iGaming Daily

Anaya McDonald (00:02.101)
When global gambling looks towards new growth regions, Latin America is usually the go-to. Often overlooked is Africa, but with growing economies across the continent, could Africa be iGaming's next big opportunity? One company that which certainly thinks so is Every Matrix, and today on iGaming Daily, I'm joined by Every Matrix's head of sales for Africa, Mark Schmidt. iGaming Daily is brought to you by OptiMove, the number one CRM marketing solution for the iGaming market. Mark.

Thanks for joining us. You recently wrote an article for SBC News on this very topic. But first of all, could you just briefly introduce yourself to our audience? What's your experience in the industry and what brought you into the role that you're in today?

Mark Schmidt (00:47.429)
Yep, thanks for having me Charlie. So I've been in iGaming now primarily, well pretty much exclusively in Africa for the last 15 years across senior roles, across both B2C and B2B. Started off probably with the best university I could have gone to which was Adan Operator, the premium operator in South Africa being Hollywood Bets and running their sports book there with a group of guys, like my own guys myself.

And then went on to join the B2B worlds and the commercial world with companies like SportRadar, IMG Endeavour, SportingTech and then now Opportunity Heroes to join Every Matrix with their big expansion into Africa as a whole. So, one of those opportunities I couldn't turn down.

Anaya McDonald (01:34.069)
Fantastic, and we're talking about Africa as a whole here, but specifically your article mentions South Africa and Tanzania in particular. Could you give us an overview of the market dynamics in South Africa? What has traditionally happened in the market and what are the key nuances that listeners need to consider when thinking about this market?

Mark Schmidt (01:55.985)
Yeah, sure. So look, there's a long history of sports betting in South Africa as a whole. If you look back even past, you know, advent of sports betting, traditional land based casinos have been around for years and years and years in South Africa and have a very strong association with them. So the casino plan, the built up understanding of how casino works in South Africa has all been there. There's also a very strong background in terms of horse racing and on course bookmakers. And then when everything kind of

Translated to online, know in the early 2000s. There were a few companies that picked that up really strongly So I mentioned Hollywood Bets early on they're pretty much the one of the founders within South Africa but with that background in land-based casinos the the boom of Online casino which we've seen in the last, you know, maybe four years or so since it became you know regulated in South Africa has it's pretty much unprecedented across the continent as a whole so, you know from from that point of view

the uptake in terms of not just you know these crash games if you're seeing such a big success with around worldwide but other you know other verticals within casino so the live casino options live related blackjack etc game shows and then particularly for south africa sluts so it's also it's a really it's really helped the industry grow here it's it's a market that is controlled primarily by two operators however the the actual size of the market is significant if you look at

the numbers released for the last financial year, you're looking at about just over 2 billion euros worth of GGR. When you put that up against some of the more established markets, South Africa goes toe to toe with them in a big way. I think some of the parts we'll probably get into, I'm sure, later on is just the opportunities for operators now that are in South Africa to kind of expand their business. And then also new operators looking to make a move into South Africa and what the

opportunities are.

Anaya McDonald (03:58.559)
Great, that's really interesting. It's good to know that that traditional land based presence has sort of influenced the player dynamics and those demands in the market. And it's useful for operators to know what types of content works best. But you mentioned some of the key figures briefly there. There is a massive opportunity in South Africa. Could you just outline...

why every matrix thinks that South Africa is such an enticing market to go into compared to some other markets and why this is one of the key global opportunities that you're going after.

