Episode Transcript
[00:00:14] Speaker A: My name's Robin Harrison. And welcome back to Right to the Source. And I'm here, as ever, with the Mary Kate to my Ashley, Mr. Ed Birkin. Ed, how are you this fine day?
[00:00:25] Speaker B: I'm good, thank you. I'm just a bit concerned that you look like you're in some kind of interrogation room dungeon and you're talking about the Olsen twins. Yes, I do know who they are. Well, I did. I mean, I haven't heard of them in about 20 years. They were on Disney Channel.
[00:00:39] Speaker A: Yeah, I don't know if they're on Disney Channel. They are now a fashion designers or something. They have a company that makes a very ordinary looking pair of trousers, but sells them for about two grand.
[00:00:52] Speaker B: Two grand?
[00:00:53] Speaker A: Seriously?
[00:00:53] Speaker B: Let me have a look at this.
I mean, generally, this is your fault. We haven't even started the podcast and we're already getting sidetracked. Olsen twins trousers. Is this another fact that it's not true?
[00:01:07] Speaker A: Genuinely?
[00:01:08] Speaker B: It's called the Row how to dress like the. Okay. The Row how to Dress like the Olsen Twins.
[00:01:15] Speaker A: I mean, you thought. You thought me being in what looks like an interrogation chamber and talking about the Olsen twins is creepy. And then you Google how to dress like the Olsen twins.
[00:01:25] Speaker B: No, that's the first thing that came out.
Okay, so some discounts. The rogue gala, wide leg wool pants, $1,150.
[00:01:33] Speaker A: I mean, seriously, look, apparently so. I mean, it's just a throwaway line. And yes, you are right. I am currently recording from my basement.
[00:01:43] Speaker B: Sorry, just go back. How. How do you know what the Olsen twins are doing nowadays?
[00:01:47] Speaker A: Because when I googled famous duos before this to quickly pick out something to to call you, it came up. The Olsen twins fashion brand is.
[00:01:57] Speaker B: Ah, so you have been preparing for the podcast. Like it. Do you know how old the Olsen twins are?
[00:02:04] Speaker A: Early 60s. What?
[00:02:06] Speaker B: Early 60s?
[00:02:07] Speaker A: Yeah. Why not early 60s?
[00:02:09] Speaker B: 39. Weirdo.
[00:02:11] Speaker A: What's weird about that? You said have a guess. I had a guess.
[00:02:15] Speaker B: I'm assuming one of the people in this picture is their mum. Either that or things haven't gone well. Yeah, anyway, let's move on. Yes, yes. Robin, welcome. Thank you. Thank you for the introduction to the podcast. You know that you can go on Amazon or Dunelm or Ikea or something and get lampshades. Make it look a bit less interrogation.
[00:02:33] Speaker A: Like it doesn't look great, I'm not gonna lie.
[00:02:35] Speaker B: And that window, I mean, does it actually look out over anything?
[00:02:39] Speaker A: It's actually a little skylight. So it goes down and then light shines down so you get this beautiful box. A sense of the outside world and light rather than standing in the basement. But look, it's a work in progress. We're getting there by the next episode. I desperately hope I've got some pictures up because I'm aware it looks a.
[00:03:01] Speaker B: Bit better, but the room you were in before, whatever one that was, was actually really nicely kitted out and good. And now you're in a basement that looks as though it. I mean, even the window doesn't look like real light.
[00:03:12] Speaker A: It is actually. That is actually light coming from the outside.
[00:03:15] Speaker B: It looks like you're gonna put an X ray up there and start looking at it.
[00:03:17] Speaker A: I might do that for next week. I'll try and get an X ray and put with that.
[00:03:21] Speaker B: Yeah. Anyway, right. I. I believe our podcast last time was. Was pretty long, so.
[00:03:27] Speaker A: Yes, it was. Yeah. And a huge thanks again to Kaladali from Iberia for joining us.
A. And thank you to you as well, of course, Ed.
[00:03:37] Speaker B: Yes. For finding the website such insightful questions. Yes, thank you very much.
Yeah.
Right. What. What has been in the news this week? Robin, come on.
[00:03:48] Speaker A: Well, well, we are recording in the week of.
I'm not sure I'd call it a bombshell announcement, but a surprise announcement unless that Kevin Mulally stepped down as chief executive of the General Commercial Gaming Regulatory Authority, which is of course the gambling regulator in the uae. He's going to. Please.
[00:04:08] Speaker B: Question, question.
[00:04:09] Speaker A: Okay.
[00:04:10] Speaker B: IGB talk a lot about the UAE licensing and stuff. Should people actually care that much?
[00:04:16] Speaker A: I think it's very interesting for first of all, in the initial stages for that land based market, look, there's the potential to have one license per emirate. Some of the Emirates are a bit more conservative. They won't go in for it.
[00:04:32] Speaker B: Okay. Realistically, in the medium term, there's going to be one casino. Yeah. Which Wynn are doing. Is that right?
[00:04:39] Speaker A: Yeah, Wynn on Marshan island that will open in 2027. There's scope for developments in Dubai, there's scope for developments in Abu Dhabi. And you're looking at a market and Win's projections on around, you know, 3 to 5 billion at maturity.
Okay, so that land based sector.
[00:04:59] Speaker B: Okay, so.
[00:05:00] Speaker A: So Win's got that high value audience.
[00:05:02] Speaker B: Okay, so Win's got that. Where there's going to be rich people gambling. That's fine. VIP market. That's name lottery.
Are people going to be allowed to do it and people actually want to do it?
