Episode Transcript
[00:00:16] Speaker A: Hello everybody. Welcome back to Right to the Source. We're on episode 15. My name is Robin Harrison and I'm here as ever with the C3PO to my R2D2. It's Mr. Ed Birkin. Ed, how are you today?
[00:00:30] Speaker B: I am well, thanks, Robin.
I was going to say your little comparisons get more obscure, but I imagine most people watch that rubbish, which is a multi billion dollar franchise.
[00:00:41] Speaker A: I think most people have seen Star Wars. Yes, it's quite popular. It caught the zeitgeist.
[00:00:47] Speaker B: Yeah. It's just. I mean, I've seen clips of it. It's never made me want to sit down and go, oh, that looks good. Why don't I watch it? I mean, but you know, billions of dollars and.
[00:00:58] Speaker A: Yeah, I mean, the first three films are great.
[00:01:00] Speaker B: Yeah. I mean, then again. Well, I suppose looking at it now is a bit unfair, but I watched Jaws recently and it is just special effects are pretty terrible. But then again, it is from now say something. Yeah.
[00:01:13] Speaker A: This is a great film though. Jaws is a kind of film that if you see it on television, no matter what point it's in, you watch the rest of it.
[00:01:21] Speaker B: Yeah. It's also been blamed for people effectively being SC of and then hunting and killing great whites.
[00:01:28] Speaker A: They are terrifying.
[00:01:29] Speaker B: Yeah. But mainly because of that apparently before they just got on with their life.
[00:01:32] Speaker A: They still eat people.
[00:01:34] Speaker B: Yeah. But it wasn't such a big thing about it. And whereas now it's like, oh, let's kill the great whites. And are they endangered?
[00:01:40] Speaker A: I'm not sure. I mean, I think we're endangered for. From them in certain contexts.
[00:01:45] Speaker B: Pretty sure population's exploding, but we're in danger of not talking about gambling.
[00:01:52] Speaker A: See what you did there? Look at that. Nice little segue. Yes. So we do have a guest coming up in this episode. We will cut that in later after some very judicious editing.
[00:02:05] Speaker B: But before kind of went a bit off even for us. It went very off track.
[00:02:09] Speaker A: Yes. Some of some of that footage will never be a. Will never be shown to the world.
[00:02:16] Speaker B: No.
And it makes my language seem very polite.
[00:02:19] Speaker A: If it wasn't on a computer, I'd take it outside and burn it. I think it's safer. I don't think the world is ready for that podcast.
[00:02:31] Speaker B: No. John was a great guest and in between the banter that we had, most of which will never be heard, he made some very good points.
And look, let's just tell people we were talking about the flawed data poor misleading, put in other adjectives article that Gordon Brown wrote about why we should increase the remote gaming duty to 50% in the UK. You know, that will be explained by later in the podcast at the moment. What we're going to talk about the countries. What countries did we. You should know what countries we talked about because you messaged me half an hour ago saying, ed, what countries are we talking?
[00:03:07] Speaker A: Yes, I do. We're talking about Korea and we are talking about Canada.
[00:03:11] Speaker B: South Korea.
[00:03:12] Speaker A: South Korea. Korea.
The national dish being kimchi. I had some on Saturday night at a very good Korean restaurant called Dongnae in a Bristol. It was very nice. It was part of a sort of spread of that they call Banchan, where you've got lots of different small dishes. It was really good. Very big fan. So if you're in Bristol, go to Dong Night. It's an excellent restaurant or their sister restaurant, Bok Man. Both come highly recommended.
[00:03:40] Speaker B: But yeah, so I didn't think we were allowed to do endorsements on here. You're getting kickbacks. I'm sure the listening population in Bristol is pretty small, but, you know, you can't be doing this stuff.
[00:03:51] Speaker A: Bristol has a small but perfectly formed a hub of gambling professionals, I'll have you know. Yeah, there's. There's a few people down here.
[00:03:59] Speaker B: If you're going to be doing kickbacks for promoting things on the show, then let me know.
[00:04:03] Speaker A: Believe me, I got no money off that bell.
So shall we start off then with career?
[00:04:10] Speaker B: Okay, so population.
[00:04:12] Speaker A: A population? Not sure. Actually A. I think we had at the end of last week, 51 million. 51.
[00:04:20] Speaker B: Two main. Well, three bits of gambling. The legal betting, casino, lottery, a betting GGR, over 3 billion euros. Horse racing is a large part of it. Then you've got the kind of lottery. Sports betting covers all the main sports, football, volleyball, golf, baseball, blah, blah, blah. And then you have a bit more niche stuff. So there's a smaller part, bicycle, pretty large business, but Kirin bicycle.
[00:04:43] Speaker A: Yeah. Similar to Japan, actually.
