Episode Transcript
[00:00:10] Speaker A: Hello, everybody. Welcome back to Right to the Source. My name is Robin Harrison and as ever, I'm joined by the rigs to my mirto, Mr. Ed Birkin. Ed, how are you on this fine day?
[00:00:25] Speaker B: I am very well, thank you, Robin. A good, classic pairing.
Am I Riggs or Murtar?
[00:00:33] Speaker A: I gave you Riggs.
[00:00:35] Speaker B: Riggs. Okay. I like that he's the one that, you know, everyone prefers the Maverick.
[00:00:44] Speaker A: Slightly problematic.
[00:00:46] Speaker B: Yeah, I mean, he does have his fair share of problems.
Some call him slightly egotistical.
Chicks dig him. Can you say that in the 21st century? Probably can. Don't know. I mean, given. Given I get bleeped out for saying the word, then that's probably gonna get bleeped out anyway.
But yeah, no, I can. I can take that. Which was your favorite one?
[00:01:08] Speaker A: A. Probably two.
[00:01:11] Speaker B: Okay.
[00:01:12] Speaker A: I thought it was the best one.
[00:01:14] Speaker B: Is that the one when you sat on the toilet?
[00:01:17] Speaker A: A. I think that was that one where R is hitting with the bomb.
I think that might have been. Was that three?
[00:01:26] Speaker B: I don't know.
[00:01:28] Speaker A: And also, we've managed to. In fact, let's not say what we're talking about because we're not offering people a life raft of naming the franchise. So if they don't know the characters, this is going to mean nothing to them.
Let's leave it like that.
[00:01:43] Speaker B: Sounds good. And also you say ever present. But to be honest, we seem to be doing this about once every two weeks because you're complaining that your day job takes up too much time, as if you've even prepped for this, as if it takes more than 40 minutes of your life.
[00:01:57] Speaker A: I'm not complaining that my day job takes up too, too much of my time because.
Right. So let's think about last week.
Where were you?
[00:02:08] Speaker B: I've seen Thursday afternoon and Friday I was around.
Monday I was in Latvia giving a presentation to the new regulator.
Tuesday I was in Amsterdam meeting a very important person.
And Wednesday I was in Poland at the European Economic Congress. Congress, exactly.
[00:02:28] Speaker A: So. So if you're. If you're spawning about Thursday, Friday I was around.
[00:02:32] Speaker B: I just can't help that H2 is in demand to give the, you know, best market intelligence view to regulators and governments.
[00:02:45] Speaker A: So I kept my Monday free, my Tuesday free, my Wednesday free. The week the, the meeting piled up had piled up because I was keeping all those days free. Oh, you're off Galaxy.
[00:03:00] Speaker B: Different words. And see what the line is for your new producer.
[00:03:04] Speaker A: Bleep me out while you're off interrailing.
[00:03:09] Speaker B: I wish Ryanair and Lot airlines. Anyway, lots to talk about.
[00:03:14] Speaker A: Last so much to talk.
[00:03:15] Speaker B: One talks about prediction markets and. Yep.
[00:03:18] Speaker A: And before this I obviously said, let's not talk about prediction markets.
[00:03:24] Speaker B: I know, but since that came out and since you actually. Yeah, time you'd got round to. To publishing my article on it and reports at the same time, Brazil had banned them. Not ban them, just said, if you want to do sports betting, you need to get a sports betting license, otherwise you're an illegal sports betting operator.
[00:03:41] Speaker A: No, that happened. That happened on Friday. That happened on Friday because.
So I get a call a. From our editor at large in Brazil, Gildo Massa, who's absolutely phenomenal. Or call her a text, whatever.
[00:04:00] Speaker B: Romance is ridiculous saying that.
[00:04:04] Speaker A: What were we saying? He was saying, yep, this press conference has been called on sports betting. So you think, shit, considering all the saber rattling, yes, it is probably electioneering by Lula.
But you do think, oh, God, why are they calling a press conference on it? Especially with I think the Minister of Finance and the equivalent of their kind of presidential Chief of staff.
Do you think it's going to be something quite big?
And then obviously they're talking about Mercados provisois. I think the phrase is a lot of the. The. The press conference was in Portuguese, so Gildo is obviously following.
And then in WhatsApp, in my mediocre Portuguese. Did he just say this? Did he just say this at one point, actually, and probably the best Portuguese I used was, this must be like watching TV with a child that won't shut up.