[00:05:12] Speaker A: People are doing it. So if you read igamingbusiness.com and if you've read it for a few years, so it's www.igamingbusiness. you know, to spell them.
[00:05:26] Speaker B: I spell E Y E Because it never seems to work. It says the website doesn't work.
[00:05:30] Speaker A: No, it's spelled A Y E.
Scottish.
[00:05:34] Speaker B: Got it. Okay. Yeah, yeah.
[00:05:36] Speaker A: So if you read that, you'd actually see that the lottery license was awarded to a company called Momentum llc.
And sales for tickets for the UAE lottery, as it is known, went online in December last year. And actually in October, the first ever winner of like the absolute top prize, which I think was something like 100 million dirhams, was announced. So someone's won the top prize.
So people are actually doing it.
[00:06:11] Speaker B: So 100. That's $27 million.
[00:06:14] Speaker A: Okay. Yeah.
[00:06:16] Speaker B: All right. So the surprise. So this guy stepped down as head of the regulator.
[00:06:19] Speaker A: Yeah, Well, I mean, that's quite an interesting thing because obviously there's still a lot to do and there's still a lot to come from that market. For example, online casino and online sports betting licenses, we've seen a number of online suppliers license, but we haven't seen any operators certified.
[00:06:40] Speaker B: But there's still debate about, isn't it about whether if you get a license, there's going to be what, one license per emirate? Yeah. And whether you're allowed to then just do it in your own emirate or whether you're allowed to do cross border. Because, for instance, if Dubai don't want something, then they're not going to let people say, oh, you're licensed in somewhere else and therefore you can just come and have our players use it. And then whether Emirates are going to be able to gamble or not, well.
[00:07:02] Speaker A: They are not in the real money gaming places. So that's going to be the casinos and online sports betting. Online casino. But if you look at that population breakdown, you're probably looking at 88% expats, roughly.
[00:07:18] Speaker B: I actually did some figures on this a while ago. I mean, if, if I, if I'd have known that we're actually going to be talking about the uae, then it probably would have.
Would have helped with the preparation. So I. Here we go. I'm glad I'm on my computer. I estimate the current online market is between 185 and 225 million US dollars.
[00:07:44] Speaker A: But that will be an offshore market currently.
[00:07:48] Speaker B: Yeah. And the market post regulation, if you allow advertising and multiple operators, could be 400 to $450 million. However, given the limited number of operators, I assume one or two initially, this is likely to be lower. So say kind of maybe halfway between 2. So 300. 350 million GGR and about 2/3 onshore. And I kind of estimated. And this is. I put best guess 50, 50. Sports side gaming may be a little more weighted to sports.
Yeah. And actually other people have. That's it. I saw one. Someone else gave me a figure. Big market potential, could be around a billion. But the serviceable market is going to be 15 to 45%. So about 150 to 450. So similar to my numbers. Yeah. Offshore currently 200. You know, if everything open could be up towards 500, it's probably going to be around 300, 350. Two thirds, I'm sure maybe. There you go. We've got data and I didn't even have to prepare it.
[00:08:39] Speaker A: Wow. We haven't had that for a few weeks.
[00:08:41] Speaker B: We haven't.
[00:08:42] Speaker A: No, no.
So what else has been going on?
[00:08:47] Speaker B: I can give you some other data if you want.
[00:08:48] Speaker A: Yeah, I'd love a bit more data. I mean, what interesting things has H2 been tracking and analyzing and cogitating over? No one uses that word anymore.
[00:09:00] Speaker B: No, they don't.
I wouldn't even do that. So the most expensive pair of the row trousers are the straight leg leather pants at $6,900.
[00:09:14] Speaker A: So if either of the Olsen twins listen to the podcast, which I assume at least one of them does, Ed is very interested in a sample pair of these trousers. For review purposes, of course. You get a shout out on the podcast to an audience of slightly more than we thought.
[00:09:34] Speaker B: Yeah, damn right.
[00:09:35] Speaker A: Yeah, I mean it's.
[00:09:37] Speaker B: Yeah, it's been nice leather slash silk.
Sellvia's lambskin leather pant. It's nice to see. I mean this is going to upset some people, but it's nice to actually see some proper leather trousers rather than all this PVC fake leather stuff. I say as someone who. Who used to have a share in a tannery until it went bust. So I'm very pro.
Pro leather.
Pro leather until it went past for the second time. I should clarify the first time that's when I helped Biden administration.
[00:10:06] Speaker A: But anyway, the powerful leather lobby.
[00:10:10] Speaker B: No, well, I mean, look, it's the. The hide or a byproduct of, you know, the, the meat industry and therefore it's a shame to all go to waste. Instead. You think that by creating more plastic that's a better thing.
[00:10:21] Speaker A: No. Really? Yeah. All right.
Wow. I mean we are just tail spinning into different diversions. I do actually agree with you. I think if people are going to consume animal products, people should maximize the use out of them. You know, I think the way that we consume a lot of these things is far too selective. You know, it's like having, you know, kind of a pipe ground in kitchens. Very big believer in, you know, the Fergus Henderson nose to tail thing. Because St. John is the best restaurant in London and possibly the world.
[00:10:56] Speaker B: Another stat going away from expensive leather trousers.
[00:10:59] Speaker A: Is it on gambling?
[00:11:02] Speaker B: The cheapest price of trousers are $650 at some filled slit front skinny pants. Anyway, gambling. Now I'm going to save the, the date for the gambling for when we talk about what we were going to talk about last week before. Week before, yeah.