[00:04:45] Speaker B: Motorboat racing. And I'm pretty sure we got down bull fighting.
[00:04:50] Speaker A: Bull fighting.
[00:04:51] Speaker B: So that's on the betting and on the casinos.
So there are how many casinos, Robin, in the country?
[00:04:56] Speaker A: I think there's maybe about four. Between four and six. But aside from Kangwan Land, I don't think any of them allow locals in.
[00:05:06] Speaker B: Yeah. So there are 18 casinos, but there are. There's. Yeah, it's kind of about four big operators. Yeah. Kangwan Land is the only one allowed to accept locals.
[00:05:14] Speaker A: It was foreigner only, so interestingly, they did do foreign. I think it was a special area. It was Like a foreigner only trial.
[00:05:23] Speaker B: In Kangwan Land they have very few foreign visitors but yeah out of the casino market 2.2 billion euros GGR in 2024 Kangwan land accounts for 40% over 40% of that.
It's more table games weighted it tends to be in Asia so US you know you're looking at 70% plus on slots, 60% table games and actually the Kangorland is planning on opening a second casino in 2028 which will.
It's going to add 50 tables which is 25% capacity and 250 gaming machines which is another 18% capacity. Total tables to 215 gaming machines to 1610. So there you go.
[00:06:03] Speaker A: Yeah I suppose a few interesting things in that market foreigners only rule. So that's similar to for example Vietnam which had a trial of allowing locals into I think it might just be one property but then that was meant to be over a three year period but then that was kind of cancelled earlier.
Kangwon Land obviously the market leader in terms of these other foreigner only casinos. I mean how does performance compare? Like is there any kind of standouts or is it.
Or are these other 17 properties I suppose are these a, you know, is revenue kind of like markedly lower?
[00:06:43] Speaker B: I mean it's markedly lower by the fact that you've got one casino that has over 40% of the markets and another 817 that have 60% so we get total figure supplied by the regulator but we do get a split.
We have Auto Tour, just Dream Tower, Grand Career Leisure and Paradise Co who will report as business companies.
What are they looking at? I mean they are, they're large parts of it.
Try and get some of the actual figures now. But there are, there are some effectively there are some bigger ones the farther only ones are bigger and more resort and there are smaller ones that are definitely not evenly split. Yeah we do in our model have data for different properties of those three big operators as well as Kangal and actually what's keep using the word interesting in a.
A loose sense but the performance between the properties does vary by each year, each quarter. You see actually this one's done really well and that one's not why that is I don't know. I'm sure someone with more knowledge would look at, you know. Well obviously you know that's because they're hosting this and they're doing that but yeah so if you look at Grand Career Leisure they've got two of their three are in Seoul, one's at Hilton, one's at the Gangam Busan Lotte or something that may be pronounced completely separately. But even between those properties, if I look at, let's say, July data, so they're one in gang. I mean, this say gross win 19. Imagine billion. Yeah. Billion marine one. The one in the Hilton was 13 billion and the Busan Lotto was 6.6 billion. So even within that just, just like one company, their top performing casino is generating three times the revenues of their bottom performing casino. So there is obviously a significant disparity across them.
[00:08:32] Speaker A: Okay, that is actually quite interesting. I was preparing to tune out there, but I actually thought that was quite an interesting fact to bring up.
[00:08:38] Speaker B: I think we need final tinted words are interesting. Niche.
[00:08:42] Speaker A: Intriguing.
[00:08:43] Speaker B: Intriguing. Slight remotely informative.
[00:08:46] Speaker A: I think that's a great tagline for this podcast.
[00:08:52] Speaker B: Canada.
[00:08:52] Speaker A: Yes, Canada. Oh, Canada.
National dish Poutine. The home of Rush, Justin Trudeau, Mike Myers.
[00:09:00] Speaker B: And although it's not the home of it, I actually started watching an NHL documentary, as in the documentary first bit did. And I always knew that ice hockey was, you know, yeah, they take some hits. But I was like, washgate, it is brutal.
[00:09:16] Speaker A: Oh yeah.
[00:09:17] Speaker B: I mean, it is.
They play a lot of games as well. It's not like the NFL where there's not many games. You have time to recover and also like getting the NFL, fine. But you get hit when you're on ice and you just legs go. Or you get hit against the wall and then if that's not enough, you just take off your helmet and start hitting each other. And then you have that many games as well. I mean, it is.
[00:09:39] Speaker A: It's tough. Absolutely brutal. I mean, there's. There's quite a few sports like that, like baseball. The volume of games that they play is ridiculous.
[00:09:49] Speaker B: Yeah, but you stand there and catch a ball. I mean.
[00:09:51] Speaker A: Yeah, but the strain and like. So you think about the pictures. There's a lot of a.
