PLUS

CLEARING UP
ESPORTS CONFUSION
ARE CRYPTO TOKENS
UNDER THREAT?
FOXWOODS’
RODNEY BUTLER​

ISSUE 37 | Q3 2018

LEAGUE OF THEIR OWN

HOW US SPORTS ARE STAKING A CLAIM TO THE FUTURE OF US WAGERING
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CONTENTS
Editor’s letter 04 Editor profiles
Compared with igaming,
which has experienced 06 Events calendar
glacial progress since the
first three states went live in
08 News
2013, US-regulated sports
10 Business as usual
wagering has come flying out of the blocks.
With four states having already gone live with 13 Sports data comes to the fore
sportsbooks alongside Nevada, it now seems
hard to believe the ban was only lifted as 15 Q&A: State Senator William Coley
recently as May.
The strong early figures from these states 18 Q&A: Mashantucket Pequot tribal chairman Rodney Butler
clearly indicate a pent-up appetite among
Americans, while in New Jersey – where in 20 Sports betting handbook
August more than a quarter of the $96m
turnover was transacted remotely – they 25 Aerial view
show just how integral digital channels have
become to the sports-wagering experience. 27 Power play
The leagues continue to drive many of
the debates over the future of US wagering, 29 Giant strides
with integrity still as central to their discourse
as it was when fighting against the lifting of
33 Cover feature: Bring on the major leagues
PASPA. We talked to the NBA and PGA to
36 Esports… or not esports?
get a steer on how the main stakeholders –
operators, regulators and the leagues – plan 38 Talk of the town
to collaborate and move forward (p33).
In the background are of course the 40 Social casino Q2 update
offshore books, which Larry Gibbs argues
are being assisted by initial post-PASPA 44 Sports betting and tribes: A long and winding road
actions (p10). Chairman of the Mashantucket
Pequot Tribal Nation and interim Foxwoods 47 RP iGaming Index: Reality bites
CEO Rodney Butler (p18) also argues that
the leagues’ integrity-fee proposals will 50 Just the ticket
affect operators’ “ability to compete with the
massive, unregulated black market.” 52 Profitable thinking: Are crypto tokens under threat?
These issues and many others impacting
the future of US sports wagering will be 55 Key progress in the Keystone State
discussed in depth at our ICE Sports Betting
58 Skin in the game
USA event in NYC on 27-28 November. We
hope to see you there.
62 State of the Union
Stephen Carter 66 Data Center, including Hitwise US data and H2 Dashboards
Editorial director

Editorial director: Stephen Carter, stephen.carter@clariongaming.com Senior account manager: Luke Webb, luke.webb@clariongaming.com
Deputy editor: Hannah Gannagé-Stewart, hannah.gannage-stewart@clariongaming.com Senior account manager: Katie Woods, katherine.woods@clarionevents.com
Sub editor: Guy Parsons Account manager: Sandeep Haer, sandeep.haer@clariongaming.com
Publishing director: Richard Linn, richard.linn@clariongaming.com Subscriptions: info@igamingbusiness.com
Management and marketing editor: David Briggs and Nicky Senyard
Regulation Editor: Mark Balestra Published by: iGaming Business North America, 10300 West Charleston Boulevard, Suite 13-482, Las Vegas, NV 89135, United States.

Tribal gaming editor: Paul Girvan
Fantasy and eSports editor: Hai Ng
Designer: Ogo Ikeogu
Production & studio manager: Craig Young, craig.young@clariongaming.com
Managing director: Alex Pratt, alex.pratt@clariongaming.com
Head of media sales: Ian Larcombe, ian.larcombe@clariongaming.com
Senior account manager: Laurie Pilate, laurie.pilate@clariongaming.com
T: +1 (609) 385-1017, www.igamingbusinessnorthamerica.com. iGaming Business North America is published bimonthly © iGaming Business
Ltd 2016. ISSN 2473-5744. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means,
or stored in any retrieval system of any nature without prior written permission, except for permitted fair dealing under the Copyright Designs
and Patents Act 1988. Application for permission for use of copyright material including permission to reproduce extracts in other
published works shall be made to the publishers. Full acknowledgement of author, publisher and source must be given.
The paper used within this publication has been sourced from a Chain-of-Custody certified manufacturer, operating within
international environmental standards such as ISO14001 and EMAS. This is to ensure sustainable sourcing of the raw materials,
sustainable production and to minimise our carbon footprint.

iGamingBusiness North America | Issue 37 | Q3 2018 | 3

EDITOR PROFILES
Stephen Carter
Editorial director
Stephen Carter is editorial director of iGaming
Business and its sister journal, iGB Affiliate.
Prior to joining iGB, Stephen worked for a variety
of igaming sector publications and affiliate websites,
including eGaming Review, where he was deputy editor.
Stephen entered the igaming industry after retraining
as a journalist in 2006.
David Briggs
Management & marketing
An experienced figure in the igaming industry,
David joined Ladbrokes in 1999 to head its fledgling
online division, going on to become MD of
Ladbrokes eGaming. He has more than 17 years
of board-level experience in the regulated sector
and is also chairman of geo-positioning solutions
provider, GeoComply.
Mark Balestra
Regulation
Mark Balestra is US special counsel, igaming law, for
Vancouver-based Segev LLP. Balestra has guided clients in
a variety of capacities in the gaming and gambling industry
for nearly 20 years. His expertise spans a number of
gaming-related industry sectors, including online gambling,
poker, skill gaming, fantasy sports, esports and tribal
gaming. He was also the founding member of igaming
consultancy BolaVerde Media Group (BVMG) and served
as that company’s director from 2009 to 2016.
Paul Girvan
Tribal gaming
Paul Girvan is a 30-year veteran of the US commercial
and tribal gaming industry.
Hai Ng
Fantasy and esports
Co-founder of Neomancer, a unique technology
strategy and management firm, Hai Ng has more than
three decades of experience in the technology sector,
with a decade in igaming. Hai tweets on matters of
igaming as @HaiOnGaming.

INTELLIGENCE CENTRE

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You can also find more information about the Intelligence Centre on
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4 | iGamingBusiness North America | Issue 35 | Q1 2018
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EVENTS CALENDAR
9-11 October, 2018
G2E Las Vegas
Sands Expo
Las Vegas, USA
globalgamingexpo.com

17-20 October, 2018

Lisbon Affiliate Conference
Lisbon Exhibition and
Congress Centre, Portugal
igbaffiliate.com/events/
lisbon-affiliate-conference

14-15 November, 2018

Totally Gaming Summit
Queen Elizabeth II
Conference Centre, London, UK
totallygamingsummit.com

27-28 November, 2018

ICE Sports Betting USA
Convene, NYC, USA
sportsbettingusa
conference.com

28-30 November, 2018 4-6 December, 2018

SiGMA World Gaming Expo 2018
MFCC, Malta Grimaldi Forum, Monaco
sigma.com.mt world-gaming-expo.com

6 | iGamingBusiness North America | Issue 37 | Q3 2018

 Visit us online at
www.igamingbusiness.com

5-7 February, 2019 13-15 May, 2019

ICE Totally Gaming ICE North America
ExCeL London, London, UK Boston Convention
icelondon.uk.com Exhibition Center,
MA, USA
icenorthamerica.com

iGamingBusiness North America | Issue 37 | Q3 2018 | 7

News
AGA STILL AGAINST SPORTS
BETTING FRAMEWORK
The American Gaming Association
(AGA) has doubled down on its
opposition to a proposed federal
framework for regulated sports
betting in the country, claiming
such a system would replace an
“already proven regulatory regime”
backed by most US citizens.
In August, Senator Chuck
Schumer put forward his proposal
for regulations to cover the sector.
States have so far adopted their
own legislative approaches to
sports betting in the wake of the
repeal of PASPA in May.
The AGA, which had already
communicated its displeasure
William Hill partners with casino giant Eldorado
William Hill has expanded its
reach in the US sports betting
sector after partnering with casino
giant Eldorado Resorts, which
operates in 11 states.
The bookmaker will become
Eldorado’s exclusive partner in the
provision of digital and land-based
8 | iGamingBusiness North America | Issue 37 | Q3 2018
with the proposals to enforcement oversight
Schumer, wrote and robust state
again in September regulation. Bringing
to reiterate that sports betting
it “believes that activity into a
additional federal Sara Slane, transparent legal
senior vice-president
engagement is not market, under state
of public affairs, AGA
warranted at this time.” and tribal regulatory
In the latest letter, Sara Slane, oversight, empowers law
senior vice-president of public enforcement to tackle illegal
affairs at the AGA, wrote: “AGA gambling, provides essential
has long been a leading advocate consumer protection and better
for eliminating the vast illegal ensures bet and game integrity.”
sports betting market in the The AGA highlighted how some
US, which was largely enabled parties that had previously been
by PASPA. We believe this can against the expansion of legal
best be achieved through law sports betting were now taking
sports betting services as well as access to properties in the
online gaming. sports betting states of Nevada,
As a result, William Hill’s reach West Virginia and Mississippi,
now extends to 13 states where as well as New Jersey, when
sports betting is either legal or Eldorado completes its takeover
sports betting bills are tabled. of the Tropicana in Atlantic City
The 25-year exclusive in the next few months. Eldorado
partnership gives William Hill also operates resorts in heavily
advantage of the new system.
In August, the NBA entered into
a partnership with MGM Resorts
International, while in September
NFL franchise the Dallas Cowboys
set a league first by linking up with
WinStar World Casino.
“Since the court’s decision,
companies in Delaware,
Mississippi, New Jersey and West
Virginia are now operating legal,
regulated sportsbooks,” Slane
said. “More than 20 other states,
including New York, are likely to
consider legalised sports betting
when their legislatures convene
in 2019.
populated states such as Florida,
Ohio and Pennsylvania.
Eldorado, which is in the
process of buying Tropicana
Entertainment, will receive $50m of
stock in William Hill, a 20% stake
in William Hill US and a share of
profits attributable to its licences.

NFL could claim $2.3bn
boost from sports betting
The NFL could boost its annual revenue by
$2.3bn through legal, regulated US sports
betting, according to a report commissioned by
the American Gaming Association (AGA).
The study authored by Nielsen Sports
analysed the revenue streams that legal
sports betting could generate for the NFL,
resulting from spending by betting operators
on advertising, data and sponsorship and also
generated by increased consumption of the
league’s media and purchasing of products.
The new season kicked off in September,
with betting on NFL games legally available in
New Jersey, Mississippi and West Virginia for
NJ’s first ever online sports
betting figures revealed
Figures released in September by New
Jersey’s gambling regulator show $95.6m was
wagered on sports in August — more than
twice as much as the amount bet in July.
Of that, nearly $74m was wagered at brick-
and-mortar venues, while $21.7m was via
online or phone apps.
In terms of digital sportsbook revenue,
DraftKings, which is partnered with Resorts
Casino Hotel, made $2.97m.
“We are pleased with the excitement shown
by New Jersey sports fans during DraftKings
Sportsbook’s first month in the state,” the
company’s Jamie Shea said.
the first time following the repeal of PASPA.
According to Nielsen, greater fan
engagement and viewership could boost the
NFL’s total annual revenue from media rights,
sponsorships, merchandise and ticket sales by
13.4%, producing $1.75bn in new revenue.
Spending by betting operators and data
providers could help the NFL generate an
additional $573m. The study projected that
gaming operators may spend $451m on
advertising, which will directly increase the
league’s rights fees by the same amount.
An additional $92m in sponsorship revenue
and $30m in data is also projected for the
league and its teams. In a memo sent to teams
obtained by ESPN in July, the NFL is reportedly
seeking to ensure that any casino brand that
advertises with a team buys official league data.
ESPN.com noted that the report does not
weigh up integrity fees, which the AGA has
been fiercely opposed to and would see
the NFL and potentially the players’ union,
NFLPA, receive a share of the handle bet on
their games.
“Our goal was not only to be first, but to
also offer the most innovative and entertaining
experience for consumers. Our August
performance exceeded expectations and we
are excited by the momentum the industry is
seeing right now.”
DraftKings began its soft launch on August
1 before rolling out its full Kambi-powered
service to New Jersey punters on August 6.
Land-based venues made around $6m
in revenue, with FanDuel’s Meadowlands
Racetrack — close to the New York border
and the MetLife Stadium — again the leader
with $3m.
iGamingBusiness North America | Issue 37 | Q3 2018 | 9
News
DraftKings CEO backs
DFS to thrive
DraftKings CEO Jason Robins has insisted
the growth of US sports betting will not
cannibalize daily fantasy sports.
DraftKings was the first operator to launch
an online and mobile sportsbook in NJ
in August, in partnership with Kambi and
Resorts Casino Hotel.
Robins told MetroBet: “It’s a halo effect
we’re seeing with sports betting and [DFS],
not just in New Jersey but we’re seeing a
big spike in customer re-activation for [DFS]
across the board.”
IGT enters tribal
sports betting market
International Game Technology (IGT) has
expanded its sports betting services into the
tribal gaming sector by linking up with the
Mississippi Band of Choctaw Indians.
Under the deal, IGT will offer its PlayDigital
PlayShot sports betting solution at the Pearl
River Resorts’ Golden Moon Hotel & Casino
and Silver Star Hotel & Casino in Choctaw, as
well as the Bok Homa Casino in Sandersville.
Consumers can place pre-match and
in-play bets over the counter at the three
casino sites.
NJ to surpass
Nevada by 2021
New Jersey could have as many as 20 online
operators by the end of the NFL season and
have a bigger sports betting market than
Nevada by 2021.
Eilers & Krejcik Gaming has tipped the
fledgling market to increase from a yield of
just $35m this year to $442m by the end
of 2021.
Over the same period, Nevada is expected
to rise from a current $279m to $410m,
according to the research company’s US
Sports Betting Monitor report.
 Sports Betting
BUSINESS
AS USUAL During the rush to build new US legalized sportsbooks, many believed illegal sports wagering
would immediately die down — but they were wrong. Larry Gibbs explores why this is
and asks whether initial post-PASPA actions are to blame
Members of the casino industry and
sports bettors alike will forever see May 14,
2018, the day that PASPA was repealed, as
Independence Day.
When an act or law is enforced, its
intention is often to prevent or at least slow
down the progress of an illegal act. However,
as we approach the five-month mark
post-PASPA, it seems obvious that things
haven’t changed much in the illegal offshore
wagering market. Nor, for that matter, in the
illegal street-level bookmaking game.
Although change takes time, is it possible
that individual states are moving through the
legislative path too slowly? Will new federal
legislative outcries from prominent US
Senators including Chuck Schumer (D-NY)
and Orrin Hatch (R-UT) further delay the
process and help illegal factions maintain
a two-decade competitive advantage? Will
their intentions for uniformity, taxation and
mandates for “integrity” work? Or potentially
enable the public and bettors to carry on
believing that political forces should not join
10 | iGamingBusiness North America | Issue 37 | Q3 2018
the sports leagues enforcing their games. In
effect, now that it’s unbroken, let’s not fix it.
These are all good questions to be debated
and answered. But shouldn’t they have been
settled first before opening the doors to the
store? Meanwhile, the “illegal” competition is
seizing any advantage for as long as possible.
And like any competitive business, they’re
utilizing any potential incentive to maintain a
long-standing customer base.
State vs. federal rule
Besides incumbent Nevada, the honeymoon
for state rule had barely begun in four new
states (New Jersey, Delaware, Mississippi and
West Virginia) before a dangerous call for
divorce from the US Senate emerged. While
several states, including New York, Florida
and California, are stalling in their legislative
progress, momentum is building again to
collect support for a federal plan.
Senate Minority Leader Schumer is trying
to initiate a bipartisan debate in Congress
based on three core principles: ensuring
consumer protection, protecting problem
gamblers and maintaining the integrity of the
game. His proposal comes on the heels of a
similar proposal by Senator Hatch of Utah.
In response to Schumer’s proposal, the
NBA, MLB and PGA Tour issued a joint
statement, which read: “As legalized sports
betting spreads across the states, there is
a need for consistent, nationwide integrity
standards to safeguard the sports millions of
fans love. We strongly support the legislative
framework outlined by Senator Schumer,
and we encourage Congress to adopt it.”
The problem here is timing. Nearly
one-third of the Senate is up for re-election
in November, with any federal legislation
focused on sports betting unlikely until after
the midterm election. In the interim, it is more
likely that calls for federal legislation will
build coinciding with league support.
Also, Schumer’s plan proposes strict
guidelines banning players under the age
of twenty-one, while restricting advertising
for the young and vulnerable. Both Schumer
 Sports Betting

“For two decades, anyone choosing to wager sports

online has had to accept the risk of NOT getting paid.
Legalized wagering brings with it a guarantee that
all winning bets will be honored at all US casino and
racetrack sportsbook locations”
and Hatch’s plans unite in protecting the convenience. Although this segment will utilized their long-standing status to acquire
purity of the game. But if progress is slow and never completely disappear, swifter uniform bonuses, rewards, etc.
individual states start dragging their heels policies and well-known national guidelines For the sophisticated bettor, the
then illegal wagering will be the winner. could help. opportunity exists to play within a more even
In the offshore segment, well-trained or global wagering line. At present, bettors
Understanding ‘the market’ teams of phone operators often take a within each US state are restricted by law to
Street bookmakers have been around significant portion of the action (perhaps as wager within state borders. As an example, a
for decades, offering unsecured credit much as 30% for call-in wagers), catering player should expect a crush of local money
and the opportunity to create their own to an older clientele who shun the internet. invested on popular local teams — an uneven
terms. Latterly, personalized websites have Many personal relationships have been amount wagered on, say, the Jets, Giants,
also become part of their 21st century established for several years and VIPs have Yankees or Mets in New Jersey or New York.

iGamingBusiness North America | Issue 37 | Q3 2018 | 11

 Sports Betting
Depending on perspective, this remains a
competitive advantage.
Winning with a low profile
Another unfortunate tradition has been
rumored among new legalized US sports
wagering bettors. Long common in illegal
offshore wagering and in Europe, it sees
successful, large bettors being flagged by
casinos and barred from further sports
wagering action. The prevailing excuse has
been to protect against money laundering
or against illegal wagering funds becoming
incorporated in the pools. It’s reminded many
of the argument involving skill vs. luck in
daily fantasy sports. However, this time the
adversary is the casino.
Echoing the birth of legalized online
gaming in the US, New Jersey has again been
first out of the gate when it comes to legalized
sports wagering. And the state that led the
charge repealing PASPA has an interesting
policy involving skill and wagering.
“Patrons cannot be barred from wagering
based solely on their winnings or skilled
play,” David Rebuck from the Division
of Gaming Enforcement of New Jersey
announced. He went on to explain that
New Jersey’s Supreme Court had previously
ruled that only those on an exclusion or
self-exclusion list, or who had violated the
Casino Control Act or State regulations,
would be excluded.
“These same rules apply to sports
12 | iGamingBusiness North America | Issue 37 | Q3 2018
wagering,” Rebuck continued. “However,
a facility can act against skilled players,
such as lowering an individual’s bet limit.
Additionally, online accounts may be closed
by an operator for misconduct.”
To date, two bettors have reportedly been
banned under these clouded conditions.
These could be the first of many cases as
legalized sports wagering spreads throughout
other US states.
As an interesting footnote, should this
policy become stricter and more pervasive, a
restricted legal sports bettor may have only
a few sportsbook choices available to them
per state — but they’ll be able to choose from
hundreds of illegal online wagering sites.
Legally convenient
Undoubtedly, the ability to settle bets is
the biggest selling point that new legal
US sportsbooks have over any illegal
competition. For two decades, anyone
choosing to wager sports online has had to
accept the risk of NOT getting paid. Legalized
wagering brings with it a guarantee that all
winning bets will be honored at all US casino
and racetrack sportsbook locations.
Behind this is another potential major
legal advantage. Still largely unknown to
new bettors and account holders, most
current state policies dictate that all tickets
must be cashed at casino and/or racetrack
sportsbook locations. This includes online
account withdrawal requests paid onsite.
While this is a useful marketing strategy
for casinos, as it encourages ancillary
wagering, it’s not so useful for punters. This is
especially true if they’re used to online horse
racing websites, where winning funds can be
paid into users’ bank accounts as soon as 24
hours after a race. A giant advantage could
be obtained by negating the need for an extra
trip to a location to pick up winnings.
In retrospect, we cannot blame the four
initial states for opening their sportsbooks
as soon as possible after the PASPA ruling.
While more states consider joining them,
shouldn’t everyone be on the same page with
a set of rules to live by? Most crucial, like any
business, shouldn’t priority be a plan based
on what customers prefer? In this case,
that could mean observing what worked or
currently works to provide optimum results.
Here’s hoping that all US legislators,
casinos and gaming affiliates unite
as quickly as possible to seize every
advantage, while at the same time
protecting bettors. But for now, it’s business
as usual this week legally AND illegally in
the sports wagering industry.
Larry Gibbs is vice president
of US Gaming Services,
a full-service consulting and
marketing research organisation
with 15 years’ experience in
US online gaming.