[00:11:17] Speaker A: So basically two. It's taken us two weeks to get to talking about OPAP and Uganda. And I'm sure there was something else that I sent to you and said I want to talk about it in this week. Oh, you did?
[00:11:30] Speaker B: Yeah, yeah, I sent.
[00:11:31] Speaker A: Me.
[00:11:31] Speaker B: I sent email about it myself. That's the, the Malta case with kindred about people being able to.
Mr. Green. Mr. Green.
[00:11:42] Speaker A: Mr. Green. Yeah. So that's an interesting one. It's kind of known as Bill 55 and essentially what it says is provided the activity is licensed in Malta, you're insulated from prosecution, you know, for, you know, if it's not legal in other markets.
[00:12:00] Speaker B: Well, yeah, there's two bits to it. There's one. Yeah. So insulated from prosecut prosecution that you're, you're gonna find, which the big issue there is that it's effectively going against the whole European courts and European law. And the second bit was then the player who wanted to. There's prosecution of doing it, but also players wanting to reclaim losses because they said it's illegal. And then this came around because they said, well, actually we want you to freeze some of their assets and bank accounts so that we can get the losses. And Walter is saying no.
So do you have anything to say on that? Because I wrote something.
[00:12:34] Speaker A: You wrote something. You have a prepared statement to read out on this?
I kind of want to hear the statement.
[00:12:42] Speaker B: Well, it's less a statement, but the.
[00:12:47] Speaker A: Could you read it out in the style of a Premier League chairman who's just fired their manager under acrimonious circumstances?
[00:12:55] Speaker B: What part of say he's northern, is.
[00:12:59] Speaker A: He going to be northern?
[00:13:00] Speaker B: All right, listen up, listen up. Look, we, There's a bit of disharmony in the dress room, but we want to say thanks to Frank. He's put a lot into the club.
You know, it was a, it was a mutual agreement of parting ways. I think we both know that it was time and we're looking forward to a new chapter. And I'd like to thank Dave for stepping in, you know, as interim manager to prepare the team and you know, we look into the future. But thanks again for all of Frank's hard work. You know, as a club, we're going to pull together in these difficult times and try and get the points to get us up the table.
Any questions? Speak to. Speak to Jane. Thanks.
[00:13:34] Speaker A: I don't understand how any of that relates to Malta's Bill 55.
[00:13:38] Speaker B: Oh, I thought you were talking about.
Oh, okay. I was giving a. What would happen if I just sat the manager.
[00:13:44] Speaker A: No, no, I was saying read it in the style of a chairman who has just sacked their manager.
[00:13:49] Speaker B: Ah, I get it. I just need to try and understand what I've written. So the underlying dispute stems from cross border stuff and players being allowed to recover their losses. They've sued it. Players in Austria have sued in the courts to recover the losses.
[00:14:01] Speaker A: Malta said yeah, these live cases in Germany and Austria, I think the initial one was a. The insert case. It was a player called Sebat insert I'm pretty sure.
[00:14:13] Speaker B: And then the Maltese pass something that says we're allowed to freedom provide services which has been kind of completely just everyone's pretty much accepted that's not the case now when it comes to gambling and it's been proven, it's been ruled.
[00:14:27] Speaker A: On and they've said it's quite literally the European Commission under Barnier, I think it was briefly president of a. Not president prime minister of France a few years ago said that 2017 was it that the EU wouldn't be taking up infringement cases related to gambling because that was state issue.
[00:14:51] Speaker B: Yeah. And so yeah the European Court of Justice effectively said that you know it's. They can restrict freedom provide services if justified and proportionate etc. Malta said. So they tried to sue Maltese companies cover their losses. Malta said that declared foreign lawsuits against Maltese licensed companies inadmissible and bars Maltese courts from recognizing enforcing judgments.
What is like to happen next is the European Court of Justice will likely reaffirm national gambling controls can restrict freedom to provide services if justified. I. E. Each member state may impose its own licensing rules and Therefore Malta's Article 56 Gaming act probably breaches EU law.
It will probably the account preservation order so that they will freeze assets.
They may justify issuing it but that's a bit of a kind of you know the certain things Such as, you know, is there an urgent need and real risk.
But the broader implications is it's likely to reinforce member states power to regulate gambling in their own jurisdiction, strike down Malta's laws that undermine mutual enforcement and confirm EU debt recovery tools must be interpreted robustly to ensure effective judicial protection across border I. E. Potentially they could go ahead and say, yeah, you know, we can freeze assets to recover losses. Now I, I have an issue here personally is that I disagree with all the mold stuff. I don't believe that cross license, I mean EU law says cross licensing, you know, isn't jurisdiction, isn't there? So people who are operating in Austria without an Austrian license are according to most people's, most member states belief and the other thing, operating illegally. Okay. The fact you're in Malta doesn't matter. That is same for me, you know, but for most people believe that's true. Okay, yeah, I also do.
But so you know, if someone wants to come after them and say, you know, find them for operating illegally and stuff like that, then I think that is, you know, one of the risk you take of operating markets. We're not locally licensed. However, for a player to gamble with someone, lose money and then say, oh, they don't have a license, I want my money back. I mean you kind of know what you're doing and if you don't, you should learn to check the site and if it was a license site, you wouldn't your money back. So the fact these guys aren't licensed doesn't matter. As far as I'm concerned, you have entered a contract. You would expect to be paid if you won. If you lost, you shouldn't try and get your money back. Suck it up.
[00:17:18] Speaker A: Well, this is it. There's no talk about players reimbursing operators for amounts A1 during that period.