There's a lot of a. Kind of examples of a. You know, pictures having what, what they call kind of Tommy John surgery, which is kind of ligament. And there you go. There you go. You came prepared. Well done.
[00:10:06] Speaker B: I got this at a Pittsburgh Pirates game when I was nine years old.
[00:10:10] Speaker A: Wow.
[00:10:11] Speaker B: Never been used in baseball context.
[00:10:13] Speaker A: Never been thrown in anger. Risk of Tommy John surgery.
[00:10:16] Speaker B: Then look, okay, fine. Pitchers have some impressive thing from pitching. Yeah, fine. But it's not. It's not. That's why they get. That's why they play 100 and something games a year. Because it's like when even the batters. It's like you swing. Yeah, it's.
[00:10:27] Speaker A: There's There's a lot, there's a lot of injuries that can happen mainly for pictures. Like, you think about the way that they throw and the amount of times that they throw, that puts a lot of strain, especially when you start it young. But I mean, ice hockey, I mean, like, if you've ever been to a game, when they, like, if they smash into the sightings, like, you understand why they need the padding, so.
[00:10:51] Speaker B: New York Mets right fielder, Yuan Soto.
[00:10:54] Speaker A: Juan Soto.
[00:10:54] Speaker B: Yes, Juan Soto. Okay. He's projected to earn 126 million for taxes and agent fees. This is largely due to his 15 year, $765 million contract with the Mets. Yeah, I mean, come on. I mean, that is just.
[00:11:10] Speaker A: He is a phenomenal player. He's not. This hasn't been, you know, this sort of like superstar breakout season. But the thing is, seasons are so long and you kind of saw this with Francesco Lindor, you know, came in a massive contract and they take time, they build up, you know, and the length of the contract, that kind of reflects the fact that players are given time. It's a lot less short term than something like football.
[00:11:39] Speaker B: Yeah, they're given time because they don't, you know, you're catching a ball. Okay, fine. Yeah. Pitchers can get some stuff even with a hitter. Yes. Bear in mind, I am, you know, I don't know as much about baseball, but you know, you can play for a long career because it's not that challenging. Let's be honest. It's not a physically challenging. For a lot of them it is. Obviously if you lose your 100 mile an hour, you know, fastball and everything. But as a general rule, there's a reason you can play 100 and something games a season versus what, 17 in the regular NFL game. I've got no idea how he even got onto this.
[00:12:09] Speaker A: No. Well, you started talking about NHL and then because, because you follow baseball. I just clawed onto that. So I had a clue what we were talking about beyond having been to. I can't even remember the name of the team in New York. The Rangers.
[00:12:25] Speaker B: What? NHL.
[00:12:25] Speaker A: Yeah, yeah, yeah. I went to a Rangers game when I was over there.
[00:12:29] Speaker B: If anyone wants to give me tickets to a NHL game in Vegas drawing G2E, please feel free to get in.
[00:12:36] Speaker A: Touch and you'll get a shout out in the podcast, I imagine.
[00:12:40] Speaker B: Yeah, whatever the non existent lawyers we use for this say and.
[00:12:46] Speaker A: Canada.
[00:12:47] Speaker B: Yes, Canada. Let's go quick. We've got a guest and everything, so we need to speed up.
[00:12:51] Speaker A: Yeah, we need to Race through. So, I mean, the difficult thing here is we're obviously talking about a lot of different provinces, each with their own monopoly model. Obviously Ontario is the most mature by virtue of it being the only one that's actually legalized. But I think for the most part that regulation, I'd be interested to see what the figures say. But it feels like it's been a success. It feels like the market is highly competitive.
It feels like there hasn't been, you know, the kind of slightly kind of aggressive pushback on the regulated industry.
However, having said that, the way it regulated it was sort of in the way that. In the way that the US Effectively said, all right, nothing has happened until, until we cross this line and then everything starts. Canada effectively opened up the licensing model to the gray market competitors.
[00:13:45] Speaker B: Yeah. Which I think is important. I noticed I haven't put my lights on to make myself look good for the YouTube. There we go.
I think it's important because I was having this discussion about New Zealand. If you kind of say to anyone who wants to get a license, they have to go through this period where they have to stop operating, then it means players who are operating with them now will go to other offshore sites who aren't interested in getting licensed. Hence they're still accepting the players. So if you want to bring players onshore, you then have to kind of get them back off there and re sign them up. Yes. If you're a, let's say New Zealand ifrit. Sky City. Okay. And you're saying it's unfair that someone comes on shore and they've got all the customer list. We can't compete. It's not fair. We should. They should have to resign their customers. I get that argument. But in terms of the greater good of.