[00:05:09] Speaker B: While you two were watching this, I already knew about it and had already posted on LinkedIn. Much to your displeasure.
[00:05:15] Speaker A: Yes. So we put together the story and I'll go into it a bit more because I think you could have glossed over some of the important points.
[00:05:22] Speaker B: I don't think people need to know this much detail about you writing a story with your new best friend.
[00:05:27] Speaker A: Well, we worked hard, we got it out, sat back and then a click on LinkedIn and then, oh, God, Ed just put out a half hour's tweet on it.
But essentially what has been done is there's been a resolution from the National Monetary Council of Brazil which has basically said these are applicable subjects for derivative markets. And of course it doesn't include anything about the weather, entertainment, sports, whatever else. They were very careful in just taking all the stuff that essentially has brought these markets into that retail environment.
It's a good way of doing it. It's not running the rule over saying, are these markets permitted or not? It's just narrowing the scope of what they can do effectively
[00:06:20] Speaker B: what a derivative contract is designed for rather than turning it into just sports book or little, you know, playground to do novelty bets on what person's going to sing what song whenever. So you know, and it just, I think it takes away the argument that these markets are going to be worth trillion in volume and 10 billion opportunity and quite frankly it's going to make the US operators who are doing this look quite foolish at some point.
[00:06:47] Speaker A: Well, when there's a guy in France who wins a pretty chunky bet on temperatures by standing by the temperature sensor with a hair dryer.
[00:06:59] Speaker B: Yes. No, I did see that. Yeah, that's so yeah. Charles de Gaulle Airport, they, the guy bet that the temperature in Paris was going to be above a certain amount and then just, just tampered with the sensor just to win it. I mean it is just nuts.
[00:07:14] Speaker A: Yeah, it's. Yeah.
[00:07:17] Speaker B: Well look, talking and let's move on from prediction markets but a little segue talking about manipulation.
[00:07:25] Speaker A: Manipulation.
[00:07:26] Speaker B: Okay, well putting a hairdryer on a thermometer is manipulation of temperature. Yeah, yeah, yeah.
[00:07:33] Speaker A: But I'm interested in the segue. Where are you going?
[00:07:35] Speaker B: Well, I know it's, it's kind of going back a bit but the, you know, the NCAA is it president effectively wrote asking prediction markets to stop accepting bets on, on, on college players given that, you know, the federal prosecutors unsealed this point shaving indictment earlier in the year. And again, yeah, just the fact that like to be honest, I believe that college sports should be allowed to be wagered on by legal operators because the significant majority of integrity things are actually picked up. Well, they're all picked up by legal operators because legal operators don't report them. But most of the activity is with illegal operators so banning them doesn't work.
But again with prediction markets there's none of the integrity stuff. So, so they won't get picked up.
And you know, I think the US is in a difficult position here. DraftKings effectively came out and said we don't think any state regulator will be putting up taxes or should put up taxes in the current environment because if they do, we'll effectively just operate with the prediction market, not pay them anything. And I mean that is pretty, it's not cream ballsy and that's what I think is going to come back and get them. Then the CTFC's now sued Arizona. Anyway, we're not talking about prediction markets but.
[00:08:58] Speaker A: No, no, no, you said let's move on from prediction markets.
[00:09:01] Speaker B: Yeah.
[00:09:02] Speaker A: Further down the rabbit hole, talk about
[00:09:04] Speaker B: the ncaa but let's look, let's talk about other regulations. So what's happened in the last few weeks? Portugal centralized self exclusion system.
So rather than having to self excluded every operator, it's now just across all operators.
Very sensible. Think it should be in every market. Tick good.
Australia gambling ad reforms.
They've been described as draconian.
It's not a total ad ban. Could have been worse.
[00:09:33] Speaker A: I think we, they wanted to go a lot harsher.
[00:09:35] Speaker B: Yeah.
You know I think Brazil as he talked about could, you know, are probably going to go down some form of route at some point with an advertising restriction, hopefully not a full ban. And that segues into Brazil and KA have said they are now pausing their launch of the online betting. Is that correct?
[00:09:54] Speaker A: Yeah, they have, yeah. Until 2027 which is, you know, quite
[00:10:01] Speaker B: something given it's been ready for, you know, partnering playtech. But I love this, I, I love this, this analysis. So they've, they spent 30 million on a payment for the license and it's a five year license now.
So there's questions about whether it's a good use of public funds for them to have this license of paid for not using it.
