options in Ontario: apply and be granted a licence or exit out of the market. The “transition” period won’t last much longer. However, the Alcohol and Gaming Commission of Ontario (AGCO) has an open application process, so operators (non-grey market ones) can apply at any point in time. While you are correct in saying that the former grey market is now a black one, the AGCO has indicated a willingness to work with applicants to bring them into compliance. Operators pay a licensing fee to initiate the application, so there’s incentive to see the process through to completion. It stands to reason that there
THE SHORT ANSWER IS YOU ONLY HAVE TWO OPTIONS IN ONTARIO: APPLY AND BE GRANTED A LICENCE OR EXIT OUT OF THE MARKET
will be enforcement actions taken for suppliers who continue to service black market operators. SBC: So what challenges does this cause from a customer retention standpoint? AB: Kindred will continue to take a disciplined approach and not engage in any unsustainable push for player retention, be that marketing or bonusing. Ontario is one of the more competitive markets in North America, and customers will be trying out different apps to find out what works best for them. We know how important it is to build relationships with our customers and provide them with an exciting and robust product offering that uses the latest game features and functionality, both on the casino and the sports betting sides.
WHEN WE ENTER A MARKET, IT IS FOR THE LONG TERM
A long journey ahead
When we enter a market, it is for the long term, and our focus is on ensuring we operate in a responsible and sustainable manner and make our customers as happy as possible.
from far away. Kindred prides itself on providing a hyper localised experience for its customers, whether they be in Ontario, Pennsylvania, the UK, or France.
SBC: Due to the nature of the market, does home market advantage count for anything? AB: Operating in Canada always requires a different approach. This is underscored by the fact that so many operators, like Kindred, have hired locally to be able to tap into the uniqueness of this market. Home market advantage is achieved by having employees located in Ontario who understand what resonates with customers and who can keep an eye on what is going on in the market. I don’t know how that can be achieved
SBC: What has surprised you the most about the Ontario market? AB: Truthfully, nothing yet. It’s a new market and I expected some hiccups. My hope is that as the market grows and matures, we will be able to achieve refinements in some of the AGCO’s and iGaming Ontario’s standards to help operators run their businesses more efficiently.
OPERATORS IN ONTARIO WOULD DO WELL TO LEARN FROM US MARKETS AND SELF-REGULATE THEIR SPEND AND PROMOTIONAL ACTIVITIES
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SBC: Are the predictions made prelaunch coming true or are we seeing a different narrative? AB: The prediction made pre-launch was that Ontario would become one of the most important markets in the world because of its open licensing and robust product mix for online casinos and sports. Given the number of licensees already in the market, which include some of the biggest operators in the world, this should be seen as confirmation.
THE HOPE IS THAT ONTARIO’S MARKET WILL BE LARGE ENOUGH THAT OPERATORS OF DIFFERENT SHAPES AND SIZES CAN SUCCEED The hope is that Ontario’s market will be large enough that operators of different shapes and sizes can succeed. SBC: What does the future hold for Ontario? AB: Channelisation is key for the success of any locally regulated market. To be successful, licensed operators must be given the right framework to operate in a competitive way. Operators in Ontario would do well to learn from US markets and selfregulate their spend and promotional activities to have a better defined path to profitability. Kindred wants to be in Ontario for the long term and help build a sustainable industry. This is not a race to the finish line – we’re at the beginning of a long journey. •
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Bison Bonanza Basic Info: The almighty bison roam the reels in this scatter pays video slot that incorporates a maximum win potential of up to x10,000 the bet. Featuring cascading symbols, a free spins bonus, free spins selection and a Bison bet, bonus gold coin symbols are used to activate the free spins round. During this mode, the multiplier symbol will become active, awarding a multiplier from x2 to x500 when appearing in view during a win cascade. At the start of the free spins bonus, the player is given the choice of four options. Meanwhile, the bison bet can be activated during the base game. Once activated, the player can choose from
Reels: 6x5 Paylines: Scatter pays RTP: 96.50% Volatility: Medium - High Key Features: cascading symbols, a free spins bonus & selection, and a Bison bet
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Def Leppard Hysteria Basic Info: In this branded title, Def Leppard hit the stage to rock out a maximum win potential of x10,000. Within the base game, on any random non-winning spin, symbols shuffle and three to six wilds are added. Moreover, players can fill the charge metre by winning with randomly selected symbols. Once filled, this will add three to six wilds to the grid. The title includes a Pour Some Sugar on Me feature,
Reels: 5x7 Paylines: Cluster pays RTP: 84.28 - 96.27% Volatility: Medium Key Features: A ‘Pour Some Sugar on Me’ feature and a charge metre
66 SBC LEADERS • JULY 2022
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Magic Spins Basic Info: Abracadabra! This cluster pays video slot takes players on a magical adventure with a maximum win potential of up to x2,500 the bet. In the game, landing six or more bonus symbols of any type activates the Hold the Jackpot bonus game. Special bonus symbols drawn on the big and mega reels become sticky for up to 10 respins, increasing the chances of activating the Hold the Jackpot bonus game.
Reels: 29 Paylines: Cluster pays RTP: 96.17% Volatility: Volatility Levels (optional) Key Features: A Hold the Jackpot bonus game, sticky bonus symbols and four potential Jackpots to win
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Goblins & Gemstones: Hit ‘n’ Roll Basic Info: This enhancement of one of Kalamba’s titles comes with new mechanics and features as well as a maximum win potential of up to x38,890 the bet. In the game, when three bonus symbols appear in any position, the Hit n’ Roll bonus feature is triggered. Each time it is activated, the game awards one bonus wheel spin. After the bonus wheel spin is played, the player
Reels: 5x4 Paylines: 1,024 RTP: 96.86% Volatility: High Key Features: A Hit n’ Roll bonus, Cashpots, three types of Free Spins, and a Bonus Wheel
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Alex Cohen, COO and Co-Founder at Kalamba Games, shared: “Drawing upon the original title’s long-standing player base while engaging new players through an upgraded max win and a host of gameplay improvements means that we will be delivering a game that has universal appeal. We look forward to seeing the reception the title receives from players upon release.”
State of play
ANDRZEJ HYLA: SCALE OF US OPPORTUNITY NEEDS NO INTRODUCTION WAZDAN’S CHIEF COMMERCIAL OFFICER looks at the
state of play for the US market, unpacking some of the key opportunities presented for the games provider as it looks to solidify its North American standing
BY CHRIS MURPHY
SBC: For those of our US readers who are less familiar with Wazdan, can you explain more about your company and what it brings to the marketplace? AH: Wazdan has been focusing on slot development for more than a decade, boasting a portfolio of more than 150 HTML5, mobile-first titles built with player experience as the focal point. Our game development philosophy is based on honesty, creativity and innovation. Ultimately, we want players to enjoy our content and operators to see tangible results from our games. With a broad portfolio and 24 annual releases, we contribute to the modern igaming industry with our highly immersive games and innovative player engagement boosting tools and solutions, such as our flagship Cash Drop promo tool or cutting edge Volatility Levels feature. Our titles are certified in 20 jurisdictions worldwide, with more being added regularly, and can be played in 25 languages. We proudly see ourselves as facilitators of our clients’ growth, which links with our business ethos. We know that we can only achieve this by providing our clients with bestin-class games, liaising with them to ensure they take our optimised titles
OUR GAME DEVELOPMENT PHILOSOPHY IS BASED ON HONESTY, CREATIVITY AND INNOVATION
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for their target regions, and constantly expanding our top-tier player engagement suite. SBC: You already have a significant presence in North America, having
been certified to offer games in Michigan, New Jersey, Ontario and West Virginia. Can you talk us through the current state of play with each of those states? AH: The scale of the US opportunity is one that needs no introduction, and has also lived up to the hype. Revenues have increased to $3.71bn in 2021, a year-on-year increase of 139%, while we see companies active from both North America and further afield. What is probably more exciting for all involved is that this growth shows
key features of this market that we need to know about? AH: Wazdan is currently on track to acquire its operational licence in Pennsylvania. Despite the state having the highest internet gaming tax rates (54% for online slots), it is still one of America’s fastest growing markets, with revenues having nearly doubled in the course of just one year. Pennsylvania legalised online gambling through the Expanded Gaming Act in 2017, and the Gaming Control Board has the authority to issue licences and regulate licence holders. Pennsylvania igaming stats show over $100m in GGR every month since March 2021. That puts the state among the leaders in online casino revenue, as only New Jersey and Michigan can say the same. With seven legal online casinos posting monthly gains in Pennsylvania, it’s one of the more stable and reliable igaming states.
WE’RE PROUD TO BRING OUR INTERNATIONALLY RECOGNISED TITLES AND PERFORMANCE-BOOSTING SUITE TO THE NORTH AMERICAN MARKET
no sign of slowing down. New Jersey is the number one state in terms of igaming revenue, with Michigan and Pennsylvania also topping the $1bn generated. These levels are so far unmatched by other states. We already have 40 games certified for New Jersey, including the top-
performing Power of Gods: Hades, and every month we launch new hits in the US. Our newest releases, Magic Spins and Sizzling Eggs will also be available soon for players in North America. SBC: What is the status with Pennsylvania now - and what are the
SBC: What are your plans for the forthcoming SBC Summit North America event and what message will you be taking to delegates? AH: It is a show we’re very much looking forward to, and we’ll be exhibiting our products at booth 413. We’re proud to bring our internationally recognised titles and performance-boosting suite to the North American market, and we can’t wait to present them to the US and Canadian operators. As a newer supplier into the US, we’re looking forward to providing a steady stream of fresh games to the market, with our customers in the US already benefiting from our leading games, such as Power of Gods: Hades. We are licensed in New Jersey, West Virginia, and Michigan, as well as Ontario, Canada and will soon be entering Pennsylvania, while our games are also available through an exclusive partnership with Light & Wonder, ensuring even further reach. Innovation is our driving force. We’ll
State of play
be showcasing our top performing slots and innovative engagement suite, including cutting edge in-game features, added-value promotional tools, and unique adjustable features. A fresh and hugely effective addition to our engagement suite offering that we would like to bring attention to is the Collect to Infinity feature. It promises to please even the most demanding players, enhancing their experience through high immersion levels and amplifying casinos’ results. It is an excellent retention-boosting tool and is intended to drive revenue growth for partners. In addition, we’re looking forward to showing how our unique Volatility Levels feature works as we maintain our commitment to innovation across our portfolio.