SPORTS DATA
COMES TO
THE FORE Scott Longley looks beyond the PASPA hype to uncover a booming sports data
industry that igaming firms need to be aware of
The news being generated by some of the
biggest companies in the online gambling
sector in the months since PASPA was struck
down has been dizzying. Understandably,
this once-in-a-generation opportunity has
been the focus of much industry speculation.
Yet, in among the US-centered tie-ups,
supply deals and acquisitions announced in
the past three months, the significance of a
couple of deals has perhaps been overlooked.
The two investment deals bookending July,
first with Sportradar and then with Genius
Sports, indicate the growing importance of
sports content and data, not just to the sports
betting industry but also much more widely.
For the first, the investment announced on
July 9 on the part of the Canada Pension
Plan Investment Board (CPPIB) and Silicon
Valley-based growth equity firm TCV
gives Sportradar an enterprise value of
€2.1bn ($2.4bn).
No further financial metrics were given,
but current shareholder Ted Leonsis, co-
founder and partner at Revolution Growth,
said he had previously invested in the
company because “we know how powerful
real-time data and analytics have become to
the live sports business.” This view has been
bolstered by the PASPA decision.
Similarly emboldened by recent events
is UK-based Apax Partners, now the proud
owner of Genius Sports, having announced
it had bought the company in late July for
an undisclosed sum thought to be around
10% of the size of the Sportradar deal. Like
Leonsis, Gabriele Cipparrone, partner at
Apax Partners, cited live sports data and
Perform Group by division, 2016-17 (£m)
300
250
200
150
100
50
0 Perform has its own somewhat
Content Media DAZN Other
2016 (£m) 2017 (£m)
iGamingBusiness North America | Issue 37 | Q3 2018 | 13
Sports Betting
its attendant technology as “key drivers
of growth.”
The latest financial figures available for
Genius Sports for the year to December 2016
show the historical growth path. Combined,
the various entities under the holding
company umbrella enjoyed a near-50% leap
in revenues to £32.2m ($41.9m) while the
Betgenius data collection arm enjoyed a 68%
increase to £26.9m.
If a similar growth path continued into
2017, revenues for the year would approach
£45m-£50m, driven to some extent by
acquisitions including the Italy-based Data
Project bought in September last year.
It is the available results from another of
the sports data and content world’s largest
constituents, Perform, which give a clearer
view of some of the broad trends affecting
the area of sports content and data collection
and distribution.
complicated ownership issues. At one time
listed on the London Stock Exchange, the
 Sports Betting
company was delisted in 2014 and returned
to the hands of previous owner Access
Industries, the privately-owned industrials
group controlled by Len Blavatnik.
As can be seen from the chart on page
13, the content side of the business, which
includes the Watch&Bet streaming operation
and data collection company Runningball,
as well as Opta, saw revenues climb 41% to
£278m in the 12 months to last December.
DAZN is Perform’s over-the-top (OTT)
sports streaming service which launched in
Germany in 2016. It takes the sports content
familiar to in-play betting offerings direct to a
consumer audience.
While Sportradar has a different strategy
focused on providing a similar B2B offering
to sports rights holders, the general trend
holds true for all. According to Perform,
sports streaming has come about in response
to “rapid changes” in the consumption
of sports and media content. It is a trend
14 | iGamingBusiness North America | Issue 37 | Q3 2018
which helps explain the recent corporate
activity, with these significant investments
coming about as a result of the confluence of
technology and consumer behavior.
It also helps explain why sports data – and
in-play data in particular – has become that
much more valuable. Add in recreational
habits around the consumption of sport and
the consequent growth of the sports industry
alongside the growth of the betting element,
and it is understandable why there is so
much interest in the sports content area.
The timing of the PASPA repeal is fortuitous,
but it’s not the major driver. As it stands, there
are not all that many investable businesses
involved in sport – surely no one other than
billionaires truly believes football clubs fall
into that category – and it is no coincidence
that a good few of them happen to be in the
sports content and data delivery sector.
The three companies mentioned,
together with the much more secretive
IMG, aren’t the whole of the sector though
they are currently attracting the most
attention. All are currently embroiled
in the discussions around official data
and integrity fees in the US and similar
discussions around the database right
in Europe. But behind the headlines lie
very solid businesses with very attractive
growth opportunities. The gambling
industry should take note.
Scott Longley has been a
journalist since the early
noughties covering personal
finance, sport and gambling.
He has worked for a number of
publications including Investment Week, Bloomberg
Money, Football First, eGaming Review and
Gambling Compliance. He now runs his own
editorial consultancy, Clear Concise Media, and
writes for a number of online and print titles.

Q&A
Despite the National Council of Legislators from Gaming States taking an agnostic
stance on legalization, the organization’s president William Coley says the right
approach to legislation and law enforcement is critical to states on either side of the
debate achieving their goals
iGaming Business North America: What
is the National Council of Legislators
from Gaming States’ (NCLGS) role in
shaping debate around the legalization
of sports betting?
William Coley: You can put a portal in place
that tracks all the bets for any individual
state. NCLGS has been advocating for that
and for states to enter into compacts with
each other to share that information. A
number of our member states are looking
at it and we are strongly recommending
that every state that decides to regulate
sports betting embraces that system. The US
states already have national crime systems
that they all share — they share licensing
information, and it’s very similar to that.
The whole concept of sharing information
to combat crime is very common.
What has been the main driver for the
earlier adopters of legislation?
It varies by state. Everybody recognizes that
there are illegal operators in every state.
Many of them work just through the internet
but there’s also a ton of traditional brick-
and-mortar bookies out there, be they the
barber, the bartender or the security guard at
WILLIAM COLEY
STATE SENATOR AND PRESIDENT OF NCLGS
the law school. The Supreme Court has given
the states a new tool in terms of combatting
that. If you’re going to fight illegal gambling,
you can try and do it the way we’ve been
doing it, by getting law enforcement to
arrest these people, but the other thing you
can do is legalize it. It’s up to each state
whether they take that opportunity. Even if
they legalize they have to use part of that
revenue to fund a law enforcement group,
be it a casino control commission or a lottery
commission that goes out and arrests the
illegal operators. That’s the real goal here.
“At the first NFL game in
New Jersey, the line to
make a wager was an
hour long so if you don’t
have the ability to let
them wager online,
you’re just going to
send them to the
offshore books”
iGamingBusiness North America | Issue 37 | Q3 2018 | 15
Sports Betting
What have been the common points of
contention that have held states back?
When we talk to individual legislators we
tell them that you need to decide whether
to combat it by legalizing or not, but if you
choose to combat it by legalizing it then
you need to empower a specialized law
enforcement agency to combat that crime.
If they decide to legalize it, they have to
ask who is going to be allowed to offer a
sportsbook. Are you just going to let the
casinos and racinos offer them? Are you
going to allow lottery? Are you going to
allow the internet? Then you have to ask
what are you going to allow them to bet
on? Are you going to allow amateur and
pro sports or are you just going to allow
pro? If you look at European operators,
they offer an entertainment product. At
ICE last year, we saw a product that paid
about £760,000 ($1m) on a £10 bet. The
first match of the wager was the severe
underdog winning the match, the second
wager of the match had some guy off the
bench who was going to kick the first goal
and the third match ended in a 4-4 tie.
That’s why it paid £760,000! Do you want
to allow that in a different venue to your
 Sports Betting

traditional sportsbook? Obviously you could

have a much higher tax rate on that product
compared to a traditional sportsbook.

Where are you looking to find best

practice in terms of consumer protection
and suspicious betting?
That’s where we have to develop.
We have to look at the experience
in Europe and then apply modern
technology to it, which is why we’re
looking at this concept of a portal that
all bets funnel through and that allows you
to do the data analysis to identify this.
Then you share that with companies
that do that kind of work.

Is there a downside to legalizaton?

As states legalize sports betting, there is
going to be more sports betting and we
know that one or 2% of the population has
addiction problems. So as that market
gets bigger the one or 2% becomes more

“Sometimes legislators
and more people. There are going to be
tragic stories around this and that’s where
you have to work around the issues that
we talked about and you have to use the
funds wisely. Someone asked me recently,
like to stick their
“Five years from now who are going to be the
big winners?” And I said if we get this right, head in the sand and
five years from now the leagues, the sports
involved, are going to be the big winners. pretend things aren’t
happening, so guys
Because there will be a natural inclination
for more people to watch sports. But if we
get this wrong, then the biggest losers will
be the sports because of the integrity issue.
Each sport wants to ensure that they remain
like us like to remind
a true competition with integrity and not
just an entertainment product. them that the problems
Will legalization succeed in shutting off do exist and they need
dealing with”
traffic to offshore sportsbooks?
Again, if we get it wrong they could be the

16 | iGamingBusiness North America | Issue 37 | Q3 2018


biggest winners. If we get it right
they’re going to lose because
they’re going to be prosecuted and
their customers will be investigated
and prosecuted. But if we get it
wrong we’re just setting up more
people to show interest in sports
betting, and we could be greatly
increasing their customer base.
That would be terrible. Typically,
casinos are taxed at about
33% but up until PASPA was
repealed the only place you
could legally bet was
Nevada. Now more states
are legalizing and you
can’t say you’re going to
have a 35% tax rate.
How do you balance the need
to generate a tax income
against needing to build
a viable industry?
Sometimes the answer that plays
well on the 30-second soundbite
for the nightly news isn’t the best
answer. It’s not terribly difficult
but it requires some intestinal
fortitude and legislative courage.
If you’re thinking about having a
50% tax rate and $10m license fee
and you’re not going to spend a lot of
money on vigorous law enforcement, you
would be better off just keeping sports
wagering illegal in your state. You have
to have aggressive law enforcement if
you legalize gambling. There are no ifs
or buts.
What do you expect is the future for online
gambling in the US?
For sports wagering they just consider it
because it’s how consumers do it now, albeit
iGamingBusiness North America | Issue 37 | Q3 2018 | 17
Sports Betting
illegally, but they do it now. At the first NFL
game in New Jersey, the line to make a wager
was an hour long so if you don’t have the
ability to let them wager online, you’re just
going to send them to the offshore books.
Do you think the ban on gambling could
ever be lifted at a federal level?
There’s always a chance. I don’t think it’s
necessary. We can operate at a state level.
We do that with alcohol now. So we can do
it with gambling but I think it’s something
that they would consider. States can do this
through compacts with one another or we
can have a national law that creates the
infrastructure to do it, but the infrastructure
must be created. States that choose to ban
gambling have to be able to have access
to all that information to be able to fight
illegal gambling. Sometimes legislators like
to stick their head in the sand and pretend
things aren’t happening, so guys like us like
to remind them that the problems do exist
and they need dealing with. It doesn’t make
you the most popular guy in the caucus
room but NCLGS is neither pro nor against
gambling, we’re just in favor of good laws.
Do you think a constitutional amendment will
be required to legalize sports betting in Ohio?
I don’t believe there’s a constitutional
problem in our state right now. Our
constitution has a ban on lotteries other than
the state lottery. The definition of a lottery is
really left up to the lottery commission and
the legislature. The casino legislation bans
anyone else from having table games or slot
machines, but sports betting is not a table
game nor a slot machine so I think it’s up
to the general assembly on what they want
to do. I think we could have that done this
year if it’s the will of the legislature. It’s just a
question of what they want to do.
 Sports Betting
Q&A
As a tribal chairman and interim CEO of Foxwoods Resort Casino,
Rodney Butler looks at the US gaming landscape post PASPA
iGaming Business North America: To what
extent was Foxwoods prepared for the news
of PASPA’s repeal?
Rodney Butler: We had been closely
following the development of New Jersey’s
sports betting case for years, in addition
to serving as members of the AGA’s Sports
Betting Task Force. After the oral arguments
in the US Supreme Court for the PASPA
case occurred in December 2017, we had
a strong feeling that PASPA was trending
towards a full repeal. In preparation, we
ramped up our internal education on sports
betting, and in Q1 2018 we began the
process to select a sports betting partner that
will lead us and the entire sports-fanatical
Northeast region of the US into this new
and exciting business.
What impact would the leagues’ insistence
on integrity fees have on your business
model with regards to sports betting?
The proposed royalty fee by the leagues
has no place in legislation. Sports betting
has been operated effectively in Nevada
without royalty fees, and to date no state
has passed legislation with royalty fees
for the leagues. Simply put, these fees will
affect an operator’s ability to price sports
markets competitively and affect their ability
to compete with the massive, unregulated
black market – which contains groups that
18 | iGamingBusiness North America | Issue 37 | Q3 2018
RODNEY BUTLER
CHAIRMAN MASHANTUCKET PEQUOT TRIBAL NATION
don’t pay integrity fees, taxes, or have any
real consumer protections in place. A royalty
fee will drive the already slim sports betting
margins even lower and will offer little
incentive for licensed operators to invest in
product and marketing, which in turn will
adversely affect a regulated operator’s ability
to recapture the prolific black market. In
turn, this negatively influences the revenue
opportunity for both the operator and the
jurisdiction that derives revenue from the
operator’s activity. It flies in the face of
social responsibility. I don’t think there is an
operator that would be averse to working
with the sports leagues on something that
makes sense commercially, but from a
business and public policy perspective, the
royalty fees don’t make sense to include in
law. In reality, a market structure without
“Over the last two
decades, the tribes
in Connecticut have
employed many
thousands of people
and funnelled over
$8bn to Connecticut’s
general fund”
integrity fees will likely be better for the
leagues, which stand to profit handsomely
through their existing revenue
streams from a stronger, growing
fan base.
Should the tribes’
exclusivity agreement
in Connecticut prohibit
Connecticut Lottery from
providing sports betting?
In the case of sports betting
in the USA, we believe brand
trust is extremely important.
We are not creating a new sports
betting market, but rather we are
working to recapture a large, pre-existing
black market from mature, offshore
unregulated operators and underground
bookies. Foxwoods Resort Casino has
been a trusted gaming operator for 26
years. We think it is important for strong
gaming brands to serve both existing and
new demand for sports wagering in a
transparent, high-reputation environment.
Will you be able to offer sports betting
under the existing compact with the state
or are there revisions that need to be
made? If so, what would they be?
We would work through our existing
exclusivity agreement with the state, and

TRUST
EQUALITY
depending on negotiations, we would
collectively determine whether or not we
needed any revisions.
What is the appetite for sports betting in
Indian Country?
In general, Indian Country is excited about
the prospects for sports betting so long as
tribes are treated equally and maintain
some level of regulatory authority over
betting. The National Indian Gaming
Association has put forward a resolution
supporting such a measure and we want
to be an active part of any sports betting
dialogue, be it at the state or national level.
What is the tribe’s current stance on how
sports betting should be regulated, and
how does it differ from other tribes with
a significant presence in other states?
We support a common sense market
structure that fits the business we aim
CONSUMER
BEHAVIOR
LEGAL
BRAND
LOYALTY
to operate. Over the last two decades, the
tribes in Connecticut have employed many
thousands of people and funnelled over
$8bn to Connecticut’s general fund, so it
would be fair to say that we strongly support
the constituents of Connecticut and the
public policy initiatives that affect everybody
living in our great state. Nevada is a fine
example of how a state can structure sports
betting regulations, while Pennsylvania has
created what appears to be an arbitrary
market structure that will do little to support
the recapturing of the black market and
hinder the regulated market’s growth and
sustainability. We believe that a lower
effective tax rate and pragmatic regulation
for sports wagering will create a strong
market structure that will drive higher
volume for the operators and the state. It will
also allow us a better chance of eliminating
the black market. I think it’s fair to say that
anybody that has become educated about
iGamingBusiness North America | Issue 37 | Q3 2018 | 19
Sports Betting
CHOICE
the economics of
sports betting likely
holds a similar view.
What role do you believe
mobile and online gaming to have and
what work are you doing to prepare for its
introduction should it happen?
I saw a great headline recently that read, “If
sports betting makes sense, online gaming
makes dollars.” We agree. New Jersey is a
great example of how online gaming can
both drive new revenues and also produce
incremental benefit to retail casinos. We
support the legalization and regulation of
online and retail sports betting, along with
online casino gaming, to augment our guest
experience, create new jobs and adapt with
the ever-changing times. To this end, we have
selected a partner to help us enter the online
gaming market and are actively lobbying the
state of Connecticut to legalize the activity.
SPORTS BETTING
iGaming Business North America has teamed
up with law firm Segev to create a directory
HANDBOOK
of enabling legislation for sports betting across the US
In our first sports betting directory, we have drawn together the relevant
regulatory and licensing conditions for each of the states currently allowing
sports betting: Delaware, Mississippi, Nevada, New Jersey, Pennsylvania and West
Virginia. Executive Director of the Mississippi Gaming Commission Allen Godfrey
also provides some detail on the conditions under which operators can currently
offer sports betting in the state.

Allen Godfrey that their system is working, the MGC

The Mississippi
Gaming
Commission
(MGC) has
authorized
sports betting
in the state of Mississippi since the
adoption of regulations in July. The
casino licensee will be responsible
for operating the sports book on
their respective properties. Many
operators will have to use the services
of companies such as William Hill, SB
Tech or others looking to get into the
process of providing platforms and
hardware. In order for an operator
to open their sports book to accept
wagers, they must prove they have
knowledgeable staff to operate the
book, be able to explain the wagering
process to patrons and notice what
may be considered a suspicious wager.
Once they demonstrate to the MGC
will authorize them to start accepting
wagers from patrons. There are
currently 20 operators with authorized
sports wagering and seven more in
the pipeline to open their books in
the next month or so. The operators
wanted to open before the start of
the football season and most of them
had a few weeks to operate before
the start of collegiate football and
professional football. New Jersey has a
solid reputation as a regulator and has
been preparing for this for a long time
so I expect sports wagering will be a
tremendous asset for the operators
and ultimately provide revenue to the
state coffers. The law as it was written
in Mississippi allows a wager to be
placed only on the licensed premises.
Until the law is changed, mobile
wagering will only be allowed on the
property and no change has been
requested or approved yet in the state.