Mark Schmidt (04:37.476)
Yeah.

think a lot of it links back to that number, that GGR number I referenced a couple of minutes ago, just being over 2 billion euro and that, with the market being kind of dominated by two key players, key operators in Hollywood Bets and Bedway, they make up a large portion of that GGR but a significant part of it is made up of everybody else that's currently operating in South Africa. Now, if you look at the opportunity to grow in terms of those operators outside of the top two, or even let's say the

their growth potential is significantly stagnated in my point of view and shared by the team at Every Matrix and that the opportunity to access cutting edge turnkey tech that allows them to maximize their growth, to understand the player demands, understand what products need to be rolled out is crucial. speaking to operators within South Africa, I'm very fortunate to have a lot of close friendships with C-Level.

execs across South Africa that run operations here and the frustrations are never ending in terms of what they have and what they're working with. I suppose it's like you're trying to take on, know, trying to win a Formula One race with a bicycle, it's not going to happen. And we know with what we've done worldwide.

that I've done in the background with the team will touch on the FSP acquisition and how that helps with the South African expansion. But we just know that the products that we have are first in class. There's a different approach. It's not just you getting a... If you look at the South African operators now that are by and large using two key providers that are covering 80 % of the market, it's the same product suite. It's the same casino offering.

Mark Schmidt (06:30.611)
It's the same front end. The front end, the only differentiator from a front end perspective is a few cosmetic changes, know, in terms of color waves, etc. But, you know, we are able to kind of offer a fully unique and bespoke product per operator requirements. And I think that's really important. You know, there's some operators in South Africa that want to be stronger on the sports betting side of things and the others that want to really push their casino operations. And then there are two that want to, you know, offer full kind of, you know, cross part there.

Anaya McDonald (06:53.663)
Mm-hmm.

Mark Schmidt (07:00.371)
option in terms of both verticals and we able to do that's dependent on what they want.

Anaya McDonald (07:06.591)
Great. And I'll come back to the technology side of things, but I just briefly wanted to ask you about the sports side of things as well and what that mix is between casino and sports bettors. you know, they are two different types of player. You can try and cross sell and that's something that operators are increasingly trying to do. But what is the mix between casino and sports players in South Africa?

Mark Schmidt (07:30.065)
It's a tricky one to answer as it dipped us significantly per operator and it comes down to what I mentioned now in terms of the offering that some of these guys that don't have the necessary good offering and the offering that they should have from Casino, their numbers in terms of sports football will be higher because their sports offering is pretty standard, using the standardized feed across the market, there's no kind of customization there. So I would say from...

The lower end guys, might see their sportsbook being 70, 30 in favour of a sportsbook over casino. But from the numbers how Betway and Hollywood change things, you're looking at, you know, could be 60 % casino for Hollywood and Betway and 40 % sportsbook. And that comes down to, you know, just those two companies again being able to, and they're on their own proprietary in-house tech, they're able to push our casino games when they want to, how they want to, and display it in a way that they know.

works for their players and they're not kind of waiting six or seven months for an operator in Europe to get around to you know kind of allow them to use the new casino game that they want.

Anaya McDonald (08:42.165)
great. Let's dive into the crux of your piece in SBC News then, which is all about this sort of legacy tech that is being used in the market and the title itself, know, ending the over-promise and under-deliver culture in South Africa on the technology side of things. You have briefly mentioned it already, but what is your assessment of the technology in the market?

currently and I guess more importantly, why do you think that it is substandard?

Mark Schmidt (09:14.801)
I don't believe it's just a South African problem. It's a problem across the continent. The thoughts of over-promising and under-delivering is incredibly common. If you speak to an operator in Nigeria, Kenya, South Africa, over the years they would have had the same feedback that they were promised the world but basically got a tenth or twing of what they were actually expecting. In South Africa it's different in that there's a

lack of the tech and the turnkey about I'll talk from a turnkey point of view you know from a platform and fees etc it's there's been a lack of choice for the operators you know going back for the last 20 years there was a legacy provider in South Africa that basically had you know 90 % plus of the market

They're very slow to roll out features. They're very good from a horse racing perspective, but pretty weak across every other vertical within the operation. And that allowed different companies to try and come in thinking that they would offer something new. The South African operators being pretty much fed up with what they were kind of being given, which was not much, took the opportunity to speak to these new providers coming into the market. But then they soon found out that those providers

couldn't really do what they had promised either. So I think there's a lack of hesitancy from the operator side to kind of look at anyone entering the markets over the last, if we can take up the last three years, before that the guys that were entering the market weren't really serious about South Africa. There's also the interesting part and crucial part to consider is the red tape from a regulatory point of view that's in place.