[00:10:31] Speaker A: So that would be essentially
[00:10:36] Speaker B: don't take away the analysis. Febralox, the lottery federation estimates kites inaction causes about 6 million a year in losses over the five year license.
You see what they've done there, they've put out an estimate where they've divided 30 million by five years and they've estimated it's about 6 million a year.
I mean at least it's a correct number.
[00:11:04] Speaker A: Let me just check the maths on that.
So three zero divided by five.
I don't know if you can see that but that is a six. That's a six.
[00:11:18] Speaker B: It's better than people claiming the natural number of something. That's complete rubbish. So, but yeah, so they did also claim they were going to get to number one when they launched and I just cannot see them being anywhere near quite frankly
[00:11:38] Speaker A: if they were coming out as the market opened. Yeah, they'd be there or thereabouts.
[00:11:45] Speaker B: Still don't think so.
[00:11:47] Speaker A: No, no, I think the power of these brands is kind of, I think
[00:11:53] Speaker B: you're establishing the operating expertise of.
[00:11:58] Speaker A: I'm not, I'm not at all. I mean these are, these are fantastic operators but I think there's an element of trust that these sort of endemic brands because I don't think there, I don't think there's a lot of gambling brands that can really kind of call themselves like fully endemic. Whereas, you know, whether it's, you know, like a Kaisha Danska spell Svenska spell ve, they, they have a place in society.
[00:12:29] Speaker B: Sorry, didn't we do a podcast quite recently on, was it Norway?
Where effectively the lottery had completely messed up all this stuff. So yes, they may be well known, but I don't believe that lotteries are necessarily, you know, this hugely trusted, everyone loves them kind of thing. I, I,
[00:12:56] Speaker A: no, no, they, they're, I'm not saying they're trusted and beloved, I'm saying they are endemic. Like everyone knows a brand because they've seen it all their lives.
Like if you think like if you're in a supermarket in Denmark or like a tobacconist, they're in France, you see the pmu, the FDJ kiosks or the Dans Caspell little kind of window where you can buy your tickets, you know, put your coupon on, all this kind of stuff. It's. They are seen and they are known so people will gravitate towards them.
[00:13:31] Speaker B: That's completely different. FDJ have had a sports betting brand and they've been endemic in the market as sports betting for a long time.
[00:13:39] Speaker A: I don't, this is what I'm saying.
[00:13:40] Speaker B: They will be. I, I, I, I actually, I actually want them to launch because, just to prove the point, because I just do not believe they'll be anywhere near the top or they would have been even if they launched straight away.
[00:13:52] Speaker A: But you're going to have to wait a year for that now.
[00:13:54] Speaker B: Yeah, look, 365 essentially been in the market for years, so they're never going to compete on that.
[00:14:00] Speaker A: I know, but I think in a regulated market, when that came online, I think they would get an influx of customers.
What sort of revenue are we talking about for Caixia in the past year, Just to give a listeners an idea of the scale of that business.
[00:14:15] Speaker B: It's a lottery business. You can't compare the two.
[00:14:19] Speaker A: I know it's not, it's apples and oranges, but it's still like it, it still can work. Because what's like, well, I mean, the Danske Spill model, let's call it, you know, you have Danske Spill, then you have Dansk Leckens or Lisensk Spill, Danska,
[00:14:40] Speaker B: which is a monopol on betting in the market before it launched.
[00:14:49] Speaker A: But then they created this digital offshoot where they have that experience and you could argue that that's sort of what Vikehouse is doing with this new.
As they prepare for it, it's been some very good coverage of Finland from Nicole Macedo and Jake Nordland and igamingbusiness.com talking about regulation.
[00:15:13] Speaker B: You know, it's interesting about the affiliate being banned in Finland. Okay. To put it into context. So let's have a look. Lottery market, 2.65 billion euros. GGR.
Okay. Last year, if we look at the onshore market, onshore online betting and gaming, 5.8. So, you know, over double. Over double the size. They're not. Anyway, I just don't believe they're going to get anywhere near it.
But, you know, by the sounds of it, whether they launch the, the, the way. There is one way they'll be number one operator.
[00:15:54] Speaker A: What's that?
[00:15:56] Speaker B: And that's if some plans that some people have are of shutting down the entire commercial market and making it a kai monopoly, that will put them in pole position.
[00:16:10] Speaker A: That's not going to happen. You know, that's not going to happen.
[00:16:13] Speaker B: There's talks.
[00:16:15] Speaker A: No, it's like it's, it's court.