IT SHOULD BE A VERY EXCITING SECOND HALF OF THE YEAR FOR US, AND WE CAN’T WAIT!
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SBC: What has been the highlight of the year so far for Wazdan in the North American market? AH: It has been a really exciting year so far for us, with Wazdan being granted licences across three US states as well as in Ontario. We’ve also signed major deals with Light & Wonder and Rush Street Interactive. In addition, we’ve been nominated for the prestigious SBC North America Awards, highlighting the recognition we’re starting to receive on the continent. Our leading products have seen good uptake locally, with Power of Gods: Hades being nominated for the Best New Game title at the EGR North America Awards. However, North America is a new market for us, and we are still identifying what will resonate effectively with its audience. We are certainly on the right track with our US portfolio, containing a mix of established content from our existing catalogue and innovative new games built with the flourishing US market specifically in mind.
NORTH AMERICA IS A NEW MARKET FOR US, AND WE ARE STILL IDENTIFYING WHAT WILL RESONATE EFFECTIVELY WITH ITS AUDIENCE SBC: And what are your thoughts on the outlook for Wazdan in the remainder of 2022? What company developments can we look forward to? AH: We’ve got a number of new titles coming out in July and August, including 9 Coins, Power of Gods: Valhalla, and Sizzling Kingdom: Bison, and we’re looking forward to releasing these thrilling games, packed with innovative features to increase engagement and playtimes. Our Pennsylvania plans remain on track, with a number of strong conversations occurring as we’re set to achieve our licence in the state. On top of all of that, we continue to hire, so we’re set for an even bigger Wazdan team. It should be a very exciting second half of the year for us, and we can’t wait! •
Becoming a pioneer in Argentina
BOCA JUNIORS GAMING: TRADITIONAL CLUBS WILL CONQUER ESPORTS FEDERICO MAQUES, Marketing Manager of Boca Juniors,
speaks with SBC Leaders about the journey to launch an esports organisation and what it means to have a presence in a market with infinite growth potential
BY LUCIA MOURIÑO
n a global level, esports’ growing popularity is a trend which is nigh impossible to ignore; in some markets, this vertical has taken over more ‘traditional sports’. Statistics from the BBC have shown that global revenues for esports totalled $947m in 2020, with more than 429 million tuning in to esports events across the world. Fan engagement with esports across
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Latin America is second to none globally. This is evident in all areas: the passion of the player and the viewer is one of the reasons why so many organisations decide to invest in the region. In recent years, we have seen more football teams turn their attention towards virtual sports. Given its local and international history and the incomparable fan base that Club Atlético Boca Juniors has, arriving in the esports world in early 2021 was just a natural step for the club.
According to Maques, the rise of esports has become much more prevalent across Latin America, and Argentina in particular. This, he said, is why the club decided to expand into the esports space. Discussing the move, Maques noted that Boca Juniors Gaming holds the key to the club’s online expansion and aims to “bring the name and professionalism that an institution like Boca Juniors can provide to the scene”. He said: “The global trend shows that traditional clubs will reach esports and we wanted to get involved to be one of the pioneers in the country. In this sense, the turning point was to observe the trend and understand that esports are not only the future, but also the present.” However, despite the fact that the
move into esports has been “more than positive”, the road has not been straightforward. Maques shared: “It’s one that has to be taken calmly, keeping always in mind where we want to go and what we want to achieve.” The process started by trying to consolidate a League of Legends (LoL) and CS:GO team, as they are games that “lead the way in the region due to their past and present”. A year later, the CS:GO team became the one to beat in Argentina. But due to its history and identity, the club intends to become the leader in Latin America as it sets its sights on competing across other markets. Maques added: “On the LoL side, we were one of the strongest teams in the Liga Master Flow this season, coming out in first place in the regular season. We aspire to fight to the end to play
in the LLA. As we go through this process, we’re setting our foot into this space with PUBG and Brawl Stars.” The next step for Boca Juniors Gaming will be to conquer FIFA, he explained, adding: “We are very excited and waiting to see what the future holds. Everything takes time and we want to secure a strong foothold in as many esports competitions as possible.” In 2021, Boca was one of the 13 teams emerging from traditional football clubs that participated in the
EVERYTHING TAKES TIME AND WE WANT TO SECURE A STRONG FOOTHOLD IN AS MANY ESPORTS COMPETITIONS AS POSSIBLE
Brawl Stars Master League. Commenting on the benefits and disadvantages of leagues that exclusively have teams from football clubs, Boca’s Marketing Manager stressed that it was a productive experience since it brought the esports world closer to a traditional audience that might have not been aware of what they are and what they can do. “This is one of the main benefits of the league, to create bonds and grow the communities between traditional sports and esports,” he said, acknowledging that both clubs and organisers face a big challenge in studying an industry where methods of communication are different between traditional sports and esports. He stressed that including these teams in tournaments can help the
Becoming a pioneer in Argentina
games gain a more competitive stance, precisely because of the popularity of the clubs. “A clásico in Brawl Stars or in any esports game can simulate the same feelings and desire that you have to win a football match,” he noted. But while the exclusivity of clubs from traditional entities can have some disadvantages for those organisations that solely focus on esports, it can also create new alliances and relationships between the two worlds.
esports clubs and tech companies, sportsbooks and apparel brands are already popular among European and North American teams, Argentina is yet to reach the point where such collaborations are considered as a new revenue source. When asked about the team’s expectations around sponsorships in the near future and if they’re seen as a priority down the line, Maques assured that “it’s definitely one of our
“All the tournaments and leagues that are committed to the esports world are positive to the industry,” he added.
priorities, one of the key points in our commercial plans, since it will allow us to amplify and depend the work that we have done so far”. Moreover, he argued that the growth is a result of many factors, one of which is that more brands and sponsors are interested in supporting the industry. He stated: “It grows when we all push in the same direction, and the same happens with brands.”
The importance of carrying the success from the traditional to the electronic world When announcing the creation of an esports team, the club called it “part of Boca’s legacy to continue its success”. Being one of the most recognised football institutions in the world, bringing its name to any new discipline implies a great challenge and responsibility, something that Maques and the club see as a positive thing. “Boca Juniors demands excellence in all areas that it operates and that’s what we aspire to achieve. We want to bring Boca’s great name and prestige to the esports scene,” he said. In traditional marketing, linking a brand to a football team can be considered to be one of the most exclusive sponsorships, especially because of the brand exposure. While sponsorship deals between
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WE THINK THAT NEW BRANDS WILL CONTINUE TO JOIN THE INDUSTRY AS THE POTENTIAL IS ALMOST PALPABLE Maques also explained that in recent years, big brands have supported different esports organisations from Argentina, as well as a number of competitions. This is something that he believes won’t change any time soon. “On the contrary, we think that new brands will continue to join the industry as the potential is almost palpable,” he said.
Future expansion, mobile esports growth and Boca’s plans The popularity of Free Fire has contributed to Latin America becoming a hotbed for mobile esports. Maques predicts that this will continue to grow at a staggering speed in 2022 and beyond, arguing that the industry’s potential is limitless. “Mobile gaming is strongly evolving and is becoming more accessible, which makes it very popular and has a wide reach of players and viewers,” he said. “The Free Fire phenomenon in the region is amazing.” Boca Juniors Gaming’s plan was to initially compete in League of Legends and CS:GO, but it has already expanded to other games such as FIFA and PUBG among other games. Can we expect greater presence in other popular games? According to Maques, the club’s goal when entering a new game is to do it right, studying the scene and the existing tournaments to be able to settle in in the best possible way and “represent the colours and values that an institution like Boca Juniors has”. “We have new games in the pipeline, but this will be done and will be announced when we’re sure that it’s time to take that step,” he said. Looking ahead to the rest of 2022, Boca is interested in continuing this path of growth, winning the current tournament of the Liga Master Flow to fight for a spot in the Liga Latinoamericana, since “it is undoubtedly one of the most prestigious competitions on the region”. As for CS:GO, the plan is to continue dominating the local market to qualify for international tournaments and represent Latin America in the biggest stages. In the short term, Boca Juniors Gaming will compete in the Fire League, described by Maques as “a nice challenge”. In addition, the club landed in FIFA in April, and the expectations around possible achievements are high because the game includes “prestigious trips and competitions to aspire to”. The plan, Marques concluded, will be “to continue working throughout the year to represent Boca Juniors’ colours in the best possible way”. •
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BRAZILIAN GAMBLING: A LONG STORY SHORT BY GUSTAVO GUIMARÃES THE LONG AWAITED LEGALISATION of the
gambling industry in Brazil is still pending, but seems to be getting closer. With several proposals on the table at Congress, Gustavo Guimarães, Senate Adviser and former Head of the Secretariat of Evaluation, Planning, Energy, and Lottery (Secap), analyses the current regulatory landscape
BY FERNANDO NOODT MOLINS
razil’s rules that govern the gambling industry have changed over time. But based on recent events, the future looks bright for the sector. Almost all gambling has been banned in the country since the 1940s. While games of chance are prohibited, the Federal Government has exclusivity on the provision of lottery services under the state monopoly, and horse race wagering and games of skill, such as poker, are also legal. A turning point in Brazil’s gambling laws has been on the table for more than 30 years at the National Congress and judiciary system. There has been little change for decades, but the last few have led to a remarkable turnaround. In 2015, a first attempt to liberalise the Brazilian private gambling market came up as a legal design of instant lottery known as Lotex (Law 13,155). Through a public concession model, the tender took place in 2019, but the bidding
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consortium unsigned the contract and a new auction needed to take place. In 2018, one small step for lotteries, one giant leap for gaming: Law 13,756 fixed the distribution of traditional lotteries’ resources to different entities and innovated by legalising sports betting (SB), or the fixed-odds betting lottery model, restricted to the sports market, with bets linked to real sporting events. Still, sports betting has yet to become legal. Two years later, the Federal Supreme Court (STF) allowed states to explore lottery products. While the Federal Government maintains the private constitutional competence to legislate on lotteries, states can also operate. New players and competition were all
A TURNING POINT IN BRAZIL’S GAMBLING LAWS HAS BEEN ON THE TABLE FOR MORE THAN 30 YEARS
that were needed to end the longlasting lottery monopoly and enhance this industry and the economy. The result will be a Pareto improvement, good for players, companies, states and the federal government. Another crucial step was taken in 2021: Law 14,183 adapted the Brazilian taxation model on SB to the main practices of the international market, to incorporate internationally recognised practices, in which gross gaming revenue (GGR) is considered instead of turnover. In 2022, the Chamber of Deputies approved Bill 442/1991 which proposes the structuring of the “National Gambling and Betting System”, expressly allowing the exploration of casino games, bingo games, local lottery game Jogo do Bicho, online games and turf betting in Brazil, both online and landbased. The Federal Senate is currently debating the proposal. The pressure is on, as Brazilian
out for the regulatory framework to be ready by the legal 2022 deadline. The competition model is also key for regulation. Law 13,756/2018 allows two ways: concession or authorisation, a simpler process already used in sectors like national civil aviation. The main challenge is to set the basic rules, but most of the work is already done. The former Secap issued three public consultations, and one of the main findings is the demand for a more liberal model: unlimited licences