[00:17:24] Speaker B: No, no. So I just think this guy's, I don't say an idiot, that's wrong. But I think he's just, he's just, you know, suck it up. You decided to gamble, you did a contract with someone, you spun or you placed a better wage on a thing. That's fine. Speaking actually of which, on an unrelated, on a very related note, but slightly unrelated, what really got me, did you hear about that Coinbase, the Coinbase CEO on their conference call? That is absolutely appalling. I mean that is pretty, I don't know exactly if it legally is, but that pretty much thinks of and admitting market manipulation. And as someone who runs a, an exchange like Coinbase Exchange, I think it's Moronic. I cannot believe he actually said that on the call. I would be absolute livid. Guys have lost thousands of pounds because he literally went, you know, the bet on me saying the word web3. So I'm going to say on this call because, like, that guy should be heavily, heavily sanctions.
[00:18:13] Speaker A: Yeah, it's. It's the equivalent of Wayne Shaw eating a pie in the bench.
[00:18:19] Speaker B: I was about to say that.
[00:18:20] Speaker A: Yeah, it is literally Wayne Shaw, but in a situation where.
[00:18:25] Speaker B: Explain that for people who, who aren't familiar with non League FA cup or whatever it was.
[00:18:32] Speaker A: I think it was against Arsenal, I'm pretty sure it was quite a big team. So essentially there was a keeper for a non league team progressed through the FA cup rounds to play against Arsenal, who are, of course a Premier League team. Now their reserve goalie, Wayne Shaw, and.
[00:18:49] Speaker B: Therefore this was being televised. And it's quite a big game of like underdog. So, like, there's a lot of media on it.
[00:18:54] Speaker A: Yeah, like big kind of mismatch. But their reserve goalkeeper, Wayne Shaw was quite a husky gentleman and I think it was Sunbets. There was jokey Market Willie, you know, eat a pie during the game.
He saw it, thought it was funny and sat on the bench eating a pie. A few people won a bit of money. He said it was all a bit of fun. That is, let's face it, it's essentially spot fixing. Obviously, a lot of scrutiny, disciplinary action probably, you know, probably really made this guy's life a misery, you know, when. Without any. Without any real malice in it, let's be honest.
[00:19:33] Speaker B: Well, then he kind of told some friends he was going to do it, didn't he? And they were money. So I suppose, you know.
[00:19:38] Speaker A: Yeah, there's. There's that kind of integr. Integrity angle as well.
[00:19:41] Speaker B: And that's similar, which is same as. Same as this one. Like, as far as I'm concerned, that guy should be fine, heavily reprimanded and face some form of punishment. And the fact what gets me more is if I would, if I'm an analyst of that company or an investor, knowing the guy who's running it, is that stupid to kind of say that on a conference call and think it's all funny? Like, talk about a huge misjudgment. I wouldn't want. I wouldn't want someone running my company who had that kind of misjudgment.
I mean, it's, it's just ridiculous.
[00:20:11] Speaker A: Well, we don't want to call him.
Well, we have already called him stupid, I suppose, but Yeah, I mean it is.
[00:20:17] Speaker B: He's not stupid necessarily. He just did a very stupid thing in my opinion.
[00:20:22] Speaker A: Actions were misguided.
Right. Should we actually talk about what.
[00:20:28] Speaker B: No, no, because I think there's a. There's another. There's another. An element to this of okay, what happened. There's a guy eating a pie who then, because it was gambling, a regulated thing, there were then issues and you know, people making an integrity ET.
Now, will anything come back from this? Because it was on. Was on polymarket.
[00:20:43] Speaker A: Yeah, polymarket. So it was on the prediction market.
[00:20:46] Speaker B: And so is anything. Can anything actually be done from this? And is this then go around the bit what we're talking about a bit with Khalid last week.
But the general thing of is there any integrity protections and stuff around these prediction markets and is this just highlighting the massive issue there is with prediction markets that you don't have these same rules. Forget about the fact that states may not want, you know, California doesn't want online sports betting and the tribes don't want them to have online sports betting and therefore it goes against tribal sovereignty.
[00:21:18] Speaker A: A bit more annuance than that.
[00:21:19] Speaker B: Yeah, but, but you know, you can't, you can't operate in online sports betting in California. Okay. So suddenly that get. That goes. Just breaks through all of that state sovereignty, even states where you can legally wager, there's just. There's just no protection from these prediction markets. Like I think if this had happened on a Fangil or a DraftKings or other sites available, you know, then there probably would have been more comeback because he's effectively saying, you know, he is. He is manipulating that market. Now he may not have done it for anyone's particular financial game, may have just manipulated it because he thought it was funny, but he still manipulated the market.
[00:21:59] Speaker A: Well, well, yeah. I mean this is worrying thing about these prediction markets.
You don't feel they are fully formed, but they're allowed to grow with impunity.
And it's. I mean, let's face it, this goes back to that meme stock thing, you know, where a load of people on Robinhood, you know, send. I think. What was it called? Was it game GameStop. I think with a shop that sold video games, loads and loads of people bought the stock. Their stock price absolutely skyrocketed.
And this I. And it was just almost as a jokey thing, this kind of meme stop thing. Meme stock. Sorry. And a lot of people made a lot of money out of that.
And it's really, it's that same attitude that where on one level you have some of the companies talking about these as financial instruments and therefore legitimate, carefully regulated. But then you see someone doing that on a call and then kind of talking about it as if this is a funny thing.
[00:23:13] Speaker B: And Coinbase's response. So a company spokesman. Spokesperson, sorry, can't say spokesman. Stated the comments were made in a light hearted, offhand way. Unconfirmed internal controls prohibit employees from participating in prediction markets related to the company.