[00:16:18] Speaker B: Yeah. Lula is apparently, you know, he's just doing this, so he says he's done it for the event. But, you know, stuff happens anyway, that's how they get to number one. But look, we always talk about Brazil, we always talk about prediction markets. Next you'll be telling me about the Netherlands, which we don't want to do. Let's.
[00:16:35] Speaker A: We don't want to talk. Why don't we talk about prize draws?
[00:16:41] Speaker B: What about prize draws?
[00:16:43] Speaker A: The prize draw market in the uk.
[00:16:46] Speaker B: Don't tell me you've just entered this like Omaze or something to win a house in the Cotswolds. Have you?
[00:16:52] Speaker A: No, I haven't.
But it's just like. It's something we've been talking about in the team and it's quite an interesting little sector because obviously in terms of players spend 1.3 billion so far smaller than the National Lottery, which think is about 8, 8.2, something like that.
Player base 7.4 million, you know, prized royal players.
But it's, it's very young.
So in. I think it was last year, the DCMS did a report kind of on the sector and whether or not they were going to look at some form of regulation and ultimately they decided against it.
But most of the companies in the sector, I think. Well, not most of them. I think it was 44% of the companies in the sector were incorporated post 2020. So only the last six years, a big chunk of them kind of like 2/5 of market is 2/5. 2/5 of the operators in the market came in in the past six years.
So that suggests it's kind of very early stage. You did mention amaze.
Have you seen the, the advert? Actually you don't have Instagram, but, but I'm sure, I'm sure there are other mediums that you might have access to like TV or wireless or.
I don't, I don't know what kind of. You know, it's like they probably advertise in print. I think Omaze swallows up about 60 of the customer base.
[00:18:31] Speaker B: Did they advertise on igamingbusiness.com because that's the only.
That's my main source of information.
[00:18:39] Speaker A: Well then I'm sure you read Nicole Mercedes article about prize draws a few days ago.
Or maybe a weaker one.
[00:18:48] Speaker B: Anyway, so I'm just wondering. Okay, so five draws young.
I don't think it's. It's a big niche. I mean, I'm surprised it's that size, but a niche. When you say spend well, I suppose it is kind of.
[00:19:03] Speaker A: So this is people entering. So. Yeah. So. So obviously with this sector, essentially you can either have them totally free, which just makes it.
That's just going to be essentially a kind of lead Gen X size, you know, data capture.
You can have it free entries plus paid entries, where the free entries are generally oddly difficult. So most people just buy tickets. But because that option's there or there's an element of skill where it's generally a pretty easy question.
So it could be what kind of animal is Lassie?
And then you have an option of dog.
Dog, horse.
Yeah, they're kind of easy to get in.
But you think about where the market is. We've obviously had the remote gaming duty hike.
You've got sports.
[00:20:04] Speaker B: I'm so intrigued as to whether this ramble has a. Has a solid point for listeners.
I have no idea where we're going with this.
I know like how you've tried tie in the remote gaming duty hikes. Keep going.
[00:20:17] Speaker A: Yeah, yeah, yeah, I'm going to keep going.
So for an industry that is obviously taking some brick bats, if that's the right context to use that phrase. It's just quite nice to say this is a sector that the government has essentially said we don't see the need to properly regulate. It's got a voluntary code of conduct which is, you know, don't market to people under the age of 18, let themself exclude and don't make advertising Too kind of outlandish, you know, don't make it seem too much of a sure thing. So the government has essentially looked at it and isn't going to do anything.
Do you see this as a product that could be used to potentially mitigate or to almost kind of take some, almost even monetize the acquisition funnel for real money? Gaming operators buffeted by public scrutiny, the remote gaming duty hike and perceived worsening public perception.
[00:21:41] Speaker B: No.
[00:21:42] Speaker A: Why not?
[00:21:44] Speaker B: Also, perhaps if you just messaged me, I don't know, an hour ago and gone. Hey Ed, we're going to go into something really random and off topic prize draws as a heads up.
But okay. Because I think it's completely, it's just completely different. It's like if you want to call it a soft, very soft version, it's a bit like the, the lottery. You know, people are, people are. I'm gonna go with the omaze. Although I appreciate there's other things and I mean omazes, it's like for a watch or something and it's almost, you're almost like bidding or kind of thing as well, isn't it? And, and things like that. So but let's just go that, you know, like, like a lottery is okay, I'm willing to spend 50 quid or 10 quid whatever it costs or lottery 2 pounds because if I win I only get a house in the Cotswolds which I can't afford to live in. But hey, I can sell it or you know, you're going to get something that's life changing, utility, different and they can obviously afford or hopefully can afford the input price whereas you know, sports betting, slots.