20 | iGamingBusiness North America | Issue 37 | Q3 2018

 Sports Betting

NEW JERSEY
Types of sports betting •Most types of sports betting
authorized •Only casinos licensed by the Casino Control Commission, or operating pursuant to an interim casino
authorization, a racetrack, or former racetrack are eligible to obtain a sports wagering license

Licensing and/or •New Jersey Casino Control Commission

regulating agency •E: licensing@ccc.state.nj.us
•T: 609 441-3441

Types of license available •Sports pool license

•Casino service industry enterprise license (operated in concert with a casino)

Relevant fees •$100,000 for initial issuance of a sports wagering license

Tax rates •8.5% on gross revenue for onsite casino sports pools
•13% for online sports pools
•Additional 1.25% if operating through a racetrack and not a casino

Status •Currently accepting applications

Current license holders •Many casinos, including Meadowlands Racetrack, via Fanduel Sportsbook: and Resorts AC, via Draftkings

Applications currently •Several, including Freehold Raceway and Hard Rock AC

under review

MISSISSIPPI
Types of sports betting authorized •Full sports betting, allowed only on-site in casinos
•No mobile or online wagering can take place outside casino grounds

Licensing and/or regulating agency •Mississippi Gaming Commission

•E: info@mgc.state.ms.us
•T: 601 576-3800

Types of license available •Gaming license – allows sports betting

Relevant fees •$5,000 application fee
•$5,000 license fee

Tax rates •Approximately 11.2% tax (8% state tax plus local tax, typically 3.2%)

Status •Currently accepting applications

Current license holders •Beau Rivage, Gold Strike, IP Casinos

Applications currently under review •Many of the casinos in Mississippi

iGamingBusiness North America | Issue 37 | Q3 2018 | 21

 Sports Betting

NEVADA
Types of sports betting authorized •Full sports betting
Licensing and/or regulating agency •Nevada Gaming Control Board
•E: gcbresch@gcb.nv.gov (Tax and License Division)
•T: 775 684-7700

•Nevada Gaming Commission

•E: mbell@gcb.nv.gov
(Executive Secretary: Marie Bell)
•T: 775 684-7750
Types of license available •Non-restricted gaming license
Relevant fees •$500 application fee

Tax rates •7.75% effective tax rate

Status •Currently accepting applications
Current license holders •Many – over 200

Applications currently under review •Unknown

PENNSYLVANIA WEST VIRGINIA

Types of •Most forms of sports betting Types of sports •Full sports betting
sports •Slot machine licensees will be able to conduct sports betting authorized
betting wagering at the slot machine licensee’s licensed Licensing and/or •West Virginia Lottery Commission
authorized facility, as well as over the internet within the state regulating agency •E: mail@wvlottery.com
Licensing •Pennsylvania Gaming Control Board •T: 800 982-2274, 304-558-0500
and/or •E: pgcb@pa.gov (Headquarters)
regulating •T: 717 703-2988 (Licensing) Types of license •Operator’s license
agency available •Available to gaming facilities that
Types of •Sports wagering operator are already licensed
license •Sports wagering manufacturer Relevant fees •$100,000 – Operator’s license
available •Sports wagering supplier
Tax rates •10% adjusted gross sports
Relevant •$10,000,000 licensing fee wagering receipts
fees •$5,000 application fee
Status •Currently accepting applications
Tax rates •34% of daily gross sports wagering revenue
•2% of daily gross sports wagering revenue
– local share assessment
•Additional 0.4% of gross revenue from sports Current license •Hollywood Casino in Charles Town
wagering (problem gambling and liquor use fee) holders

Status •Currently accepting applications

Current •None yet
license
holders Applications •Two casinos in early September, two to
currently follow a few weeks later
Applications •None yet under review
currently
under review

22 | iGamingBusiness North America | Issue 37 | Q3 2018

 Sports Betting

DELAWARE
Types of sports betting •Full-scale sports betting through Delaware Sports Lottery
authorized
Licensing and/or •Delaware State Lottery Office
regulating agency •Director: Vernon Kirk
•T: 302 739-5291
Types of license available •Agent license (to conduct sports lottery operations)
•Technology provider license

Relevant fees •Unknown

Tax rates •Was 10.2% prior to new law; awaiting new regulations

Status •Not currently accepting applications

Current license holders •Delaware’s three casinos: Delaware Park, Dover Downs Hotel & Casino
and Harrington Raceway & Casino

Applications currently •None

under review

iGamingBusiness North America | Issue 37 | Q3 2018 | 23

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G2E LAS VEGAS
STAND 4023 </u>

There is data
behind every story
you tell.

Power your stories with Sportradar

The action on the playing field can be recorded in different ways, but what matters is
the story that it tells. What these stories have in common is the data that they originate
from and that data needs to be fast, accurate and trusted. Sportradar provides data
to a wide variety of storytellers in the sports ecosystem: media companies, sports
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sales@sportradar.com

AERIAL VIEW
Sportradar’s Neale Deeley takes a look at the trends and patterns emerging across the market following PASPA’s repeal
A
s one of the world’s
leading providers of sports
betting, data, media and
integrity services, Sportradar started
monitoring the US wagering market
situation well before the landmark
Supreme Court of the United
States (SCOTUS) decision to lift the
widespread ban on sports betting.
How have things moved so far
regarding US betting since the
repeal of PASPA?
In many ways, although it is clearly
a fast-moving situation in terms of
the deals that have already been
announced, it is still very much
early days. States like New Jersey
and Mississippi had legislation in
the can and were ready to go almost
as soon as the PASPA decision was
handed down. Although it will be
interesting to see which states are
in line to get the ball rolling for
the next legislative sessions, the
likelihood is that the various moves
will be protracted. Overall, we are
encouraged by the progress made so
far but at the same time we’re aware
that there’s a long way to go.
Are any trends emerging thus far
regarding how companies are
approaching betting in the US?
Yes. We’ve seen many large casino
interests taking steps to claim a
COMPANY PROFILE
•NAME SPORTRADAR •FOUNDED 2000 •SECTOR SPORTS BETTING
•WEBSITE SPORTRADAR.COM •TWITTER @SPORTRADAR
INDUSTRY INSIGHT
share of the pie, and we are also Are there any specific challenges
seeing new start-ups emerge, such emerging in the market, and if so,
as BetChicago, which hopes to how are companies/providers dealing
take advantage of any potential with them?
opportunities in Illinois. It’ll be I think the specific challenges are
interesting to see the degree to NEALE around the differing attitudes being
which each state allows for mobile DEELEY taken by each individual state.
betting. If wagering is restricted Neale Deeley is Operators and suppliers have to be
to land-based betting, then the Sportradar’s vice alive to these issues. What works in one
opportunities for new entrants are president of sales state might not work in another. The
limited. But if mobile betting is a part for gaming in the examples might not be relevant. Just
of any legislative package then more US, based in Min- look at the differences between New
opportunities for new and existing neapolis. Neale Jersey, say, where you have multiple
brands will open up. joined Sportradar skins and mobile. Or Delaware, where
in 2014 and it is lottery only, and with a very limited
What are the key points companies since October customer proposition.
need to bear in mind when it comes 2017 has played
to approaching a new market like the a pivotal role in Is the pattern of growth within the US
United States? developing strat- market so far similar to other previous
First of all, anyone looking to the egy for the US emerging areas?
US has to understand that each gaming division There will always be wide differences
state is different, with a varied slate and its commer- between how markets develop, although
of stakeholders all wanting to be cial team. Prior broad patterns will be discernible. It
involved. Each market will pose its to this, Neale is like Europe. The patchwork quilt
own challenges and having a grasp led Sportradar’s of regulations in differing countries
of the politics of legislation in each virtual gaming means that a European strategy has to
state is a task in itself. Then it will division for three have flexibility to deal with the country-
come down to understanding the years. Before by-country nuances. US state-by-state
commercial opportunity. This is basic joining Sportra- sports betting will be no different. Once
stuff for any operator in any given dar, Neale spent markets are up and running, the sector
market; understanding the financial 12 years working will better understand the size of the
viability of an opportunity from day for both suppliers opportunities ahead and the expected
one and being properly committed and operators, growth paths. What we do know is that
will mean you don’t make any including Inspired there is a willing audience for sports
egregious mistakes further down Gaming, GTECH betting in the US, but that is just the
the line. and William Hill. start. This market will be huge over time.
iGamingBusiness North America | Issue 37 | Q3 2018 | 25
 INDUSTRY INSIGHT

POWER PLAY
WHY IN-PLAY BETTING WILL SET THE USA MARKET ON FIRE
In a rapidly changing US landscape, in-play betting is set to make a big impact.
Richard Carter explores the potential of live markets on US sports

T
he passion of US fans for the
big four American sports is
legendary, and in the wake
of the repeal of PASPA, the time is ripe
for in-play betting to emerge as an
important part of the country’s rapidly
regulating sports betting industry.
In-play already accounts for nearly
half of all bets placed with European
operators, and the formats of US sports
make them ideally suited to live betting.
That’s why some of the biggest names
in the American sector have turned
to SBTech, the undisputed leader of
in-play, to offer their customers the best
all-round live experience.
Future growth will be driven
largely by casual bettors inclined
to bet predominantly on mobile.
The most successful operators will
therefore be those that offer the fastest
placement flow, with personalized
recommendations at the heart of the
user journey alongside gamified betting
features that deliver the biggest wins in
the shortest time frames.
SBTech has the tools and experience
to provide US operators with a
complete in-play product that includes
odds on more than 25,000 live events
a month. Its renowned speed to
market was illustrated by quickfire
launches with partners in New Jersey
and Mississippi within weeks of the Taking full advantage
introduction of sports betting regulation With US customers now familiarizing
in both states this summer. themselves with the latest features
provided by sports betting suppliers,
Innovation leaders and more states expected to introduce
RICHARD Product development has been central legislation over the next 12 months, there’s
CARTER to the success of SBTech’s in-play never been a better time to take advantage
is group CEO offering since it launched more than a of everything that in-play has to offer.
of SBTech. He decade ago, and the company’s recently In retail venues, operators can utilize
previously ran the launched in-play features represent a SBTech’s TV screen management system
highly respected superb fit for US players. to display live odds for all the biggest
Deutsche Bank With so many games played games, ensuring that players are always
European Equity simultaneously in leagues such as the aware of any significant price changes
Gaming franchise NBA, MLB, NHL and NFL, Add2Bet and new markets. SBTech has already
in London and allows players to react quickly to entered into deals with horse racing giant
has more than 10 changing circumstances by adding Churchill Downs and casino operators
years of experi- selections to open bets, thereby creating Golden Nugget and Resorts, providing its
ence focused on larger parlays with bigger payouts. best-of-breed platform and sportsbook to
both the global Patent-pending innovation Pulse Bet these prestigious operators.
land-based and is an industry first, offering a jackpot- Casinos and racetrack operators are
online gaming style sports betting experience that is currently leading the charge to define the
industry. Richard perfect for fast-moving games. Players evolving sports betting sector, but a host
was instrumental bet on a key incident to happen in an of high-profile brands, as well as start-
in helping create upcoming period of a live game and ups, are certain to enter the space in the
the European watch their winnings rise in real time. coming years. For major brick-and-mortar
quoted online Meanwhile, bet suggestion tool organizations, an effective omnichannel
gaming sector. Action Betting alerts users to the most approach uniting on-property, web and
relevant in-play betting opportunities, mobile will therefore be essential.
with messages displayed whenever a With regulation set to increase across
significant event such as an NFL red the country, the future is bright for what
zone play is about to occur. Players can will become one of the world’s biggest
then place a quick bet directly from the markets. We’re delighted to play our part
widget on the page. in what will be a very exciting journey.

COMPANY PROFILE
•NAME SBTECH •FOUNDED 2007 •SECTOR SPORTS BETTING
•WEBSITE SBTECH.COM •FACEBOOK SPORTSBETTINGTECH

iGamingBusiness North America | Issue 37 | Q3 2018 | 27

The World’s Biggest
Sports and Racing Jackpots
NFL FANTASY AND ESPORTS JACKPOTS COMING SOON

corporate.colossusbets.com b2b@colossusbets.com

GIANT STRIDES Bernard Marantelli discusses Colossus Bets’ cash out process, innovation in the industry
and the steps his company is taking in the wake of PASPA
C
ash out seems to be the
most pervasive innovation
in European gambling
in the last five years. What can
we expect to see in the space
in America?
Cash out is the perfect product
because it gives both operators
and players a good deal. It should
become as widespread in the US as in
Europe. Also, in the US, cash out was
trumpeted as a must-have feature
from day one so many sportsbooks
launched with it. On the flipside,
the US will differ on a few fronts.
Cash out will need state-by-state
regulatory approval. And patents
are critical here, whereas they are
virtually absent over in Europe, so
operators will not have carte blanche
to replicate features.
A lot of online bookmakers over in
Europe offer cash out functionality.
What’s different about your version?
Colossus was the first operator to
introduce cash out and partial cash
out. Most firms now have partial
cash out, although a few still restrict
it to an all-or-nothing decision on
technical or UX-related grounds. I’d
say the main difference is our cash
out process takes place within a tote
or pari-mutuel pool, which is harder
to deliver than in a fixed-odds setting.
COMPANY PROFILE
•NAME COLOSSUS BETS •FOUNDED 2013 •SECTOR SPORTS BETTING
•WEBSITE COLOSSUSBETS.COM •TWITTER @COLOSSUSBETS
Horse race wagering has long
been the most legally available and
widespread form of online betting in
the US, but how does the lifting of
PASPA change the opportunities for
a business such as Colossus?
It’s a blessing and a curse. On the one
hand, racing operators are in a great
position to monetize their existing
player base by extending into sports
betting. They also hold an oligopoly
on racing betting so they’re better set
to offer a full product suite. On the
other hand, people who bet on horses
might now flock to sports. Either way,
“ON THE WHOLE, I THINK
BETTING IN THE US MIGHT
FOSTER INNOVATION BETTER
THAN IN EUROPE”
given that Colossus guarantees the
biggest racing and sports jackpots in
the world, we think we’ll fit nicely into
operators’ US roadmaps.
The industry is criticized for a lack of
innovation, but new products launch
into the online betting space regularly
now. Is the industry more innovative
these days or does it come down
to other factors, such as critics
conflating disruption with innovation?
There are plenty of people looking
to generate a USP and still, sadly, the
INDUSTRY INSIGHT
majority of European start-ups fail and
then see their innovation replicated by
the big operators. That is not to say that
big operators never innovate, but they
tend to be followers rather than leaders.
BERNARD The US might be different in this regard,
MARANTELLI firstly because they fund and support
is founder and start-ups more vigorously. Also, patents
CEO of Colossus protect inventors and first movers in
Bets, award- a way they don’t in Europe. So on the
winning provider whole, I think betting in the US might
of the world’s foster innovation better than in Europe.
biggest sports
and racing jack- The regulatory tendency in igaming
pots and pioneer is towards ring-fenced markets
of Cash Out and and therefore liquidity pools. What
‘crowdfunded’ challenges does this present?
Syndicates. From Ring fencing liquidity has historically
a background in occurred where there was a legacy,
financial trading, quasi-governmental operator. These
Bernard saw an limitations have been lessened due
opportunity to to online competition and evolving
revolutionize the regulation. However, the challenge could
sports betting persist in the US market despite PASPA
space with being repealed. Notably, tote betting on
lottery-size prizes races enjoys an exception from the Wire
and better player Act so it is legal to cross most state lines.
engagement. Ultimately, liquidity in big jackpots is
Today, Colossus key and harder to achieve if the market
jackpots are live is fragmented. Colossus currently sell
with 50+ op- pools in over 30 countries, including
erators globally, most major European and African
including Betfair, markets, so we are not being overly
Betclic and restricted, at least not more so than fixed
Betway Africa. odds operators.
iGamingBusiness North America | Issue 37 | Q3 2018 | 29
Murmuration Theory
Giorgio Parisi explored the beautiful and
mesmerising movement of starlings and with
his research team published a paper on scale-
free correlation where every movement of a bird
affects the rest.
#spiritofgenius
 5-7 February 2019
ExCeL London, UK
 ™

WITH OUR LEADING SPORTS BETTING SOLUTIONS

IN-VENUE | DIGITAL | MOBILE

FOR MORE INFORMATION
VISIT: WWW.SCIENTIFICGAMES.COM
 Feature

BRING ON THE
MAJOR LEAGUES
As the US enters a bold new world of legalized sports betting,
Scott Longley talks to key stakeholders in sport about how their
influence is coming to bear

Just in case anyone was getting comfortable
with the progress being made with regulated
US sports betting, Senate Minority Leader
Chuck Schumer and his Republican colleague
from Utah, Orrin Hatch, sent a curveball in the
direction of the nascent sector in late August.
Schumer, the senior senator for New York,
cited his status as a fan of both the New York
Yankees and the New York Giants as one
reason to go public with his concerns over
sports integrity in the wake of the Supreme
Court decision regarding PASPA.
“My priority in the wake of [the striking
down of PASPA] is making sure the integrity
of the games we love is preserved, that young
people and those suffering from gambling
addiction are not taken advantage of, and that
consumers that choose to engage in sports
betting are appropriately protected,” he said in
a statement.
There was much in the full statement
that was non-controversial; the need for
information sharing to root out corruption,
for instance, and requirements for appropriate
player protections and a betting ban on
sports participants.
But these likely weren’t the reason why the
American Gaming Association (AGA) opted to

iGamingBusiness North America | Issue 37 | Q3 2018 | 33

Feature

go immediately on the attack, suggesting that

previous federal oversight of sports betting
“Core federal standards are critical
had been an “abject failure for 26 years,” with to safeguarding the sports we
love, the millions of athletes
the only thing to show for it being a “thriving
illegal market with no consumer protections
and safeguards.”
“New federal mandates are a nonstarter,” the across the country who play these
AGA added for good measure, and it is easy to
identify the more contentious issues raised by
games at all levels and our fans”
Schumer and Hatch.
For instance, Schumer suggested that there
be a requirement for betting operators to
share betting information with not only the
regulators but also the sports leagues and
sports governing bodies. Then there were the
provisions requiring all bets to be settled using
“official league data” and the proposal for
restrictions around which bets can be allowed,
to be determined by “the league or appropriate
governing body.”