[00:23:27] Speaker A: Like.
[00:23:30] Speaker B: You can probably tell. It makes me angry.
[00:23:32] Speaker A: Yeah, I mean it makes me angry because sports betting is a highly regulated, highly taxed, highly controlled industry.
And then you have this level of disruption and it's being treated as a bit of a joke. It's just, it's bad for the industry.
And they are part of this industry, whether they want to call themselves, they want to say, oh no, we're not gambling. You seem to be using a lot of the same mechanics and the same markets to do it.
[00:24:01] Speaker B: Yeah, okay, fine, it wasn't a sports betting thing. But how can you say this isn't like a share price going up or the price of oil? And we can argue back and forth about whether investing in the stock market is gambling or not.
[00:24:12] Speaker A: There's a lot of things where it's the same kind of thing.
[00:24:16] Speaker B: You're essentially say a word on an outcome. Yeah. Is someone going to say a word during a conference call? Is that's just gambling? Like the fact it's on sports or not doesn't make a difference. And he's manipulated, you know, he's manipulated it.
[00:24:28] Speaker A: He's been sure. He's been sure, but he doesn't get a pie. No.
[00:24:33] Speaker B: Anyway, so. And the fact that they think it's fine is just even more outrageous.
[00:24:38] Speaker A: But anyway, shocking. Right.
[00:24:40] Speaker B: Should we quickly talk about OPAP and Uganda?
[00:24:42] Speaker A: Yeah, let's rush through the thing we spent two weeks talking about as if we've.
We built it up and now we're just going to quickly dash it out. So do you want to start with OPAP or.
[00:24:52] Speaker B: I'll start with Uganda. Okay, so Uganda. Go on, you start.
[00:24:56] Speaker A: All right, so Uganda, the one thing that jumped out at me and if I'm remembering this right and actually did double check this against some H2 information. So it better be right around 2019 because I remember it was pre Covid they, I think the president said that none of the existing licenses open license market, none of the existing licenses would have certifications renewed. And essentially what that would mean, according to the finance minister, I think it was, was Uganda would essentially transition to a monopoly for sports betting. Did that actually come to pass?
[00:25:38] Speaker B: No. What's happened? They haven't taken that back per se, but the regulators continue to license and renew operators, I think even as recently as last month. So it's still an active betting market.
In terms of online market size, we estimated around US$300 million GGR, 75% to 80% onshore, about 85% of that sports and there were about 30 onshore operators. And at the moment there's also lottery and land based gaming. Cool, that was good.
[00:26:14] Speaker A: What about taxation? What's the tax rate look like?
[00:26:17] Speaker B: Oh man.
The tax rate for online in Uganda.
Let's hope we go. So the effective tax rates about 28% of GGR, but there's a 24% GGR tax. But there's also a withholding tax that tends to be covered by the operators. And that's where it starts to get complicated and makes it a bit less attractive.
And we go back to the whole customer based taxation rather than operator based. I think because it's quite low withholding tax. What tends to happen a bit is that some of the operators just kind of COVID it and suck it up. But that'll depend on the individual operator or if you know, like in many African countries, whether all the operators actually pay all the tax anyway. But in theory, they're the taxes.
Right. Opap.
[00:27:08] Speaker A: Opap. So OPAP was essentially acquired outright by Alwyn. So another M and A deal. How do you feel about M and A this weekend?
[00:27:19] Speaker B: Look, as soon as M and A happens in the industry, there's all this thing of oh, that's amazing. It's transformational. Chances are it's not okay to me. And I think what Albin have created, you know, over the past few years is fantastic and they are a big force to be reckoned with in the sector. But this particular deal literally couldn't give a crap. Like it's pretty much irrelevant.
It's good for opap. It's good for opap.
[00:27:43] Speaker A: It's. It's more of shareholders. Yeah, it's more kind of almost administrative M and A, you know, like OPAP's results were still reported as part of all WINS quarterlies as well as, you know, alongside their own, you know, release.
So it feels more just like taking it, taking it fully in house.
[00:28:07] Speaker B: Okay, okay.
So what changes? Okay, in terms of the impact for OPAP investors?
I think it's good because they're getting shares in the combined entity, which means they have access to higher growth markets. And not just reliant on OPAP in Greece, which has done very well in fairness since all win invest in it, it's done well. But there is a certain top that it's going to reach. So for OPAP investors, good, okay.
For analysts like me, good. Because we get more. They report us some Patano data which we didn't have before. So we got some more data out of this. That's more visibility in the market. So I'm happy. Why do I think they did it? To be honest, it's a quick and easy way of getting listed. They have now can, you know, for the owners of of of Allwin, they are now going to be a listed company. So you know, a bit like when you had SPACs and stu. You can argue why they on the Athens exchange. Well, you know, there's opap, there's Novi Bet. They can always change but you know, it makes them a listed company. So that's the story for them. They become a list of company. In terms of some of the shit that was written about like, oh, this is going to be, you know, shows be transformational for the sector.
[00:29:14] Speaker A: No way.
[00:29:15] Speaker B: It makes no difference. Like some of the stuff you always read all this hype about it and you know, oh, is this now the next bit into making it a true global powerhouse?
[00:29:24] Speaker A: And it's like, I mean it's already a global powerhouse.
[00:29:26] Speaker B: Yeah, it literally is.
It is a nothing story. Apart from the fact it makes Alwyn become a public company.
[00:29:35] Speaker A: I wouldn't say it's a nothing story.