I don't think people, I know there's jackpots and things like that, but I don't think many people play slots to win life changing amounts of money. You know, it's a form of entertainment or you know, they're doing it because of low rtp. And actually we can go onto the RTP in the UK because that's another thing in a second. Yeah, so somehow I've segued this most random conversation into something remotely useful.
But again, on sports betting, I would guess, and I have zero data for this, even H2 has zero data on this.
I would guess a significant majority of people who do sports betting have never placed a wager where their potential winnings are what you would call life changing.
Yeah, I mean, yeah, most people who do long, long odds would put like a quid or even 10 quid on it. And you know, if someone's doing 100 quid on it, then it means they could probably aff it. And for them, if it's, you know, if it's a thousand to one odds, then it's 100 grand possibly isn't life changing for them. You know, this isn't talking about winning a lottery or winning a 3 million pound house. So I don't think, I don't think it's the same people.
And the, if you look at the size of the wagering market, I'm assuming the number of the prize draws you gave me of the one point, whatever, 8 billion or whatever, that will just be tickets bought. So that's turnover. So it's actually a tiny, tiny fraction of the realm of the gaming market.
So with everything going on, you know, if you're a flutter or anyone else, Midnight or name a company, you know, and you're focused on trying to gain share, you know, and keep people from going through legal markets, then wasting resource and brain space on that I think would be a waste of time. So, but let's talk about rtps because we had, it's almost as if we've written this for like a plan of what we were going to do because we knew what was going to happen over the year. So we had a few months ago, Big Daddy Gaming.
[00:25:04] Speaker A: Yeah, yeah, yeah, we did.
[00:25:07] Speaker B: And we asked them, I can't remember if it's you or me.
One of us asked about a very good question about rtp so I imagine it was me.
[00:25:18] Speaker A: That doesn't sound, that doesn't sound right.
[00:25:20] Speaker B: It does because remember what happened is you were just doing lots of fluff questions being like, oh come on our podcast and you can, you know, promote yourself. And I was asking the hard hitting stuff, the deep but you know, positive.
[00:25:34] Speaker A: Well that's not some negative that's gonna get bleeped.
[00:25:40] Speaker B: The insight anyway.
[00:25:43] Speaker A: Insightful.
[00:25:47] Speaker B: I asked about RTP and they gave. I can't remember exactly what it was but they gave an insightful response which.
Do you remember exactly what they said? But it wasn't like I don't remember exactly.
That was it. That was it what I asked about the RTP and said effectively if they could just change the RTP from 96 to. So for those who don't know RTP, return to player. Okay, so every 96, every hundred pounds I, I wager on spins on average over thousands and thousands of games, I will get 96 pounds back. Okay, so. And they keep four.
[00:26:27] Speaker A: Yeah.
[00:26:28] Speaker B: So if they change it from 100 to 92, then I'm saying they're not just going to double the amount of revenue they get. I mean, if it was that easy, they would have done it already.
[00:26:40] Speaker A: Yeah, of course, yeah.
[00:26:41] Speaker B: And I said, and the reason they haven't is because the lower, the lower RTP for the customer, the less the,
[00:26:48] Speaker A: the less far the customer's money will go.
[00:26:52] Speaker B: Yeah, it'll go less.
[00:26:52] Speaker A: And the less the entertainment value, less
[00:26:54] Speaker B: the entertainment and the experience.
[00:26:56] Speaker A: Yeah, they're good. They're less, they're less likely to trigger any kind of bonus round. So again, they won't, they won't win. Life changing.
[00:27:04] Speaker B: So they have already decided over a number of years this is the optimal rtp.
[00:27:08] Speaker A: Yeah.
[00:27:09] Speaker B: Right now. And where this changes, where they have to change it is where there's a tax on turnover. So if you're being taxed 5% of turnover, like in Germany, you can't just pay, you know, get 4% of turnover as your revenue. But in markets where your tax on ggr, this is a kind of standard, everyone's going to realize this is it. Yeah.
And the guys at Big Daddy Gaming said, which I thought was interesting, said I don't think it will impact or the customer will notice that much because one, the theoretical RTP is over such a large number of games, it may not impact one person particularly I think is, you know, okay, I get the point, but.
And the second one he's said a lot of it is hidden in the bonus rounds rather than just the actual game.