ONE SMALL STEP FOR LOTTERIES, ONE GIANT LEAP FOR GAMING
society and the country’s economy depend on the State's efforts to establish a healthy gaming market. The road to success is paved with failure. Attempts to open the market and enhance this industry are working and Brazil is close to being a global reference. With the government still impacted by the economic consequences of the COVID-19 pandemic and the Russia-Ukraine conflict, potential gambling revenues have become more important than ever. As a first step, the federal government needs to promote the implementation of the lotteries already allowed in the country. Lotex is a low-hanging fruit. It has studies, public consultations, Federal Court of Accounts (TCU) assessment, and previous bidding documents. Considering the resolution of the STF – which ends the federal government’s lottery monopoly – opens new possibilities of exploration
and tends to expand interested players. A simplification of the previous bidding process will attract more investors and better outcomes, in the short and long terms. There is the law, the infra-legal rules and Brazilians already know (and love) gambling. From the moment Law 13,756/2018 legalised sports betting, international companies arrived in Brazil, but operated from abroad. It’s the worst scenario, with all money played from the country reverting to income and taxes abroad, while its negative side, like problem gambling, remains local. There are still many details to work
THE PRESSURE IS ON, AS THE BRAZILIAN SOCIETY AND ECONOMY DEPEND ON THE STATE'S EFFORTS TO ESTABLISH A HEALTHY GAMING MARKET
under the authorisation process. Learning from the best international practices, Secap’s primary goal was always to propose a regulation to protect players, promote the sustainable expansion of the sector and corporate social responsibility, while creating a competitive environment for gambling, while also keeping in mind that time is short. Not just because of the regulation’s legal deadline in December 2022, or the FIFA World Cup as an opportunity, but rather to create new employment, income, and revenues for Brazilians. Every day that passes without a regulated SB market is another day without society reaping its benefits. Not only is the authorisation model faster, but also presents greater appeal to investors, and a greater financial return to the government. Since it’s a legal scheme, the federal government can regulate the sector and set requirements to allow operators to explore the national market by infra-legal acts (containing: governance and technical capacity, socially responsible market, advertising and marketing permissions, rules to standardise the national and foreign market, and requirements of minimum capital) and regular payments for the licence, it can place desirable barriers to unqualified companies and cover the prizes. The design of any regulatory system worldwide is improved over time. The optimal regulatory policy will be dynamic, by integrating the market and learning while doing. The
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Brazilian financial system - one of the safest, most stable, and robust in the world - uses a “regulatory sandbox” to evaluate new models and could be a reference to the rising gambling regulation. The second step is to expand the scope of legalised gambling in Brazil, including casinos, bingo, igaming, and other modalities. There are a lot of projects in Congress, in addition to Bill 442/1991 and Senate’s Bill 186/2014 which are now also under review. The Senate, which is the "House of the Federation", must not be omitted in such an important discussion not only for this industry, but for all Brazilians. Interestingly enough, all opinion polls conducted by DataSenado, the research institute of the Upper Chamber, show strong support for gambling legislation. After many years of debate, Brazil finds itself in a new critical window. The gambling boom in 2021 and 2022 set new historic records after the pandemic slump, as tourists returned to key gaming destinations.
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It needs to go further. The gaming industry in Brazil is huge, not only in size but in opportunities too. Like carnival, samba or many sports, it has world-class gaming. Poker and esports are excellent examples. Both have grown in the country with international championships, players,
WE HAVE NOW AN INCREDIBLE OPPORTUNITY TO ACHIEVE WORLDWIDE PROMINENCE IN THE SPORTS BETTING REGULATED MARKET and teams based there. It is also urgent to set a well-made regulatory framework to provide legal certainty for them. Despite the actions taken by the executive and legislative branches, the judiciary has been active and can be decisive in the future of gambling. The STF will soon judge whether a ban on gambling is unconstitutional (extraordinary appeal 966,177) and its
ruling will be decisive for gambling legislation. Brazil’s gaming ecosystem is destined to grow. All government branches have taken steps to advance this agenda. In the next few years, gambling will continue to be a hot topic in Brazil. It allows novel solutions to attract investment and contribute to public revenue, fiscal soundness, and foster economic activity that was impaired during the pandemic. Long story short, 80 years after the gambling ban, we are now ready to seize opportunities in the gambling and gaming industries. We have an amazing opportunity to achieve worldwide prominence in the regulated sports betting market after years of hard work. Sound regulation, balanced legislation and a rational court decision may pave the way to the realisation of the potential for employment and income for Brazilians, as well as funding for social causes. The next few years will be busier than ever for gambling and gaming in Brazil. •
A new era for digital currency
ELOISA MARCHESONI: THE EVOLUTION OF CRYPTO REGULATION CAN BE KEY FOR US GAMBLING AS THE US EVOLVES ITS REGULATORY FRAMEWORK
for digital currency, we take a deeper exploration into how it can ‘solve endemic industry problems’ in gambling BY JOE STREETER
ecent announcements from President Joe Biden around the regulation of cryptocurrency in the US underline a new era for digital currency in the region. Adoption of the President’s order runs alongside the rapid growth of the US gambling market and, according to Eloisa Marchesoni, the two sectors can complement each other. Marchesoni, a self-made crypto entrepreneur, has become a leader in fintech and blockchain. She spoke to SBC Leaders about the role of digital currency within the US. SBC: Firstly, as US igaming and sports betting regulation expands, what impact can digital currencies play in the payment journey for those sectors? EM: There’s a significant overlap between igaming and betting audiences and cryptocurrency audiences. In fact, cryptocurrency offers discernable use cases that go beyond sponsorship opportunities. It offers to solve endemic industry problems — and promises to alleviate others. One of the prime use cases for cryptocurrency in such industries is the ability to offer prize pool payouts in crypto. The borderless nature of cryptocurrency offers a solution,
A new era for digital currency
particularly in less economically developed regions. Finally, firms in the betting and gambling sector can offer crypto as a seamless, native payout option. SBC: How significant is Joe Biden’s executive order for the regulation of crypto and what does it mean for the growth of digital currency in the region? EM: This order is a big achievement in the sense that the government acknowledges the importance of the asset class and of the technology and wants to take a whole of government approach without moving too quickly and creating laws which prevent unintended consequences. Note that it does not rule out the potential for more restrictive policies in the future, especially given that different facets of the US government
NOTE THAT IT DOES NOT RULE OUT THE POTENTIAL FOR MORE RESTRICTIVE POLICIES IN THE FUTURE
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hold varying opinions on how cryptocurrencies should be regulated, but this is certainly a very good day for the asset class and for the industry. This order really instructs policymakers to expand and assess the impact that it will have on consumer and investor protections.
SBC: In terms of regulation, what are some of the lessons that can be learnt by the US from other more mature digital currency markets? EM: Singapore is one of the most crypto-friendly countries that I believe the US should learn from in order to open up to crypto without becoming the go-to place for scammers, like Dubai has become. Similarly to the United Kingdom, Singapore classifies cryptocurrency as property but not legal tender. The country’s Monetary Authority of Singapore licenses and regulates exchanges as outlined in the Payment Services Act. Singapore, in part, gets its reputation as a cryptocurrency safe haven because long-term capital gains are not taxed. However, the country taxes companies that regularly transact in cryptocurrency, treating gains as income. SBC: With the turbulence of Terra Luna, what does the future look like for Stablecoins and is more regulation required? EM: The situation with TerraUSD proves that stablecoins are a rapidly growing
product, and that they come with all sorts of risks that such an innovative financial technology solution could ever bring. Specifically, there are risks to financial stability that are not mitigated at all due to the lack of an appropriate framework. In a hearing, US Treasury Secretary Janet Yellen reiterated the need for a regulatory framework, also referring directly to the events involving the Terra ecosystem. The Financial Stability Oversight Council is working on a report in accordance with the executive order issued by President Biden in recent weeks, with the aim of identifying potential risks to financial stability and/or potential gaps in regulatory oversight. If the US merely draws attention to the drafting of a regulatory framework, Europe’s approach seems more aggressive, at least according to a leaked document that Coindesk has used as an unofficial source. In fact, it seems that the European Commission is considering limiting the use of stablecoins to prevent them from being used as a replacement for the fiat currency. This would be a document that does not reflect the formal position of the Commission and that should be taken as one of several documents produced to guide the debate on crypto that has been going on for months and months now, behind closed doors, in the context of the finalisation of the Markets in Crypto Assets Regulation. TerraUSD has been well below the dollar for several days now, and although the inventor and founder of technology Do Kwon has said a solution is being worked on to get blockchain back on track, investor confidence is at an all-time low. Many doubt, in other words, that the currency will be able to recover its target value. Overall, the TerraUSD case has put the spotlight on the risks, which are always feared, about the effective sustainability of algorithmic stablecoins. The advantage of algorithmic
GREATER REGULATORY GUIDANCE, IF WELL TARGETED, COULD HELP REDUCE SPECULATION AMONG CRYPTO ASSETS
THE TERRAUSD CASE HAS PUT THE SPOTLIGHT ON THE EFFECTIVE SUSTAINABILITY OF ALGORITHMIC STABLECOINS stablecoins is that you don’t need to have large economic resources to engage in other escrow investments. But what if an abnormal operation is carried out on the network that the algorithm is unable to balance - and there are no external and independent resources to keep the whole system stable? Well, exactly what was observed with Terraform technology. Moreover, the whole market (and not
just crypto) is plunging, thus making the situation even worse. Stablecoins are suffering, too, as it is becoming more and more costly to keep the peg by growing the reserves, and the mirage of richness is hard to give up for the projects’ founders. They have enjoyed an abnormally long summer which lasted a little over 10 years. Do Kwon may have not been able to accept the coming winter, and the same could happen with other stablecoin projects. Is it the fault of technology or of humans operating it? You answer. SBC: What are the steps that you think need to be taken by governments
and regulators to ensure that digital currency is further embraced by the mainstream? EM: Greater regulatory guidance, if well targeted, could help reduce speculation among crypto assets. Less speculation can lead to higher investor confidence, which could draw in more long-term investors who have so far said no thanks to a highly speculative, volatile crypto market. Crypto investors currently have little to no protection in the market, as there is no regulatory framework in place to ensure protection of assets. Some exchanges maintain compliance with evolving federal and state regulators in the United States. This includes many established,
high volume US-based exchanges, like Coinbase and Gemini, but they’re not regulated similarly to public stock exchanges or alternative trading systems. That can be problematic. Investor protections could make the market less vulnerable to outside manipulation. Safer markets can lead to more investor confidence, which often means greater value over time. Crypto isn’t even subject to requirements to prevent fraud manipulation, nor to standards on conflicts of interest. My point is simply that we don’t have the same kind of standards that we have in other markets and that regulators need to fix that, too, as soon as possible. •
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Is cash still king?