I think there are ripple effects and interesting things that you want people are going to be looking at off the back of this because obviously you think about the stake in Botano that you would think, well, maybe a few years ago you would have thought that they'd look to acquire Botano outright. That's a big business now. Would Botano want to be part of this big conglomerate? I mean like the thing about Alwyn is you can obviously see, you know, excellent operational nous. They've done a lot of things really well. They've got very complex business and they've made it work. You know, there are very, very talented and very smart people across that business.
I think with the UK and the national lottery, they may be being a little bit slow, but I don't think anyone could do such a big transformation program, you know, without hiccups because it is a big transformation program for the.
[00:30:34] Speaker B: I agree with all of that. I think the Botano point's interesting. I agree with the uk, I Agree with everything you say. I don't see how them buying the remaining 48 of OPAP makes any difference to those questions. They didn't need to buy it to do what they've done in the uk. They didn't need to buy it for Botano to show the strong growth and how well it's done.
[00:30:51] Speaker A: Stop getting fixated in the headline. Like the headline. Yes. They bought this thing.
[00:30:55] Speaker B: Well, that's the thing we can talk about and that's fine, but the deal itself is largely irrelevant. The only relevance I think it gives is it probably gives them more ability to raise funds for future M and A. No, it's not.
[00:31:08] Speaker A: It's interesting that. That. That is interesting. Like the headline. Yeah, the headlines, whatever. You know, it's more the ripple effects out of these things that people are interested in. But I think it's also. It's worth talking about OPAP as a business, because when I started in the industry, it felt a bit chaotic as a company. It felt like it was struggling. It felt like it was not doing quite as well as it should have done as a massive, you know, essentially as a, you know, as, you know, a kind of like fairly expansive monopoly holder.
And it feels like over the past 10, 15 years, there has been a big turnaround, hasn't there?
[00:31:49] Speaker B: Yeah, it was actually the first company I was given to look at back in 2007 as a wee analyst when Andy Lee.
Andy Lee was my boss and he.
[00:31:59] Speaker A: Was like, yeah, incredible industry legend.
[00:32:02] Speaker B: We should get him on to talk about Africa.
[00:32:04] Speaker A: Yeah, we should, yeah. Yeah.
[00:32:06] Speaker B: Anyway, we've already moved on from that, so, yeah, look, OPAP's done very well, but as you say, there is a, you know, there is a limit to, you know, being Cypriotous and Greek focused. Yeah, let's talk about shareholders.
[00:32:21] Speaker A: Yeah, let's talk about the, like, the latest results. So what would that have been? Q3 or HR?
[00:32:29] Speaker B: Yeah.
[00:32:30] Speaker A: I'd quite like you to bring out some data, actually. Do you have any of that?
[00:32:34] Speaker B: I was just giving angry opinions. I thought we'd moved away from data.
[00:32:37] Speaker A: No, no, no. We need to keep data in there.
[00:32:40] Speaker B: Okay. I gave you lots of data on the Olsen twins clothing.
[00:32:44] Speaker A: I know. I mean, we need, we need to stop going back to the Olsen twins. I think it sounds a little creepy now, doesn't it?
[00:32:50] Speaker B: Yeah, does the way you talk about it. Right. OPAP. Oh, Q2 is the latest. So Q2, 25 GGR increased by 4.7% year on year to $558 million.
[00:33:03] Speaker A: And so what's the breakdown of that?
[00:33:04] Speaker B: Well, there's strong online growth and solid retail performance.
[00:33:09] Speaker A: Okay. Want to share any more data behind that?
[00:33:12] Speaker B: I'll get my financial model open here. It's quarterly data right to 558 lottery of 181 million of GGR that was up 2% year on year and represented 32% of revenues. I think 17832 of revenues as well was down 2% year on year. VLTs World Cup.
[00:33:33] Speaker A: No World cup or major tournament.
[00:33:34] Speaker B: BLT is 80s and I think there's been probably a bit of weakness in the margins as well. Is up 7% year on year and 15 of revenues at 86 million. Instants and passives. Also a paper 5% of revenues at 27 million. And online casino is 15 of revenues at 86 million and that is up 24 year on year. And if we look at the growth rates from Q2 22, it's up 31, 29, 32, 37, 13, 26, 29, 2048, 21, 2024. So as you can see, online casino has been a big driver for them. Has doubled since in the last three years.
[00:34:18] Speaker A: Well, well, it's obviously really exciting that they've been that Alwyn have acquired that remaining a 40, 48% stake.
[00:34:25] Speaker B: I mean I hardly slept when I heard the news.
[00:34:28] Speaker A: Yeah.
[00:34:29] Speaker B: I mean in terms of retail. Yeah, retail's done fine as well.
Retail was 377 million online. 181. Online lottery is still actually very tiny if you want some facts.
[00:34:41] Speaker A: It's. It's very. It feels like in person product. You know, it's very much around the kiosks, stuff like that.
[00:34:49] Speaker B: It's 5% of lottery revenues. 9 million out of 181. 48 of that's online now. But they've got, they've got the. They have stoics, don't they? In the shops? No, in the shops. And then there's stoics.
It's kind of online.
[00:35:05] Speaker A: So with. So just in that online lottery point, this is going to really annoy you.
How does that compare to something like fdj?
Because FDJ under, you know, Stefan Palais.
Incredible tenure. Let's be honest.
A has are you.
[00:35:24] Speaker B: Well, is there some poly market thing where you're just name dropping people and then saying like incredible and things?
[00:35:29] Speaker A: No.