Political footballs
Schumer’s interjection into the debate around
sports data and sports betting highlights
the simple fact that regulated sports betting
remains a controversial issue, not least for the
sports leagues and governing bodies which
remain major actors within the debate.
Not surprisingly, all the major bodies took
the opportunity of the Schumer and Hatch
initiative to let it be known they were fully
behind the proposals.
“As legalized sports betting spreads across
the states, there is a need for consistent,
nationwide integrity standards to safeguard the
sports millions of fans love,” said a statement
from Major League Baseball (MLB), the
National Basketball Association (NBA) and
the Professional Golf Association (PGA). “We
strongly support the legislative framework
outlined by Senator Schumer and we
encourage Congress to adopt it.”
Also issuing a joint statement were the
National Football League (NFL) and the
National College Athletic Association (NCAA).
“We applaud the leadership demonstrated by
Senators Hatch and Schumer in supporting
federal legislation to protect the integrity of our
games following the Supreme Court decision,”
the two bodies said.
“Core federal standards are critical to
safeguarding the sports we love, the millions
of athletes across the country who play these
games at all levels and our fans.”
Speaking to iGaming Business, Dan Spillane,
senior vice president for league governance and
policy at the NBA, was keen to emphasise that
what is being talked about here is an overlay on
state regulations rather than a full-blown effort
to legislate for sports betting nationally.
“We regard gambling as something that
has always been dealt with at state level and
we don’t want to change that,” he says, before
adding that the sports still “want a seat at
the table” when it comes to discussions at
state level.
A federal role
The official status of data is just part of the
equation. “It’s important,” Spillane says, but
it’s only one of many issues including data
sharing, cooperation, consumer protection,
age limits and more.
None of this comes out of the blue. Andy
Levinson, senior vice president for tournament
administration at the PGA Tour, is keen to
stress that, for nearly a year, various sports
bodies and leagues have been speaking
publicly about the need for stakeholders —
betting operators, regulators and the leagues
— “to work together to create the best possible
regulatory system.”
In this respect he namechecks the
recent deal between the NBA and MGM
which, he suggests, “demonstrates that a
leading betting operator understands the
importance of protecting the integrity of
sports competition and ensuring that the
markets they offer are based on accurate,
real-time information.”
Spillane is keen to point out that the deal
with MGM was important because it was with
an “established and well-respected operator,”
a comment which at least points to common
ground. More than that, the NBA already has
an ongoing deal with sports data supplier
Sportradar for distribution outside the US, and
Laila Mintas, deputy president at Sportradar

34 | iGamingBusiness North America | Issue 37 | Q3 2018


US, makes clear that organizations such as the
NBA are well aware of how sports betting has
developed further afield.
“We have been working with the NBA for
many years, addressing issues around sports
data and betting integrity,” she says. “We see
the task in the US as one of education and
guidance. As with some of the Schumer and
Hatch proposals, there is much that already
forms the basis for regulated territories
in Europe and elsewhere regarding the
relationship between betting operators and
sports bodies.”
This is a view echoed by Levinson at the
PGA who agrees that various of the leagues —
including the PGA itself — have already been
engaged in “public discourse” on the issues.
“All domestic leagues share common interests
in protecting the integrity of our competitions,
safeguarding consumers from misinformation
and eliminating the black market that currently
exists in the US today,” he says.
The last point is important. “This remains
early days for regulated sports betting in the
US,” says Mintas. “We are still in the stages
of helping the leagues better understand
the betting sector and also vice versa. The
model for the US will be different than it is
in Europe, and indeed each individual state
market will vary, just as it does in Europe.
“But still the examples are there for how sports
and betting can work together and we are
confident solutions can be found that will
satisfy all stakeholders.”
One such example is fan engagement,
something that was touched upon by
NBA Commissioner Adam Silver when
announcing the MGM deal. He suggested
the collaboration would result in “the
best possible gaming and entertainment
experience for consumers through the use
of accurate, real-time NBA and WNBA data,
and our collective efforts to maintain and
enhance the integrity of our games.”
The benefits are also touched upon by
Levinson, who says the leagues are aware of
how betting can bring further fan engagement.
“The PGA Tour recognizes that sports
betting, if regulated properly, will introduce
new audiences to our competitions and our
iGamingBusiness North America | Issue 37 | Q3 2018 | 35
Feature
athletes, which is part of the reason we have
been publicly engaged on this issue for quite
some time.”
The sports betting debate will widen out to
include more states in 2019 and the position
of the leagues and sports bodies will be crucial
to how the various discussions progress. More
than one respondent for this article suggested
that it was merely the “first minute of the game”
for sports betting in the US, and positions are
far from being set. But still, the field is in motion
and that will mean an interesting next few
years for the sports and the betting sector.
Scott Longley has been a
journalist since the early
noughties covering personal
finance, sport and gambling.
He has worked for a number
of publications including Investment week,
Bloomberg Money, Football First, eGaming Review
and Gambling Compliance. He now runs his own
editorial consultancy, Clear Concise Media, and
writes for a number of online and print titles.
 Fantasy and eSports
ESPORTS…
OR NOT ESPORTS?
Despite its unstoppable march into the mainstream, esports is still seen by some as a catch-all term for anything
connected with electronic gaming. But that’s plain wrong, argues Hai Ng
The challenge with any new phenomenon
is the temptation to explain and describe it
through simplification, often leading to broad
generalizations and confusion. The hilarious
exchange between Samuel L. Jackson and
KTLA entertainment reporter Sam Rubin in
2014 comes to mind. When Rubin mistook
Jackson for Laurence Fishburne, Jackson
retorted, “We don’t all look alike. We may be all
black and famous, but we don’t all look alike.”
Esports suffers something similar: if it’s an
electronic game, if it happens in an electronic
game? Then it’s esports.
Do you know what’s esports?
Loot boxes
Loot boxes have attracted the attention of
many governments across the globe for one
particular reason: they’re often portrayed as a
dangerous gateway to gambling for children.
Belgium’s Gaming Commission has certainly
made that point clear.
So what exactly are loot boxes?Well, as the
term implies, they’re boxes with stuff in them.
In this case, as the boxes appear in-game and
the virtual stuff inside can range from cosmetic
items (elements that do not provide any boosts
to the player’s in-game abilities) to things that
will help make you more powerful in the game.
Gamers call the latter “pay-to-win.”
Many popular games, several of which are
esports games, are free to download and play,
36 | iGamingBusiness North America | Issue 37 | Q3 2018
but many of them still gross millions a week
in revenue. Part of that revenue comes from
selling loot boxes in the game. In other words,
loot boxes are a mechanism for monetization
in both free and paid-for games.
In some games, players are rewarded
with loot boxes just for playing frequently
or for achieving goals, but boxes may also
be bought by those less inclined to work for
them through hours of play (what gamers
call “grinding”).
Loot boxes are operated in various ways. In
some games, you buy boxes; in others, you are
given the boxes but you buy keys to open them;
then in others still, you are given boxes but it
takes time to open them (though you can speed
up the process by paying); and everything in
between. Almost always, payment is done
through an in-game currency instead of
regular fiat currency.
Since players won’t know what’s in the
boxes until they open them, pundits will claim,
therein lies the similarity to gambling.
But wait a minute. The loot box mechanism
is really no different from the prize in a box of
Cracker Jacks or a pack of collector cards, or in
products like Kinder Surprise or LOL dolls —
you buy the item but you don’t know what’s in
them until you open them.
Similar to loot boxes, these real-world
equivalents will contain items that are
pedestrian in value and items that are
extremely exclusive to the appreciating
collector. And the similarities don’t end there.
Neither the virtual nor the real publish the
buyer’s odds for what they will get inside.
So why are loot boxes now considered
“dangerous” and “like gambling” for children
when similar real-world equivalents have been
on sale for decades? That’s a discussion for
another article.
No current esports game involves a player’s
“skill” in opening loot boxes. No current esports
game allows the content of loot boxes to affect
a tournament player’s performance, even in
those games where a “pay-to-win” element
exists. Tournament modes exist that place all
athletes on an even footing.
So, while there may be valid concerns, from
gambling to consumer protection, loot boxes —
not esports.
Skin betting
A hot 2017 topic, skin-betting is still something
that gets associated with esports, especially
when it comes to calls for regulation.
A close relative to loot boxes, by virtue that
loot boxes often contain “skins,” skins is a loose
term to describe in-game cosmetic items that
wrap around in-game objects to change their
appearance, thus the term skin.
Some games, such as Counter-Strike: Global
Offensive, feature skins that can be traded
and sold between players, with rare

skins going for big sums of real cash.
While often explicitly prohibited by game
developers, due to an implied value being
associated with skins by the existence of
a market, they can, and have been, used
as a form of virtual currency. Indeed, until
a crackdown in 2017, there were many
unregulated online casinos that accepted and
encouraged skins as currency for wagering.
Skins are basically a form of virtual
currency, but while some may use them as
a currency to bet on the outcome of esports
events, skins — not esports.
Skill-based slots/EGMs
Apart from the usual suspects, a new breed of
game and machine developer is bringing new
options to the casino floor. In an effort to draw
in younger players who prefer games of skill
to chance-based slots, these new games from
the likes of GameCo and Gamblit combine
elements of skill-based electronic games with
the rapid spins-per-hour revenue potential of
traditional slots.
Gaming regulators in both New Jersey
and Nevada have granted approvals for
many of these cutting-edge machines on
their respective licensed floors, and clearly
the companies behind them are looking to
perfect their craft and bring these machines
to more jurisdictions.
Many of these games draw upon game
design concepts from electronic games, but
no makers currently draw or license any game
that is played as an esport.
However, while skill-based slots and
EGMs target a similar player and audience
demographic as esports, skill-based slots and
EGMs — not esports.
Arcade 2.0/PvP and Tournament
Gaming Lounges
These have begun appearing in Las Vegas
resorts and beyond. They range from 80s
arcades on steroids to well-equipped electronic
gaming lounges that offer tournaments
featuring esports games with the opportunity
to win prizes and money.
While the former may bring customers
nostalgia in the form of Pac-Man or a pinball
tournament, the latter is what is interesting.
Venues including the now rebranded
Esports at the Downtown Grand and Level
Up at the MGM Grand offer visitors the
opportunity to enter competitive electronic
game tournaments for prizes, with some of the
games available being esports games.
These may evolve into a practice that often
happens after some esports events. Known as
“Salty Suites,” the practice sees players compete
against each other for a friendly wager. Side
bets between audience members has also been
known to occur.
Integrity and security are both important
factors here, and there is a strong case for
these venues to have regulatory and consumer
protection and oversight.
Arcade 2.0, then, while it may be cool to
compete for cash and prizes on your favorite
arcade game — not esports.
iGamingBusiness North America | Issue 37 | Q3 2018 | 37
Fantasy and eSports
However, these new tournament venues
have the potential to become the physical
sports equivalent of putting money on your
basketball game down at the courts. With
that in mind, PvP and Tournament Gaming
Lounges — too close to call.
So, what is esports?
Esports, at its most basic, is simply electronic
sports.
As with physical sports, some have more
tournament structure than others; similarly,
all esports games are competitive electronic
games, but not all competitive electronic
games are esports games.
Which games qualify for the esports
moniker is a trickier question best left for
another article, but basically the name
is reserved for games that have a strong
methodical skill component, well defined
tournament rules, organization and structure.
Oh, and while we’ve covered some ground
on what isn’t esports, writing an article for this
magazine — not esports.
Hai Ng is iGaming Business
North America’s fantasy
and esports editor. He is
co-founder of Neomancer, a
unique technology strategy and
management firm, and has over three decades of
experience in the technology sector, with a decade
in igaming. He tweets on matters of igaming as
@HaiOnGaming
Social Gaming
TALK OF
THE TOWN
Operators could be missing a trick when it comes to increasing monetization from their social slots,
writes Guy Hasson. Instead of reaching out for new players, try tapping up your existing player base
for more cash. How? By giving players what they crave: bragging rights
During the first few years that social slots
existed, we relied on real-money gaming slots
thinking for monetization. Mainly this: why
would people spend their real money?
The answer was simple, we all believed.
People will pay because they run out of coins
and they want to keep playing.
It makes sense, right? After all, that’s how it
works in the real world.
The thing is, over the last few years most
leading social slots have been able to spike
their monetization consistently — even
double it — based on features, mini-games
and other tricks that have nothing to do with
losing coins in the games themselves.
In this article, I’m going to take you
behind the scenes and show you something
surprisingly simple that should increase your
revenue from your top-paying players by tens
of percent a month.
Understanding why people pay
First, let’s define who this strategy is for.
This is for your paying players. In fact, it’s for
your top-paying players. These are the players
who pay you hundreds, even thousands of
dollars a month and in exchange get millions,
38 | iGamingBusiness North America | Issue 37 | Q3 2018
tens of millions, or even hundreds of millions
of coins at a great discount. With these coins,
they can play for a week (if they’re heavy
players) or months, without paying you again.
So they don’t need to pay, right? Wrong.
Sure, people pay for coins. The thing is that
most people would pay for other things as
well. And one of these things is status.
Players will pay to get status. And, even
better for you, players will pay to keep
their status.
Once we understand that, we can create a
system that allows us to benefit from this.
The Billionaire’s Club trick
Let’s start by giving some status to your
top-paying players. Let’s say that any player
with over a million coins is officially in the
Millionaire’s Club.
Being in the Millionaire’s
Club is cool. It gives the player
special perks or discounts on
things. But, most of all, it gives
the player bragging rights.
However, if their balance falls
below one million, they will
lose that status, the bragging
rights that come with it, the discounts, etc.
But being a millionaire is kind of common,
since people can get there by being lucky,
without paying.
So let’s give them something to strive to.
Being in the Millionaire’s Club may be nice,
but being in the Billionaire’s Club is really
something to aim for. It has true bragging
rights and absolutely amazing discounts
and perks.
Once more, if a player drops under one
billion coins, they are out of the club. So
when that happens, they may get a message
from you suggesting they pay more money
for more coins to keep their status (even
though they have more than 999 million
coins and don’t need them) . If you offer
amazing perks and give players a great way
to brag about being in the club, most of them
will pay to stay in.
Now repeat that process. Being
in the Billionaire’s Club may
be awesome, but being in the
Trillionaire’s Club is stupendous!
It has the BEST perks and
discounts. And it has the bragging
rights of being in true rarified

“Follow your players to learn how they brag. For
example, if you look at Facebook fan groups of
some of the top games, you’ll see that players like
to post screenshots of massive wins”
air, in a club that numbers only two or three
people, or maybe even just you.
Once more, if the player drops under one
trillion, they get a message from the game,
and he or she will most likely pay even
though the last thing they need is more coins.
Status is more important than coins. That is
human nature.
You can see how this works: a player can
lose their amazing status, a player must pay
to keep that status, and the player always
has a higher status to strive towards. Most
importantly, players can brag and you should
give them ways to do that.
One last tip
Since boasting is important, keep in mind
that there is more than one way to do it.
Follow your players to learn how they
brag. For example, if you look at Facebook
fan groups of some of the top games, you’ll
see that players like to post screenshots of
massive wins. Some wins, you’ll notice, are
wins of 100 million or more. The only way to
get wins like that is to play with huge bets, the
kind that mean that the player has paid to get
a large number of coins.
Therefore, if people like to post really big
wins, help them. Fix it so that anyone in any
of the clubs can take a screenshot of their
big win and big win celebration and save
it or share it. The saved picture or shared
picture will also have a stamp on it, stating
Millionaire’s Club, Billionaire’s Club or
Trillionaire’s Club, etc.
This is one example of many
These club monickers are just an example —
no doubt you’ll have your own ideas about
what to call your clubs. As long as you give
iGamingBusiness North America | Issue 37 | Q3 2018 | 39
Social Gaming
players a status they want, and threaten to
take it away in the nicest possible way, this
should work.
This is just one of the many tricks you can
employ to improve monetization in ways that
have nothing to do with your actual slots
games. There are many reasons people pay,
especially people who have already paid you.
Rather than trying to squeeze a few more
non-paying players for a few dollars, why
not go to your existing top-paying players
and give them more of what they want, in
exchange for significantly increasing their
monetization?
Try this trick. You’ll be surprised.
Guy Hasson worked for
Playtech for three years before
becoming Playtika’s content
manager, responsible for the
content of Slotomania and Caesars
Casino. He is now a social-slot consultant,
specializing in game popularity. His website:
hassonslots.com
 Social Gaming
SOCIAL
CASINO
Q2 UPDATE
Standout performers in the last quarter included Playtika, Huuuge Games,
KamaGames and DGN Games as the social casino market grew
19.1% year-on-year. Adam Krejcik from Eilers & Krejcik Gaming reports
We estimate the global social casino game
market grew 2.5% quarter-over-quarter
or 19.1% year-on-year in Q2 of 2018. We
estimate social casino revenues generated
on Facebook were down 1.9% q/q, while
mobile was up 3.6% q/q. For the trailing 12
months to 30 June, 2018, we estimate a total
market size of $4.92bn or up 20.7% y/y.
Given the stronger than expected growth
in 1H of the year we are raising our CY18
market sizing estimate and now expect the
social casino industry will reach $5.24bn or
“We are raising our CY18 market sizing estimate
and now expect the social casino industry will
reach $5.24bn or up 15.8% y/y against our previous
estimate that called for 14.6% growth”
40 | iGamingBusiness North America | Issue 37 | Q3 2018
PLAYSTUDIOS’
REVENUES
WERE UP
12% Y/Y
ARISTOCRAT
THE NUMBER TWO
PUBLISHER WORLDWIDE
WITH 12.2%
MARKET SHARE
up 15.8% y/y against our previous estimate
that called for 14.6% growth.
Performance among the top 15 social
casino publishers was mixed but Playtika,
Huuuge Games, KamaGames and DGN
Games all had a strong showing.
From the last quarter there was some
key movement in the ranking charts:
High 5 Games moved up a place to 12th
position, DGN Games moved up again into
the top 15, while Super Lucky fell out of
our rankings.

PLAYTIKA
SAW REVENUE COMPANY HIGHLIGHTS
INCREASE
BY 7% Playtika saw revenues increase 7% q/q and
31% y/y. Despite being twice the size of its
nearest competitor, the company continues
to gain market share and execute in an
exceptional fashion. Playtika’s entire portfolio
enjoyed healthy growth with a standout
performance from Slotomania and
Bingo Blitz.
Aristocrat remains the number two publisher
worldwide with 12.2% market share, which
assumes a full quarter contribution from
Big Fish (social casino only). Pro-forma
gross revenues were up 1.7% q/q and
DOUBLEU 33.1% y/y. In terms of breakdown,
GAMES we believe Product Madness
TOTAL GROSS was up 2% q/q or 45% y/y with
REVENUES UP 2.6% sequential growth driven by FaFaFa
(now wholly owned by Aristocrat)
HUUUGE and the launch of its latest standalone
GAMES game Lightning Link.
REVENUES Looking ahead we believe the majority
INCREASED of growth in CY18 will be driven by newer
8.6% Q/Q games such as Cashman Casino, Lightning
Link, FaFaFa and Jackpot City Slots.
DoubleU Games, the owner of DoubleDown
Interactive, is the third largest social casino
publisher worldwide with total gross
revenues up 2.6% q/q. Overall, it was a
relatively healthy quarter for both Double
Down and DoubleU Games, as they were
able to grow revenues on a sequential basis.
We estimate DoubleDown Interactive
revenues on a standalone basis were up
2.5% q/q, largely driven by its franchise
game DoubleDown Casino. We estimate
DoubleU Games grew revenues 2.9% q/q
and 27% y/y on a standalone basis, largely
due to DoubleU Casino. This marks the
third consecutive quarter that pro-forma
revenues have grown on a sequential and
iGamingBusiness North America | Issue 37 | Q3 2018 | 41
Social Gaming
y/y basis. It appears the recent round of
strategic changes at DoubleDown is starting
to pay dividends.
SciGames Interactive saw total social
revenues (B2C only) increase 2.1% q/q
or 9.1% y/y. In terms of individual game
performance, we believe Jackpot Party Casino
was up mid-single digits on a sequential
basis, while Gold Fish Casino and Bingo
Showdown also grew on a sequential basis.
Monopoly Slots, the company’s newest
title, only contributed a nominal amount
in the quarter. Looking ahead we believe
the majority of growth in CY18 will likely
be from scaling some of its newer titles:
88Fortunes, Bingo Showdown and Monopoly
Slots. We also believe the company has
further room to improve monetization.
Zynga saw its social casino bookings decline
1.6% q/q but grow approximately 1.6% on
a year-over-year basis. Zynga Poker, which
had been the primary growth driver over the
past few quarters, saw a modest single-digit
sequential decline likely due to Facebook
Connect issues. The company’s slot portfolio
was essentially flat q/q as the product team
continues to focus on ways of improving
conversion and monetization rates. While
social casino still represents roughly half of
Zynga’s total bookings, it has not represented
a major growth driver as of late and we
believe management is increasingly looking
towards other segments. Hyper-casual,
specialty card and puzzle games would be
among the primary growth drivers.
Huuuge Games continued its impressive
growth trajectory with revenues increasing
8.6% q/q or 63.8% y/y resulting in market
share of 4.5%. Growth in Q2 was largely
 Social Gaming

“GSN/Bash Gaming
(majority owned by Sony)
MURKA
saw its social casino CONTINUES TO ENJOY
STRONG PROFITABILITY
revenues decline 2.3% AND IS SEEING SOME OF
ITS BEST EBITDA
q/q or 5.4% y/y” MARGIN LEVELS

KAMAGAMES
STRONG MOMENTUM
WITH REVENUES UP
12.1% Q/Q

driven by Billionaire Casino (we estimate an
increase of 33% q/q), and to a lesser extent
Huuuge Casino (we estimate 3% q/q). The
company continues to dominate on Android/
Google Play and is now the fourth largest
standalone social casino publisher on this
platform (putting it ahead of SG Digital and
just slightly behind Zynga). Huuuge recently
unveiled the launch of Tap Tap Games, a
new publishing label focused on publishing
hyper-casual mobile games. The company
stated that the new brand is part of its
mission to become “the global leader in real
time free-to-play casual gaming.”
PlayStudios’ revenues were flat on a
sequential basis but up 12% y/y. POP! Slots
remains the company’s top grossing game
and once again saw healthy sequential
growth in the period. That, however, was
offset by declines from myVegas and Konami
slots (partly related to the Facebook Connect
issues). The company also launched Royal
Charm, a game developed in partnership
with King Studios, but it only contributed a
nominal amount in the period. The company
is still optimising the game and expects a
larger contribution in 2H18 when it begins
paid marketing. Additionally, PlayStudios
has made a number of new strategic hires
in recent months and is realigning its studio
structure, which it hopes will lead to further
efficiencies and growth opportunities.
GSN/Bash Gaming (majority owned by Sony)
saw its social casino revenues decline 2.3%
q/q or 5.4% y/y. The company’s two biggest
titles, Bingo Bash and GSN Casino, both
declined by low- to mid-single digits on a
sequential basis. Other titles, namely Fresh
Deck, Mirrorball and Wheel of Fortune made
modest revenue contributions.
Murka saw its revenues decline 12.5% q/q
or 6.9% y/y this period. The company has
significantly reduced UA spending in recent
months, which has negatively impacted
top-line results. Despite this, the company
continues to enjoy strong profitability and is
seeing some of its best EBITDA margin levels.
We also believe the company will introduce
new content and features in future periods
that should help reinvigorate revenue growth
in 2H18.
KamaGames, which entered our top 15
rankings last period, continued to enjoy
strong momentum with revenues up 12.1%
q/q or 40.5% y/y. Growth this quarter was
attributed to new product releases (Split Bet
Poker), new slots games being added
and a number of other new features
being added to the company’s portfolio
of games.