So it is not quite as simple as, okay, they're now going to have less enjoyment and maybe some people won't realize, but on the flip side, if it was so just as simple as we'll get a lot more money, then they would have done it before. So based on all of that, Robin, and your photographic memory and recall of the discussion we had with it that I didn't need to explain, do you, do you think this is a good or bad thing?
[00:28:31] Speaker A: I think on balance is probably a
[00:28:33] Speaker B: bad thing for the operators or the players or both, I think for the
[00:28:38] Speaker A: operators and the players.
Because I think ultimately if, you know, as I said, if the money doesn't stretch as far, essentially the entertainment value declines, they're going to spend less time on site.
And it could be that they hop around games more trying to get that kind of value or they could turn to other products
[00:29:12] Speaker B: and illegal providers and
[00:29:13] Speaker A: to be honest, of course. Yeah, but equally, equally.
[00:29:16] Speaker B: Yeah, but if the.
[00:29:17] Speaker A: Hear me out, hear me out. Maybe they decide they want a bigger thrill and are Prepared to wait a longer period of time and then they think, a house in the Cotswolds.
[00:29:31] Speaker B: How on earth did he bring it back to that? I walked into it.
[00:29:36] Speaker A: He really did.
[00:29:37] Speaker B: But like this, could you say, actually legal operators are, you know, pushing them in a way, give them a helping hand towards illegal ones by making the offering and they'll argue that they're being forced into it.
[00:29:51] Speaker A: But yeah, well, it's going to be a bit. It's going to be a bit of a kind of circular firing squad, isn't it, to say that? Because, you know, the. The regulators will blame perceived harm caused by the industry, the operators will blame government, the government will blame the regulators for not policing the market. And the illegal operators would just sit there, you know, kind of like holding. Holding open the velvet curtain going, come on in.
[00:30:18] Speaker B: And then. So let's look at a scenario like this. Okay.
So it is an effective way of higher monetization of the players, getting them to spend more. Yeah. Okay.
[00:30:33] Speaker A: And play for longer session duration.
[00:30:36] Speaker B: No, no, but let's say they're losing money quicker. Yeah. So not playing as long.
[00:30:39] Speaker A: All right. Yeah, all right. Sorry. Yeah, yeah, Losing money.
[00:30:41] Speaker B: Crackers. But you're getting more money. So the, you know, you're getting twice as much money per spin and let's say they're spending 25 less time on there. So. Yeah, spending 50 more.
[00:30:50] Speaker A: Okay.
Yeah.
[00:30:53] Speaker B: So how's the industry look after this happens?
Everyone has. Most people have said this is like the biggest disaster and half the market will be illegal and blah, blah, blah. Clearly that's not true. No, we put a report out saying that it's just massively overhyped the impact. It's not good for the industry, but, you know, we actually don't have the market going down.
[00:31:14] Speaker A: Okay, would you revise that on the basis that people are going to cut rtp, which may reduce the attractiveness of slots on the illegal market.
[00:31:25] Speaker B: Increase the attractiveness of slots on the illegal market.
[00:31:28] Speaker A: Decrease.
Increase on the illegal, decrease on the legal.
[00:31:32] Speaker B: Because I. E.
I'm not a slot guru. Personally, I find them dollars dishwater.
But, you know, I'm assuming that there's some people more knowledgeable about slots than me who have done analysis saying that this will make them more money. Okay.
So when we have more information, we'll reevaluate your numbers. But we have the market still growing, just not as quickly as it was before. Okay.
[00:32:00] Speaker A: Okay.
[00:32:01] Speaker B: And so let's say it plays out that this happens as. As we forecast. Okay.
The market continues to grow. Yes, the illegal market grows by more, but the legal market continues to grow.
Operators are making less money because tax suppliers are making less money because the tax affiliates are making less money because of the tax.
But the market's still growing and the government is getting more money. Okay, not as much as just the whole, you know, previous things and dumbing it, but they're still getting more, more money than they were before. Yeah, if you're the government, you're just going, hang on, you were telling me this was going to be a complete cluster bomb. Yeah, just a com like and the legal market is going to be out of control, etc. Okay. They can look at our numbers and believe the illegal market's grown or not, but yeah, for most people it's pretty easy to put your head in the sand. So all they look at is say, okay, you've changed your pricing. Okay, you're making less money as a gambling company. But I'm an mp. I don't give a crap. Okay.
