iGaming Daily

Martyn (00:04.246)
As global gambling winds down for its Christmas festivities, headline news continues to circle the industry. Breaking yesterday morning, Oztrac, Australia's financial watchdog, announced an investigation into alleged systemic compliance failings at Entain's Australian subsidiaries, NEDS and Labbrokes. And from the other side of the world, gambling.com group continued its &A expansion.

by announcing its largest deal to acquire ODS jam for $160 million, a deal that raises eyebrows for observers of the troubled US affiliate landscape. I'm Martin Elliott and welcome to today's edition of iGaming Daily, brought to you in partnership with OptiMove, the number one CRM marketing solution for the iGaming industry even.

And I'm delighted to be joined once again by Ted Menmure, Content Director for SBC. How you doing, Ted?

Ted (01:11.286)
Good Martin, I think this is our second last tango of the year on Podcast Eats Eats. Yes, yes, signing in.

Martyn (01:18.388)
I believe so. believe so. Yeah. Ready for Christmas.

Ted (01:26.86)
I am, I am. And to the audiences, I'm doing all the cooking at the Emmery household. Yeah. I've got, actually I've got my, Japanese side of my family coming over. So there's, yeah, that's something to forward to. I haven't seen them in about 15 years. So.

Martyn (01:33.453)
Excellent.

Martyn (01:44.929)
Yeah, yeah.

Am I right in thinking that it's a Christmas tradition in Japan is to go to KFC for lunch?

Ted (01:54.86)
Yeah, I hope so. But no, no, I mean I have not. To the audience, I can cook. I will cook something better than KFC. And I'll report back in the new year. Might put up one or two part fives on LinkedIn.

Martyn (01:59.12)
you

Martyn (02:06.21)
Excellent.

Martyn (02:13.676)
Excellent. I'm making a note to ask you about that. I'm the first pod back in January to see whether you had to call in the emergency KFC on Christmas Day.

Ted (02:16.14)
yeah the pressure Martin the pressure

Martyn (02:24.944)
Yeah, wow, can you imagine how badly wrong things would have to go to resort to that? Still. I mean, I was tempted about four years ago, I thought I'd cook a goose, which I'd never done before. It was utterly terrible. So I'm not doing that again. Anyway, more tricky than cooking a goose.

Ted (02:32.875)
Yeah.

Ted (02:41.792)
Very hard, very hard dish. Yeah.

Okay, that's... yeah.

Martyn (02:53.899)
is the situation Entain finds itself in in Australia. What can you tell us about this OzTrack Pro, Ted? What did it uncover?

Ted (03:05.928)
Okay, so the first important to note that there's no kind of specific details or accounts have been published by Ostrac related to untamed failings. The statement really focuses on the lack of AML oversight of NEDs and that book Australia's in the customer care. And it states that their online platforms have been found to be exposed to high criminal risks.

And these kind of failings come in the backdrop where there's been a number of changes in Australia's AML codes enacted over kind of last three year period, in which kind of Ostrac now undertakes kind of a higher oversight of gambling as a high risk sector.

And as such, it'd be interesting to see what period these kinds of incidents cover and how they can respond to recent ML changes that we've seen in online and retail gambling by Oztrak.

Martyn (04:06.896)
Yeah, sure. mean, it's perhaps important to note at this point, Entain not being the only bookmaker that's been under scrutiny from Oztrak. think Flutter's sports bet arm had to agree some undertakings with Oztrak. there was an announcement of an investigation into bet 365 as well. I haven't had it.

Ted (04:14.102)
Yeah.

Ted (04:19.819)
show.

Martyn (04:35.836)
doesn't appear to be an update on that since that was first announced in the first half of this year. So certainly something that authorities in Australia are clamping down on. What's the response been from Entang to this recent announcement?

Ted (04:46.698)
Mm-hmm.

Ted (04:56.075)
Well

Okay, so, Untamed's response, as you expect, is that they're cooperating fully with Ostrak, and it has moved to of implement the changes swiftly that are needed in compliance. I think overall, look, Untamed views Australia as a key market and a market in which it's targeting market share growth against market incumbents.

This got kind of really drilled upon in the HD report.

It's a market where it really sees a potential for Ladbrokes and Ned to grow. Now, yes, this will be viewed as a setback there, but I don't think it's changing its plans in Australia and what a key market it is for them moving forward in 2025. And it's a market that has really pushed forward to investors saying, look, we think that we can take a podium there. And we think that we can really kind of stamp our place here within the top three brands, be it Ned's or Ladbrokes.

and I think it's a market where it's going to put a lot of investment in the platform to outperform competitors.

Martyn (06:08.435)
Sure, and with that sort of plan for Australia in mind within time, do we have any...

any idea of what the sanction might be from the courts and from Ostrach.

Ted (06:23.724)
So here we've got to be reflective of what's happened in other cases and now it's being sent forward to the Federal Court of Australia and they will determine kind of the penalties and the fines imposed on Muntain. Now in reflection over a two-year period it's sanctioned a record 450 million pounds on Crown Resorts and another on Sky City for 63 million for compliance and primarily AML findings on its businesses and especially on its retail network. Now here you

have to really have to underline that these are very kind of specific, very different to what's been going on in the online space. Again, it's interesting what period it will cover, but we will only know how severe the obtained fines are once the federal court publishes its judgment. The other thing here is that we have to kind of reference what is the remit of Ostrack.