AFRICA’S ‘FRAGMENTED’ BUT ‘EVOLVING’ DIGITAL PAYMENTS SPACE ASTROPAY CEO MIKAEL LIJTENSTEIN sat down
with SBC Leaders to discuss his views on the direction Africa is heading in terms of digital payments, how important financial inclusion is for the continent and where it stands in the current global digital payments landscape
BY VIKTOR KAYED
echnological advancements over the last couple of decades have completely transformed the way we communicate with each other. Not only in text and speech, but also financially. While moving money nationally and internationally used to take days and even weeks in a time not so distant from now, today this occurs instantaneously, with millions of transactions being processed every hour. Payment provider firms such as AstroPay have become game changers for both individuals and companies alike. People working abroad can transfer money to their loved ones just by making a few taps on their mobile phones, while businesses and merchants can develop cross-border operations with ease. However, some markets have managed to catch on with the technology faster than others, diluting the concept of a total global financial inclusivity. One such emerging landscape is Africa, where AstroPay has established
a strong local presence to help the continent become a hub for digital payments.
The longstanding narrative is that the space is still heavily fragmented Starting with a general overview of Africa’s current attitude towards digital payments, the firm’s CEO Mikael Lijtenstein noted that widespread
adoption has been slower because of inconsistencies in how each country views and offers transactions. “The prospect of Africa going cashless has led to a rush to revolutionise the continent’s digital payments landscape,” he said. “Digital payments in Africa are evolving fast and expected to become more dynamic with the evolution of alternative payment methods and
Is cash still king?
digital currencies. “But despite huge investments into the industry over the years and the presence of big players working to shape its infrastructure, the longstanding narrative is that the space is still heavily fragmented. “Having different payment options in each country, and the difficulty of handling online transactions in different currencies, complicate the processing of digital payments in the continent.” While Africa has high mobile money penetration across markets, merchants
offers access to all these payment methods, from a single integration and from one contract, enables merchants to grow their business cross-border.”
The realities of emerging countries are very different from those of developed ones This is different to a more ‘mature’ European market, for example, which Lijtenstein points out provides “universally guaranteed” access to payment options like digital wallets. However, as lucrative as it might
mature markets, it is about countries finding the solutions they need for their citizens. The realities of emerging countries are very different from those of developed ones, so it is not always possible to adapt the same practices.” Lijtenstein cited lower rates of internet penetration and bandwidth connectivity as some of the aspects that hold back the expansion of Africa’s digital payments. “Africa’s digital transformation is underway, generating transformational changes across all economic sectors and providing much-needed social upsides. On several market growth telecommunications parameters, the continent has recorded the highest growth rates globally. “However, while the growth figures are impressive, a stark digital divide remains. An estimated 900 million people are still not connected to the internet, and for those who are connected, connectivity prices remain mostly high, and bandwidth is severely limited in many areas.”
WHILE THE GROWTH FIGURES ARE IMPRESSIVE, A STARK DIGITAL DIVIDE REMAINS
who want to establish cross-continent operations need to consider each country on a one-to-one basis. “In Ghana for example, users can pay with MTN, AirtelTigo, Vodafone, or from a bank account. Kenya, on the other hand, is highly driven by mobile money, while in Nigeria bank transfers are more common,” Lijtenstein explained. “The challenge for merchants that want to expand their business to the region is to be able to provide each of these options per country. Partnering with a reliable payments company that
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seem to just copy and paste whatever works in a developed landscape, it is not always that easy, as the foundation often differs in an emerging market, AstroPay’s CEO noted. “Rather than learning from more
THE PROSPECT OF AFRICA GOING CASHLESS HAS LED TO A RUSH TO REVOLUTIONISE THE CONTINENT’S DIGITAL PAYMENTS LANDSCAPE
Going back to merchants in Africa having to juggle between multiple payment offerings to reach a wider audience, Lijtenstein highlighted how solutions like AstroPay are here to help. He said: “In our experience the main challenge merchants face is being able to provide as many payment options as possible to reach a wide range of users, mainly the younger generations that are digital first and who always want to use the latest thing on the market. “Over a thousand merchants already partner with us and have benefited from the possibility of accessing countries in Africa, Asia, LatAm and Europe from a single integration, allowing them to offer over 200 payment methods without the need to partner with them one by one. “Also, merchants can access a community of over six million users to promote their brand, a number that keeps growing exponentially.”
Fintechs have become agents of democratisation for the unbanked populations Lijtenstein believes that Africa has a bright future in the digital payments market space due to the continent’s young population that is generally more tech-adept. He noted: “The population of Africa is majorly young, especially when compared with the population of the other continents. “Around 200 million people are aged between 15 and 24-years-old, a wide audience that is mobile-first and has a strong demand for online solutions that are convenient and secure. This has a direct impact on financial inclusion, as most of the population in the continent does not have access to traditional
THE REALITIES OF EMERGING COUNTRIES ARE VERY DIFFERENT FROM THOSE OF DEVELOPED ONES
financial institutions. “Instant payments can further realtime payments and foster financial inclusion in a continent where cash transactions are still the king. Fintechs have become agents of democratisation for the unbanked populations, making it possible for them to pay online on international sites.” Concluding with developments in the payment journey and player trends in African sports betting, Lijtenstein underscored AstroPay’s continuous advancement into the sector. “At AstroPay understanding the complexity of the region and the particularities of each market within Africa has been paramount to develop a user experience that satisfies these populations’ needs. “For 13 years we have been working in developing local solutions by listening to our users to make sure we fully understand what our customers want. This is where our experience comes as an advantage. It allows us
INSTANT PAYMENTS CAN FURTHER REAL-TIME PAYMENTS AND FOSTER FINANCIAL INCLUSION IN A CONTINENT WHERE CASH TRANSACTIONS ARE STILL THE KING to offer exactly what our clients need by respecting the differences of each population. “Offering the most renowned local payment methods in each country assures reaching a wide audience, regardless of their access to traditional payment options. “We also have dedicated teams to source feedback from our users, especially the early adopters in each country, to hear about their experience using our product, suggestions for improvements, and which sites they’d like to use AstroPay on, among other things.” •
A regulatory marathon
David Clifton, legal expert
Charles Cohen, industry compliance expert
AFFORDABILITY: THE GAMBLING REVIEW’S MAJOR DILEMMA AS WE APPROACH THE GOVERNMENT’S REVIEW
of the 2005 Gambling Act, compliance and legal experts are questioning whether affordability will become the tricky last hurdle that industry stakeholders need to overcome 86 SBC LEADERS • JULY 2022
BY TED MENMUIR
n its spring update, the UK’s Department of Culture, Music and Sport was unwavering in its decision that it will publish the Gambling Act White Paper review by an ‘unspecified date in June’, thus concluding a painstaking two-year process to deliver UK gambling’s generational change. The process has become a regulatory marathon, pushing
compromise to the forefront of gambling leadership minds who have long accepted that the industry’s terms of play will be altered forever. Ahead of the White Paper, industry stakeholders have pledged to accept its judgement on new advertising standards, sports sponsorship, licensing duties, operator conduct, safer gambling, enhanced customer care, game design and consumer protections. A stoic mindset was required as ministers moved to ‘rewrite the gambling industry’ in which its participants were deemed to have benefitted from more than a decade of liberalised market conditions. But having decided to conform with reformists' demands, UK gambling remains resolute that any actions on customer affordability checks will bring a damaging conclusion to the government’s review. Affordability has, therefore, become the tricky last hurdle to clear as the review comes into its final stretch,
and with UK gambling having no inclination as to what direction the government will take in the most divisive of outstanding matters. As legal expert David Clifton (partner of Clifton Davies) observed in his latest ‘White Paper Musings’ for SBC – following a review that saw DCMS gather more than 16,000 consultations from industry stakeholders during its call for evidence phase – “no clearer indication has yet been provided with regard to the precise nature of the Commission’s current expectations on affordability checks.”
NO CLEARER INDICATION HAS YET BEEN PROVIDED WITH REGARD TO THE PRECISE NATURE OF THE COMMISSION’S CURRENT EXPECTATIONS ON AFFORDABILITY CHECKS Of note, Clifton pointed to December’s GambleAware Conference, in which DCMS Gambling Minister Chris Philp and new UK Gambling Commission CEO Andrew Rhodes addressed industry concerns. Both review stakeholders cited affordability as “vital to solving the issue of financial vulnerability of UK consumers engaging in gambling”, yet remained tight-lipped as to how the government would choose to implement any type of customer affordability requirements.