There's more tax revenue and the market's still higher than it was when it was at 21%.
So I, I, I just don't, I just, I just actually think the, the industry is going to be in a worse position because having cried a lot of wolf and I'm not, 40% tax shouldn't happen. It is bad for the industry. I'm not defending in any way, but I think especially with doing tactics like this, which they're being forced to to a certain extent, the industry will continue to grow and then the government will just be like, what were you moaning about? You know, and then they'll come back to them again for more, more stuff in a few years time and say, well, last time he told us it was going to cripple you and it didn't. So, you know, they're not upset. There's a few betting shops being closed by rogue, you know, they'll see the industry growing. Unlike Switzerland where you have the legal industry. You know, that was up by 1.2% last year on onshore online land based down, total regulator market down, you know, unregulated market up.
Yeah, that's issues. But I'm going into a cul de sac here. So come on, Robin, rescue it and tell us what we're gonna, we need to talk about something and quickly because it's near the end of the episode that's actually interesting. So we can say this episode is about.
[00:34:23] Speaker A: Well, I mean, I think we've, we've almost kind of done this, this has almost Been a bit like doing a clip show of past episodes.
We've talked about prediction markets, we've talked about Brazil, we've talked about RTP and the danger of crying wolf. We've talked about Big Daddy and that episode and bringing back some of those themes.
And then in the middle of it, I've got a lot in the middle of it I chucked in something new, fresh and interesting and you just dismissed out of hand.
[00:34:55] Speaker B: I've got one.
[00:34:57] Speaker A: All right, all right.
[00:34:58] Speaker B: On you 1st of April, the Consumer Federation of America filed suit against Meta saying it was knowingly targets and profits from fraudulent ads while misleading users about platform safety and that gambling was a major contributor to this illegal gambling.
Now when I was at ice, I spoke to a few people who are either legal operators or on the regulator side of things, etc and a pre recurring theme was when they'd approached Meta about blocking illegal applies up away from gambling, Meta turned around and pretty much said in a slightly politer way, go do one.
[00:35:41] Speaker A: The other attendees of the World Gaming Forum may have also noticed a panel on this very subject.
[00:35:51] Speaker B: So quite frankly, Meta deserve pushback because they don't care. And they are, this is not controversial. Say they are a major, if not the predominant source of advertising for illegal gambling.
[00:36:11] Speaker A: Yeah, that's fair to say. I think, I think there is a role.
Yeah. I mean obviously there is a role for big tech and stamping out the illegal market but they don't care.
[00:36:27] Speaker B: Yeah, I mean money, they don't give a. They don't.
[00:36:29] Speaker A: Yeah. Like this is one of the things, you know, we, we're obviously very embedded in the industry and we think about it and some days in your case when you're not into railing, we think about it every day but essentially we live and breathe it because we do that because out of, let's face it, Stockholm syndrome, because once you get into gambling, you never leave. It's one of those industries. But also out of beyond Stockholm syndrome, a bit of a genuine love of the industry. It's a fascinating place to be, especially online where you've essentially, you know, over the past the worrying. Almost two decades I've been in the industry now you've seen it kind of emerge and grow and evolve and stuff you never saw happen. Like, you know, the US doing sports betting when, you know, when I started in 2010, all the focus was online poker, California. You know, I mean like we live and breathe the industry but then when you sort of zoom out when you think about subjects like illegal gambling, you know, kind of illegal Advertising, you suddenly realize we are just a blip to a company like Meta, even to, you know, some of the federal authorities in the US The AGA has obviously written to them and kind of pushed for action and there's very little going on.
[00:37:54] Speaker B: That's true. That is true.
[00:37:56] Speaker A: Ultimately, we're, you know, like a stone in the shoe of a lot of these other industries, but a niche within a niche.
[00:38:05] Speaker B: So I actually took a break from thinking about gambling on Saturday.
And why fly fishing for the first time? All right, well, I was going through. It turns out I have 14 fishing rods, the.
The majority of which I inherited from my, my, my, my late father. So I was going through those and, and all the stuff. I don't know why I've had it since 2021.
[00:38:31] Speaker A: Right. But just because you were saying I was going through, and I'm just waiting for a midlife crisis crisis.
[00:38:37] Speaker B: So, you know, I went fly fishing.
Didn't get a single bite. But, you know, it's enjoyable. Nice, peaceful out there just on my own, casting the fly onto the lake.
Anyway, try and segue that into something. Right. On that note, you can find us on.
