iGB Diary: US igaming ban, Unreg'd markets - low risk, Garber wages, NAC: praise to iGB events and unsual biz cards
Rejoice igamers, it's Friday! Your favourite Diary (EVER.) is back. This week, in no particular order, we wonder whether US igaming should brace itself for more attacks from AG Jeff Sessions, marvel at Mitch Garber's Gargantuan salary for 2016-17, are amazed at the low risk that unregulated markets offer and astounded at one business card we picked up during the Nordic Affiliate Conference. You'll have gathered, lots of wonderment this week.
US igaming resistance starts here
Good to see Chris Grove of US-focused website Online Poker Report have a dig at the anti-igaming lobby in the US in the Huffington Post. It’s time the hypocritical and counter-productive stance taken by some US stakeholders was called out. Of course we're referring to newly-appoitned Attorney General Jeff Sessions potentially pushing for a federal igaming ban, backed by Las Vegas Sands supremo Sheldon Adelson in his effort to do “whatever it takes” to stop online gaming in the US. If that means pouring millions of dollars into lobbying, well, it works so well in politics, there’s no reason why it shouldn’t be just as effective when it comes to repealing state-based regulations surrounding igaming. These are also much less high profile than anything like Obamacare or Trump’s recent move to starve planned parenthood clinics of funds. How much of a difference will columns like Grove’s or strong academic and legal research make though? If recent events have proved anything it surely must be that politicians (and parts of the public) simply don’t give a monkey’s whether what they say is true, false or even vaguely grounded in fact. Should Sessions start pushing for the ban, legal challenges will abound from US states and resistance will no doubt be fierce. As ever though, should a US-wide ban ever come into force, the major beneficiaries will be the offshore, unregulated and untaxed sites that will only be too happy to accept US traffic.
Unregulated markets, low risk
Speaking of regulated vs. unregulated markets (a debate that is as old as the industry itself), Simon French of Cenkos Securities explains that the discussions he has had with investors reveal that “risk is misunderstood and certainly mispriced by the market” (paywall). And while a higher premium is (naturally?) placed on revenues from regulated markets, the risk of working in unregulated markets, is, on the whole, not that high; and can be highly rewarding. One simply has to look towards Sweden or Germany to see that in action or point to unregulated operators accepting bets from regulated markets (Italy, France) to see a similar scenario play out.
NAC: amazing handling of stressful events by iGB events team and... very strange business cards
As you know we recently held our Nordic Affiliate Conference in Stockholm, which unfortunately was interrupted by a terrorist attack in the heart of the Swedish capital. First of all we would like to point out the amazing work of the event director Shona ODonnell and head of events Alana Jones, which was also highlighted by the many attendees who emailed iGaming Business after the event to thank both of them for handling an extremely difficult situation with the utmost clarity and level-headedness. They kept everyone very well informed of ongoing developments and played a major role in keeping all attendees calm and collected. The conference itself was a resounding success, with over 400 delegates and 10 exhibitors and it was fascinating to hear about Sweden and Scandinavia in general, which, despite being sparsely populated (i.e. 11 million in Sweden and 5 million in Denmark as the two leading markets), has been a true igaming innovator and pioneer in the past 15 years. We’ve covered all the M&A activity in the affiliate and operator space there widely, Gaming Innovation Group added another affiliate network to its stable today. We also met many new and old contacts at the event; and among the newer ones was one Hakan Klingen, founder of Nicerodds.co.uk. However it wasn’t his site that caught our attention, but his business card. Why his business card? Well, it’s a condom. That’s right, that’s his, err, calling card (?). What we’re wondering though is whether it ever proves successful with the ladies.
He earned how much??
For our final item we go back to the US and more specifically Caesars Interactive Entertainment chief executive Mitch Garber’s pay package. Quite simply, it’s staggering. Garber earned US$210m in the last 12 months, an amount that puts him at the very top of the highest corporate earners list in the US. Even the financial gurus at KRR didn’t earn as much (co-founders Henry Kravis and George Roberts earned US$116m and US$119m respectively). Garber told CDC Gaming Reports that he had “gotten incredibly lucky”. False modesty or just benig humble? He does seem to have played a blinder. When he invested US$1m of his own money into setting up CIE in 2009 there were some raised eyebrows, mainly to do with the fact that US wasn’t, and still isn’t, a thriving igaming market for regulated operators. Nonetheless, one thing leading to another, in 2011 he persuaded Caesars then-boss Gary Loveman to acquire a small social gaming company called Playtika for US$110m. As we all know, Playtika was acquired for an eye-watering US$4.4bn by Shanghai Giant Network Technology in August 2016. The sale enabled Caesars to renegotiate its huge debts from a completely different position and cut its full year 2016 losses to US$2.7bn, from US$5.7bn during the 2015 period. At least Garber is doing well even if his parent company isn't.
On that note, we’ll get back to the day job.
Have a great weekend!