Disclaimer: Eilers & Krejcik Gaming, LLC is an independent research firm and is neither a registered broker dealer nor a registered investment advisor.
No information contained in this report shall constitute as a recommendation or solicitation to buy or sell a security.
Eilers & Krejcik Gaming, LLC is a boutique research and advisory firm focused on servicing the gaming equipment, technology and interactive gaming sectors within
the global gaming industry. For more information about our firm and services please visit ekgamingllc.com

42 | iGamingBusiness North America | Issue 37 | Q3 2018

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Tribal Gaming

If you read the news, it appears the entire

SPORTS BETTING AND TRIBES

A LONG AND
US gaming industry is obsessed with sports
betting. Hungry for new product offerings
and approaches, operators see the potential
that sports betting offers to produce new
revenue streams. Sports betting and igaming

WINDING
are popular with players and profitable
for operators across the world. In the UK,
the remote sector accounts for some 35%
of total gross gambling yield — and 41%
of these revenues are generated by betting
on sports, per UK Gambling Commission

statistics. “Legalized sports betting in the US
is expected to increase the revenue potential
of igaming and therefore generate more
revenue where it is permitted online,” says
Paul Girvan, an igaming industry expert.
“This equals greater potential tax revenue
and therefore more incentive for states to
permit online gaming with sports betting as
a component.”
But what about those states that allow
gaming on Native American lands?
According to the National Indian Gaming
Commission’s annual reporting, in 2017
there were 494 tribal gaming facilities in 29
states across the US, with Native American
properties generating more than half of all
gaming revenues in the country. Therefore,
no discussion of sports betting or igaming
in the US is complete without considering
tribal facilities. For tribes and those doing
business with tribes, the process for bringing
about sports betting will be neither quick
nor easy, but the result could be increases in
visitation and revenues at brick-and-mortar
facilities, as well as increased engagement
and revenues for online operations.
What’s legal?
With the overturning of PASPA, states were
given the freedom to permit and regulate
sports betting within their borders in much
the way they do with traditional casino and
online gaming. Heidi McNeil Staudenmaier,
ROAD
As the US moves towards a legalized sports betting landscape, most in the
industry are still toasting their good fortune. But the path to legalization won’t
necessarily be an easy one for the country’s tribes, which are faced with
having to renegotiate a host of tribal-state gaming compacts.
Suzanne Leckert plots their likely journey
a recognized expert in Indian and Gaming sports betting at existing casinos but not
Law, is quick to point out that the Supreme necessarily online.
Court decision alone “doesn’t mean [sports Tribal gaming enterprises, however,
betting is] legal.” First, each state must pass operate through gaming compacts with their
its own legislation to permit sports betting respective state governments. State legislation
within its borders. Some of the first states (or in the case of California, possibly a
to authorize the practice — Delaware, statewide constitutional amendment voted
New Jersey and Pennsylvania — have on by the people) must precede tribes’
also permitted igaming. Still others have introducing sports betting. Although US
embraced the sports betting opportunity Senators Orrin Hatch (R-UT) and Chuck
while not yet addressing igaming: Schumer (D-NY) have recently announced
Mississippi, West Virginia, Rhode Island support for federal oversight of sports
(launching this November) and Oregon (legal betting, D. Michael McBride III, an Indian
prior to the PASPA decision). Under pressure and Gaming Law attorney practising in Tulsa,
from their constituents and those in the Oklahoma, foresees no change to the state-
casino industry, many other states are by-state model of regulating sports betting
working on legislation to enable for both commercial and tribal gaming.

44 | iGamingBusiness North America | Issue 37 | Q3 2018


McBride warns that federal oversight and
its impacts on tribal-state gaming compacts
“would be very complex” and “not a quick
legislative hit.” Furthermore, “States and tribal
governments have proven that they know
how to regulate gaming,” according to Valerie
Spicer, the former executive director of the
Arizona Indian Gaming Association. Spicer
believes that “we’ll start to see a natural
consensus of good policy” across the country
with regard to sports betting.
Much the same process will be required
if online gaming is to be widely adopted by
Native American tribes. And while compacts
with states will likely need amending, the
approval of sports betting and adding it to
the menu of online gaming options forms
Tribal Gaming
“The current and most likely path forward for tribes to
offer sports betting is through state legislation followed
by amendments to tribal-state gaming compacts”
an ever-stronger case for tribes and states to Staudenmaier, “State governments need to
take another look at online gaming. review their exclusivity clauses and be sure
that those aren’t being violated.” In potentially
Path forward lucrative markets such as California, this
The current and most likely way forward could be problematic. Don Casper, vice
for tribes to offer sports betting is through president of marketing for the Cabazon
state legislation followed by amendments to Band of Mission Indians’ Fantasy Springs
tribal-state gaming compacts. While sports Resort Casino in Indio Springs, CA, is quick
betting is considered a Class III gaming to point out that tribes “have the exclusive
activity, the vast majority of these compacts right to provide casino games in California”
were negotiated prior to the Supreme Court and that “sports betting and igaming fall
decision, and sports betting was generally into that category.” Of course, the card rooms
not included. Before moving forward, says and horse tracks in California have sought
iGamingBusiness North America | Issue 37 | Q3 2018 | 45
Tribal Gaming
to offer igaming for many years and see
this issue differently; therefore, a turf war is
expected to ensue. Casper does not expect
any movement on sports betting or igaming
in California in the near future due to the
political environment (it will be electing a
new governor this November), and the fact
that the charge will be led by the state’s
largest tribes, which have the political clout
to handle the complex negotiations. This
conflict between the tribes, card rooms and
horse tracks over what types of games each
may offer is a long-standing one, but perhaps
the push toward legalized sports betting will
be what California needs to resolve these
issues and bring igaming to the state.
In California and other states, the
amendment of a tribe’s gaming compact
could be a multi-year process. Even with
state legalization and a gaming compact
that permits it, other legal issues may still be
present. Staudenmaier cautions that “both
vendors and tribes need to be careful that
any agreement they enter into isn’t viewed as
a management agreement by the National
Indian Gaming Commission (NIGC), and
therefore they need to be very careful in
their negotiations and in working with the
NIGC.” Critical to consider, according to
McBride, is that “any wagering would have
to take place on the tribal property.” This
on-site requirement could limit the potential
for sports betting as well as igaming wagers
through tribal gaming enterprises.
Business decision
Many tribes are assessing not just whether
igaming or brick-and-mortar sports betting
fits into their master plans but also the
financial feasibility of operations. The low
margins for sports betting (15% on average in
the UK) and the necessity of a large volume
of wagers could prove problematic for small
tribal sportsbooks. One possible solution
is the formation of partnerships or shared
liquidity for sports wagers. Given the low
margins, it would seem that the igaming
platform offers an attractive avenue to take
46 | iGamingBusiness North America | Issue 37 | Q3 2018
“With the push to increase
competitiveness and
bolster casinos’ positions
in the marketplace,
on-site sports betting is
garnering lots of interest
across the US from both
tribes and commercial
gaming operators”
advantage of this revenue stream. That,
however, requires compacts to address both
sports betting and igaming.
No stranger to the tribal-state compact
process, Valerie Spicer is aware that the
introduction of sports betting is a business
decision. She advises that tribes look at “what
it takes to operate sports betting, and how
you’re going to approach it… are you going
to do it on your own or outsource it to an
operator? What is the competition in your
given state?”
First and next movers
The Pearl River Resort Casino in Choctaw,
Mississippi, is so far the only Native
American property to offer sports betting.
The tribe has converted its sports bar into
a sportsbook and announced plans to
launch mobile-device betting in the near
future. They are a first-mover, Staudenmaier
points out, because of the permissibility of
Mississippi’s gaming laws, whereby Native
American properties have the right to
operate any kind of gaming that commercial
operators can. Mississippi was among the
first states to permit sports betting but it has
not enabled igaming yet. New Mexico could
be a next state to introduce sports betting at
tribal facilities, as its compacts are “very wide
open… and tribes probably have an easier
road because they don’t have to amend” their
compacts. There is a lot of interest among
Native American tribes across the US and
a “lot of careful planning and research”
underway, according to Spicer. Tribes in
Arizona could be well positioned to introduce
sports betting too, with many currently
engaged in gaming compact discussions.
The experts that we talked to agreed that
sports betting will not come to tribal lands
overnight. According to McBride, now is
the time for the sports betting and igaming
sectors to network and develop relationships
with tribes. At the same time, tribes would be
well positioned by forming partnerships with
other tribes for shared liquidity.
With the push to increase competitiveness
and bolster casinos’ positions in the
marketplace, on-site sports betting is
garnering lots of interest across the US
from both tribes and commercial gaming
operators. Added to a suite of igaming
offerings, however, sports betting has even
greater potential. But Spicer says those
hoping to capitalize on this emerging market
should “be mindful that this is a process.
Companies need to know and understand
the tribal-state compacts within a given state
and also the state statutes with regard to
gaming and igaming. They need to be patient
and respectful of the tribe and the process.”
For sports betting to truly take off in the
US and to develop along the lines of the
UK market, not only must tribes secure the
right to operate igaming but also sports
betting within their states. The uptake on
igaming may have slowed, but the increased
revenue potential (read taxes) associated
with sports betting could lead more states
to take another look at these related issues.
That will open the door for the tribes to do
the same — and in those states where tribal
gaming predominates it is the tribes that will
be leading the way.
Suzanne Leckert is a founding
partner of Convergence Strategy
Group, which provides strategic
planning and analytical services to
gaming, leisure, commercial, tribal and
public partners. Find out more at convergencestrat.com
 Business and Finance

RP IGAMING INDEX
REALITY BITES
The Global iGaming Index is being reintroduced and reformed in partnership with Regulus Partners, one of whom,
Paul Leyland, had the dubious honour of founding the index back when US online sports betting was all the rage in
very different circumstances. He runs through the revised methodology and what
has unfolded since May’s momentous US Supreme Court ruling

Rather than go back to the dawn of online, beginning for a large proportion of the entrants such as Caesars). We have chosen to
we have chosen to rebase our new index on constituents and it showed in their share prices, denominate in dollars not only to capture the
Friday, 11 May, 2018. That date is significant initially at least. newfound fashion for US exposure but also to
because the following week PASPA was Before we examine what has moved swerve some of the more aggressive currency
repealed and the UK government announced and what has shaken in the listed world fluctuations likely in the coming months
its long-awaited decision on FOBT maximum of igaming, we will first briefly explain our (involving sterling in particular). Because of
stakes. (FOBTs or fixed-odds betting terminals revised methodology. The index comprises 35 this currency decision, and to factor in the
are found in UK betting shops and are similar global gambling stocks with some exposure tech-media driven nature of the sector, we have
to electronic slots. In May the UK government to the online sector (see table on p53). We benchmarked the index against the NASDAQ
announced that the maximum stake allowed calculate the index by constituent market composite. This also has the benefit of looking
would be reduced from £100 ($130) to just capitalization weighted to revenue exposure to at an index with very little online gambling
£2). The week therefore represented a new real money gambling (or a token 1% for new exposure in its current makeup.

Chart 1: RP iGaming 35 stock index Chart 2: Top 15 components by Index share (31 August, 2018)

140 8,200
6.8%
1.6%
120 8,000 1.8% 21.1%
2.1%
2.2%
100 7,800 2.4%
2.6%

80 7,600 3.3%

2.9%
60 7,400
4.2%
16.2%
40 7,200
6.6%
20 7,000

7.5%
0 6,800 11.6%
7.7%
11 May

18 May

25 May

1 June

8 June

15 June

22 June

29 June

6 July

13 July

20 July

27 July

3 August

10 August

17 August

24 August

31 August

Stars Group Paddy Power Betfair GVC Kindred Group Evolution Gaming
Churchill Downs 888 Holdings William Hill Betsson Tabcorp
Index NASDAQ (RHS) Index-WMH Playtech NetEnt Jackpotjoy Bet-at-home Kambi Other

iGamingBusiness North America | Issue 37 | Q3 2018 | 47

Business and Finance

Some of the expected big beasts dominate Chart 3: Top 10 Index components (11 May-31 August 2018)
the index: Stars Group represents 20%; Paddy 11,000
Power Betfair 16% and GVC 11% (see Chart
10,000
2). Due to retail-led acquisitions and profit
warnings, Playtech represents only 2% (similar 9,000

to NetEnt), while the largest US constituent 8,000

is Churchill Downs (4%, counting ADW
7,000
horseracing). Other material components
include Evolution Gaming and Kindred (both 6,000
8%), William Hill, Betsson and 888 (all 3%). 5,000
Due to the very small levels of online revenue
currently generated, US giants such as Scientific 4,000

Games, IGT, Caesars, Boyd and Penn do not 3,000

(yet?) feature significantly, but they are included
2,000
as placeholders for a promised future. It should
also be noted that some of remote gambling’s 1,000
biggest operators and suppliers are private and 0
therefore do not feature in the index at all.
11 May

18 May

25 May

1 June

8 June

15 June

22 June

29 June

6 July

13 July

20 July

27 July

3 August

10 August

17 August

24 August

31 August
The opening shape of the RP iGaming 35
is exactly what everyone would have hoped in
response to a momentous week for gambling: Stars Group Paddy Power Betfair GVC Kindred Group Evolution Gaming

a 10% overall increase, powered in descending Churchill Downs 888 Holdings William Hill Betsson Tabcorp

order of impact magnitude by PPB, Stars,

GVC, Churchill Downs, William Hill and 888.
Perhaps tellingly, however, the big US stocks
hardly moved, with only the highly leveraged
Scientific Games clocking double-digit gains
(the leverage being an important component of
stock volatility — in both directions).
The index largely held onto these gains
during the pre-Q2 reporting period, buoyed
by US newsflow (with plenty of hyperbole), the
hope of a strong World Cup performance for
exposed stocks and relatively strong underlying
market conditions. Indeed, the index reached
its peak for this period in the week of 20 July —
just before the Q2 reporting season began (and
several weeks after Playtech’s profit warning).
Most companies reported broadly in-line
Q3 results, but most were aggressively sold off
regardless (see Charts 1 and 3). It should be
noted that this was a largely gambling-specific
phenomenon — our benchmark has continued
to make steady gains while the RP iGaming
index sank to pre-momentous levels and has
yet to recover. The index is currently trading 3%
off its start and fully 13% off its July highs. We
believe there are four reasons for this, though
Stock in focus: William Hill
We focus on William Hill for this edition because it captures all of the key drivers discussed in the article.
The relief of knowing UK government policy on gaming machines, however bad, combined with a John-the-
Baptist-like position in the US drove 17% share gains in ‘momentous week.’ However, enthusiasm wore off as
other companies busied themselves with deals (particularly rivals PPB and GVC) while Hills looked relatively
left behind. Equally, while H1 results were solid enough there was nothing of the double-digit growth that gets
investors’ pulses racing — and the US made no money at all due to the costs of PASPA positioning (possibly
well spent, but we don’t know yet). All this has left William Hill lower than where it started (see Chart 3).
The knowns are negative and relatively current: swingeing £2 cash flow impact and a difficult UK growth
environment across channels. The unknowns might be positive (US potential, operational turnaround beyond
market share stability, M&A) but that is just it — they are unknown. And the market doesn’t like waiting…
we caution that seeking reason in short-term revenue — material, and a big swing factor in
price movements is often a fool’s errand. the summer, but easily lost in the noise. Equally,
First is a condition that has been present in while PASPA might be exciting in the long term,
gambling for as long as the sector has been initial results inevitably reflect the costs long
popular with investors: reality is rarely as before the rewards.
exciting as the promise. This is particularly an Second, we are seeing a material shift in
issue with a period driven initially by M&A, growth patterns which is not helpful for listed
World Cup and US hopes. While there has companies. Online growth is still strong in
certainly been some of the former (PPB- southern Europe, as demonstrated by official
FanDuel, for example), the big companies figures in Spain and Italy. Restricted markets
have not yet been the target. Equally, for all the are also seeing mass market boosts with
hype around the World Cup, it is at best only catalysts — see France and Portugal. It is also
about 5% of a typical European sportsbook’s possible that Asia is growing strongly (except