[00:38:54] Speaker A: So just like, just like the, the. The lure flies through the air water.
This podcast will be flying over the airwaves onto all your favorite podcasting platforms, whether that's Spotify, whether that's Deezer, whether that's Apple podcasts, Whether that's Castos, YouTube. Igamingbusiness.com we have very much enjoyed this weirdly structured episode.
[00:39:28] Speaker B: There was no structure. There was no structure.
[00:39:30] Speaker A: Oh, come on. Inadvertently, there was a sort of weird, loose structure that developed without us in terms of how we segued onto stuff. We didn't mean to do any of that, but somehow we did.
[00:39:45] Speaker B: Look, we should also just talk very briefly about the biggest topic this week so, you know, to show we don't hide from stuff that other people do. Sport radar, short selling, being accused of operating with illegal operators, black markets, etc.
One thing I would say on that is I think it also opens up the debate. Again, not for what they've allegedly done, but I think it does open up the debate about whether companies who are commercial data providers should also be integrity monitors. And the reason I mentioned that is because Alberta has announced it's launching in July and they, I think, like Ontario, do not allow commercial data providers to be integrity monitors. They view as a conflict of interest. So, like IBEA will be the main monitor there.
In Brazil, you know, you have iBear, but also support radar allowed to Be
[00:40:48] Speaker A: a monitor genius and.
[00:40:50] Speaker B: Yeah,
[00:40:53] Speaker A: yeah, yeah, of course. Like it's, yeah, like it's an interesting point.
I, I will say in mitigation they do ring fence off. That business is not almost. I think it's run for like just from previous conversations as a kind of a break even business rather than revenue generator.
But I do agree there is, it's, it's a naughty situation and it could even be, could you. I don't know, it could even be a case of almost spinning off as a sort of foundation, that kind of thing.
[00:41:32] Speaker B: And in terms of the industry as a whole, you know, having this. Because investigations I believe are now happening and there will be kind of cases, you know, by shareholders who said they lost money.
You know this at a time when imagine at some point there'll be more on. The evolution. Playtech thing is not a good look for the industry, is it?
[00:41:54] Speaker A: These short seller reports are interesting because on one level you could have.
It can be presented as bad actors or kind of like bad faith kind of, you know, trying to, trying to kind of trying to undermine competitors equally.
These reports you can, you know, the generally it's a fairly broad brush denial.
Like what I'd really like to see actually is in these situations someone come out and provide a very, very, you know, very detailed point by point like refutal or rebuttal. Sorry, that's the word.
[00:42:38] Speaker B: Yeah. I mean look, okay, yeah, there's the whole playtech thing, you know, you can discuss how much of that's undermined competitors this one.
You know, you say the short sellers have got what they wanted, they put the report out, shares dropped 25, they made money, job done. But I would imagine that if all of this could be proved that was in the port proved to be false and it can be hard to prove a negative as well. I'm not saying just because it's not proven false doesn't mean that it's true.
But with these short selling reports you have to be very careful because surely this leaves them open to like huge potential losses and, and lawsuits if, if anything they say or anything material they say proves out to, to not be true. So yeah, you know, I don't suppose there's different views on whether short selling should be allowed etc and if it's right. But quite frankly if you do see if they are seeing not radar but a company, they're like, well hang on, stuff they're saying is just completely wrong, you know, and they're overvalued from that, then you know, maybe there's a place for them. But I think it will be interesting to see how this unfolds and whichever way it does. Again, not good for the industry.
Yeah.
[00:43:55] Speaker A: But on that note, slightly more somber than the one I hope we were ending on, but never mind. I thank you very much for listening. We will be back, hopefully sooner than every other week if it's.
I don't know what. Where you going next? Camping trip or something?
Disneyland.
[00:44:12] Speaker B: Yeah, we're going to go camping.
I am trying not to leave the UK again until SPC Lisbon.
[00:44:22] Speaker A: Okay.
[00:44:22] Speaker B: That's the aim that'll be around next week. So, you know, let's. Why don't we even try and coordinate beforehand and discuss what we're going to talk about and put a structure in here.
[00:44:34] Speaker A: Yeah, we did, but then you didn't seem to like that.
You always seem to be a bit sulky when it sent you things to talk about.
[00:44:42] Speaker B: Yeah.
So good. Good use of the word Brick bats earlier in the episode.
[00:44:49] Speaker A: Thank you. Thank you. Yeah, Right. Thank you very much for listening, everyone. And we will be back alarmingly soon with the next one.