And if you look at their website, it's really monitoring kind of betting account transactions, exchange of exchanges in currency and the payout of winnings by operators.

Martyn (07:36.981)
Okay, okay, so it's a very, it certainly looks different from the fines within the sort of land-based casino sector, which, you know, some of those were ongoing for a number of years, weren't they, before we came to the bit where the fine came and the threat of the loss of licence and all that kind of thing. So, would...

Ted (07:57.94)
Yeah, and then the other failings there that they were very, very exposed to criminal gangs and overseas money laundering, which I don't think is the same case for what we're seeing with the online failings.

Martyn (08:11.542)
No, Well, we'll see how that plays out, obviously. But it is a bit of a setback for the new leadership team at Entame, would you say? The last set of results looked to be heading in the right direction. And only on, I think, Thursday last week, they were tipped in the Times finance section as a share to buy.

Ted (08:26.986)
Mm-hmm.

Martyn (08:36.758)
for this year and I think the immediate market reaction to this news when it broke yesterday morning was the share price lost 6.5 % within four hours of the market opening. So a difficult thing for Gavin Isaacs to deal with I guess.

Ted (08:55.536)
I don't know about the times, them being tipped. Yes, I mean, it's bad news for Intain concluding time 2024, but I think you're gonna put that in perspective of what happened last year when pretty much same period, in the same period, they to issue the guidance of 900 pound losses. And look, as we saw in H2 trading, Intain does have.

Martyn (09:13.867)
Yeah.

Ted (09:19.136)
positive narratives now. It's returning to growth in the UK. It has a very kind of fast growth presence in Eastern European markets. But again, it's a company that, you know, it's got positive stories, but then it has kind of very, very, very kind of big, big issues surrounding it. I primarily, for me, it always returns back to the better, you know, the better MGMJV and how kind of leadership are.

Martyn (09:38.123)
Yeah.

Ted (09:47.276)
what direction they're going to take on that. And that's kind of the premium obstacle for Entain. Again, it's going to be a company to watch in 2025, but it always is. So it's as if nothing changes. I think next year, we are kind of sitting on the sidelines and we're kind of viewing like what is going to be Gavin Isaac's big move for Entain.

Martyn (10:14.646)
Yeah, well that will definitely be something to watch and I have to say from a purely journalistic point of view, Entain is one of my favorite companies because there is always something really quite interesting to write about. You know, it's not the case with, there are successful companies in this industry who just get along with things quite quietly. Entain, let's have some more headlines guys. More drama.

Ted (10:27.284)
Yeah.

Ted (10:38.101)
Please, more drama.

Martyn (10:41.61)
So let's turn our attention to another form of drama, which I guess has been the roller coaster ride of affiliates I've had over the past 12 months, particularly the big listed affiliates and those who have focused much of their business on the U.S. It's been very difficult. We've seen, know, Xcel media pull out the market completely, Katina media have

Ted (11:08.373)
Mm.

Martyn (11:11.096)
struggled, I don't think that's exaggerating to say that, and Better Collective have also run into smaller problems. But the shining success story in the sector has been gambling.com, which has actually sort of seen its financial position improve over the period everyone else has been struggling. And they've sort of set some targets for next year or laid down a marker for next year.

Ted (11:17.333)
Sure.

Martyn (11:40.184)
with the acquisition of Odds Holdings Inc., which is the parent company of Odds Jam. So that's a bit of a surprise purchase, wasn't it?

Ted (11:45.726)
Yeah.

Ted (11:54.258)
It is, it is at this time of the year and it is considering what the affiliate market overall is going through. But I think, you know, gambling.com is making its move. I think that it believes that this is a deal that diversifies its business.

and also gives them a lot more kind of technology capabilities, especially towards targeting sports betting audiences and also a better and kind of more professional type of betting punter that I think is sought by its contracts out in the US, especially by FanDuel and the likes of DraftKings and the remaining incumbents in that market. I think the risk element here and what really raised our eyebrows is

how the deal was structured, 80 million upfront and another 80 million on kind of deferred payments. I think over a year or a year to 18 months, I think, don't quote me on that. But it, yeah. And I think that that is where kind of the observers will have their eyes. Now, the other kind of consideration here is that, yeah, gambling.com is making its move, but.

Martyn (12:57.316)
Through to the end of 2026, yeah.

Ted (13:12.306)
If the affiliate market is ruptured and we're seeing this in the main competitors, whether it's Katina or Better Collective, it's that we don't know exactly how they're going to reorganize their portfolio. So I think a lot of analysts are saying, why spend 160 million now, where maybe you can pick up cheaper assets down the line?

And I think that's been a point of contention that's been kind of brought forward to me chatting about industry deals as we as you should do people as you know we should all be be be nosy and poking at these deals because they're fun to do it's fun to do so yes.