The regulations here in South Africa are incredibly stringent. It's an all-in approach. Everything is covered. Every stone is turned over. Everything is laid out in the open. It's really good because everybody wants a very well-regulated market to work in. But it also doesn't work well for some companies trying to enter South Africa because they're putting their BNC teams in. I might get some kickback for that.

Mark Schmidt (11:34.003)
but you know the BNC teams on Africa and it's not really being seen through as it should. So these are things that you know I'll touch on in the lessons that we are able to implement both from my experience here in South Africa and I mean through this numerous times and as well as the experience that we've onboarded with the FSB team after the acquisition.

Anaya McDonald (11:56.31)
I guess it leads nicely into the question of why these legacy providers have prevailed for so long really. You talk about regulation, but is it also that traditionally other companies haven't really seen the untapped potential of the South Africa market? Why is it that think that legacy providers have prevailed for so long and had that 90 % of the market that you mentioned earlier?

Mark Schmidt (12:22.971)
Yeah, think a lot of it comes down to the regulation side of things and how stringent it is and how much time it takes to actually get done. And companies, when they see the costs associated with it, they will pull out and they'll get a third of the way out and done and they'll realize that this is just not too worth their while. But I don't think it's been taken seriously and I don't think it's been done well. And the companies that have entered here before, I don't believe there's a lot of them that have entered and failed.

And that comes down to purely just not offering the right product, the right customer support, and understanding the requirements of the South African players. It is an incredibly competitive market. And if you have a sales team that's based on the other side of the world that's trying to understand how you work from a day-to-day perspective, the chances of that relationship being successful are pretty much slim to none. And the good part that I have with being here is that I'm in South Africa.

in my office now in Durban. We have another office in Dar es Salaam in Tanzania. We're able to meet with our clients face to face. We're able to build a relationship outside of business and we're able to get a real understanding of what their requirements are from a ground-up perspective, which puts us at a really advantage, a point of advantage compared to who we compete with in the market. So if you put those together,

I think it puts every Matrix in a really good position and to add to that, we'll be increasing our team over the next year or so, significantly, where we will have localized support to support players here in real time, the payment mechanisms that are needed to have supports, channels, et cetera. It's just that extra layer that should have been provided before that becomes part of the package with every Matrix and how we do business.

Anaya McDonald (14:19.872)
fantastic and yeah let's talk about every matrix solutions in the market and how you're trying to do things a little bit differently and sort of your role in this as well. what is it that every matrix is bringing to the market that sort of moves things forward and how do you fit into this as well?

Mark Schmidt (14:39.409)
Yeah, if you just look at the results of every matrix over the last few years, it's record breaking year after record breaking year. And this past financial year, we just shattered records once again. And that comes in from clients performing well, new clients wanting to work with us. And the good thing is that that money gets invested back into the product that we're able to offer to our partners worldwide. I'll talk specifically from a South African perspective. You look at the casino.

offering that we have. We have the largest casino aggregator worldwide. Our odds matrix products for sports book and feeds is again best in breed. You're looking at a 170,000 plus live and play games a month that operators can choose from. And outside of that is that we are able to also offer niche products that are suited to the market. you know, whereas if you look from a European perspective in the UK, for example, horse racing is a must have for pretty much 90 % of the books there. It's the same here.

in South Africa. It's a must-have product, it's not a huge turnover product, but if you are seen as not having a suitable horse racing product, you're not really seen as a serious operator in many people's eyes. That can be different with the younger demographic, for sure they're looking at sports like e-sports and casino, it's vitally important and if you look at what we have, just outside obviously football is really popular worldwide, especially in other

in the rest of Africa. But in South Africa there are niche sports that are crucial here. There's rugby, cricket, golf, etc. that need to be provided at a very high level and we're able to do that quite easily. from a sports perspective we covered, from a casino perspective we're more than covered. And then horse racing is attached on early on with the acquisition of FSB. They had a world leading horse racing product that was pushed out to clients.