48 | iGamingBusiness North America | Issue 37 | Q3 2018

 Business and Finance

Stock Channel Type Exchange Shares Online mix Currency US$ ex-rate
888 Holdings Online only B2C LSE 359.7 100% GBP 1.29
Aspire Global Online only B2B NN 44.4 100% SEK 0.11
Bet-at-home Online only B2C FSE 7.0 100% EUR 1.16
Betsson Online only B2C SSE 122.1 100% SEK 0.11
Boyd Gaming Omnichannel B2C NYSE 112.3 1% USD 1.00
Caesars Omnichannel B2C NASDAQ 147.0 1% USD 1.00
Churchill Downs Omnichannel B2C NASDAQ 16.6 33% USD 1.00
Codere Omnichannel B2C BDM 118.4 1% EUR 1.16
Evolution Gaming Online only B2B SSE 36.0 100% SEK 0.11
Gamenet Group Omnichannel B2C MSE 30.0 8% EUR 1.16
Gaming Realms Online only B2C LSE 284.4 100% GBP 1.29
GAN Online only B2B LSE 85.5 100% GBP 1.29
GiG Online only B2C OSE 895.7 100% NOK 0.12
GVC Omnichannel B2C LSE 578.3 52% GBP 1.29
IGT Omnichannel B2B NYSE 203.5 2% USD 1.00
Inspired Entertainment Omnichannel B2B NASDAQ 21.5 10% USD 1.00
Intralot Omnichannel B2B ASE 157.0 20% EUR 1.16
JPJ Online only B2C LSE 74.3 100% GBP 1.29
Kambi Omnichannel B2B SSE 30.0 100% SEK 0.11
Kindred Group Online only B2C SSE 230.1 100% SEK 0.11
LeoVegas Online only B2C SSE 99.7 100% SEK 0.11
MRG Online only B2C SSE 40.9 100% SEK 0.11
Nektan Online only B2B LSE 47.4 100% GBP 1.29
NetEnt Online only B2B SSE 206.5 100% SEK 0.11
OPAP Omnichannel B2C ASE 319.0 5% EUR 1.16
Paddy Power Betfair Omnichannel B2C LSE 82.4 80% GBP 1.29
Penn National Gaming Omnichannel B2C NASDAQ 83.5 1% USD 1.00
Playtech Omnichannel B2B LSE 317.0 40% GBP 1.29
Rank Group Omnichannel B2C LSE 390.7 15% GBP 1.29
Scientific Games Omnichannel B2B NASDAQ 87.6 8% USD 1.00
Sportech Omnichannel B2C LSE 186.8 10% GBP 1.29
Stars Group Online only B2C TSE 272.0 100% CAD 0.77
Stride Gaming Online only B2C AIM 75.8 100% GBP 1.29
Tabcorp Omnichannel B2C ASX 2013.0 35% AUD 0.72
William Hill Omnichannel B2C LSE 860.6 43% GBP 1.29

for Playtech), though this is opaque. The
problem is that listed companies have very little,
if any, exposure to these markets because they
are small and/or their leading operators are
private. Instead, listed companies are heavily
weighted to the UK and Nordics, where growth
has become a lot more challenging since last
year (not for all, but certainly for a critical mass
of exposed stocks). The problem with single-
digit underlying growth is that even a high
margin World Cup cannot make it exciting
relative to the risks.
The third reason is regulation, of course.
The FOBT issue in the UK might have been
decided, but the regulatory heat has shifted
online without cooling materially. Equally,
Italy has pushed through an advertising ban,
Spain is looking to tighten restrictions and
licenses becoming available in Sweden and
the Netherlands also come with tougher
regulations and tax. Playtech has also had a
second profit warning, with the first (outside
the period but inside investors’ consciousness)
caused by regulatory crackdowns in Malaysia.
It is also notable that Q3 sees the lapping of
withdrawals from Australia and the Czech
Republic among other “grey” markets —
material inhibitors to growth that will require
lots of “underlying” reporting finesse to
play down.
Finally, RP has developed a thesis that
mature market growth is much more mass-
market and content driven. This means
it requires a different approach than the
historical one of “benchmark product and then
turn on the marketing tap.” Within our index,
we see only six such companies: SBG within
Stars, Evolution (B2B), LeoVegas, MRG, Gaming
Realms and GiG. Each of these, however,
has had its operational and (relative) growth
issues recently, while at least two are not yet
fully proven in terms of achieving consistently
profitable growth. In our view, the fact that only
about 13% of the index is operationally growth
positioned could prove a challenge to the
strategic hopes of many constituents.
Disclaimer
The narrative provided represents the opinions of
the authors. Any assessment of trends or change
is necessarily subjective. The information and
opinions provided are not intended to provide
legal, accounting, investment or policy advice,
nor should they be used as a forecast. Regulus
Partners may act, or have acted, for any of the
companies and other stakeholders mentioned in
this report.

iGamingBusiness North America | Issue 37 | Q3 2018 | 49

 Management & Marketing

An experienced figure
in the industry, David Briggs
joined Ladbrokes in 1999
to head its fledgling online
division, going on to become MD of
Ladbrokes eGaming. He has over
17 years of board level experience in the
regulated sector and is also CEO of geopositioning
solutions provider, GeoComply.

JUST THE
TICKET
With only a handful of states allowing lottery tickets to be sold online, players are turning to courier services
to ensure they’re in the game. David Briggs reports on this expanding secondary market

In states that have not yet implemented or

legislated online lottery ticket sales, courier
services have stepped in to fill the gap. Spotting
a business opportunity, companies such
as Jackpocket, theLotter and Lottery.com
purchase tickets on behalf of players, store a
scan of the ticket in the buyer’s account and
then transfer the physical ticket to the player in
the event of a win. Courier services are already
operating in a number of states and are subject
to many of the same restrictions and regulatory
requirements facing other online gaming and
sports betting operators.
This area of the market has seen rapid
growth, with operators even investing in
mainstream TV commercials in some areas.
Jackpocket’s spots featuring CEO Peter Sullivan
and his father, which air in Minnesota, are a
case in point.
A brief history of courier services
The historical interpretation of the Wire Act
and the limitations of the Unlawful Internet
Gambling Enforcement Act (UIGEA) had
thwarted online lottery sales until New York’s
lottery division and the Illinois governor’s office
asked the Department of Justice to review the
Act in relation to online lottery sales. The legal
opinion of the DOJ declared that the Wire Act
was limited to sports betting and that online
lotteries would not be violating it.
This opinion opened the door to online
lottery ticket sales, with the caveat that the
practice be confined to an intrastate model
in order to comply with UIGEA. Thus states
could empower their lotteries to sell tickets
to adults within the state’s borders if a) they
employed stringent age verification measures
and b) used geolocation technology to ensure

50 | iGamingBusiness North America | Issue 37 | Q3 2018

 Management & Marketing

INDUSTRY PIONEER PROFILE

ZAK CUTLER, JACKPOCKET
As a DraftKings veteran,
what prompted you
to make the switch
from the DFS giant to
courier lottery start-up
Jackpocket?
After meeting Jackpocket’s
CEO Pete Sullivan and learning
about what he’s built and where
he’s taking Jackpocket, I knew
this was an opportunity that I
could not pass up. Then I saw
the quality of the product and
back-office tools, met the team
behind it, and learned about the
solid unit economics surrounding
Jackpocket’s initial KPIs. If you
combine all that with the size
of the lottery industry, and our
opportunity within the space,
it quickly became a no-brainer to
join up with Pete and the team. I
enjoyed participating in the growth
of the DFS industry at DraftKings.
They are a top-notch team and
I’ve worked with many of them at
different companies over the last
10 years, which made the decision
to leave very difficult. There was
also the pending SCOTUS verdict
around sports betting, which
no doubt was another exciting
opportunity to stick around for. It
was something I always believed
DraftKings was extremely well
positioned to capitalize on.
How do you see
Jackpocket’s positioning
in the NJ market?
We allow age-verified players,
in approved jurisdictions, to
place orders for official state
lottery tickets through our
mobile app, which of course
has undeniable convenience
benefits for the player. On the
other side of the fence, we
are attracting a new, younger
demographic to the lottery and
helping lotteries increase their
sales in the process. It’s really
a win/win proposition for both
lotteries and players. We are
also bringing some innovative
features to the industry, having
recently launched a pools
product that allows players to
play the lottery with their friends.
We are very excited about the
opportunity ahead and expect to
be announcing some big news
over the next few months!

that ticket buyers were physically located
within state boundaries.
Further developments
In 2017, New Jersey became the first and only
state to pass a law legalizing courier services.
The law is very comprehensive and covers all
aspects of the service, including consumer
protection, ticket processing, regulatory
concerns and responsible gaming.
A large part of the regulatory concerns
center on the need for courier companies
to “at all times deploy a geolocation software
system that will permit customer transactions
be made only from within the borders of the
State of New Jersey” to ensure that only players
physically located within the state are able
to purchase tickets through a courier service.
The geolocation software that the courier
deploys must be tested and approved by the
New Jersey Division of Gaming Enforcement.
As the state’s internet gaming regulatory
body the courier requirement essentially
calls for geolocation technology equivalent
to the systems in place for online casino,
poker and sports betting.
Geolocation compliance for courier services
While the current New Jersey law is specific
to the state, other states looking to create a
plan for online lotteries and courier services
often find themselves playing “follow the
leader” in terms of how they draft their own
legislation. This isn’t an issue for New Jersey, of
course. Indeed, thanks to the state’s extensive
experience in online gaming and now sports
betting, its understanding of the mechanics,
legislative framework and technologies needed
to implement and regulate a compliant online
gaming system is second to none.

iGamingBusiness North America | Issue 37 | Q3 2018 | 51

Regulation

PROFITABLE THINKING:

ARE
CRYPTO
TOKENS
UNDER
THREAT?
Blockchain might be here to stay, but what about those applications that use its technology?
With regulators taking an ever-keener interest in exactly what constitutes a security, the future
of crypto tokens, and by extension ICOs, isn’t so certain. Mark Balestra reports

52 | iGamingBusiness North America | Issue 37 | Q3 2018


We are long past the debate over whether
decentralized platforms will alter the course
of interactive gaming and gambling. They
have altered it — and they will continue to
do so. It is increasingly evident, however,
that not all doors created by blockchain
technology will remain open.
The advantages of decentralized gaming
platforms (security, scalability, accessibility,
efficiency, etc.) are plentiful and gambling
regulators are carefully adapting to the new
frontier. Accordingly, gaming operators will
adapt to new compliance standards and
develop the necessary controls for offering
gambling over decentralized networks. In
North American markets, the adoption of
decentralized gambling solutions
might come slowly, but it is indeed an
irreversible reality.
The prospects for utilizing blockchain
technology as a vehicle for raising capital
in North American markets outside the
jurisdiction of securities and banking laws,
on the other hand, are not as promising.
Front and center, the initial coin offering
(ICO) is looking more and more like a
prohibitively treacherous endeavor.
Through a collaborative effort that
yielded the SAFT whitepaper, in October
2017 Protocol Labs and Cooley LLP drew up
what many regarded as the quintessential
roadmap for token generation. Under a
SAFT, or Simple Agreement for Future
Tokens, developers raise capital through
accredited investors for developing an
underlying network. Upon completion of the
network, the SAFT is converted into a right
to purchase crypto tokens at a discount.
The SAFT whitepaper attempted to
present an effective means of raising
money in conjunction with an ICO, as well
as guidelines for generating non-security
crypto tokens that need not comply with
securities regulations. The whitepaper
established a model for conducting ICOs
through a four-step process:
(1) Publish a whitepaper, incorporate
and secure commitments from accredited
investors.
(2) Enter into a SAFT with the accredited
investors relying on the exemption set forth
in Rule 506(c)69 of Regulation D of the
Securities Act.
(3) Use the proceeds to develop the network
into a product that provides genuine utility
to its users.
(4) Launch the network and deliver the
tokens to the investors.
The intent of the model was to create an
investment vehicle that is not an investment
contract under the well-established legal
test presented in the US federal case SEC v.
Howey. Under the Howey test, a coin/token
is an investment contract if
(1) there is an investment of money;
(2) there is an expectation of profits;
(3) the investment of money is in a common
enterprise, and
(4) the profit comes from the efforts of
others. (Canadian courts similarly apply the
Pacific Coin test, which achieves the same
outcome.) If all these elements are present,
the token is an investment contract and,
therefore, a security.
“While little has
been tested in the
courts, securities
regulators have
gradually crystalized
their positions on
crypto currency”
iGamingBusiness North America | Issue 37 | Q3 2018 | 53
Regulation
Most importantly, the token must
have utility and, as such, is purchased
for a specific purpose and not solely on
expectation of profit. Generally speaking,
the idea was that as long as the token has
a legitimate purpose other than generating
profit, it is not a security.
Notwithstanding the model’s intention
of establishing stable legal footing for
non-securities coin offerings, however,
regulators in North America have rejected
the employment of the “utility” safeguard. In
doing so, they have opined that the bulk of
crypto coins in circulation are securities and
need to be registered as such.
In the last year, the Securities Exchange
Commission (SEC) has subpoenaed a large
number of ICO issuers, their investors
and their advisors, and the agency is now
reportedly targeting SAFTs. SEC chairman
Jay Clayton, who told a US Senate committee
in February that he hadn’t seen a single ICO
that wasn’t a security, has indicated that the
agency would target attorneys who advised
their clients to conduct ICOs without the
proper offering documents.
While little has been tested in the
courts, securities regulators have gradually
crystalized their positions on crypto
currency. On June 11, the Canadian Securities
Administrators published Staff Notice
46-308 — Securities Law Implications
for Offerings of Tokens, stating that many
ICOs involve the issuance of a security (and
possibly also a derivative) and that every
offering is unique and must be assessed on
its own characteristics. They also advised
on when an offering of tokens involves an
offering of securities, as well as on offerings
of tokens that are structured in multiple steps.
On June 14, SEC Division of Corporation
Finance Director William Hinman
Regulation
“Beyond the scope of regulatory enforcement, coin issuers have become
targets of complex litigation through which investors in crypto tokens are
alleging violations of securities law”
made a speech to the Yahoo Finance
All Markets Summit: Crypto in San
Francisco, in which he provided guidance
on factors and considerations relevant
to the characterization of a digital asset
as a security. Despite his opinion that
decentralized crypto currencies such as
bitcoin and ethereum are not securities,
he clarified that the key to this distinction
is true decentralization. In other words, he
said, where there is a third party (ie the token
issuer) driving an expectation of a return, the
token is a security.
More recently, the North American
Securities Administrators Association
(NASAA) announced on August 28 that
state and provincial securities regulators
in the United States and Canada were
engaged in more than 200 active
investigations of ICOs and sundry crypto
currency-related investment products
as part of NASAA’s ongoing initiative
“Operation Cryptosweep.”
The overriding theme among securities
regulators has been that the presence
of legitimate utility does not necessarily
eliminate the possibility of a token being
a security. A definitive legal test specific to
crypto tokens may be a work in progress,
but the general idea is that any token that
can be acquired at a certain price and
later sold at a higher price sufficiently
stokes the Howey test’s requisite expectation
of profit. Thus, even a token that serves an
important non-investment-related function
54 | iGamingBusiness North America | Issue 37 | Q3 2018
can be deemed a security if it secondarily
serves as an investment vehicle.
That’s not so say there is no future for
ICOs, as a number of groups have proceeded
on the premise that the tokens to be issued
will be securities and subject to securities
law regulation. These tokens will be made,
traded, custodied, and remain security-
compliant all along. Firms including
Tokensoft, OpenFinance Network, Teknos,
Polymath, Verify Investor, Start Engine,
tZERO, Templum, Kingdon, Blackmoon,
Securitize, Slice, Swarm and Harbor are
among the companies building standardized,
interoperable and scalable security
token solutions.
Beyond the scope of regulatory
enforcement, coin issuers have become
targets of complex litigation through which
investors in crypto tokens are alleging
violations of securities law. Most notably in
the gaming space, the outcome of a class
action lawsuit filed in a Washington court
in August 2018 against esports blockchain
betting platform provider Unikrn could
hinge on whether the group’s UniKoinGold
(UKG) tokens are found to be unregistered
securities. In line with the Protocol Labs/
Cooley model, the UKG tokens were initially
available through a SAFT and subsequently
offered on the open market through an ICO.
Prospective token issuers should closely
watch the Unikrn case and others like it, as
favorable outcomes for the plaintiffs could
spur a barrage of similar suits targeting ICOs.
The bottom line is that enforcement action
initiated by securities regulators is not the
only web in which issuers can get tangled.
Additionally, crypto tokens utilized as
currency are under close scrutiny of the US
Treasury Department’s Financial Crimes
Enforcement Network (FinCEN). On August
9, the agency’s director Kenneth Blanco
delivered a speech through which he
outlined the department’s approach to crypto
currency. In his speech, Blanco emphasized
that ICOs are money transmitters and,
therefore, subject to FinCEN’s anti-money
laundering regulations. He added that even
peer-to-peer exchangers could be considered
money transmitters. He also stated that
FinCEN will closely examine crypto currency
money transmitters for violations of the Bank
Secrecy Act (BSA).
All this is not to say opportunities for
businesses riding the blockchain wave are
evaporating. But, just as it is with any other
technology-driven gold rush, barriers rise
over time, and the days of operating free
of regulatory oversight – at least in North
America – are all but over.
Mark Balestra is US special
counsel, igaming law, for Vancouver-
based Segev LLP. Balestra has guided
clients in a variety of capacities in the
gaming and gambling industry for nearly 20
years. He can be reached at m.balestra@segev.ca

KEY PROGRESS IN THE
KEYSTONE
STATE
In his latest update from Pennsylvania, Christopher Soriano puts the PGCB’s forward-thinking igaming licensing process
under the spotlight and explores how it plans to regulate fantasy sports contests
Pennsylvania, under the regulatory authority
of the Pennsylvania Gaming Control Board,
continues to implement the significant
expansion of gaming that was adopted by
the Pennsylvania Legislature in October 2017.
That legislation included igaming, ilottery,
satellite casinos located in the state, video
gaming terminals at truck stops, fantasy
contest regulation, sports betting and other
changes. In the last few months, Pennsylvania
has undertaken significant regulatory
steps towards the rollout of igaming, while
continuing to proceed with fantasy contest
regulation and taxation. In this update, we
will discuss what stage the state is at in
implementing regulatory systems for both of
these newly regulated activities.
The igaming process in Pennsylvania
Pennsylvania took an interesting approach to
the authorization of igaming. First, by statute,
igaming was divided into three categories:
peer-to-peer, non-peer-to-peer slot games
and non-peer-to-peer table games. In other
words, online poker, online slot and online
table games were each approved individually.
In order to offer one of these, a provider
must have a certificate from the Pennsylvania
iGamingBusiness North America | Issue 37 | Q3 2018 | 55
Regulation
Gaming Control Board authorizing it to
offer the specific form of gaming. In other
words, an operator could choose to offer
poker only, in which case it would apply
for and receive a peer-to-peer certificate
but no other. The legislature made 13 of
each certificate available.
During the first 90-day period where
the PGCB was accepting applications for
interactive gaming certificates, existing
Pennsylvania casinos could apply for three
certificates as a package for a total certificate
fee of $10 million. During that period, which
ended on July 16, 2018, nine casinos applied,
Regulation

resulting in 27 of the 39 certificates being

reserved. During the next 30-day period, TAX REVENUE FROM
FANTASY SPORTS
ending on August 14, 2018, a casino could
apply for one or more certificates at a cost
of $4 million each. During that period, an
additional five certificates were applied
for, leaving seven on the shelf. Of these $200,000 $152,000 $131,000
remaining certificates, two are for slots, two MAY 2018 JUNE 2018 JULY 2018
are for table games and three are for poker.
Although certificate requests were limited
to existing casinos during the initial 120-day
period, the legislation provided the PGCB
with the opportunity to award any left over to
Qualified Gaming Entities, or QGEs. A QGE
is defined as a gaming entity licensed in any
jurisdiction that has satisfied the financial
and character suitability requirements
established by the PGCB. Significantly,
then, the QGE process allows entities other
than existing Pennsylvania casinos to offer
igaming in the state. This is different from the
New Jersey, Nevada and Delaware models, all
of which limit igaming offerings to existing
casinos. In other words, non-Pennsylvania financial backers. The QGE should also list described, each QGE can apply for up to three
casinos can compete with existing casinos in all jurisdictions in which it is licensed by a certificates; in other words, they may seek
the igaming space. state or other nation to conduct gaming and to offer the full suite of igaming products or
The PGCB has now established a process provide a copy of all licenses. Furthermore, one specific type. The first QGE drawn will be
for awarding the remaining seven certificates the entity must submit a letter of good assigned the number of certificates requested
to QGEs. It has declared that a QGE must standing from each jurisdiction in which it (from the seven remaining), after which
have the attributes of a licensed casino. To is licensed. more QGEs will be randomly selected until
qualify, therefore, a QGE must be licensed in Once all of the applications have all certificates are allocated. If a QGE seeks
another jurisdiction to conduct either casino been filed, the PGCB will publish a list of more certificates than are available when
slot and table games, or internet gaming. The petitioners’ names. At that point the PGCB their entry is selected, then the QGE will be
license must be in good standing without will conduct a blind, random draw for the allocated only those certificates remaining.
any pending enforcement actions seeking award of the certificates. As previously Once selected, the applicant will have
the suspension or revocation of the issued 45 days to file a completed application on
license. Additionally, a QGE must submit a
“Pennsylvania is moving behalf of the entity, its principals and its
bond or letter of credit from a US bank in the key employees. At that time, the PGCB will
amount of $4 million, as a guarantee of its far down the line toward utilize its normal licensing process, conduct a
ability to pay the certificate fee in the event of
it receiving one.
becoming the next US background investigation and subsequently
determine whether the QGE is suitable to
The process by which QGEs will be state to begin offering hold the certificate. If deemed suitable, the
selected is unique. A QGE has a 16-day
window ending on October 31, 2018, to
igaming, once these QGE will be authorized to proceed. Notably,
award of an igaming certificate will not allow
submit a petition to the PGCB requesting final licensing and a QGE to engage in online sports betting.
that it be determined a QGE. Various bits of At the same time as this QGE process, the
information must be included in the petition,
technical arrangements PGCB is also considering petitions by the
including a list of all owners, principals and have been dealt with” existing casinos for the issuance of igaming

