Good morning. We start with the highlights from Bill Miller’s fireside chat at the SBC Summit North America yesterday where he tackled the issue of the current elevated levels of media spend. Then we report on the blowback to Jason Robins’ ‘controversial’ comments on profitable players. We also have further highlights from Meadowlands and a rumor of the day about bet365’s US intentions.

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SBC Summit North America highlight

Advertising wears: During a fireside chat, Bill Miller, president and CEO of the AGA, said the “unsustainable” level of advertising seen since the start of the NFL season was all about switching players onto the benefits of the legal market.

“There is a lot of advertising, but it is because they are acquiring customers, often from the illegal market,” Miller added. “Is it too much? It’s too much if you are a shareholder. But they have given operators a long leash.”

Fool to cry: Still, Miller did caution that the industry would be “foolish” not to look at what has happened in the UK, Spain and Australia where the levels of advertising have played a part in the public turning against the gaming sector. He noted that while 50% of respondents in the US have trust in the gaming sector, “in the UK that level is 5%”.

Fact check: According to statistics from the UK Gambling Commission, the percentage of respondents to a telephone survey who felt that gambling in the country was “fair and could be trusted” had fallen from 34.3% in 2016 to 28.8% in 2020.

Storm warning: Miller was keen to stress the US sector’s credentials when it comes to player protection and responsible gambling.

“This is a different industry to others in the leisure and hospitality space,” Miller said. “Social responsibility comes with the gaming licence. You take that responsibility seriously because if you are irresponsible, the government can take your business away.”

See below for more on the Summit sessions.

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Jason Robins fireside chat

That’s entertainment: DraftKings CEO Jason Robins excited much online chatter earlier this week with his comments that betting is “an entertainment activity” and that “people who are doing this for profit are not the players we want.” He added that bonus hunters were the players “you don’t want anyway”. “They are not the most profitable customers.”

High-tax high wire: Robins was speaking at the Canaccord Genuity digital conference and when asked about New York, he suggested DraftKings could make the tax regime work. Citing the example of Australia, he suggested high-tax regimes can work.

“Australia is 43% tax and it’s one of the most profitable countries for a lot of the operators there. I think that high tax rates certainly favor the scale operators because the fixed costs are buried in a lot more top-line revenue.”

Bridge and tunnel: He went on to suggest DraftKings would run with less bonus and free-bet promotions in New York and spend less on marketing. Somewhat contradicting himself, Robins said the “best players” will continue to play in New Jersey or Connecticut “because they think they’ll get a better deal there.” “But that’s a policy decision for New York,” he added.

On social

Rich Ryan @RichTRyan

@spanky I, for one, am shocked that a business is operating like a business.

November 30th 2021

14 Likes

Also on social

Jason Robins @JasonDRobins

Honest question: how many public companies with 10 figure revenues are growing as fast as we are?

December 2nd 2021

11 Retweets107 Likes

Colossal IP: Meanwhile, Colossus Bets is suing DraftKings for “wilful and deliberate infringement” of its sports-betting cash out product and has filed a US patent lawsuit with the District Court of Delaware. Colossus founder and CEO Bernard Marantelli said: “We attempted to resolve this amicably and we gave them ample opportunity to do so.” Colossus holds patent licenses with bet365 and Esports Technologies in the US and has issued similar IP infringement proceedings against  Tabcorp Holdings in Australia. 

Calendar: Jason Robins is speaking later this morning at the Jefferies Sports-Betting and iGaming Summit at 10am ET. WE+M hopes to be listening in.

SBC Summit North America day 1 recap

Extinction event: A lively debate towards the end of the day looked at M&A in the current environment with Crispin Nieboer, recently head of corporate development at William Hill and now a consultant, suggesting that “a large part” of the operators among the lower end tiers “will be wiped out”. “Some will have real quality that they can sell,” he added. “Some won’t”.

Franchise expansion: American Affiliate’s Chris Grove (American Affiliate owns Wagers.com) added that the route to profitability might come via diversification into “adjacent” products. “Products where you are risking money on uncertain outcomes with the potential of reward and in ways that might not need regulatory permission,” Grove added. “So more NFT mediated games, more and more skill gaming exemptions. In that expansion, that is the path to profitability.”

Quick conference quotes

Coining it
“Our product turns a live three-hour event into a slot machine.”
Chris Bevilacqua, chairman and co-founder of micro-betting provider Simplebet.

And don’t the kids just love it
“Today’s sports-betting products will be rejected by the next generation.”
Tomash Devenishek, CEO, Rush Sports on the necessary ‘Tik-Tok-ification of sports-betting’

What's it like to brag about, raking in dollars
“People don’t want the man defining their success or failure.”
Scott San Emeterio, founder and CEO at Ball Street Trading, on why sports-betting and financial trading convergence might be limited.

Mark to market
“What’s tricky is that everyone would like sports-betting to become more like the financial markets but I’m not sure it will get that far. If you look overseas, it hasn’t got there. There is a lot working against that kind of market efficiency.”
Scott Shechtman, head of new markets at Nasdaq, on the potential for transposing sports-betting into the financial trading model.

Sharps need not apply 
“Those who think only about TAM have got it all wrong, if people are watching a game let’s make it less about skill and more about fun, turn it into sports lotto, the market will be 10 times bigger.” 
Bally Corporation Chairman Soo Kim on getting rid of skill in sports betting.  