Unless you're in a Sky City, have their own customer, they send away from labase, but the greater good of getting as many people on shore as possible, you need to keep. You need to have people who are getting licensed to have the customers already. I think the Canada is a bit different because the only, the only competition was with LG and they already. They're already operating anyway. So it wasn't like Olga said, oh, we don't have anything and it's unfair. So it's like, well, we're now just all competing on the same way. So I think it made it easier to do that. The likes of Fangil drafting other. Some of the US brands, you know, have gone, well, hang on. We weren't operating because we weren't allowed to. I Mean same or someone else. Yeah, but yeah, so. And I think, I think the surprise there for them, not for me, is that they just thought, oh, look at us in the US we dominate and we'll just go in and just take all the market. And it's like one, it's a different product and two, you're competing against very good people who've already been there. So guess what? Bet365 still has by far the largest sports wagering market share in the market. It's been there for ages.
I don't give a crap what fragile draftkings are doing in the us you're not going to compete with them. By the way, did you see recently that bet365 has had its most successful quarter in the U.S. sports wagering? You remember I said that they might want to watch in the US and they're going to keep taking share. I've got a lot of stuff wrong, but keep watching that one.
[00:15:43] Speaker A: Right. Hold on, hold on.
[00:15:46] Speaker B: Yeah, so it has been successful. We've got 90% onshore channelization and if you compare that to the national market, excluding Ontario, then the channelization there is currently running at 37% betting. So we think the betting is only about 16% onshore. Other lotteries have much better betting and they're doing better on the gaming. We've got 43% for the gaming. Some of them pretty successful on the igaming but there's just very little they can, I think they'll really be able to achieve to get that. We still have the option growing.
[00:16:20] Speaker A: So one of the things I'm curious about is when you look at, for example an Alberta which is obviously coming in hot with regulation, or even, you know, British Columbia, which still, you know, is still a monopoly. I mean, I kind of feel that the lot of Quebec will hold its monopoly to the better end. But you kind of feel like BC could go, Alberta is going. I'd be interested within those two provinces in particular. How much of that gray market activity is Ontario licensees?
[00:16:53] Speaker B: Again, I could have given you a pretty good estimate if you've actually given me the heads up beforehand. Let's see from our main operators. Let's quickly have a look at. So our main offshore and I'm not going to name the main offshore operators on here legal, blah, blah, blah. Sign up to our data to get more information.
In no particular order, supergroup obviously licensed in Ontario.
I don't know if they're licensed in Ontario or not. 365. Yes, I'm going To make sure I'm not just reading down a list HPI bets and imagine they are other ones on the list Leo Vegas I imagine they are stars will be 888 sports interaction ones I assume aren't BC game Tony bet not sure Power play maybe Bodog it's unlikely Playojo Rubet Gandom so I mean depending on what we think about stake whether licensed in Ontario but you're looking at a good 50% on the market also if you include stake who is licensed how do you not know if that license is Ontario unless that's your role no it's not operating in Ontario. There you go but it's no surprise then you I mean this is a completely different different one but you know that stakes biggest I believe endorser what do you want to call it break who apparently is Canadian and so when I talk about this someone put on a it's one of his songs and I kind of vaguely recognize the token music wow.
[00:18:20] Speaker A: You'Ve not seen Star wars but you can you can recognize a Drake song well I don't know if.
[00:18:25] Speaker B: I song but I was like yeah it kind of sounds vaguely familiar I don't know why it's not my country music playlist no it's not Morgan Rollin.
[00:18:32] Speaker A: Or Hank Williams but apparently he is.
[00:18:35] Speaker B: You know he does a lot of this stuff on the the social media the tick tocky things and you know.
[00:18:42] Speaker A: It'S the tick tocky things that stake.
[00:18:46] Speaker B: Have moved moved one seems steadily but you know significantly up the charts in our estimates of the non locally licensed Canadian market.
[00:18:56] Speaker A: So before we bring in our guest stat of the week Stat of the.
[00:19:00] Speaker B: Week Stat of the week relates to Sweden does it now so we what's happening there?
Loads of stuff mainly flat pack furniture and meatballs and saunas I believe but in the gambling world I had a question from a long term subscriber said you know why are we seeing my channelization Sweden going down different things have happened but really I was then looking at who we estimate as the biggest offshore operators so the top five offshore operators in Sweden four of them are what you would class as crypto casinos. It doesn't mean that all of us crypto as we said on the the last episode during my rant that a lot of their revenues can be non crypto for crypto CAS these top five generated 29% of offshore activity in 2024 this is based on web traffic not in GTR versus those same five represented only 6% in 2020 and their traffic from these five is up 25 times in the past four years. So 25 fold increase in visits to their size. Now obviously other ones with a trip dropped down but it's.
I just thought it's just a you know new whether it be crypto, non crypto because you know they're targeting these markets and you can in a four years isn't a short period of time but they're able to get significant traction and be getting significant volumes of people to their size. I just thought, you know, we're not talking about someone who's you know, change of regulation and seeing traffic increase 5% time.