Chris Philp, DCMS Gambling Minister
the debate spotlight, affordability requires wider technical understanding with regards to customer privacy, handling of sensitive data and the role of financial services in verifying customers. At the GambleAware conference last December, Philp had admitted that he could not see the Gambling Commission being required to verify the “payslips or bank statements from every customer spending £100 or so”, adding that the measure “is likely to be unwelcome, disruptive and disproportionate to the risks”. Fast-forward to April’s rescheduled ICE London 2022 conference, where
industry compliance expert Charles Cohen warned attending delegates that the “UK government was poised to announce an affordability limit of £500”. Founder of gambling affordability data specialist DoTrust, Cohen outlined that the government wanted to avoid a repeat of 2018’s bungled FOBTs verdict that led to a split between DCMS and the Treasury on the ‘delayed timeline’ to implement a machine wagering reduction from £100-to-£2. But why enforce an affordability check at £500? Cohen responded:
Clifton’s musings concluded that while affordability will play a critical role in the review’s outcome, “operators will be in the dark until the White Paper is published and discloses definitive requirements”. The subject matter has even divided ministers and industry reformists, who seem unable to define how customer affordability checks should be imposed on operators. Though checks on individual customer spend have hogged
OPERATORS WILL BE IN THE DARK UNTIL THE WHITE PAPER IS PUBLISHED AND DISCLOSES DEFINITIVE REQUIREMENTS
A regulatory marathon
“The view is that the number itself is the messenger, not the message. Actually having a number would be progress for many; at least everyone will know where the line is drawn and that all operators are being held to the same threshold.” Of significance, it was reported that DCMS had cited a UKGC sanction against a PLC operator, “in which an NHS worker earning £1,400 a month set a deposit cap at £1,300 a month”. Though such a limit is yet to be officially declared, Cohen remains steadfast that a £500 affordability measure will be imposed on UK operators, with a pending decision coming at a time when the “cost-ofliving crisis in the UK will put pressure on punters’ wallets at a crucial time in the evolution of the sector”. Cohen proceeded to follow the
WHOEVER GETS THE JOB OF WRITING THE RULES WILL CERTAINLY NEED GUIDANCE
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observation with the astute comment that “we are at a time when the government must value the cost of pasta over the cost of gambling”, adding: “The hope is that the industry is consulted at this point, although the record of the Gambling Commission at this stage is poor in this regard. “Whoever gets the job of writing the rules will certainly need guidance – I’m sure the sector’s regulatory and compliance experts are as we speak modelling what they think might be coming down the track. Their combined expertise will be crucial in the next six months.” Publishing its 2022 industry guidance, London law firm Wiggin LLP advised clients that it considered affordability as the “central dilemma of the pending review of gambling laws”. Addressing the unwavering stance of stakeholders on the matter, Wiggin noted a number of comments made in the 2001 Budd Report on gambling, which ring as true today as they did then. Budd’s 2001 report cited the
IT RAISES HIGHLY PERTINENT QUESTIONS AS TO THE PURPOSE OF GAMBLING REGULATION ″central dilemma″ of the desire to permit free choice and the fear that such choice may lead to harm either to the individual or to society more widely. The report also advocated a move in the direction of allowing greater freedom for the individual to gamble in ways within the boundaries of a controlled regulatory environment that has come under scrutiny today. Wiggin noted: “The central dilemma, as expressed in the Budd Report, remains today and anyone reading the consultation will be mindful of it. It raises highly pertinent questions as to the purpose of gambling regulation and the extent to which it (and indeed other forms of regulation) should impose upon our lives and restrict the choices that we wish to make.” •
JULY 12-14, 2022 MEADOWLANDS EXPOSITION CENTER, NEW JERSEY
THE LEADING SPORTS BETTING AND iGAMING EVENT IN NORTH AMERICA
CEO Sun Gaming & Hospitality
Chief Marketing Officer, Ceasars Sports and Online Gaming Ceasars Entertainment
PARIS SMITH CEO Pinnacle Sports
President Fubo Gaming
SCOTT VANDERWEL CEO PointsBet Canada
JESPER SOEGAARD CEO & Co-founder Better Collective
JIM “MATTRESS MACK” MCINGVALE Owner Gallery Furniture
COO - North America, Interactive Bally’s Corporation
CEO Fifth Street Gaming
Managing Director of Sports Betting NASCAR
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SVP Sports Caesars Digital
WEB3: EXCITEMENT, TREPIDATION AND NEW RISKS LIE AHEAD IT'S OUT WITH WEB2 AND IN WITH WEB3. Cryptocurrencies may not be nothing new,
but the development and innovation of Web3 functions such as NFTs and the metaverse is starting to shape the payment landscape for years to come
BY CALLUM WILLIAMS
hen the value of TerraForm Labs’ Luna and USD tokens crashed, plummeting 98% in value and ultimately ceasing to exist, the ‘Crypto Crash’ sent waves across the sector, with Luna’s collapse resulting in other tokens such as Bitcoin, Ethereum and Avalanche all taking a hit. This was a stark reminder of the volatility and risk that comes with investing in cryptocurrency one that could deter existing and potential investors for years to come. But instead of completely writing off cryptocurrencies due to preexisting fears, it is also important to understand why Terra Luna collapsed and what is being done to make the space inclusive and ease anxieties. It has since been revealed that TerraForm Labs Founder and CEO, Do Kwon, was not transparent with Terra’s holdings and reserves which, in turn, was not doing its due diligence in protecting investors. So how can an event such as Terra’s crash be avoided again? How can new users of crypto venture into the space without trepidation and fear over potential losses? Pavel Mateev, Founder and CEO of Wirex, suggests the use of stablecoins as an alternative to more traditional cryptocurrencies. He said: “If users have concerns about volatility, then stablecoins are a great option and thought to be the future of the digital economy, since they uphold all of crypto’s
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Pavel Mateev, Founder and CEO of Wirex
other benefits such as cheaper costs and faster transaction speeds, whilst removing the volatility factor.” Mateev also stressed the importance and need for education when venturing into the crypto space, whilst also recognising that regulation is still in its infancy. He advised: “Trust is more important than ever in the crypto environment, where some regulations are still in their infancy. It is unfortunate that the Terra Luna crash took place as it has unfairly given a bad name for much of the rest of the crypto industry in the media. “What this shows is that education is key, meaning that consumers need to do their research to ensure that the crypto company that they are working with, or giving their money to, is safe, secure and trustworthy.” Wirex is renowned for its multifunctional crypto wallet, the ‘Wirex Wallet’, which aims to make buying, selling and trading cryptocurrencies as seamless as possible, with added security measures for user safety. Built upon blockchain technology, the Wirex Wallet is labelled by the
company as a “world-first”. The firm has made it clear its ambition is to make fiat to cryptocurrency exchanges with the most amount of simplicity possible. Mateev continued: “Our core mission is to empower everyone to access the benefits of crypto, making it simple and easy-to-use is a vital part of that.
TRUST IS MORE IMPORTANT THAN EVER IN THE CRYPTO SPACE, WHERE SOME REGULATIONS ARE STILL IN THEIR INFANCY “Part of the simplicity involves improved accessibility, where uniquely, the app will not require a private key and, instead, will rely on biometrics for access. Combining an exceptional user experience with multi-party computation technology ensures resilient security and compliance.” One of the most recent updates added to the Wirex Wallet is the NFT functionality. NFTs were thrust into the mainstream in the aftermath of the
COVID-19 pandemic. However, similar to crypto, NFTs possess potential risks. The scarcity of a certain digital collectible can possibly lead to users performing NFT transactions on both sides of the sale, artificially inflating prices, also known as ‘wash trading’. Consequently, tokens could be perceived as being more valuable than they actually are. Research from Chainanalysis found that more than $8.9m of wash traded NFTs were created by just 110 potential traders. The reasoning behind this was due to buyers unknowingly purchasing digital collectibles that were overpriced as a result of the wash trade. NFT markets such as OpenSea are considerably more susceptible to hackers and fraudsters too. Just recently, the popular Bored Ape Yacht Club NFT marketplace was hacked, losing up to $360,000. This is not the first time this has happened to the Yuga Labs creators, after hackers breached their servers in April last year, resulting in $2.8m in stolen goods.
“Ownership of NFTs has been exploding in recent months, and convenience and a great user experience is important with any blockchain-related products,” stated Mateev. “As mentioned previously, it’s our core goal to enable everyone to have straightforward access to the benefits of blockchain technology, which includes NFTs.” Conversation soon turned towards the role that NFTs will play in the burgeoning metaverse, which is an almost augmented reality that connects the physical world to the digital one. He explained: “Many argue that NFTs and their technology will play a vital role in the metaverse by offering certificates of ownership. “Governed by smart contracts, NFT technology represents a sea of possibilities, most notably the ability to copyright a user's work, as well as giving buyers the guarantee that they own a unique digital asset. This will be pivotal in transferring goods within a virtual universe.” The metaverse is becoming an increasingly viable lane for financial
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institutions like HSBC. Last March, the bank bought virtual real estate in the Sandbox metaverse; JP Morgan and Standard Chartered also delved into the digital world in a bid to transform the way payments are transacted moving into the Web3 space. But what role will the metaverse play for payments, especially when it comes to transferring our fiat currency to crypto currency as we alternate between the physical and digital worlds?
WE TRULY BELIEVE THE DIGITAL ECONOMY WILL OVERTAKE TRADITIONAL FINANCIAL INSTITUTIONS THAT ARE OUTDATED “Effectively, digital and real worlds interact and there can be parallel worlds for people to exist in simultaneously,” outlined Mateev. “Therefore, the digital economy will play an important role in the metaverse, and non-custodial wallets will be an important place to store your personal information and
possessions within the metaverse, which can be connected to all around the ecosystem.” With cryptocurrencies operating largely under no defined regulation, the increased use of augmented reality would also see a rise of cryptobased payment firms, such as Wirex, take the lead for seamless fiat to crypto transfers. But this isn’t how Mateev sees the future. The Wirex CEO is fully expecting firms like Visa and Mastercard to operate within the Web3 space, as more businesses begin to adapt, the more accessible and seamless the Web3 experience will be for the user. “We have for long believed in the potential of the digital economy, and truly believe it will overtake traditional financial institutions that are outdated. “We have already seen major card networks like Mastercard and Visa make steps to both integrate the technology, and support other companies in doing so. It is likely that as regulations adapt, businesses and consumers will have more confidence to operate in the space.” •
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SHELLEY WHITE: ADVERTISING AND MARKETING INFLUX IS ONTARIO’S BIGGEST CHALLENGE RESPONSIBLE GAMBLING COUNCIL’S CEO explains
the reasons why the incoming tidal wave of advertising and marketing can pose potential problems when it comes to responsible gambling
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BY CRAIG DAVIES and JAMES ROSS
ntario’s biggest challenge is how to tackle the influx of advertising and marketing from the new operators who have entered the market. Those were the words of Shelley White, CEO of Responsible Gambling Council, who spoke about Ontario’s performance since the launch of its
online betting market in April and how safer gambling can be improved. SBC: Ontario is now open for business! How would you assess the region’s performance since it opened its doors? SW: Over the past few years, RGC has worked closely with the key stakeholders in Ontario to collaboratively develop robust igaming and sports betting standards. Igaming and sports betting have unique characteristics which make these types of gambling different from casinos, bingo and lotteries. We provided evidence-informed RG standards and recommended practices such as RG Check, prevalence study, practices and public education, the development and implementation of a Responsible Internet Gambling Strategy with a focus on harm prevention and expanded treatment services. Given that Ontario’s new online market was completely new territory, RGC saw this as an opportunity to build upon Ontario’s robust gambling regulations, to implement RG standards and practices specifically tailored for the igaming and sports betting industries, to respond to the unique characteristics of these types of gambling. We know from our research and the
prohibit ads from running during games, and during certain times of day, as well as restricting ads that target certain populations. With this knowledge in mind, Ontario has put protocols in place to try and minimise the invasiveness of gambling advertising and marketing. Restricting inducements and prohibiting bonuses in broad public advertising is a very proactive and impactful approach. This is something that Ontario should be proud of implementing.