that product what we realized very quickly is that although with the FSB acquisition and know the potential all our partners etc all that are moving across the Erie Matrix will be using the Erie Matrix technology there are certain parts that FSB did particularly well and that part one of the parts was horse racing so you look at that we'll be building it out now it's due to launch imminently and we have a bespoke horse racing product with the knowledge base that we've picked up from the team from FSB that

Mark Schmidt (17:09.053)
are fully integrated into the every matrix systems that is kind of localized specifically for South Africa. So you're not getting a horse racing product where it's a European product or UK product with all the know bed types and wind types and place types in the UK terms it's kind of customized to what the South African markets you know the way that horse racing is seen here and needed to be seen here so that's very important and those are just a few of the know the differentiators and you know from my perspective the

absolute must-haves that you need to have in the markets. It's crucial to have, but we have so many unique USPs that we can push out to operators. There's the option of early payouts where games are resulted of certain criteria are met within the game through various algorithms that there's an early payout for players regardless of the result at the end. Operator can choose to have that. Our bonus engine, again, sound like a stuck record saying that we

are the leaders and know best of breed in this but we really are a bonus engine and you know jackpot engine etc for the bonuses that we are able to give to players is something that's going to really shake up the South African market. If you look at the bonuses that players receive now they're the same bonuses that they've been getting for the last you know six seven years very very stock standard what we are able to offer to you know to the players is that through the operators is that they're able to have bespoke personalized bonus offers.

for each player on a player-by-player level. So you you Charlie, if you love watching the darts at Alley Pally, and then we know that you're going to get a bonus in your wallet to say, like, here we go, let's have a go at Alley Pally tonight. But it makes no sense to me if I have no interest in darts getting the same promo, you it's a bit of a frustration. through the back end, we're able to give all of those controls to the operators to kind of give a really more personalized approach to how business is done in South Africa.

in Africa as a whole.

Anaya McDonald (19:11.286)
Yeah, absolutely. know, bonusing is so important for both acquisition and retention. So it's key for operators going forward. And you also mentioned the FSB acquisition, which is, you know, a huge development for EveryMatrix and really pushes what you can do in terms of the sports side of things. I wanted to touch on the migration for clients as well, because there's going to be a lot of people moving from legacy tech onto the EveryMatrix solution. what is that process like?

for customers.

Mark Schmidt (19:43.907)
Yeah, it's look, it's it's a crucial part of our strategy now because we know that we're to pick up a lot of key operators in South Africa that that kind of fits in and align with our goals and what we have in mind. The conversations are advanced talks now in South Africa and a migration of, you know, serious numbers is not something that's new to every matrix. It's something that we've done very well in the past. You know, can reference Bits at Home, for example, that was a migration of five

million players that we were able to do. And then also the Hungarian state lottery, which we were able to do with a competitor of ours. Also significant numbers that went very well, where both companies mentioned, now we're very happy with the way that migration was done. And saying that, it's not a case of us thinking, well, we nailed it with these two companies, we'll nail it in South Africa. if we continue to, if anyone thinks like that, there's issues of

bound to happen. what's really assuring for me, reassuring for me, is that in the background the team has already kind of done the necessary processes and understanding of what would need to happen in terms of the migration. So it's very clearly laid out. The feedback from Erie Matrix is very straight to the point. We're not here to mess around and you mentioned that over promise and under deliver. That's not the way that anything's done in this business at all. It's one of the things that kind of took me by surprise.

in the know, the guys are really straight to the fact and that's backed up by knowing what they want. So we're not in the business of telling clients, you know, what they want to hear. We end up like it's more what they need to hear and straight to the facts and giving them a very kind of clear-cut idea of what to expect. you know, confidence levels are high, migrations are really important. It's something that can go really wrong, but, you know, touchwood and there's all confidence that we will have that wrapped up and there's no concerns from our side there.

you

Anaya McDonald (21:44.269)
Brilliant. Well, Mark, thank you very much for joining us today. I'm afraid that's all the time we have today. Thanks for joining us and thanks to the listeners for joining us as well. I would urge you all to check out Mark's piece on SBC News. We'll leave a link to that in the description and join us next time for another episode of iGaming Daily.