[00:35:30] Speaker B: All these superlatives. Everyone's amazing to you today. You must be in a good mood in your dungeon.
[00:35:35] Speaker A: Yeah, I'm in good mood in my new basement spare room slash office. No, I.
What I'm asking is under Stefan Pally one of the big tent poles. Let's call it of her strategy has been a big digital transformation push tentpole.
[00:35:54] Speaker B: Oh tentpole.
[00:35:55] Speaker A: You know like a tent pole. Like tentpole release or something like that.
What would you call it if not tentpole?
All right, one of the pillars. Let's go, let's go. Something quite Greek.
[00:36:06] Speaker B: Pillars.
[00:36:07] Speaker A: Yeah, yeah, pillars. One of the pillars of her strategy has been to grow FDJ's online presence. So I'd be really interested to get an idea of what FDJ's online to retail split for lottery is just as a point of comparison.
[00:36:24] Speaker B: I mean Q2 25 as well just to make it.
[00:36:26] Speaker A: Yeah.
[00:36:27] Speaker B: Light flight. Yeah. 231 million of GGR of 1.5. So 15.
[00:36:32] Speaker A: Okay, so it's not, it's not massively.
[00:36:35] Speaker B: Well I mean it's more 4.7 versus 15. I mean it's yeah, more than.
[00:36:39] Speaker A: Yeah more than OPAP. But it's still, it's still very much in the minority.
[00:36:43] Speaker B: It is. And but let's not forget that Greece as well a bit like Italy. So Italy's got a tiny. I mean it is much smaller than APAP in terms of center line. Yes.
You know it's. And I mean there's pretty much none Salai on say whichever you want to call them pretty much doesn't have any in Spain.
I know that.
Not on say onse. Sorry the one for the blind charity. They do have online lottery ass don't really have anything or not much.
So they are kind of. If you're looking at Spain, Italy, Greece, I'd put them all together. It's kind of still quite cash based economies whereas France has probably moved away from that a bit more. I mean it's not the kind of 50% of the UK but no you know, or Nordics.
So arguably on that basis you could say that France is possibly underperforming Greece in that respect.
[00:37:40] Speaker A: That's an interesting and controversial point.
[00:37:42] Speaker B: Well, would you say that digital transformation generally digital spend in in France is much higher than it is in the other countries you mentioned or not? Is it not clear it's not closest to the uk? I mean I haven't been to France for a while so I don't really.
[00:37:56] Speaker A: Know but I'd imagine it's a good point. I mean I've not lived in France for almost 20 years which doesn't help.
No less than that.
Maybe about 15. About 15 just for I came into the gambling industry.
[00:38:12] Speaker B: We can cut. We can cut that bit out to save time anyway.
Maybe. Maybe cut out this whole bit because I don't know. But yeah, 15.
No keeping about the leather trousers. Right. Anything else you want to talk about? I think we kind of done that. We spent more time talking about Coinbase and Poly market it, which we weren't meant to. Well, you wanted some data. Right.
[00:38:32] Speaker A: We should look forward next week.
[00:38:34] Speaker B: So, random country generator. Oh, France. Do you want that? We've just kind of talked about FDJ and we've.
[00:38:39] Speaker A: We've done France already when we went. Remember when we did.
[00:38:42] Speaker B: Oh, yeah, because you've been on holiday there. Yeah. We talked about casinos, South Korea.
I think we've done that, haven't we?
[00:38:51] Speaker A: I think we might have done.
[00:38:52] Speaker B: Well, it's just because it says kimchi as the food.
[00:38:55] Speaker A: Yeah, no, no, we did talk. Talk about that.
[00:38:56] Speaker B: Unless kimchi is also the food of another market.
[00:38:59] Speaker A: No, no, no, because I talked about that Korean restaurant that I liked in Bristol. Dong Nai. Yeah.
[00:39:04] Speaker B: Marshall Islands. Oh, my God, Argentina.
[00:39:07] Speaker A: Yeah, I think we've talked about that in passing, but let's actually talk about it in depth.
[00:39:12] Speaker B: Okay.
Do we want to talk about a company or. Given that we kind of alternate between countries and companies each week, because we tend to talk about news flow and that gets us quite a long episode.
[00:39:22] Speaker A: Yeah, we have talked about news.
[00:39:24] Speaker B: We're a bit more opinionated on the current.
Current affairs. Or by the time this comes out, the current affairs fortnight before, we seem.
[00:39:32] Speaker A: To be angrier than usual, don't we?
[00:39:34] Speaker B: Someone did describe it as me just ranting.
[00:39:36] Speaker A: I mean, I think that's very fair.
[00:39:38] Speaker B: But at the same time, you know, it meant they had to listen to.
[00:39:41] Speaker A: Know that we've got another listener.
[00:39:43] Speaker B: So, you know, who's the winner there?
So I also had a game which is too late to play now, so we'll do it next week.
[00:39:52] Speaker A: Okay.
All right.
[00:39:54] Speaker B: Six weeks.
[00:39:55] Speaker A: Right, we'll talk. Okay.
Just haven't got around to it. Oh, well, it's almost like we should prepare or something.
[00:40:01] Speaker B: No, no, we've just been too busy.
[00:40:02] Speaker A: Talking about the important issues of the day that are affecting the industry.
[00:40:07] Speaker B: Yeah. Yes, Slash. Women's clothes, fashion brands.
[00:40:10] Speaker A: Yeah, yeah, yeah.
On that note, who.
[00:40:14] Speaker B: Who. On that note, who would you say the most famous person has been from that started on kids tv.