I mean this is like big numbers.
[00:20:35] Speaker A: Yeah.
[00:20:36] Speaker B: These top five who were a tiny fraction of the market, almost 30% of it now in 2024. That's my stat of the week. What is your story Stroke fact of the week.
[00:20:48] Speaker A: So my story of the week is a piece by Jess Marquez on Bally's Corporation. Now Bally's is a fascinating company because it just seems to always pull through and you know it takes these big bets, some might say wild bets and yet somehow you know it's, it can be down at points but it's never out. So it's a really, it's a really fascinating piece by Jess. Kind of just going through the kind of current situation like it's a really good bit of analysis. Came out ahead of their results which were the first in quite a while because they stopped reporting to the market for a period.
So I'll put a link in the podcast blurb. Definitely worth a read. Highly recommend it.
[00:21:42] Speaker B: Why don't we end with picking more random countries.
[00:21:48] Speaker A: Yes, let's pick some more random countries and then we will bring in our special guest.
[00:21:54] Speaker B: You know, as. As we're talking about the ballets. I didn't know whether given the BET365 episode was was was pretty well listened to whether we should do a random country and a random operator. But I think we're just going to end up pissing off all the industry, aren't we? Talking about the operators say negative things. No doubt.
[00:22:12] Speaker A: Shall we give it a go?
[00:22:14] Speaker B: We could do.
[00:22:15] Speaker A: We'll behave ourselves.
[00:22:16] Speaker B: You know what, we're not here to make friends so let's.
[00:22:20] Speaker A: I mean I think that ship sailed a long time ago.
[00:22:23] Speaker B: That's just it. Right. So one country, one company.
[00:22:27] Speaker A: Yeah, let's do. Let's do random country generator. What we going for next week?
[00:22:33] Speaker B: Call a market. I don't think we have data. One Cambodia which the currency is. I actually have no idea Cambodian Real.
[00:22:40] Speaker A: The capital, Phnom Penh.
[00:22:42] Speaker B: Yeah. Glad you said x. I can glac 30 million.
16.
[00:22:48] Speaker A: Okay.
[00:22:50] Speaker B: Dish.
[00:22:50] Speaker A: I have been to a Cambodian restaurant before.
[00:22:53] Speaker B: Of course you have. Shout out to them. Best Cambodian restaurant in the uk. Yeah, Based in Bristol.
[00:22:57] Speaker A: It wasn't actually. It was a. It was when I lived in France. It was quite a few years ago.
I'm trying to think what I ate there. I think there was some form of minced chicken involved.
[00:23:07] Speaker B: It's a moc, whatever that is.
[00:23:10] Speaker A: What's a moc?
[00:23:11] Speaker B: This show Fish. MOC is a sweet and savory steamed fish curry.
[00:23:15] Speaker A: Sounds quite nice. Okay, so next week we'll talk about Cambodia and what company are we doing?
[00:23:21] Speaker B: So I don't have a random country generator, so I'm going to have to look at the companies that we come on the HD site and just swing.
Does that include.
It's just the operators from supplier and operator.
[00:23:34] Speaker A: Dealer's choice.
[00:23:36] Speaker B: I'll tell you what, give me a, give me a number between 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 7.
[00:23:43] Speaker A: Because it's Henrik Larsen's number itself.
[00:23:45] Speaker B: 5, 6, 7. And then give me a number between 1, 2, 3rd, 4, 5, 6, seven, seven.
[00:23:50] Speaker A: Same reason again.
[00:23:51] Speaker B: Okay. NagaCorp.
[00:23:53] Speaker A: NagaCorp, which I think, strangely enough might have operations in Cambodia.
[00:23:58] Speaker B: If it does, then this is going to just seem like the most ridiculous thing.
[00:24:03] Speaker A: Yeah, amazing. So we're going to talk about Cambodia and we're going to talk about Nagacorp.
[00:24:07] Speaker B: It owns the largest integrated gaming and entertainment resort in the Mekong region.
Filed for IPO on the Hong Kong Stock Exchange in 2006.
The first Cambodia based company listed on a foreign stock exchange. Okay, now that, that's spooky.
[00:24:23] Speaker A: I'm going out to buy a lottery ticket. That's spooky.
[00:24:26] Speaker B: Okay, cool.
[00:24:27] Speaker A: Also means there is data out there because they're reporting to the market, so. Perfect.
[00:24:32] Speaker B: Well, I've got a financial model on them. That's why I chose a company from the HTC website.
[00:24:36] Speaker A: Oh yeah, that would help. But there's also, there's, you know, there's other information out there as well.
[00:24:41] Speaker B: I'm sure there's someone. Igamingbusiness.com hi guest. And we can talk about, talk about tax rates in the UK market.