WE HAVE ALSO LEARNED FROM MATURE MARKETS, SUCH AS THE UK AND AUSTRALIA, THAT THE PUBLIC IS AVERSE TO PROLIFIC GAMBLING ADVERTISING As everyone navigates this new market, the boundaries are being established and learned. It will be crucial to monitor the market as more operators enter and operating practices become formed. We will need to be vigilant and proactive about opportunities to change and adjust regulations to prevent the potential harms of gambling.
global body of research that aggressive and prolific advertising can negatively impact vulnerable populations, such as youth and those who are struggling with their gambling. We have also learned from mature markets, such as
the UK and Australia, that the public is averse to prolific gambling advertising. As a result, we’ve seen governments and regulators in other jurisdictions try and mitigate this by putting policies in place “whistle to whistle bans” that
SBC: What do you believe are the biggest challenges that Ontario must overcome? Have you witnessed any shortfalls thus far? SW: The biggest challenge that Ontario is currently facing is the influx of advertising and marketing from the new operators who have entered the market. While we anticipated this, anecdotally we are hearing from many members of the public who find the amount of advertising in poor taste. This type of aggressive advertising does have negative impacts on certain vulnerable populations. Although Ontario does have standards in place for advertising and marketing, RGC would like to see this expanded upon to include more balanced advertising that includes appropriate responsible gambling messaging as well. We have seen some operators use some of their advertising dollars to develop ads that are rooted in responsible gambling and provide the public with information around the risks
evidence-informed. At RGC, we use a customer segmentation approach to public education campaigns. Not every audience will resonate with the same messaging or information, so we need to be very specific with the information we are providing to certain groups so that they are relevant.
WITH COLLABORATION AND KNOWLEDGE SHARING BETWEEN LEADERS, WE CAN CREATE A SUSTAINABLE RESPONSIBLE GAMBLING CULTURE TOGETHER We are starting to see the broader industry adopt a more bespoke model to responsible gambling. Cultural sensitivity and awareness are also starting to become emerging themes when developing and implementing RG in global settings. With collaboration and knowledge sharing between leaders, we can create a sustainable responsible gambling culture together.
of gambling and to play within their limits. This is very encouraging and we hope to see more of this practice. Data is an important part of evaluation and informing the development of leading RG practices. We are pleased that iGO will be collecting player data which it will make available to researchers, and they have commissioned a prevalence study to establish a benchmark for igaming and sports betting. Utilisation of player data will be vital as Ontario moves through the different stages of market maturity. We will want to be able to take note of effective standards, pain points and learnings so that we can be proactive with our standards and public education campaigns to protect consumers. It won’t be enough to make changes after the fact; we will need to be nimble and flexible to continuously improve
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as we progress through the different stages. SBC: Personalisation is a much discussed topic within gambling, but what role can this play when it comes to responsible gaming? Is it used widely and effectively enough? SW: Personalisation and customised programming based on the audience is essential to responsible gambling. RG is not a one-size-fits all approach. To be truly effective and impactful, messaging and information must be tailored and
TO BE TRULY EFFECTIVE AND IMPACTFUL, MESSAGING AND INFORMATION MUST BE TAILORED AND EVIDENCE-INFORMED
SBC: Is safer gambling firmly embedded within every aspect of companies operating within the industry? How could this be improved? SW: This question is very much rooted in the foundation of RGC and the work that we do. Championing responsible gambling has been at our core for 40 years. More and more we are starting to see a shift in how companies think about RG. It used to be ticking a box on a to-do list, and now we are seeing operators embrace and integrate responsible gambling into the core of their operations. The return on investment that responsible gambling provides a company is invaluable, not only for the bottom-line but for their reputation. Companies who care about their players and customers will succeed in creating a sustainable player base. There is always room for improvement. Companies have to change their approach and make RG a priority by embedding it into their culture from the top down. If all employees are engaged and believe in the policies and practices put in place, it makes RG more impactful and effective. •
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A costly affair
US SPORTS BETTING: REDUCING PLAYER ACQUISITION COSTS AS SPORTS BETTING CONTINUES TO SPREAD
across the US, player acquisition is more important than ever. But with more money being spent over the years to onboard players, is it becoming unsustainable? BY CONOR PORTER
BC Leaders spoke to three different areas of the US gaming industry - affiliate, advertising and free-to-play games - to find out their perspectives on player acquisition and how their respective companies can help reduce costs.
GM of Editorial and Commercial Sites BETTER COLLECTIVE Affiliate marketing companies, especially the ones who have been at it for a while, are managing a task that’s quite challenging for operators to do themselves. We’re finding the most qualified potential customers at various points within the acquisition funnel and pushing them through to become actual customers for our partners. Imagine you’re an operator, and you’re looking for new customers. And to be clear, that’s every operator, all the time, in pretty much every market. You can spend millions of dollars on TV commercials, buy print ads in magazines and newspapers, plaster yourself on billboards at key points along the highway and so much else. Operators will pay for the privilege of getting their brands in front of
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AFFILIATES HAVE ONE MAIN JOB, AND THAT’S TO MAKE SURE A POTENTIAL CUSTOMER BECOMES AN ACTUAL CUSTOMER thousands or millions of potential customers, but these advertising methods are blunt tools. Most of the people who see them on a billboard aren’t about to become their customers. But companies smother their message on everyone and hope to become ubiquitous and be the
first brand people think of when they eventually decide they want to play. With affiliates, operators don’t have to worry about paying for a bunch of potential customers who never fully get the message, or who might only decide to sign up months or years later. And you certainly don’t have to pay to advertise to people who will never consider using your product. You rarely have to worry about paying for unqualified leads. Affiliates have one main job, and that’s to make sure a potential customer becomes an actual customer. If we do it, we get paid. And if we don’t, well, we have
to try harder or try new methods or launch a whole new business if the one we have today isn’t converting enough high quality players. Operators may baulk when they see what it costs to get a single customer from a top affiliate like Better Collective. It’s either a hefty upfront fee or a significant percentage of revenue for the duration of the customer’s patronage. But any percent of $0 is $0, and if we send low quality traffic on a cost per acquisition (CPA) deal, that CPA will be reduced in short order. It’s up to us to make sure we’re sending qualified, high quality traffic. And as an operator you can rest easy that the investment you make with your top affiliate partners will result in positive revenue for your business - something TV spending can never come close to guaranteeing.
Head of ad:s US SPORTRADAR Much has been written – and US sportsbooks are under scrutiny by Wall Street – about the massive amounts of money being spent to acquire bettors as legal betting spreads across the US In markets where sports betting has been established, the shift in focus is now to the retention of bettors and monetising the acquisition costs. Operators themselves are constantly strategically re-evaluating all parts of their business to achieve the two objectives of lower CPAs and higher LTV, but often rely on marketing partners to execute their vision due to the proprietary technology, and operational expertise these partners provide. These two pieces, when paired with operator feedback, allow for the acquisition of, and retention of, the most loyal and engaged customers in an extremely efficient manner. The efficiency a marketing partner can provide a sportsbook is twofold: One, ease of use. Making a marketing manager’s life easier by taking the execution off their plate and allowing them to focus on the strategy that fits their brand. The second is performance. Relying on a partner whose technology is built specifically to achieve their goals will provide the cost-efficiency needed to continue to grow in more mature markets.
AS STATES CONTINUE TO OPEN UP IN THE US, ACQUISITION WILL CONTINUE TO BE A MAJOR PRIORITY Sportradar ad:s is a trusted marketing partner for operators due to our expertise, and our proprietary technology – an in-house DSP, and an owned dynamic creative engine. This allows operators to target highly relevant audiences, across all screens and platforms, with the right lines, offers, and opportunities for their customers which creates a better experience for both parties, and breeds loyalty. The results are not only significant reductions in CPAs, averaging around
40% cheaper vs the operator's target, but also improved quality of players, as our whole product is designed to target a betting and gaming audience. A recent customer case study shared results of 50% cheaper CPAs and 100% increased NGR from using the ad:s programmatic advertising product. As states continue to open up in the US, acquisition will continue to be a major priority, but the importance of acquiring the right customers – not just bonus hunters – has been a key lesson learned for sportsbooks. As a result, retention strategies, which include promoting betting products and the experience a bettor will have with a particular sportsbook, will be incredibly important to focus on, as well, in the interest of maximising LTV, because it doesn’t stop with acquisition.
A costly affair
Co-Founder and CEO SHARPLINK GAMING According to Front Office Sports, sports betting companies spent $1.2bn on customer acquisition in 2021, and, with more states passing legalised sports betting, that number could reach $2.1bn by the end of 2022. While most operators continue to inflate those acquisition numbers through unsustainable promos and boosts, free-to-play games are an often overlooked strategy to reduce CPA. Although not as flashy as the promotions, free-to-play games should be a company’s go-to when trying to encourage the steady growth of its user base while reducing its CPA. Offering something for free when aiming to become profitable seems counterintuitive, but it provides three key points of value to companies and sportsbooks attempting to foster a stronger, stickier customer base without breaking the bank. Free-to-play games engage with 100% of the audience. In the United States, roughly 70% of the population cannot make a legal online bet (though this percentage is continuously declining as more states legalise betting). Generic ads and promotions drive the momentum in legal betting states; at the same time, money spent on ads and promos is wasted on those in non-betting states, giving those potential customers no direct call to action (as they can’t act). Free-to-play games extend to all states, regardless of betting laws, and can be applicable to all teams, leagues, and media operators. In turn, this builds brand familiarity and loyalty. When more states ultimately legalise online sports betting, those operators will have a built-in base of prospective bettors who have already learned through game play and sports betting simulations how to place real bets using real dollars instead of starting from ground zero. Capturing user data is another huge part of how free-to-play games reduce CPA. User data is an underutilised and underappreciated product in the sports betting industry. Free-to-play games allow brands to collect valuable data on users’ personal preferences and behaviours, which lead to specific, targeted bet offers that zero in on
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preferred teams, bet types, and amounts wagered. Customers are served personalised betting offers generated directly for them instead of wasting money on “play $100; get $100” offers. Additionally, users that sign up for free-to-play games are essentially pre-qualified bettors. Broadening the scope to include a wider pool of potential customers will only benefit operators when states flip to legal betting.