56 | iGamingBusiness North America | Issue 37 | Q3 2018


certificates. At a meeting on September 12,
two casinos were awarded certificates after
making presentations to the PGCB regarding
their igaming suites. Pennsylvania casinos
have been in the process of partnering
with recognized industry operators for
platform services, geolocation, integrity
monitoring and payment processing. The
PGCB has expressed an interest in ensuring
that igaming providers offer robust player
protection mechanisms such as self-
exclusion; “cool off” periods; and deposit,
wager and session limits. Moreover, the PGCB
is carefully studying igaming suites to ensure
that appropriate data protection safeguards
are maintained.
However, the award of these certificates
does not yet authorize the casinos to begin
offering igaming. Before that can happen,
providers must also be licensed and
technology must be approved by the PGCB’s
Bureau of Gaming Operations. Nevertheless,
Pennsylvania is moving far down the line
toward becoming the next US state to begin
offering igaming, once these final licensing
and technical arrangements have been
dealt with.
Fantasy contest regulation
Another change in Pennsylvania law has
been the requirement that the PGCB engage
in regulating fantasy contests. Thus far, no
fantasy sports provider has been issued
with a license by the PGCB. However, under
the changes in Pennsylvania law, any entity
that submitted an application by April 27,
2018, has been permitted to operate while
its application is pending. At present, ten
operators find themselves in this boat.
Pennsylvania imposes two interesting
requirements on fantasy contest operators.
The first is that operators are required to
offer some contests to “beginners,” excluding
highly experienced players from those
contests. The second is a tax rate of 15% on
adjusted contest revenue (the total entry
fees collected less the total prizes paid out,
multiplied by the “in-state percentage”).
The in-state percentage is defined as the
percentage of total entry fees in a contest
iGamingBusiness North America | Issue 37 | Q3 2018 | 57
Regulation
that have been collected from within
the state. In other words, Pennsylvania
only taxes the revenue originating from
Pennsylvania. In July 2018, the amount
of tax revenue collected amounted to
approximately $131,000; in June 2018,
circa $152,000; and in May 2018, in the
region of $200,000.
As part of Pennsylvania’s overall regulatory
scheme, patrons are required to be at least
18 years old before participating in a fantasy
contest. Moreover, operators must permit
individuals to self-exclude. Patrons must also
be able to impose limits on deposits, spend
per day and the number of entries per day, as
a form of patron protection.
Pennsylvania’s gaming expansion
continues, with various elements being
rolled out since the legislation changed in
October 2017. While these new areas are
all in different phases of implementation,
the overall expansion is significant and
will result in further growth in what is
the second-largest land-based market in
the US. That said, it remains to be seen
whether interstate arrangements between
Pennsylvania and other states, which
could result in further market growth and
expansion, come to fruition.
Disclaimer: This article is prepared and
published for informational purposes only
and should not be construed as legal advice.
The views expressed in this article are those
of the author and do not necessarily reflect
the views of the author’s law firm or its
individual partners.
Christopher L. Soriano is
a partner in the Cherry Hill,
N.J. office of Duane Morris
LLP. He concentrates his
practice in gaming law, where he
represents casino operators, gaming equipment
manufacturers, igaming companies, financial
institutions, and other participants in the gaming
industry in all aspects of their operations.
Regulation
SKIN IN
THE GAME
Rachel Hirsch explores the ways in which Pennsylvania’s limiting of skins can hinder marketplace competition
This summer, the Pennsylvania Gaming
Control Board (PGCB) released temporary
regulations that further limited the market
for sports betting in the state. Along with an
unprecedented tax rate and astronomical
license fee — which already distort
marketplace participation — Pennsylvania
passed regulations that limit a sports betting
certificate holder to just one sports betting
app or website, or what’s more commonly
referred to as a skin.
While Pennsylvania regulators may have
believed it beneficial to limit the number of
skins in order to provide casino licensees
a bigger piece of the pie, the unintended
consequence of their actions is that overall
market growth will be severely hampered.
Unlike in traditional land-based operations,
marketing budgets constitute a much more
significant cost for interactive gaming.
By limiting the number of skins, the
Pennsylvania regulators have created
an uneven playing field that impedes
58 | iGamingBusiness North America | Issue 37 | Q3 2018
marketplace competition, concentrates
marketing spend on a few individual
players, and creates an overall inferior
product and user experience. Pennsylvania’s
neighboring competitor New Jersey, on
the other hand, provides for up to three
online skins for each licensee, proving that
variety is necessary to create a competitive
marketplace and to raise overall
gaming awareness.
“Parx Casino and Penn
National in Pennsylvania
had lobbied for skins
to be limited to one per
operator and for the
skins to share the same
branding as the
license holder”
Pennsylvania tax rate
When the Pennsylvania legislature passed
a sports wagering law last year, it took
a daring gamble by setting the highest
fees and taxes in the nation for operators
to participate in the sports betting
business. Its 36% sports gaming tax is
disproportionately high compared to other
states. Nevada’s sports betting tax is 6.5%
and West Virginia’s 10%.
Pennsylvania’s tax rate is four times
higher than that of its neighbor New Jersey,
which carries an 8.5% tax rate for wagering
in casinos and a 13% tax rate for online
sports betting. In addition, all states must
pay a federal excise tax, which amounts to
about another 5%. And Pennsylvania’s $10m
license fee compares to a $100,000 fee in
West Virginia and none at all in New Jersey.
While the government generates more
income at high tax rates, the casinos
actually generate less employment and
legal economic activity as a result. It can

WEBSITE
APP
be fairly said that a high tax rate hampers
market penetration and overall growth, and
in doing so contributes to an environment
that permits illegal alternatives to regulated
sports betting to thrive.
Single-skin limitation
If an unprecedented tax rate were not
enough, Pennsylvania regulators further
limited the market for sports betting in the
state by passing temporary regulations in
June that created a limit of only one online
sportsbook per casino.
In a closed-door executive session, the
PGCB drafted what it dubbed “Conduct of
Sports Wagering Generally and Licensing
Provisions.” These regulations include rules
to address several issues, such as which
properties can accept sports bets and how
they will be able to offer sports betting. In
the temporary regulations, the PGCB wrote
that a sports betting certificate holder, or a
sports wagering operator licensee on behalf
of a certificate holder, can only accept
wagers in five ways.
The fifth provision is the most striking,
providing: “Through a single interactive
website or mobile application that clearly
and prominently displays the name of the
sports wagering certificate holder.” Put
differently, along with a brick-and-mortar
sportsbook, certificate holders get just one
sports betting app or website (or ‘skin’).
Parx Casino and Penn National in
Pennsylvania had lobbied for skins to be
limited to one per operator and for the skins
to share the same branding as the license
holder. In other words, a Parx online casino
would have to include Parx in the name,
and other brands would not be permitted
to roll out a site under the Parx igaming
license. For its part, Penn National expressed
disdain for multiple skins, noting in a letter
to the PGCB that multiple skins “would
present significant new competition to the
incumbent casino operators and result in
iGamingBusiness North America | Issue 37 | Q3 2018 | 59
Regulation
overall saturation of the marketplace, as is
occurring in the online gaming marketplace
in New Jersey.”
Creating competition
The New Jersey market has demonstrated
that multiple skins are essential to a
competitive marketplace. New Jersey went
live with sports wagering in June of this year.
Unlike Pennsylvania, New Jersey provides
that each casino and racetrack eligible to
offer sports betting can operate up to three
sports betting brands. Broken down, each
licensee gets one physical sportsbook and
up to three online skins.
By effectively stripping the right of license
holders to offer multiple skins, Pennsylvania
regulators have placed the state’s sports
betting market at an even further
disadvantage than it already faced given the
state’s exorbitant tax rates and licensing fee
as compared to its neighboring state.
Arguably, the most important factor in
Regulation

“By allowing multiple skins per license, Pennsylvania would

encourage competition among operators. Limiting skins will actually
reduce the amount of revenue the state receives because it may
result in a possible reduction in the number of licenses sold”

successful regulation is the rate at which
players are channeled from unregulated
sites to the regulated sector, otherwise
known as the “capture rate.” The broader
the range of games offered under a
licensing system, the greater the proportion
of players that will choose to play in a
regulated market.
Players not captured under the licensing
system will continue to bet in the black
market, thereby depriving the state of
revenue it can earn while at the same
time offering players protection under a
regulated regime.
Traditional protectionist thinking
espoused by advocates of land-based
casinos is flawed for one simple reason: it
fails to account for the inherent differences
between online gaming and traditional
brick-and-mortar entertainment. Rather
than cannibalize brick-and-mortar gaming,
online gaming competes with other forms
of entertainment, such as casual games or
streaming services. By contrast, going to a
live casino presents a more social form of
entertainment separate and apart from the
actual gambling that takes place there.
By allowing multiple skins per license,
Pennsylvania would encourage competition
among operators. Limiting skins will
actually reduce the amount of revenue
the state receives because it may result
in a possible reduction in the number of
licenses sold, whereas additional skins
will provide other revenue opportunities
that will be necessary to offset the initial
expense of a license.
In a limited market, smaller casinos with
less brand recognition will have difficulty
competing with their larger counterparts,
and as a result may choose not to
participate in the industry at all. Limited
competition may also stymie innovation,
as operators will have limited options to
experiment with new games, interfaces and
formats. Increased competition will result in
increased content for consumers, but a lack
of competition will lead to a second-rate
user experience.
A limited number of offerings will also
result in lower overall spend in marketing
and hence a lower economic impact for
the state. In such a model, smaller casinos
stand to lose the most. One way to offset
the start-up and marketing costs is to allow
multiple brands to launch under a smaller
casino’s license. But with Pennsylvania’s
limit on skins, casinos are placed at a
significant disadvantage when it comes to
marketing budgets.
As we’ve seen, in the world of online
gaming, marketing constitutes a much more
significant cost than it does for traditional
brick-and-mortar casinos. And it is not just
brand awareness of individual operators
that is at stake. A smaller marketing spend
will mean lower overall brand awareness in
the online industry as a whole.
As the New Jersey model demonstrates,
online gaming revenues are directly
correlated to marketing spend. When
marketing dollars are concentrated among
a small group of operators, advertising
spend will remain stagnant at around
25% of their gross revenues. Coupled with
the state’s high tax rate, Pennsylvania’s
single-skin limitation actually fosters an
anti-competitive environment, wherein the
operators, customers and the state all lose.
Expect Pennsylvania to rethink this model
in the years to come.
Rachel Hirsch is an
attorney at the Washington,
DC-based law firm of Ifrah
PLLC. Hirsch focuses her
practice on complex litigation
and transactions, with a particular emphasis on
igaming, internet marketing and advertising.

60 | iGamingBusiness North America | Issue 37 | Q3 2018

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Regulation
STATE OF THE UNION
Since the US Department of Justice publicly reversed its position on the scope of the 1961 Wire Act in December 2011,
conceding it reserved jurisdiction only over sports betting, iGaming Business North America has been reporting on the
broadening of online lottery and igaming models at the state level. By Segev LLP
Delaware:
Regulated gaming type: full service
online gaming
Operator type: centralized igaming system
via Delaware Lottery and operated by the
three state casinos
Go-live date: October 2013
On 31 October, 2013, Delaware became
the first state to launch a full service online
gaming offering. The igaming program is run
by the state lottery and powered by a vendor
collaboration between 888 and Scientific
Games/WMS. Delaware’s 888-powered
poker sites, including WSOP, began
pooling liquidity with Nevada’s in March
2015. This was extended to include New
Jersey on May 1, following October 2017’s
Multi-State Internet Gaming Agreement
(MSIGA). On June 5, Delaware became
the first state to launch sports wagering
following the lifting of the federal ban
when Delaware Park, Dover Downs Hotel &
Casino and Harrington Raceway & Casino
started offering sports betting services. USA
Today reported that the Delaware Lottery
published an online betting tutorial for
SportsPick, the state’s sports gaming product.
Delaware, which had been offering parlay
NFL wagering via partial exemption under
PASPA, is yet to confirm whether it will
allow betting on college sports events. State
lottery regulations currently ban any bets
being taken on Delaware’s two Division I
colleges (Delaware State and the University
of Delaware).
62 | iGamingBusiness North America | Issue 37 | Q3 2018
Nevada:
Regulated gaming type: poker
Operator type: applicants with existing land-
based licenses
Go-live date: April 2013
There are two real-money online poker
platforms in operation in Nevada: WSOP
and Real Gaming, formerly South Point
Poker. WSOP started to pool liquidity with
Delaware in late March 2015 and on May 1
started doing so with New Jersey, following
the MSIGA signed by the three states in
October 2017.
New Jersey:
Regulated gaming type: casino, poker,
sports betting
Go-live date: November 2013
The sites on the Golden Nugget licence —
Golden Nugget, Betfair, Playsugarhouse,
Resorts, PokerStars and Mohegan Sun —
extended their share to 35.3% of the market.
A bill authorizing sports betting became law
in June this year, with the first bets taken
on June 14. The first mobile sports betting
application went live on August 6.
West Virginia
The state, the fourth to
launch sports betting
since the repeal of PASPA,
enacted its sports betting
law in March 2018
Georgia: Green
Regulated gaming type: online lottery
Operator type: Georgia Lottery monopoly
Go-live date: November 2012
Illinois: Green
Regulated gaming type: online lottery
Operator type: Illinois Lottery monopoly
Go-live date: March 2012
The Illinois Lottery has stayed online despite
lawmakers failing to reauthorize the four-
year pilot program that expired in March
2016. An amendment to legalize igaming,
sports betting and DFS failed to pass the
Illinois House Executive Committee as part
of a casino-expansion bill in late May.
Kentucky: Green
Regulated gaming type: online lottery
Operator type: Kentucky Lottery monopoly
Go-live date: April 2016
A bipartisan group of legislators is close
to finalizing a sports betting bill, which it
plans to pre-file prior to the start of next
year’s legislative session. The legislation
will reportedly include mobile and online
wagering, as well as betting at brick-and-
mortar facilities. The nine-member working
group has reportedly also agreed to forgo
an integrity fee and to tax net revenues as
opposed to handle, as provided in Senator
Julian Carroll’s previous bill from June. Three
sports betting bills have been introduced
in the state legislature, none of which have
passed a committee vote thus far. Senator
 Wisconsin New Yor

Regulation
Michigan
Washington

North Maine
Montana Dakota

Oregon Michigan Vermont

Minnesota New
Hampshire
Idaho
South
Wisconsin New York Massachusetts
Dakota
Wyoming Michigan
Rhode Island

Pennsylvania
Pennsylvania
Connecticut

Iowa New Jersey

Nebraska
Nevada
Ohio
Delaware
Utah Indiana
Illinois Maryland
Colorado West
Virginia
California Virginia
Kansas
Missouri

Ohio
Kentucky

North Carolina
Tennessee
Arizona Oklahoma
New Mexico South
Arkansas
Carolina

District of
Illinois
Alabama Georgia
Mississippi
Columbia
Indiana Louisiana
Hawaii Texas

White Live (igaming & sports betting) West

Green Legislation enabled/lottery online Virginia Florida

Amber Work in progress/under consideration

Red Undecided/back to the drawing board
Blue Missouri
No movement
Black Prohibited/pending prohibition
Kentucky
Morgan McGarvey predicted that the odds Pennsylvania: Green remaining three Pennsylvania operators don’t
North Carolina
of the most recent bill passing when the Regulated gaming type: online lottery apply by the November deadline, the state
Operator type: Pennsylvania Lottery will open the door to out-of-state applicants
General Assembly meets next in January
Tennessee
are “good.” monopoly (see p55-57). Meanwhile, the Gaming
Go-live date: June 2018 Control Board has reported that they have
Michigan: Green The only type of gambling currently offered received two applications for permits to offer
Regulated gaming type: online lottery online in Pennsylvania is the lottery (instant sports betting: the first from Penn National
Operator type: Michigan Lottery monopoly win games only), but casino games and Gaming, the owner of Hollywood Casino in
South
Go-live date: August 2014 sports betting are forthcoming. Pennsylvania suburban Harrisburg, and the second from
The House passed a bill in June that would became the fourth state to fully legalize
Carolina
Parx Casino. Sports wagering at the two
Arkansas
allow the state’s casinos to offer various online gambling in October 2017 after casinos is expected to launch in late fall.
Mississippi
forms of gambling, including poker and Governor Tom Wolf signed an expansive
sports, over the internet. Upon the bill’s gambling package into law. The legislation Connecticut: Amber
passage in the House, its author, Rep. Brandt allows for the regulation of online poker,
Georgia
Present status: In March both the state’s
Iden, said he expected it to be a top priority slots and table games within the state’s gaming tribes, the Mashantucket Pequot
Louisiana
for the Senate in the fall. Alabama
boundaries. Nine of the state’s 12 casino and the Mohegan, came out in support
operators have applied for umbrella online of legalizing online gambling and sports
New Hampshire: Green gambling licenses covering slots, casino betting. Executive director of online gaming
Regulated gaming type: online lottery games and poker. The remaining three — for the Mashantucket Pequot-owned
Operator type: New Hampshire Lottery Lady Luck Casino Nemacolin and Presque Foxwoods Resort Casino, Seth Young, in
monopoly Isle Downs, Meadows Racetrack and Casino written testimony to a Public Safety and
Go-live date: September 2018 and Mohegan Sun — have until November Security Committee hearing said: “The
New Hampshire commenced sales of lottery 13 to apply for bespoke licenses at a cost strongest opportunity for the state is in
tickets online in mid-September, making it the of $4 million per category. The regulations legalizing statewide igaming, another activity
latest state to offer lottery over the internet. allow for 12 licensees, so if any or all of the that is currently operating for Connecticut

Florida
iGamingBusiness North America | Issue 37 | Q3 2018 | 63

Kansas
Under the proposed bills, the Kansas
Lottery would have a master license,
with approval to enter into contracts with
lottery and racetrack gaming facilities
residents in the black market.” Avi Alroy, VP
of interactive gaming for Mohegan Sun, said
online casino gaming and sport wagering
would “reduce unregulated bets that are
done locally and off-shore and increase state
revenues.” Both also submitted estimates
to the committee that online gambling
would generate around $87m in tax
revenue to the state over its first five years of
operation, based on a pragmatic tax rate and
legalization of casino and poker.
Massachusetts: Amber
Present status: A measure introduced by
Senator Eileen Donoghue in January would
regulate online gambling and daily fantasy
sports as well as create a commission to
study online sports betting. In June the
Senate authorized the Joint Committee
on Economic Development Emerging
Technologies to investigate and study the
issue. Efforts to fast track the omnibus
bill fell short in 2018, but Joint Committee
Chairman Rep. Joe Wagner believes the
initiative will be up for a vote in early 2019.
Gov. Charlie Baker has confirmed that
sports betting will likely be addressed
in January.
Missouri: Amber
Present status: At least three bills to
authorize sports betting have been
introduced to the legislature, two of which
include provisions to allow sports betting
over the internet. Lawmakers have conceded
that it is unlikely any of the bills will pass in
2018 but are hopeful for 2019.
Kansas: Amber
Present status: Multiple bills to authorize
sports betting, including provisions
authorizing online sports betting, were
introduced to the legislature in 2018. Under
the proposed bills, the Kansas Lottery would
have a master license, with approval to enter
into contracts with lottery and racetrack
gaming facilities. All of the bills died in
committee, but proponents are hopeful they
will gain traction in 2019.
West Virginia: Amber
Present status: Hollywood Casino at Charles
Town Races took its first legal bet on sports
on August 30, two days ahead of schedule.
The state, the fourth to launch sports betting
since the repeal of PASPA, enacted its sports
betting law in March 2018. Hollywood
iGamingBusiness North America | Issue 37 | Q3 2018 | 65
Regulation
Casino is one of five West Virginia casinos,
with the other four expected to go live
with sports betting by mid-October. Under
the new law, casinos can offer online and
mobile wagering, but Hollywood Casino is
reportedly 30 to 60 days out from setting
up its sports betting mobile app. Use of
such apps for remote electronic gambling is
limited to patrons located physically inside
state borders.
Louisiana: Red
Present status: A bill introduced this year
in Louisiana would legalize online gaming
on a parish-by-parish basis via a voter
referendum. The bill is unclear on what types
of gambling would be authorized and makes
no mention of taxation or licensing fees. Even
if the measure progresses, the state would not
see live authorized online gambling until at
least 2020.
New York: Red
Present status: Online poker, this time
alongside sports wagering, failed to make
the final budget proposal for the third year
running, with Senate support again not
mirrored in the Assembly.
 0
0