[00:24:49] Speaker A: Yes. Today with us we have a podcasting veteran of the gambling industry. We have Mr. John Bruford.
Hello.
So, yes, Gordon Brown has made an intervention into the debate on gambling taxation and has called for essentially a 50% rate on the industry.
Now, obviously this is problematic for a number of reasons. You know, first of all, first of all, let's be honest. On one side of this kind of reform campaigner side, you have people looking to bring in restrictions on the industry which limit the availability and the visibility of the product.
That ultimately means there's going to be less revenue from the industry. On the other side, you have people saying, oh, it says golden goose, just tax it more. It doesn't, you know, it doesn't really kind of make any kind of logical sense. You can't, you know, kind of introduce, you know, kind of restrictions to whittle down, like revenue generated from the industry. And then on the other side say, oh yeah, there's all this money to tax. And then on top of that, I think was the social market foundation, correct me if I'm wrong on that, but their view is that raising the tax isn't going to have an impact on the black market. And that just seems borderline insane to me. I mean, what other sector do people say, well, there might be a risk from increased criminality. And the response is, well, let's just wait and see. Let's just see what happens. Let's see if the criminals come in. It's like on that level, there's an element of just kind of like kaleidoscopic thinking going on. And then like even the article, I had a look at it this morning, to actually go through some of these tax rates and the countries that he cited as having higher tax rates, I mean, the Netherlands companies are leaving the market. There's a lot of evidence that restrictions, higher taxes are pushing people towards illegal operators. Then he mentions Austria. That's a monopoly. Pennsylvania, it's only in slots, but that's one of the highest tax rates in the US and in Delaware it's a monopoly. So these aren't really viable, you know, comparisons.
[00:27:01] Speaker B: So on that, and I think. So it says 50% in Pennsylvania, which is true, but that's on net revenue, first of all, not gross revenue. Okay, so straight away they're taking off bonuses. So that's down to 40%, which is still high. But hey, you're just ignoring that. There's also, I think the last count, 18, maybe 2218, I think online operators in Pennsylvania. In the UK there's 2,400 and something. So just the markets, first of all, ignore the bonusing issue. Secondly, it's ignoring the market structure. Thirdly, the Netherlands, which is at say 34%, 4.8, I think, and he's calling for 50. There's an interesting thing put out by the KSA, the Dutch regulator on this only last week about the impact of it. And they say, quote, and it's talking about how land base is closing, people are moving offshore, quote, and this is a sensible regulator who is having to enforce stuff put in by the government. A financially driven measure like gambling tax is at odds with the policy objective of offering players more protection. If we want to offer players a protective gaming environment in the future, this requires serious, responsible providers. A financially sound legal market is essential for this. That is as far as, like, I think we all agree, player protection is the most important thing. And everything else that he's just put in that is complete bullshit. He says, oh, it's less than the 80% tax on cigarettes. Going to a different website is very different to getting illegal cigarettes. And there's a news article recently about all these shops that have been done with underground tunnels getting illegal cigarettes. Now, if people are going to be doing that, you know, going onto an unlicensed website is a piece of piss. So I think we all agree it's a load of rubbish. But let's say, John rant, because I ranted last week, it's been amusing to hear your. Your slight rant, Robyn, but now we've actually got a guest who's on the podcast as well.
[00:28:46] Speaker A: We've had guests who are not from Clarion before.
[00:28:49] Speaker C: Right. I think it's quite important to remember the historical context of Gordon Brown's relevance in all of this.
[00:28:55] Speaker B: Right.
[00:28:56] Speaker C: Because of course, in. In the UK, the government reviewed like the 1968 was it laws, and they're like, hang on a second, this needs sexing up. We need to do something that's freshly out of date.
Which they did, of course, in 2005. Not fit for purpose when it came in. But as part of that, there was the plan for.
It was kind of looking at casinos, looking at the need for casinos compared to population as much as anything. So, for example, there were no casino licenses for Shropshire, unsurprisingly. But, you know, it was looking at small, medium and large casinos, plus possibly, I think it was more than one super casino at the time when it was first put out there. And then that was when Tony Blair was Prime Minister.
And Blair, of course, stepped aside. Although did he really step aside? Because of course, they famously. When Brown was the Chancellor and Brown was in number 11 Downing street, they swapped flats because Blair liked the flat in number 11 more than he liked the one in number 10.
