This story first appeared in SBC Leaders Issue 18 – Click here to read the full issue.
Delasport CEO Oren Cohen Shwartz tells us more about the company’s strategy to expand globally and deliver its comprehensive mobile sports betting and igaming solutions in the US.
SBC: Thank you for talking to SBC Leaders. Can you just start by telling us about Delasport’s interest in the mobile sports betting and igaming market in the US?
OCS: Delasport is fully equipped to deliver a one-stop-shop solution to its partners in the US. We have one of the most comprehensive sports betting products in the industry, and the US is predominantly a sports market. We are expanding globally, and the US market is part of it.
The US online gaming market is one of the fastest-growing markets in the world; it has grown in popularity over the last year, increasing its customers base, and it is valued at $2.5 billion. Scalability is an essential factor in the US market. Delasport is one of the world’s fastest digital sportsbook and casino platforms in the market, and it offers true horizontal scalability. The micro-services technology allows us to tailor the solutions to the partner and market needs.
As regulation requirements differ from state to state, we have the technology advantage to accommodate each market’s needs quickly. For sports coverage, the product covers all the required sports and betting options for the US market. We offer 70,000 monthly pre-match events, 40,000 monthly live events, 2000+ markets, 125+ sports coverage, including esports and virtual sports.
SBC: What are the main reasons for this growth, and what is Delasport’s unique value in the market?
OCS: The main reasons will be accessibility and offers. Mobile sports betting availability is 24×7, players enjoy richer betting options, welcome and activity-based bonuses, and it is easy to access through mobile devices. The pandemic put the entire online industry on steroids.
The online gaming market is expected to grow and reach $8.5 billion GGR by 2025, representing a CAGR of over 15%. It is estimated that the portion of the online gaming revenues from the total gambling revenues in the US is now 20%, predicted to double by 2023 on account of additional skins going live, an enlarged customer’s base and new states legalising online gaming.
Delasport’s unique value proposition is built on five pillars; first is our robust technology, it is the core infrastructure of our business and everything else is built on top of it. Delasport’s solution is cloud-based and it is built out of microservice using the most modern technologies.
The system allows horizontal scalability that can support any load; we use real time monitoring and automation of various processes, in-house smart risk management tools and unique features like a personal trader (ability to chat with a trader), quick bet suggestion, personalised UX with events offering based on past betting activities and geo-location.
Second is our ability to deliver a comprehensive, fully managed solution and run a skin operation from A to Z. Third is our vast experience in all online gaming aspects including acquisition, retention, payment and risk management. Fourth is our capacity to tailor our solution to partner and market needs, and the final point is that our flexible business model allows us to accommodate different deal structures from turnkey, white-label and joint ventures.
SBC: What are the challenges land-based establishments face with going mobile, and how can Dealsport assist them?
OCS: There are several challenges like lack of knowledge, assimilation, and picking the right technology and service partner.
The 12 years between the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and the supreme court ruling in NJ in 2018 have created an online gaming knowledge gap that US gambling professionals are steadily catching up to by self-learning or and M&A with European technology companies that already have the know-how.
The Black Friday in 2011 has left a strong impression that things are different now and being compliant is crucial. Land-based establishments that wish to go online are required to close knowledge gaps regarding online gaming products, technologies that are different in many ways from land-based ones.
Other areas are complying with regulatory framework requirements of each state, payment processing, player acquisition and retention techniques etc. In Europe, new services, products and functionalities were introduced to the market over the last decade, and operators and players had the time to adopt them over the years. In the US, many new functionalities are introduced in a short period, which brings assimilation challenges by itself.
Running an igaming or sports betting operation is a complex task. Some land-based casinos are familiar with only running a slot and table games business. With only five states legalising online casinos, the know-how of sports betting is critical, therefore partnering with the right sports betting and casino partner like Delasport is critical. Choosing the right partner can put land-based organisations in the best position to capitalise on the opportunities regulated casino and sports betting hold.
While the potential is clear, the road to success is not without hurdles. Starting from skin licensing, liquidity allocation and financing. One crucial challenge on hand is to identify the right provider to partner with. Some casino owners will look for complete control over the new B2C operation, while others may be reluctant to obtain the know-how and like to hand the operation to a trusted and experienced 3rd party to run it for them or to ‘sell’ one of their skins, where multiple skins are allowed.
Some states allow just one skin per licence, while others do not specify a limit. For instance, PGCB in Pennsylvania offers unlimited skins for igaming licences but only one for sports betting licences. The multi-skin approach is crucial to maintain variety and healthy competition.
Delasport brings to the table the right ingredients to support the local brick-and-mortar establishments. We own our technology, and that allows us full control over the products. Over the years, we have acquired vast experience in running successful online sports betting and casino operations from the ground up. We support both strategies of turnkey solutions allowing operators to run their brand operation and fully managed solutions where we run the day-to-day operation.
We see technology as a critical ingredient that allows our partners to grow and thrive. Our microservices architecture enables us to tailor our solution and adapt it to partner and regulation requirements needs. On top of this foundation, we build our products and on top of that, our various managed services.
SBC: And finally looking to the years ahead, what are the trends to look out for?
OCS: According to the American Gaming Association, players in 26 states plus the Washington D.C. will be able to legally wager, with as many as five more states potentially permitting such wagers before the season ends in February with the Super Bowl. Enjoying the political support giving additional state tax revenues from GGR and licensing, increase in-state employment, and a decrease in illegal betting through a regulated framework, the online gaming market will continue to thrive.
Online gaming holds a broader potential that is larger than the immediate market operators and providers. There is an entire ecosystem of providers in many fields like KYC automation, anti-fraud and AML systems, AI and machine learning systems, CRM, BI, gamification tools and payment processors.
This in turn, means more indirect taxation and more job creation. Seeing the potential, operators can also take advantage of the growing interest of venture capital organisations and investment banks that have started to invest their time, effort, and money in the industry.
With the exclusion of Tennessee, the regulator gave an advantage to the brick-and-mortar establishments. This in turn should remove some of the fear of losing revenues. While online regulation will cannibalise land-based establishment revenues, mostly from the younger demographic (below 50 years old), going online is a necessity, and not doing so simply means that potential online customers will seek to do business elsewhere.
The potential of land base establishments to boost online gaming revenues comes from the fact that online availability is 24×7, it is easier to access through mobile devices, and it extends the customers base of the entire state.
We will see more leagues like the NFL and media companies like Fox and Sports Illustrated asking to take a piece of the action, and operators seeking ways to acquire the technology to control their own destiny.