0
0

0
2
4
6
8
0
0

16
18
10
20
30
40
50
60
70
80
10
20
30
40
50
60
70

10
20
30
40
50
60
70
80
10
20
30
40
50
60
70

10
12
14
16
18
10
20
30
40
50
60
70
80
20 20 20 20 2 20 20
03 03 03 00 03
03 44.2% 3 6.7 6.7 03
Data
3.0% 44.2% 44.2%
20 20 20 20 2 20
04 04 04 0 0 04
20
04 37.3%
3.7% 37.3% 4 8.8 37.3% 8.8 04
20 20 20 20 2 20 20
05 05 05 05 00 05
34.2%
4.6% 34.2% 5 11.7 34.2% 11.7 05
20 20 20 20 2 20
06 06 06 06 060 06
20
06
33.7%
5.4% 33.7% 14.5 33.7% 14.5
20 20 20 20 20 20 20
07 07 07 07 07 07 07
39.6%
5.2% 39.6% 14.7 39.6% 14.7
20 20 20 20 20 20 20
08 08 08 08 08 08 08
39.8%
6.0% 39.8% 17.2 39.8% 17.2
20 20 20 20 20 20 20
09 09 09 09 09 09 09
6.5%
40.7% 40.7% 18.9 40.7% 18.9

66 | iGamingBusiness North America | Issue 37 | Q3 2018

Not to be reproduced without permission

20 20 20 20 20 20 20
10 10 10 10 10 10 10
7.0%
41.4% 41.4% 21.2 41.4% 21.2
20 20 20 20 20 20 20
11 11 11 11 11 11 11
6.9% 45.0%
TOTAL GLOBAL IGAMING GROSS WIN (€BN)
45.0% 45.0% 22.4 22.4
20 20 20 20 20 20 20
12 12 12 12 12 12 12
7.4%
47.3% 47.3% 24.8 47.3% 24.8
20 20 20 20 20 20 20
13 13 13 13 13 13 13
7.7%
47.7% 47.7% 26.9 47.7% 26.9
Updated monthly by H2 Gambling Capital for iGaming Business

20 20 20 20 20 20 20
14 14
14 8.5%
49.7%
14
49.7%
14 14
30.3 49.7% 14
30.3
20 20 20 20 201 20 20

IGAMING AS PERCENTAGE OF GLOBAL GAMBLING GROSS WIN

15 15
15 9.5%
52.1%
15
52.1%
15 5
33.2 52.1% 15
33.2

‘WHITE MARKET’ PERCENTAGE OF GLOBAL IGAMING GROSS WIN

20 20 20 20 201 20 20
16 16
16 10.2%
54.3%
16
54.3%
16 6
36.5 54.3% 16
36.5
20 2 20
20 17 20 20 01 20
17 E 10.9% 17 17 7 57.8% 17 17
20 57.8% 57.8% 40.4 40.4 20
20 18 20 20 201 20 18
18
E E 11.6%
18
E
18 8E
E
18
E E
20 59.8% 59.8% 44.6 59.8% 44.6 20
20 19 20 20 201 20 19
19
E E 12.3%
19
E
19 9E
E
19
E E
% 20 63.1% 63.1% 48.7 63.1% 48.7 20
20 20 20 20 202 20 20
20 E 12.9% 20 20 0E 64.4% 20 E
E E E E
global igaming sector in numbers, with forecasts recently extended to 2023

9% 20 64.4% 64.4% 2 52.7 52.7 20

20 21 20 20 02 20 21
21 E 13.4% 21 21 1E 65.4% 21 E
E E E E
iGB’s principal data partner H2 Gambling Capital presents its monthly snapshot of the

.4% 20 65.4% 65.4% 2 55.9 55.9 20

20 22 20 20 02 20 22
22 E 14.1% 22 22 2E 66.6% 22 E
4.1% E 20 66.6% E 66.6% E2 60.1 E 60.1 20
20 23 20 20 02 20 23
23 E 14.6% 23 23 3E 67.4% 23 E
14.6% E 67.4% E 67.4% E 63.4 E 63.4
IGAMING DASHBOARD
8 27%
23%

6.9

7.
7.
6.5
5.4%

5.2%

7.
6.0
4.6%
6

3.7%
5%

3.0%
4 54%
2
0
27%
03

04
2018e
05

06

07

08

09

10

11

12

13

14

15

16

E
Data

17

18

19

20

21

22

23
20

20

20

20

20

20

20

20

20

20

20

20

20

20
Race betting Sports betting Casino Poker

20

20

20

20

20

20

20
Bingo Skill/other/Com lots State lotteries

Europe Asia/Middle East North America

Oceania LatAm/Caribbean Africa

27%
23%
GLOBAL IGAMING GROSS WIN BY REGION GLOBAL IGAMING GROSS WIN BY PRODUCT
(2018E) (2018E)
1%
1% Race betting Sports betting Casino Poker 9%
6%
Bingo Skill/other/Com lots State lotteries
5%
11% 27%
4%

5%

2018e
54%
26
24 27% 22.9%
22
20 27%
23%
18
16 15.4%
14
12 Europe Asia/Middle East North America Race betting Sports betting Casino 11.9%
Poker
10 10.3%
Oceania LatAm/Caribbean Africa Bingo Skill/other/Com lots State lotteries
8 8.2% 7.5%
6
4.6%
4
IGAMING
2 AS PERCENTAGE OF GAMBLING GROSS WIN BY REGION (2018E)
0
26
24 Africa Asia/Middle East Europe LatAm/Caribbean North America Oceania Global Average
22.9%
22 9%
20
18 Africa Asia/Middle
5% East Europe LatAm/Caribbean North America Oceania Global Average
16 27% 15.4%
14 4%
12 11.9%
10 10.3%
8 5% 8.2% 7.5%
6
4.6%
4 2018e 26
24
2 22
22.9%
0 20
18
Africa Asia/Middle East Europe LatAm/Caribbean
16 North America Oceania Global Average 15.4%
14
12 11.9%
10.3%
27% 10
8.2% 7.5% 23% 8
‘WHITE MARKET’
Africa PERCENTAGE
Asia/Middle East OF IGAMING GROSS WIN BYNorth
Europe REGION (2018E)
America Oceania LatAm/Caribbean
6
4
Global Average
4.6%
2
0
50.8%
Africa Race betting Sports betting Casino Poker Africa Asia/Middle East Europe LatAm/Caribbean North America Oceania Global Average
Bingo Skill/other/Com lots State lotteries
Asia/Middle East 48.8% Africa Asia/Middle East Europe LatAm/Caribbean North America Oceania Global Average

Europe 74.7%

LatAm/Caribbean 16.7%

North America 22.5%

Oceania 55.7%

Global Average 59.8%

0 10 20 30 40 50 60 70 80
Africa 50.8%
Africa 50.8%

Asia/Middle East 48.8% Asia/Middle East 48.8%

H2 Gambling Capital is the gambling industry’s leading consulting, market intelligence and data team. They have a track record of nearly 15 years focused on the global gambling industry.
Europe 74.7%
26 All of the detailed data and 74.7%
Europe the right to re-publish extracts is available via H2’s Global Data and Market Intel Service. Please email data@h2gc.com
24 22.9% LatAm/Caribbean 16.7%
22
20 LatAm/Caribbean 16.7% North America 22.5%
18
16
North America 22.5% 15.4%Oceania 55.7%
14
12 Global Average 59.8%
11.9% iGamingBusiness North America | Issue 37 | Q3 2018 | 67
10.3%
10 Oceania
8.2%
55.7% 0 10 20 30 40 50 60 70 80
8 7.5%
6
59.8% 4.6%
4 Global Average
2
0 0 10 20 30 40 50 60 70 80
 0
0
5

0
0
5

10
20
30
40
50
60
10
15
20
25
30
35
40

10
20
30
40
50
60
10
15
20
25
30
35
40
20 20 20 20
03 03 03 03
7.1% 7.1% 0.5 0.5
Data

20 20 20 20
04 04 04 04
7.3% 7.3% 0.6 0.6
20 20 20 20
05 05 05 05
7.1% 7.1% 0.8 0.8
20 20 20 20
06 06 06 06
7.2% 7.2% 1.0 1.0
20 20 20 20
07 07 07 07
8.0% 8.0% 1.2 1.2
20 20 20 20
08 08 08 08
9.5% 9.5% 1.6 1.6
20 20 20 20
09 09 09 09

68 | iGamingBusiness North America | Issue 37 | Q3 2018

10.2% 10.2% 1.9 1.9
Not to be reproduced without permission

20 20 20 20
10 10 10 10
11.2% 11.2% 2.4 2.4

6%
TOTAL GLOBAL MOBILE GROSS WIN (€BN)
20 20 20 20
11 11 11 11
13.9% 13.9% 3.1 3.1
20 20 20 20

1%
12 12 12 12
18.0% 18.0% 4.5 4.5
20 20 20 20

1%
13 13 13 13

MOBILE PERCENTAGE OF GLOBAL IGAMING GROSS WIN

22.8% 22.8% 6.1 6.1
Updated monthly by H2 Gambling Capital for iGaming Business

20 20 20 20
14 14 14 14
28.0% 28.0% 8.5 8.5
20 20 20 20
15 15 15 15
31.1% 31.1% 10.3 10.3
20 20 20 20
16 16 16 16
for 51% of global igaming GGR by 2023

34.3% 34.3% 12.5 12.5

20 20 20 20
17 17 17 17
36.8% 36.8% 14.9 14.9
20 20 20 20
18 18 18 18
E 39.2% E 39.2% E 17.5 E 17.5
20 20 20 20
19 19 19 19
E 41.2% E 41.2% E 20.1 E 20.1
20 20 20 20
20 20 20 20
E 43.7% E 43.7% E 23.0 E 23.0
20 20 20 20
H2 Gambling Capital updates on the fast growing mobile segment, now on track to account

21 21 21 21
E 46.0% E 46.0% E 25.7 E 25.7
20 20 20 20
22 22 22 22
E 48.5%E 48.5% E 29.2 E 29.2
20 20 20 20
MOBILE DASHBOARD

23 23 23 23
E 51.2%E 51.2% E 32.4 E 32.4
 6% 7%

Data

51.2%
48.5%
46.0%
43.7%
41.2%
39.2%
36.8%
34.3%
26% 54%

31.1%
28.0%
22.8%
31%

18.0%
13.9%
11.2%
10.2%
9.5%

2017
8.0%
7.3%

7.2%
7.1%
04

05

06

07

08

09

10

11

12

13

14

15

16

17

E
18

19

20

21

22

23
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Europe Asia/Middle East North America
Oceania
68%
LatAm/Caribbean Africa

GLOBAL MOBILE GROSS WIN BY REGION (2018E) GLOBAL MOBILE GROSS WIN BY PRODUCT (2018E)
1%
1% Betting Gaming Lotteries 6%
6%
7%

26%

54%
2017
31%

68%

Europe Asia/Middle East North America

Betting Gaming Lotteries
Oceania LatAm/Caribbean Africa

MOBILE AS PERCENTAGE OF GAMBLING GROSS WIN BY REGION (2018E)

55
50
45 45.2%
40 39.4% 40.8% 39.2%
6%
35
30 31.0%
25 25.7%
22.6%
20
15
26%
10
5
0
Africa
2017
Asia/Middle East 55
Europe LatAm/Caribbean North America Oceania Global Average
50
45 45.2%
40 39.4% 40.8% 39.2%
Africa Asia/Middle East Europe 35 LatAm/Caribbean North America Oceania Not to beGlobal reproduced without permission
Average
68%30 31.0%
25 25.7%
22.6%
20
N.B. Due Capital
H2 Gambling to the is theuse ofindustry’s
gambling the current exchange
leading consulting, 15 rateand
market intelligence (updated
data team. Theyat
havethe
a trackend of each
record of nearly quarter)
15 years focused on thehistorical
global gambling data
industry. may change
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All of the detailed dataquarter. 10 Data and Market Intel Service. Please email data@h2gc.com
and the right to re-publish extracts is available via H2’s Global
5
Betting Gaming Lotteries 0
Africa Asia/Middle East Europe LatAm/Caribbean North America Oceania Global Aver

iGamingBusiness North America | Issue 37 | Q3 2018 | 69

Africa Asia/Middle East Europe LatAm/Caribbean North America Oceania Global Averag

N.B. Due to the use of the current exchange rate (updated at the end of each quarter) historical data may ch
slightly each quarter.
 Data

TOP 50 GAMING
SITES WORLDWIDE
Rk Property Name Property URL Games
bet365 4 The National Lottery national-lottery.co.uk Bingo, games, lottery, mobile
Binary options, bingo, casino, esports, 5 Betfair betfair.com Betting exchange, bingo, casino,
games, in-play, lottery, mobile, poker, esports, games, in-play, lottery, mobile,
racebook, sportsbook poker, racebook, sportsbook
bet365.com 6 Tipico Online tipico.com Casino, esports, games, in-play, lottery,
Gaming mobile, sportsbook

1st
7 William Hill williamhill.com Binary options, bingo, casino, esports,
forex, games, in-play, lottery, mobile,
poker, racebook, sportsbook,
spread betting
8 Betfred betfred.com Bingo, casino, esports, games,
in-play, lottery, mobile, poker, racebook,
sportsbook
Yahoo! Daily Fantasy Sports 9 Unibet unibet.com Bingo, casino, esports, games,
in-play, lottery, mobile, poker, racebook,
Fantasy sports, mobile
sportsbook
fantasysports.yahoo.com
10 Sky Bet skybet.com Esports, fantasy sports, games, in-play,
mobile, racebook, sportsbook
11 BetIn Kenya betin.co.ke Casino, games, in-play, lottery, mobile,

2nd
racebook, sportsbook
12 eToro etoro.com Forex, mobile
13 bet-at-home bet-at-home.com Casino, esports, games, in-play, lottery,
mobile, poker, racebook, sportsbook
14 Hollywood Bets hollywoodbets.net Esports, in-play, mobile, racebook,
sportsbook
15 Rivalo rivalo.com Casino, esports, games, in-play, lottery,
IQ Option mobile, sportsbook
Binary options, forex, mobile 16 BetPawa betpawa.co.ke In-play, mobile, sportsbook

iqoption.com 17 SportPesa Global sportpesa.com In-play, mobile, sportsbook

18 Ladbrokes ladbrokes.com Bingo, casino, esports, games,
in-play, lottery, mobile, poker, racebook,
sportsbook, spread betting

3rd
19 Bovada bovada.lv Bingo, casino, esports, games,
in-play, lottery, mobile, poker, racebook,
sportsbook
20 Bet9ja web.bet9ja.com Casino, games, in-play, lottery, mobile,
sportsbook

70 | iGamingBusiness North America | Issue 37 | Q3 2018

 Data

Rk Property Name Property URL Games

21 SportPesa Kenya sportpesa.co.ke In-play, mobile, sportsbook
22 PokerStars pokerstars.com Casino, esports, in-play, mobile, poker, racebook, sportsbook
23 Sportingbet sportingbet.com Bingo, casino, games, in-play, lottery, mobile, racebook, sportsbook
24 Paddy Power paddypower.com Binary options, bingo, casino, esports, games, in-play, lottery, mobile, poker, racebook, sportsbook
25 888 Casino 888.com Bingo, casino, esports, in-play, lottery, mobile, poker, racebook, sportsbook, spread betting
26 CBS Fantasy Sports fantasynews.cbssports.com Fantasy sports, mobile
27 DraftKings draftkings.com Fantasy sports, mobile
28 bwin bwin.com Backgammon, bingo, casino, games, in-play, lottery, mobile, poker, racebook, sportsbook
29 Betway betway.com Bingo, casino, esports, games, in-play, lottery, mobile, poker, racebook, sportsbook
30 Olymp Trade olymptrade.com Binary options, mobile
31 Plus500 plus500.co.uk Binary options, forex, mobile
32 Sports Interaction sportsinteraction.com Bingo, casino, esports, games, in-play, lottery, mobile, poker, racebook, sportsbook
33 Olimp olimp.com Binary options, bingo, casino, esports, games, in-play, lottery, mobile, racebook, sportsbook
34 Interwetten interwetten.com Bingo, casino, esports, games, in-play, lottery, mobile, sportsbook
35 Coral coral.co.uk Bingo, casino, esports, games, in-play, lottery, mobile, poker, racebook, sportsbook
36 Rummy Circle rummycircle.com Games, mobile
37 Lapalingo lapalingo.com Casino, games, lottery, mobile
38 Quasar Gaming quasargaming.com Casino, lottery, mobile
39 Marathon Bet marathonbet.com Bingo, casino, esports, fantasy sports, forex, games, in-play, lottery, mobile, racebook, sportsbook
40 Oanda - FXTrade oanda.com Forex, mobile forex, spread betting
41 XM Markets xm.com Forex, mobile forex
42 IG ig.com Binary options, forex, mobile binary options, mobile forex, mobile, spread betting
43 Tatts tatts.com In-play, lottery, mobile, racebook, sportsbook
44 Ace 2 Three ace2three.com Games, mobile games
45 FanDuel fanduel.com Fantasy sports, mobile
46 Dream11 fantasycricket.dream11.com Fantasy sports, mobile
47 SBOBET sbobet.com Bingo, casino, esports, games, in-play, lottery, mobile, racebook, sportsbook
48 WorldWinner worldwinner.com Bingo, casino, games, mobile bingo, mobile
49 Mr Green mrgreen.com Bingo, casino, esports, games, in-play, lottery, mobile, racebook, sportsbook
50 FBS fbs.com Forex, mobile forex

Data provided by Casino City Press

•T raffic rankings indicate relative popularity of the 100 most popular igaming sites offering real-money wagering and
are based on historical web usage of a panel of nearly 20 million users over a three-month period prior to publication.
•T he rankings are estimates based on panel usage and should not be considered absolute ranking values.
•O nly the top 5% of all igaming sites are listed. For detailed, current, accurate information on 2,500 igaming sites and
2,000 igaming portal sites, along with rankings of the top 1,000 igaming sites and the top 1,000 igaming portals,
directories of software providers, other suppliers, regulatory jurisdictions, and more, the latest edition of Casino City’s
iGaming Business Directory is indispensable.
View sample pages at casinocitypress.com

iGamingBusiness North America | Issue 37 | Q3 2018 | 71

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© 2018 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where
indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters
and practices that become the foundation of their Responsible Gaming programs. Images are representative only.