DUMPING MONEY INTO GENERAL ADVERTISING ATTRACTS ATTENTION — SOMETIMES TOO MUCH ATTENTION In fact, through our work with NASCAR and BetMGM, we’ve learned that collecting user data pays huge dividends for the league and the book they’ve partnered with. During the 2022 NASCAR racing season, thus far, the percentage of NASCAR fans who have engaged with a specific promotional offer is averaging 11.2%
(The industry standard click through rate is less than 1%). Free-to-play games can draw in the low-frequency bettors, converting them into more regular bettors, whereas high-frequency bettors — the ones casinos and sportsbooks focus on — are generally advanced, educated bettors who put down significant amounts of money. To a high-frequency bettor, a promo offer of $100 or $500 worth of riskfree bets isn’t enough to engage them; to a low-frequency bettor, $100–500 is a large sum of money, potentially putting them off. Offering to try something for free as an introduction to your platform is a great way to widen your potential pool. Dumping money into general advertising attracts attention — sometimes too much attention — but it lacks KYC (knowing your customer). Knowing your customer by utilising free-to-play games to understand their needs, wants and behaviours might lack the flash, but it is grounded in a solid, well established foundation that works and materially reduces acquisition costs. You can bet on that. •
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JD MCNAMARA: BETTER COLLECTIVE IS PLANTING ITS FLAG IN THE CANADIAN MARKET IN THE MOST RECENT BETTER COLLECTIVE SPOTLIGHT, JD McNamara, Country
Director at Better Collective, takes a look at the growing opportunities in Canada and the need for a more personalised approach to this newly regulated market
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BY ERIN GALLAGHER
ntario is quickly becoming a powerhouse in and of itself as betting companies look to make their mark on the Canadian market. Better Collective has been no exception. With a global presence already, Ontario has already presented a host of new opportunities for the company. And as more provinces in Canada look to regulate, Better Collective believes that it will be in a prime position to educate bettors on making well-informed gambling decisions. SBC: Over the past three years Better Collective has established its North American publishing network. How important will the Canadian market be to its long term regional growth plans? JDM: At Better Collective, we view the Canadian market as an exciting part of our long-term growth plans for North America. Canada’s most populous province, Ontario (~15 million people), would be the fifth largest US state; its most populous city, Toronto (~2.6 million people), would put it right alongside Chicago as the third largest city in the US. These markets, along with the rest of Canada as it regulates, will be an integral part of our activities in the region. SBC: You’ve acquired Canada Sports Betting recently – what made it such a good fit for the Better Collective business? JDM: Canada Sports Betting is a good fit for Better Collective because it is exactly the type of site BC thrives in operating and growing – a site that educates bettors and empowers them to make well-informed decisions. Secondly, it has a really strong foothold in the Canadian market, which we are entering in earnest. It really is a great match for us and we’re excited to have CSB in the portfolio as our Canadian flagship.
WE VIEW THE CANADIAN MARKET AS AN EXCITING PART OF OUR LONG-TERM GROWTH PLANS FOR NORTH AMERICA
SBC: How do you intend to use the acquisition, along with support from your existing North American business, to grow your foothold in Canada? JDM: As mentioned, we intend to use CSB as our flagship Canadian brand. Our goal is to educate and inform prospective sports bettors in the regulated Ontario market and the rest of Canada, where we’ll also track and monitor regulatory activity. We aim to position Canada Sports Betting as a place where both media and consumers come for insights and perspective on the market, with the ultimate goal of becoming a more visible brand in Canada. SBC: What do you think are the key differences between American and Canadian sports bettors and how important is it to tailor your approach to meeting their needs?
OUR GOAL IS TO EDUCATE AND INFORM PROSPECTIVE SPORTS BETTORS IN THE REGULATED ONTARIO MARKET AND THE REST OF CANADA JDM: We know hockey over indexes among the Canadian general population vs Americans, so we expect one of the main differences in Canada will be more people betting on hockey/the NHL than in the US. Beyond that, we want to stress our ability to cater to our audience in Canada. We’re a Canadian site, with a Canadian domain, which is being run from Canada by a core team of Canadian employees. We’re truly local, and we understand the Canadian sports betting scene.
SBC: As an established publisher, will Better Collective develop any organic portals for the Canadian sportsbook/ igaming market? JDM: In addition to CSB, we’re also working on Canada-facing content across our US properties (Action Network, RotoGrinders, Vegas Insider and Sports Handle). Our mid to long term plans will likely depend on how the Canadian market develops and, of course, our performance, so we’ll cross that bridge when we get there! SBC: What are your initial thoughts on Ontario now that it’s open for business? JDM: Ontario’s market launched at a fun time on the sports calendar as we’re just getting into the start of the NHL playoffs, so it’s been quite exciting! As a huge sports fan and a casual bettor, it’s been great to try out the multitude of new sportsbooks. In terms of the regulatory aspects of the launch, I think the Alcohol and Gaming Commission of Ontario has made it needlessly difficult on lot of the market. There is still a lot that’s unclear about the regulations in Ontario, including the real motivations behind certain stringent rules that the AGCO has put in place.
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WE’RE TRULY LOCAL, AND WE UNDERSTAND THE CANADIAN SPORTS BETTING SCENE SBC: Building your network within Ontario, are you concerned with regards to black market operators continuing to target local audiences. Will the market have a clear disparity between the regulated and unlicensed offering? JDM: This is largely still to be
determined but we’re not overly concerned with the black market operators continuing to target local audiences at the moment. However, we think it is important to note that the various ad restrictions and lack of clarity around licence pending operators may lead unknowing or new bettors to offshore sites that do not work under a framework protecting the bettors. I’m hopeful that as guidance from AGCO is clarified, the market will settle and allow affiliates to play an active role in helping new bettors make responsible gaming decisions. •
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A new approach
MOVING WITH THE TIMES: DIVERSIFYING LOTTERIES IN THE US AS WE SEE MORE AND MORE INDUSTRIES move
towards the online space, lotteries are under increasing pressure to follow suit
BY NICK WARE
n important step to success for lotteries is just how well they can evolve over time and adapt to
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the demands of the current market. Do they play safe, or throw a little caution to the wind? Increasingly, lotteries that are sticking to their core, traditional principles run the risk of being left behind in a new world where modernisation reaps rewards. But there are some US lotteries seeking to introduce new methods and games to enlarge their pool of products and vary their operations. What are those lotteries doing to diversify themselves and ensure they continue to remain relevant in their field? Which lotteries have taken significant steps this year to break
new ground and set themselves apart from the competition?
Gaining the online edge Like most industries, maximising the full extent of the internet has become a priority and source of huge revenues for lotteries. But, even until recently, there has been a degree of scepticism based on fears of breaching regulations. In 2011, a hugely significant hurdle for lotteries was removed after the 1961 Wire Act was ruled to only apply to sports betting, and thus did not prohibit other forms of internet gambling, including online lotteries.
and enjoyable for users. Tobias Dengel, CEO of WillowTree, commented: “This app represents a massive step forward in both capabilities and user experience, allowing Virginians to play real-money ilottery games as a fully native mobile experience.
IT’S CLEAR PEOPLE ARE OPTING FOR DIGITAL SOLUTIONS IN ALL AREAS OF THEIR LIVES
MOBILE GAMING IS AN ENORMOUS INDUSTRY, AND THIS APP GIVES VIRGINIA LOTTERY THE OPPORTUNITY TO ENTER THAT SPACE
This was then reconsidered in 2018 before a final ruling in 2021 that reaffirmed the decade-old decision and seemingly paved the way for more online lotteries in the US, or has at least inspired them to operate with complete freedom. One of the more recent additions to the ilottery roster has been the Virginia Lottery, which has enjoyed considerable success via online offerings. In May 2022, the Virginia Lottery released a new gaming app alongside WillowTree, a mobile app and web development design business. The aim of the app is to enhance security and
responsible play, with Kelly Gee, Acting Executive Director of the Virginia Lottery, hailing the new experience and its focus on new, digital-savvy customers. The new app has been self-styled as a “huge, state-of-the-art step forward” which offers new tools and features that aims to make it more accessible
MAXIMISING THE FULL EXTENT OF THE INTERNET HAS BECOME A PRIORITY AND SOURCE OF HUGE REVENUES FOR LOTTERIES
“Mobile gaming is an enormous industry, and this app gives Virginia Lottery the opportunity to enter that space and open a new revenue stream. We know the lottery has an important mission and this new app offers substantial growth potential in terms of supporting K-12 education in the Commonwealth. “Together we have built an innovative experience that meets the demanding expectations of today’s mobile-first consumer.” Meanwhile, an increasing number of states are collaborating with Jackpocket, the first third party licensed lottery app in the US. Earlier this year, New Mexico became the 11th state to use the mobile lottery app which allows users to order official state lottery tickets in a safe and secure manner. Benefits include being able to check lottery results and make payouts directly through the app. Peter Sullivan, CEO of Jackpocket, noted: “It’s clear people are opting for digital solutions in all areas of their lives, and Jackpocket is ecstatic to meet existing lottery players where they are and introduce new players to the platform.”
Instant and draw-based additions Honing in on specific practices, instant games have continued to be a reliable source of revenue for lotteries, with their popularity leading to various new releases since the turn of the year. The Texas Lottery scaled new heights in May with the launch of its $20m Supreme scratch ticket game, marking the US lottery industry’s first scratch ticket game at the $100 price point. Gary Grief, Executive Director of
A new approach
the Texas Lottery, described the development as “monumental”, explaining that it would provide “added efficiency” for retailers. The development follows the considerable popularity of the Texas Lottery’s higher price point scratch tickets, with its $50 price point playing an integral role in its financial performance. Furthermore, its top cash prize of $20m is also the largest top cash prize ever offered by the Texas Lottery in a scratch ticket game, highlighting the organisation’s commitment to growth and the expansion of its audience.
