Gambling.com Group is coming off a record quarter of revenue driven largely by major growth in the US. The financials were strong despite the economic headwinds that hampered others in the industry, but that is not to say they didn’t come without quite a bit of effort.
Speaking with Gambling.com Group CEO Charles Gillespie and Gambling.com Group CFO Elias Mark, they discussed some of their efforts during the quarter, which focused largely on organically building up its North American sector versus acquiring a position through acquisition.
Arizona provided the road map for a successful affiliate state launch
“We were a little late to the US market compared to some of our peers that entered earlier through acquisitions, and at the heart of our US strategy. has been to do it ourselves organically,” Gillespie said. “And starting a year ago with Arizona, that was the first kind of new state launch that we really nailed. And every single state which is gone live since Arizona, we have also delivered extremely strong performances.”
The company replicated that success this fall with the only new state to enter the US online sports betting states.
“We were very well prepared for launch in Kansas, which of course launched Sep. 1 in time for NFL. So we were in the Kansas market with a variety of assets–BetKansas.com, Bookies.com, Gambling.com, plus our immediate partnership with McClatchy and the two in-market assets Kansas.com and KansasCity.com. So not the biggest state in the world, but we tried to turn it into, briefly, the most important market in America and it was good.”
The McClatchy partnership as well as the acquisition of RotoWire diversified the company’s portfolio and also brought the idea of sports betting to a very different audience than those that discover Gambling.com Group sites via organic SEO.
Looking ahead to new sports betting states and launch timing
Even though Q4 will only feature a single new state launch in Maryland, the company is fine to be patient in exchange for a successful launch. For example, Maryland took quite some time to get from legalization to the launch of online betting, but the timing, launching the day before Thanksgiving, is a great time for affiliates and operators to begin acquisitions.
It helps to have time for preparation so that we can make sure that our assets are positioned, right and that we have the content we need,” observed Mark. “But what is important with a state launch is that the market gets it right that the market is ready and, ideally, to get the timing right.”
With 35 states and Washington DC all offering some form of sports betting and the epic failure of Prop 27 in California, there are not many more new markets for the industry to conquer. Certainly, there are some big ones like California, Texas, and Georgia, but many operators are already shifting focus to retention with less emphasis on acquisition.
Gillespie and Mark have no concern that the market is anywhere near saturated, and predict affiliate acquisition will remain strong even as some states, like New Jersey and Pennsylvania, enter their fifth year of sports betting operation.
“Even if we had no new state launches, we’d still be showing pretty spectacular growth in the US just from the states that were already in,” Gillespie said. “I hate to always make comparisons to Europe, but if you look at the UK, and you look at how much money the affiliates make in the UK compared, on a really like-for-like basis, it’s just still way easier to make a lot of money in the UK. That gives us great confidence that we’re miles away from the ceiling and the limits of what’s possible in the US even without new state launches.”
Mark also noted that it is not like once you acquire a customer for one sportsbook that their value to affiliates is done. There are still plenty of opportunities to sell customers to other sportsbooks.
Online casino remains the next golden goose for US gaming
As they noted on the earnings call, the pair are also factoring in the expansion of online casino in the US to their future opportunities.
“I’d rather have New York add online casino than get Maryland a month early on sports betting,” Gillespie said. Illinois and Indiana stand out as candidates most likely to expand and legalize online casino next year, but the team at Gambling.com Group did not rule out New York as an option either.
While many companies are struggling with larger economic factors like inflation and rising interest rates, Gambling.com Group is the rare one to not only overcome adversity but thrive while others struggle. In fact, unlike some of the other major affiliates, the company reports in dollars. Therefore, unlike their competitors, they don’t benefit from the currency conversion from Euros. Most of that can be chalked up to the company, but even Gillespie concedes some of that is the nature of the business.
“In general, it’s a fairly recession-resistant industry. And I feel like the affiliate side of the industry is even more immune to that to those macroeconomic headwinds.”
That may be true, but certainly, the company is working to stay ahead of the game, be ready when opportunities present themselves, and grow in North America in a way that is thoughtful and sustainable.