Don’t tell Bernard
“We believe having the best transactional experience will be core in defining market leaders: when the UK came up with cash out, everyone scrammed to offer cashout, something similar will happen in the US.”
Matt Prevost, Chief Revenue Officer at BetMGM, on a panel assessing the US sports-betting landscape.

“What are the things we (Penn Interactive) can do that you guys can’t do?”
Jon Kaplowitz, Head of Penn Interactive, on the same panel.

Media drivers 
“The industry should understand the role media companies play in the sports-betting ecosystem: there is a focus on new bettors and FTDs, but when it comes to CPAs vs. LTVs you have to remember players have four or five accounts and only one operator will capture 60% of that spend. Sports media can drive this propensity to win that wallet share.” 
In the following panel Geoff Reis, General Manager of Yahoo Sports, responded to Prevost and Kaplowitz’s comments, reminding them of the role sports media played in driving revenue and activity to sportsbooks. 

Not us guv’
“I just want to be clear that those in the US who are betting on esports are not betting with Pinnacle.”  
Paris Smith, CEO of Pinnacle Sports, responding to comments from Bayes Esports COO Amir Mirzaee that US players were already betting on esports. 

Rumor of the day

Bet now: Chatter around the conference is about bet365’s intentions in the US. The betting giant is currently only up and running in New Jersey, but according to more than one source, the prospect is for the betting giant to enter 10 states next year.

Scientific Games buys Elk

Hunting and gathering: Scientific Games has snapped up Swedish games studio Elk for an undisclosed sum. The Stockholm-based firm’s games include Wild Toro II, Kathmandu and Cygnus. The buyout represents a further augmentation of Scientific Games’ digital gaming footprint following the recent deal for Authentic Games. Elk content is already live on Scientific Games' Open Gaming platform.

Pipeline! Separately, yesterday the Truist team issued a note on Scientific Games suggesting that the way the Open Gaming System hosts third-party content “provides unique insights for game development and creates a natural M&A funnel”. 

“The strong success of Lightning Box led Scientific games to acquire the company with sizeable scale benefits of the small studio moving to the larger platform,” the Truist team noted. “We also think yesterday's announcement of the acquisition of Elk Studios follows this pattern, enabling Elk to gain distribution more broadly in Europe (and for the first time in the US) by moving to Sci Games igaming platform.”

Startup Shoutouts

Some candy talking: Sports-betting exchange Betconnect has secured pre-Series A funding from industry figures Tom Waterhouse, former founder of the eponymous Australian bookmakers, Robin Chabbra, ex-Fox Bet board advisor and Grand Parade founder, Andy Clerkson as well as Tim Heath’s Yolo Investments and further involvement from Candy Ventures. Chhabra has also been appointed to the role of strategic business advisor. The money raised was not divulged.

Back of the net: The natural language betting software provider Voxbet (previously Onionsack) has appointed Andy Lee as chairman. Lee was previously managing director at William Hill Online and most recently he was MD of international sportsbook operations at the Stars Group. Voxbet’s technology helps players speak or type their bet request. “I believe Voxbet has one of the most applicable ideas in the market, in that it solves a genuine problem for sportsbooks and its customers as well as creating new opportunities for customer reach. There is no more timely story in our sector than this one,” said Lee.

NOTE: WE+M will report on the contenders for the Pitch competition sponsored by Wagers.com later today at the SBC Summit.

Datalines

Nevada: GGR for October was up 48.5% YoY to $1.2bn and up 19.5% vs. 2019. Strip GGR was up 86.9% YoY to $702.2m and up 30.5% vs. 2019. Strip GGR was up 86.9% YoY to $702.2m and up 30.5% vs. 2019. Total slot win for the Strip was up 77% YoY and up 21 vs. 2019 to $368m, slot handle was up 70% YoY to $4.75bn and +26% vs. 2019, good for a win rate of 7.7% vs. 7.4% YoY and 8.1% vs. 2019. Locals GGR was up 16.1% YoY to $222.5m and up 3.2% vs. 2019 (LV locals slot handle was up 11.0% vs. Oct. 2019). Wells Fargo said the results supported its “positive view on the fundamentals on the Las Vegas Strip and LV Locals gaming markets”.

Newslines

Guessing game: GAN has announced a deal to provide backend services with an unnamed “top 3 US operator” for the Ontario market. Meanwhile, the company has also announced the deployment of Ainsworth’s content with Churchill Downs’ TwinSpires offering in Michigan via GAN’s own RGS. Recall, in May GAN announced an exclusive online rights deal for all Ainsworth games. Lastly, in a busy week for GAN’s IR team, the company has announced an immediate $5m share buyback program.

Fanning the flames: Scout Gaming’s DFS offering Fanteam has officially launched in the US. Fanteam went live in Europe in 2015. It will be available in a wide range of states including California, Florida and Illinois.

Colombian rush: The Aspire Global-owned Pariplay has launched with BetRivers in Colombia with its range of over 120 titles available on the Fusion network. This is Pariplay’s third collaboration in the Colombian market.

Calendar

• 1 & 2 Dec: WE+M@SBC Summit North America

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com