Anyway, Brown steps into the main role and I have no issues with Gordon Brown. He seems like a very decent guy on the whole, but. And this, he is talking out of his arse. And he flagged this when he came into power. And I said this when he took the reins. I said he's a Presbyterian, he comes from a religious family. His dad I think was a Presbyterian minister. This is, this is through him like a stick of rock. And he spoke about his moral compass which sadly has now entered, you know, the lexicon. But he came in and he made a mess of something that all of the licenses in the plan as it started out were never going to be taken up. Not a chance in hell. You know, a lot of those places not viable. Casino industry knows that. That's why there aren't casinos there already. But he came in and you know, before he came in it was all the talk was super. Casinos come down to one. Let's put it in Blackpool. Now Blackpool makes sense. It's already known as a resort. It's already a place where even today families still go. But it's also much of Blackpool in the field is very, very depressed. And it's an area which is set up for hospitality. It's an area that's set up for people to come and visit and it has centuries of that and rejuvenation there would have been wonderful. It would have been absolutely perfect. So instead they then move it to East Manchester, a place where people only visit if they really need drugs. Do you see the difference?
It's a little bit flawed because it's like the one at the RICO arena in Coventry. It's like the one at the Neck. There's no locals market because the area around it has nothing. The area around it is impoverished. And if you got no locals market in an impoverished area, why would people want to visit? I mean, there's got to be more than one reason to visit, right? That's why the casinos in Birmingham have worked pretty well. That's why ASPERS in Newcastle worked so well for so long. Because they're part of a larger entertainment destination in East Manchester.
Your options are a little more limited, but apart from that, your entertainment is a little bit slim picking, shall we say, Unless you want to get mugged. And I'm not dissing the people of East Manchester.
[00:31:58] Speaker A: It does sound like you are a little.
[00:32:00] Speaker C: But yeah, I come from a shitty area. Do you know what I mean?
I know what's there. In fact, I once carried a friend through the roughest part of Manchester because he was absolutely shit faced. I had one guy here who I was propping up while he could still walk and had another guy over my shoulder. And I think the only reason I didn't get mugged is because people probably assumed I was kidnapping them. But anyway, that's by the by, so. So Brown's got history and he's got a history of not understanding this at all. However, I don't think he's come into this unprovoked. He's been invited to comment, do you know what I mean? He hasn't just popped up and said, actually, I'd like to, you know. But the thing is, I think what we're about to see is, and I'm going to use a term here that I'm not really sure applies, but I think in years to come we will use this term. I think what we're about to see and what the government is preparing us for is a bit of Trumpian politics, which is saying, screw you, industry, let's have 50% and then backtrack and say, well, okay, we could be more reasonable and just go to 35, which then seems great to everybody and say, look, we've been a moderate government, aren't we kind? We didn't completely wipe out the industry overnight and push everybody offshore. We found a balance. Except the problem with. The problem with model is that applying a flat rate to all gambling just doesn't work and it doesn't make any sense because the costs of supplying all gambling are different. The structure of every look at horse racing. Like, I'm not one of these people that's like, oh, horse racing, it gives so many jobs. If you've ever known anybody that works in a stable, you know somebody that is working for less than minimum wage, I guarantee it. Like, where I'm from, there's a local hunt, and on the local hunt on Boxing Day, every day, all the staff are shaking buckets and the buckets are asking people for money to pay them because some of them aren't even paid. It's like, what, you want me to pay you so your wealthy landowner boss can keep dicking about on a horse? No, I'm not going to do that. Anyway, got slightly sidetracked there. But also, I do know the people that run the hunt where I'm from and they are actually really lovely people, really nice. Although one of them has an arsenal Rolls Royce. It was. It was a gift from a friend. This is the air they breathe. But it was given to him as a. It was a joke birthday present and it's a Rolls Royce with an arsenal vinyl wrap over it.
[00:34:13] Speaker A: Is he a Spurs fan or something?
[00:34:15] Speaker C: I didn't want to ask because I just. I was. My mind was blown by somebody giving somebody else a Rolls Royce for a laugh.
[00:34:21] Speaker B: Anyway, do you know.
No that Wayne Rooney left Everton and got married, had three kids, won 16 trophies, went bald, had a hair transplant, became manyes top goal scorer, returned to Everton, left Everton to the mls, became manager of Derby, got relegated, became Birmingham manager, got sacked, became manager of Plymouth, got sacked, became a pundit and in all that time Arsenal still haven't won the Premier League. So actually I think it's quite a good joke.
[00:34:45] Speaker A: It's.
Yeah, it. There's. There's a very big commitment to the bet.
[00:34:51] Speaker B: Well look back on scaming My big issue with this, with this article is a data one because quite frankly he's using data and half truths to try and make a point. As you say, he's ignored the fact about GJ versus NGR in Pennsylvania. He's handpicked a few markets. They say one of them is Monopoly. One is just a very successful gaming market in Pennsylvania that actually say the tax rate is much lower than GGR tax rate anyway and it's got a handful of participants. So guess what? When you're sharing that market size between 18 people rather than between 2,500 it makes it easier. He's comparing the tax rate on non online products such as whiskey and cigarettes, which is a lot harder to get contrary by illegal stuff compared to online. And then he's just kind of shoehorned in, you know, what are they trying to do? Are they trying to actually raise revenue or reduce the amount of gambling because regrets the tax is there because they want people to stop smoking? Pretty much. If they want people to reduce gambling, one, we know it doesn't work, it just moves them offshore. The market probably shrinks a bit, but you have large offshore seepage and then two, you're not going to be raising the revenue anyway to go and apparently this is a magic thing to solve child poverty, which is shoehorning.