DIVERSIFYING A LOTTERY IN THE US IS NOT A STRAIGHTFORWARD TASK In April, IGT announced the launch of its Infinity Instants games in four US lottery markets, designed to revolutionise instant ticket design and gameplay. Created using multiple patented digital printing technologies, the lottery industry giant’s latest concept aims to produce games with high definition, combined with richly coloured symbols and graphics on the front and back of tickets.
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According to the Las Vegas-based company, the variable game symbols are generated in full colour at the highest known resolution in the industry. Draw-based games have not been ignored, though, with the Arkansas Lottery recently announcing plans to release its new $2 draw game ‘Arkansas Lotto’ later in 2022. The lottery’s previous draw game release was as far back as October 2012 when it released the $1 Natural State Jackpot. Indeed, this year also saw the Illinois Lottery unveil a new draw-based game which provides users with a brand new way of playing the lottery via its ScanN-Play feature. The feature enables players to buy a physical Fast Play ticket from a retail location before scanning the ticket on the Illinois Lottery mobile app. Harold Mays, Director of the Illinois Lottery, commented: “This is a US first. With innovative design and engaging content, the Illinois Lottery is giving its players a new experience and a completely different way to play Fast Play.”
Barriers For some, though, a failure to navigate past traditional rules and regulations
A FAILURE TO NAVIGATE PAST TRADITIONAL RULES AND REGULATIONS HAS LEFT THEM TRAILING IN THE WAKE OF THEIR LOTTERY COUNTERPARTS has left them trailing in the wake of their lottery counterparts. That has certainly been apparent in the state of Indiana, where frustration has been fuelled by the passing of bills to seemingly block any existence of an online lottery. There have been numerous setbacks over the years, but the most recent example occurred in March when the General Assembly passed a bill HEA 1260 - which requires legislative approval before any online lottery expansion. Unperturbed, William Zielke, Commission Chair of the Hoosier Lottery, has confirmed his intention to pursue plans for an ilottery, despite recent pushback from Indiana lawmakers. Nevertheless, it appears that diversifying a lottery in the US is not a straightforward task, and one that can come with its own set of unique challenges. •
Hall of Fame
ADDING SOME PITTSBURGH STEEL TO NEVADA’S SPORTSBOOKS PERHAPS IT WAS ALWAYS CHRIS ANDREWS’ DESTINY
to become a bookmaker; after all it was in his blood. However, while his career choice may have been a racing certainty, there was nothing inevitable about the 40-year journey that has brought him to his current position as Sportsbook Director at the South Point Hotel, Casino & Spa in Las Vegas and a place in the Sports Betting Hall of Fame
BY MARTYN ELLIOTT
uring that time, Andrews has been involved in some hugely successful businesses, launched his own company, worked with some of sports betting’s legendary names and seen huge changes as the industry evolved from a local Nevada enterprise into a success story across more than 30 states. His interest in the world of sports betting started in his teenage years, when he would travel to Las Vegas with his uncle, the celebrated handicapper ‘Pittsburgh’ Jack Franzi. It was during those trips that his industry education began, as he met people like Bob Martin, the man once described as the ‘Babe Ruth of Oddsmaking’, and casino owner Michael Gaughan. By the time he graduated from
Hall of Fame
Robert Morris University, the route from his native Forest Hills, Pennsylvania to Vegas was a familiar one. He travelled it again to take a job as a ticket writer at the Stardust in 1979, before moving to the Barbary Coast the following year to work under the guidance of Gaughan, his Uncle Jack and fellow Hall of Famer Jimmy Vaccaro. A combination of access to all their industry experience and being given lots of authority at such an early stage of his working life meant that Andrews’ year at the Barbary Coast was time very well spent.
SOMEONE COULD BE AT AN IVY LEAGUE UNIVERSITY AND NOT GET THE EDUCATION I GOT IN THIS PARTICULAR BUSINESS “One of the things that really helped my career tremendously is the authority that Michael gave me,” he said. “And learning under Jimmy Vaccaro and learning under my Uncle Jack was really like a masters or a doctorate programme. Someone could be at an Ivy League university and not get the education I got in this particular business. “I ran the swing shift as a supervisor. Now back in those days the industry was much much different. We didn't have computers and everything was handled by the supervisor. At the end of the night, I had to grade all the tickets, enter them on a ledger by hand, and arrive at the bottom line on a nightly basis. There was just me to do that. “Now, that's way too much power to give to just one person. The state changed the regulations later so one person couldn't do that, but at the time, Michael certainly trusted me to do it. It was just a tremendous experience for me to learn that much about the business with hands-on experience.” Gaughan played another key role in Andrews’ career, when he recommended the then 25-year-old to Warren Nelson, one of the owners of Club Cal Neva in Reno. Nelson believed sports betting was about to enter a boom phase and wanted someone
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to build his sportsbook into a major player. “Warren hired me on the spot and became a big supporter of mine. I spent the next 22 years at Cal Neva and eventually became one of the owners, having helped to grow the business tremendously,” explained Andrews.
I ALWAYS LAUGH THAT I DON'T KNOW MUCH ELSE IN LIFE, BUT I DO KNOW THIS BUSINESS FAIRLY WELL “When I first started there, we had two windows in the sportsbook, three windows in the racebook and a cashier, that was the entire operation. By the time I left, we’d grown that into over 28 satellite locations throughout the state and we were one of the biggest sportsbooks in Nevada. Matter of fact, I know we were the biggest at handling parlay cards, which was really a big part of our business.” The role involved not only offering
something that players enjoyed and delivering a healthy profit for the Cal Neva, but also providing a good product for the host casinos. It was a difficult balancing act at times, but Andrews credits an old school value for managing to achieve it. “If I had to pick one key to that success, I would say common sense,” he said. “I see a lot of places out there that, to this day, just don't use common sense. I don't think I'm anything brilliant or a genius or anything like that, but I think I do have good common sense, certainly within the constructs of this business. I always laugh that I don't know much else in life, but I do know this business fairly well.” After leaving Cal Neva, Andrews had spells with the Golden Nugget in Las Vegas, at Hall of Famer Vic Salerno’s American Wagering, with William Hill and even a brief stint in the world of high finance. Eventually he launched his own business, Against The Number, and was happily running that in 2016, when Gaughan approached him with
an offer he couldn’t refuse: he moved to the South Point for what he hopes will be his final job. If it is, it would conclude a career that has spawned two books - Then One Day…My 40 Years Of Bookmaking in Nevada and the pandemic-era Then One Year…History’s Craziest Year As Seen By A Las Vegas Bookmaker and seen Andrews in demand from broadcasters and podcasters keen to mine his expertise as sports betting underwent major changes and grew into a mainstream entertainment product. One of the biggest changes he has witnessed is the growth in the number of wagering options available and the selection of sports that players now want to bet on. Andrews explained: “I remember walking into a sportsbook in about ‘77 and looking at the Steelers on the board. They were -7 and next to that was a 35. And I thought ‘what's that 35 mean?’ Well, that was the over and under points scored in the game, which was like a brand new thing. But now, of course, we have a total on virtually everything. That's just one little thing. We didn't have money lines back then, but now we have a money line on virtually everything. The whole myriad of betting options has grown.”
THE WHOLE MYRIAD OF BETTING OPTIONS HAS GROWN He added: “I remember back in 1984 I put up the Masters golf and had odds on every guy in the field. And this is God's honest truth, I wrote one $5 bet. And the golfer didn't even start, so I had to give the guy his $5 back. “I put in a tonne of work trying to create an odds board for that and we got one bet. Now, of course, the Masters is just a huge betting opportunity for us, all the Majors are. Even on a weekly basis, we put up every PGA Tour event, not to mention NASCAR, tennis, soccer and lots of other sports. “When I first started at Cal Neva, I was responsible for and put up virtually every single number that was on our board. Well, that's impossible to do today. No one person can possibly do that, the market has grown way too big
t was the year the Patriots played the Eagles in the Super Bowl and for two weeks running up to the game, Michael Gaughan and (South Point’s General Manager) Ryan Growney were calling me to ask who we were going to need in the Super Bowl. I kept saying, ‘we’re going to need the Eagles, as they’re all betting the Patriots’, but in the last 12 hours or so before the game, the entire market changed. I guess the backing for New England was just exhausted, and money poured in on the Eagles. We also had a bunch of proposition bets. And one thing industry compatriots like Roxy Roxborough and Vic Salerno would tell you about me is that I’m kind of a grinder, really a conservative bookmaker. So while we needed the Eagles for the game, I’d tried to balance that so we needed the Patriots for the proposition bets. But all the money coming in on the Eagles in that last 12 hours meant we were in a position where we needed the Patriots for the game and for all the propositions. So Jimmy Vaccaro, another Hall of Famer, and I put our heads together and, in a mad scramble, moved all these propositions in the hope of getting some Eagles money and balancing the books a bit. There’s only so much we can do though and by the time of kick-off, we were convinced we needed the Patriots. Of course, the Eagles beat them pretty soundly that day and when Ryan came in and asked how we’d done, I had to tell him ‘we’re
for that. You have to have a good crew, you have to have confidence in them.” The other big difference from when he started is the introduction of mobile wagering. But despite its rapid growth, Andrews does not believe it will kill off retail sportsbooks. After all, South Point’s brick-and-mortar sportsbook has one much-loved experiential element that online will
stuck $200,000, but we haven’t put in the props yet’. We had so many props that it took close to two hours to put them all in, and I’m sitting back here not even wanting to look as the guys put them in. Vinnie’s on pins and needles too, and eventually he says ‘I can’t take it, I've got to go get a beer’. I say, ‘I hear you, but a beer isn’t gooing to do it for me, give me a double Jameson, I’m sweating bad here’.
So we’re sitting in the office with the drinks when my crew tells me that it’s all in. Just as I’m bringing it up on the computer, Ryan walks in, looks at me and asks ‘well, did we pull out of it?’ I tell him ‘yeah’ and he asks ‘how did we do?’ I tell him four and he said, ‘oh we made 4,000’. I say, ‘no we made 400,000’. It was incredible. Jimmy and I manoeuvring those props meant we went from being stuck $200,000 to winning $400,000 Little old South Point won about a third of the entire state’s win on that Super Bowl.
never be able to replicate. He explained: “Guys like to get cash in their hands when they win. When you cash a ticket online, a number just changes in your account. When you come in here, you get the cash. Whether it’s a couple of thousand dollars, a couple of hundred or whatever, boy does it feel good to get that money and stick it in your pocket.” •
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