Martyn (13:38.606)
Yeah.

Martyn (13:50.811)
Absolutely. Do you think some of this is in part a response to sport radar coming into that territory? Because gambling.com is, and I mean this with, actually it's a bit of praise, quite a traditional affiliate model it's got across most of its sites. Very content SEO driven. Sport radar, you would have to assume is not going to take that approach. It's going to be a bit more high tech and integrating its...

Ted (14:08.265)
Mm-hmm. Mm-hmm.

Martyn (14:20.46)
odds feeds and that kind of thing. So do think this is a response?

Ted (14:24.588)
You see, think that's the narrative that we're to have to follow in 2025. So that kind of encroachment of the sports data firms into iGaming media and specifically the affiliate field, I think on reflection, would have been in the mind of Gamma.com that I think that they believe...

Martyn (14:28.411)
Mm.

Ted (14:48.96)
that the affiliate market or the majority of kind of affiliate leaders believe now that the makeup of the affiliate market is going to change. And I remember speaking to Jess Wellman about this and she raised a good point that when you go to the States, there's always going to be a bigger fish and there's always a type of business that can, if it views growth in another area.

It can raise capital and just move in much quicker than in Europe And I think that may be gambling.com as a Nasdaq listed business Kind of views that and views that threat and thinks well now look you can no longer just be an affiliate relying on media relying on the SEO partnerships and relying on Yeah, did those kind of media partnerships that really got exposed by Google? You've got to be so much more kind of self-refficient now

Martyn (15:38.522)
Yeah.

Ted (15:42.468)
So I'm not surprised that I think the deals are going to be bigger. They're going to be riskier, but it's they're going to put a deeper placement on what technologies, what resources and capabilities are you bringing in house?

Martyn (16:00.216)
Yeah, sure. I I have to say I wasn't that familiar with Odds Jam till last week because sitting here in the UK, we don't really see it so much. It's quite an impressive sort of product. I can see this being a very popular with punters, particularly ones who, like me, like to assume they're quite informed when making a bet when in fact, you or I might...

Ted (16:05.899)
Sure.

Martyn (16:29.309)
You may argue I'm just guessing who's going to win the race or going to win that football match. It's a really engaging product. I think this is an interesting move for Cameragun.com.

Ted (16:32.5)
Mm-hmm.

Ted (16:39.602)
well, without a doubt, but...

One of the things that I'll be looking at for gamlin.com is what they build off the top of the technologies bringing in. And again, I think that what you're gonna see in 2025, especially in terms of the affiliate field, is that you're no longer just gonna be judged on, hey, you got great coverage online and you're dominating these, you know, SEO keyword searches and you got this penetration. I think there's gonna be a much bigger emphasis on what the affiliates.

can build out their networks, what second technology they can bring to market, what add-on components. So again, it's a time of diversification, actually, they've been saying this for years in the affiliate field, that we can no longer just be media companies, right? But I think next year it's like, what are you bringing to market? What additions are you putting into your network that really help bring in a better caliber player? And I think that this is one of these deals where

Landing.com sees this as a big refresh of its platforms, of its technologies and systems, and just being more self-reliant overall, which I think leadership deems will bring a much bigger valuation to their business long term.

Martyn (17:57.776)
Yeah, yeah, I think so as well. the big thing hanging over the affiliate sector is how search is changing. And the more people using the of the AI tools for search and Google is aiming at search products in those directions as well.

Ted (18:05.824)
Yeah.

Ted (18:14.848)
But you made a great reference to this, I think in the last time we speaking about affiliates that...

You know, Google's now like your frenemy. Like, you know, you don't want to be kind of overly exposed and when they make a change, you're there, caught out. And then I think what the affiliate numbers showed, it's that planning to Google is such a dangerous strategy because you might be six months, eight months, a year out of Google trying to just get back with nothing left in your armory apart from like, well, we used to have these.

Martyn (18:24.434)
Yeah.

Martyn (18:45.47)
Yeah.

Ted (18:50.982)
These portals are high ranking and now they're on page 5, now they're on page 6 and then they have very little to offer.

Martyn (18:59.805)
Yeah, absolutely. I I would always go back to the, it's not in the gambling industry, it's not even in the affiliate industry, but Google, what happened to Winter Flora when it dropped out of Google search rankings? And then you'll see that the strategy of relying for 90 % of your business on your, relying on Google for 90 % of your business is fundamentally flawed, I think.

Ted (19:13.311)
Mm-hmm.

Ted (19:23.646)
Yeah.

Martyn (19:29.47)
or certainly in the long term. I think the affiliates who moving towards a different model and integrating technology and upgrading their product to make it almost an entertainment product or a research product in its own right are very much doing the right things here. But I guess we will see across the next couple of years whether that's going to work out well for

for gambling.com and also for the current shareholders in odds holding, whether they're gonna get that $80 million of performance-righted payments.

Ted, thanks once again for joining me on today's iGaming Daily and I'll speak to you for our final episode of the year next week. to listeners, thanks for joining us and tune in again tomorrow for another edition of iGaming Daily.