[00:40:23] Speaker A: And think of who actually started in kids tv. Did Jodie Foster count? She started out as. She was quite like a child actress and she's pretty big.
[00:40:32] Speaker B: No, but I'm talking about like, you know, on Disney or Nickelodeon stuff. Not a child actress. Not like Macaulay Tolkien or something.
[00:40:38] Speaker A: Oh, okay.
[00:40:40] Speaker B: It's like the Olsen twins are on there or the guys who are in Kenan and Kell. Oh, I've got one.
[00:40:45] Speaker A: Keenan.
[00:40:45] Speaker B: No, it's not. It's not long.
[00:40:48] Speaker A: Is the longest serving Saturday Night Live cast member, Keenan Thompson. From Keenan and Kell.
[00:40:54] Speaker B: Okay, cool. Well, not him.
[00:40:57] Speaker A: Well, I mean, let's face it. It's probably going to be someone like a Justin Timberlake.
[00:41:03] Speaker B: Yeah.
[00:41:05] Speaker A: Not Ryan Reynolds, the other one.
[00:41:06] Speaker B: Ryan Gosling.
[00:41:07] Speaker A: Ryan's Ryan Gosling.
[00:41:09] Speaker B: I don't know. What was he on?
[00:41:10] Speaker A: He was in one of the kids TV things. He was in, like Disney Kids or something thing.
[00:41:14] Speaker B: Because we obviously got Will Smith, who's in Fresh Prince of Bel Air, but he wouldn't count because he was just in a TV program. So. Yeah, you got the Olson twins.
[00:41:21] Speaker A: He was already a recording artist before that was.
[00:41:26] Speaker B: Yeah, Justin Timberlake was on the kind of Disney one. Was he on Nickel? Was he. Was Jessica Biel there as well? If I just made that up because they're married. I think married someone.
See, I wasn't sure about that. It's Britney Spears.
[00:41:38] Speaker A: Christina Gosling.
I. I really don't know. I. I didn't grow up in America, so I didn't.
[00:41:46] Speaker B: I'm really glad we cut short. Short our gambling and, you know, chat to discuss this.
[00:41:52] Speaker A: I mean, I was thinking from the UK side, so I was thinking. I was thinking, I don't know, Fern Cotton.
So, okay.
[00:41:59] Speaker B: Hillary Duff.
[00:42:01] Speaker A: Okay, there's that woman with the ponytail. She was in the film with the witches.
[00:42:06] Speaker B: That's it. Selena Gomez, Miley Cyrus, Zach, everyone. Demi Lovato, Zendaya, whoever that is. I'd say Mighty Silas.
[00:42:14] Speaker A: I actually know who's in.
She was in a program that was semi disturbing called Euphoria.
[00:42:21] Speaker B: She's known for her role on Shake it up, apparently, and achieved massive success as an actress. Jonas Brothers.
[00:42:27] Speaker A: Yeah. Well, there's. I know them from the south park episode about band.
[00:42:31] Speaker B: They're gonna start with Disney.
I would say Miley. I mean, Selena Gomez is pretty one of them. I would say Miley Cyrus.
[00:42:38] Speaker A: Who's the one with the ponytail? Is that Selena Gomez?
I think she's a singer, but she's in the film about witches.
[00:42:45] Speaker B: Stars in Wizards of Waverly Place.
Yeah.
[00:42:49] Speaker A: Maybe it is her then.
[00:42:49] Speaker B: And has a successful.
I'm sure when she ties her hair back, she does.
[00:42:53] Speaker A: It's like this. This person's famous for having a ponytail or something.
[00:42:56] Speaker B: I'm pretty sure. Selena Gomez isn't famous for having a ponytail. In fact, when she was on Disney, she didn't have a ponytail. In fact, all the images I'm looking, she doesn't want to have a ponytail.
[00:43:06] Speaker A: Oh, well, it must be someone else and. But we should stop talking about, oh.
[00:43:12] Speaker B: I think she has a ponytail in this YouTube. Yeah.
When she was like, this is upload in 2014. I mean, she looks about six.
[00:43:24] Speaker A: I think that's a good point to end the podcast.
So, everyone, thank you very much.
[00:43:30] Speaker B: I actually think a good point to end the podcast would have been 15 minutes ago.
[00:43:33] Speaker A: I think it. I don't know. I meant to end the podcast entirely.
[00:43:37] Speaker B: Yeah, me too.
[00:43:39] Speaker A: And take it offline and never do another.
[00:43:41] Speaker B: Oh, no, no, not that.
[00:43:43] Speaker A: It's just fun.
[00:43:43] Speaker B: We haven't got merchandise done yet.
[00:43:45] Speaker A: I mean, I'm not sure people will be buying the merchandise of. I'm probably gonna cut a lot of this and just pretend that we didn't talk.
[00:43:51] Speaker B: No, just leave it in. It's gold. You're too busy, apparently, to do editing. Leave it all in. I don't know why you bother editing it anyway. It's all gold.
It's a waste of your time.
[00:44:00] Speaker A: On that note, thank you very much for listening. Next week we will be talking about.
What will we be talking about, Ed?
[00:44:09] Speaker B: Argentina.
[00:44:11] Speaker A: Yes, we will.
[00:44:13] Speaker B: We haven't talked about any sports this week, so we'll probably chuck something on that.
We'll probably find some relevant news flow of someone doing something stupid that upsets.
[00:44:23] Speaker A: Me and all you needed to say with Argentina, and we can fill in the rest later. Okay? Okay. So on that note, thank you for listening and we'll see you in the next one.