[00:36:00] Speaker A: That's one thing that bothers me slightly because that feels that's a structural issue that takes a lot to address. And then there's this magic sticking plaster that's gambling.
[00:36:12] Speaker C: Gambling gets blamed for creating poverty and now it's being touted as the cure. That's a government that is not accepting its role in creating poverty. And I appreciate this. Labour government was always going to be screwed no matter what it did when it came in because of the previous Labour government who Created no end of problems. And I'm talking about Blair and Brown, but also the Tory rule in between that they just inherited crap on crap. They need a minimum of two terms to make any meaningful change. I don't think they're going to get two terms. I want to just bring one thing up about Pennsylvania. Pennsylvania is actually a really interesting market to suggest because Pennsylvania actually has a massive illegal slots problem and I noticed that they're not commenting on that.
[00:36:55] Speaker A: There's skill based games like the physical machines. Yep.
[00:36:58] Speaker C: And it's, it's big, big money in Pennsylvania if I'm right. I'm pretty sure I am. Pennsylvania is A where it started and B, where most of the manufacturers are.
Because when you've got a market that's been, that's gone to the, to the extent, to the expense of normalization and I mean normalization as in establishment of a market rather than oh, this is normal, which, any, any new in any area, then you'll always have these sketchy outliers riding on those coattails because somebody else has done the work. I tried to launch a running magazine once because I knew that the newsagent would have to put it next to Runner's World and I knew that Rodale as it was would pay premium for their shelf space. So I'd get premium shelf space just because my magazine was also about running. That's basically the same principle.
[00:37:42] Speaker A: It's been lovely to have you on. If you don't listen to it, do listen to the Gambling Fellas podcast. It is very good. Occasionally has a. Some interesting industry luminaries on it and of course it's co hosted by the always excellent Finton Costello.
[00:37:59] Speaker C: True, it's worth it for Finton with.
[00:38:01] Speaker A: His lustrous mane of hair and so a huge thank you for joining. For John Brewford joining us as our fourth guest.
[00:38:10] Speaker B: Yeah. And now we've had the same number of non Clarion guests as well. Clarion, yes. And it means we can probably do another month without having to find anyone else to interrupt our flow.
[00:38:20] Speaker A: Our flow.
[00:38:20] Speaker B: I mean, I mean add adds. Add. Add insight to our ramblings.
[00:38:25] Speaker A: Yeah. I mean flow I think is pushing it a bit. Like it's been a lot of fun. It has. If you're watching this when it's live has also been a lot of work to edit. So thank you very much for your time.
[00:38:37] Speaker B: No one's watching it when it's live, is. Am I?
[00:38:39] Speaker A: No, absolutely not. Can you imagine maybe do that if.
[00:38:41] Speaker B: We get it good enough or popular enough. It's already amazing. We could sell tickets to a live show. How cool would that be?
[00:38:48] Speaker A: I'd be interested.
[00:38:49] Speaker B: What's his name? They do it on the overlap whenever. Gary Neville and Roy Keane and Jamie Carragher.
[00:38:53] Speaker A: But to watch them sit around a table and talk. I am actually going to see a live edition of a podcast.
[00:39:00] Speaker B: Yes. You know. Right. That is our aim. We're going to do a live.
[00:39:03] Speaker A: All right. Okay. Yeah. A live edition of the podcast.
[00:39:07] Speaker B: We could sell the rights. I know. Do I be owning the rights to this?
[00:39:11] Speaker A: I would hope so. I wouldn't trust it in either of our hands. Would you?
[00:39:15] Speaker B: Maybe we have to offer them first refusal for the live edition of ice.
[00:39:18] Speaker A: Is this. Is this your. Are we back to you finding your way onto the main stage at ice?
[00:39:23] Speaker B: Oh, yeah. I used to say, put us on the main stage. Do you know how upset if anyone from the Ice team was actually listening to this? Do you know how upset they would get about the idea that their precious show was going to get tarnished by us two talking crap for 45 minutes?
[00:39:39] Speaker A: Yeah. But anyway, on that note, we definitely better go. Thank you very much for listening and we'll be back talking. Cambodia and Nagacorp couldn't have planned that out better. On the next episode of Right to the Source with Robin Harrison and Ed Birkin. See you in the next one.
