Having recently joined The Unit, a provider of design and developmental resource for sports betting and igaming companies, as Strategic Advisor, Andy Clerkson spoke with SBC about his new role and plans for the company, particularly in the evolving US landscape.
SBC: Can you give us an overview of The Unit and what it offers?
AC: The Unit has been operating as a marketing services provider for a number of years, mostly in the sports betting industry. The division of the business that I’m really interested in, that has just started to scale, is a specialist sports betting and igaming design and development shop.
I was introduced to the firm by Paddy Casey, one of The Unit’s founders, with whom I’ve enjoyed a long history. He worked for Grand Parade, my previous company which I sold to William Hill in 2016. Paddy was one of the most experienced, quick-witted and intelligent business analysts I had come across. He used to help design our sports betting products and was the main guy who briefed our 100+ strong dev teams. We built a lot of great technology in those days, and after I sold the company, Paddy left to pursue other projects.
Paddy then got the resources together to launch The Unit, which involved him, a few other key personnel based in Dundalk, including the superb Rob Egan who I worked with at SportCaller, and their own development team, primarily in Ukraine.
This business very much mirrored Grand Parade, where we had about 200 developers in Krakow, Poland, 20 account managers and designers in London, and we pretty much had all of the major operators at the time as a client in some way.
SBC: How do you feel the industry has evolved regarding the issue of developing technology in-house and/or outsourcing?
AC: Back in the early 2010s, sports-betting platforms were finding their feet and had massive problems ranging from capacity issues, content display issues, data issues, you name it. Grand Parade filled a huge gap by having super-experienced analysts, product staff, UX and UI designers that knew sports betting/gaming websites and apps.
Developers that have been trained in those disciplines are very different from developers who might work for Amazon or a bank, for example. We offered a really flexible way for operators to use us to supplement their in-house tech teams. If they wanted a team of four to work on a silo project and integrate with their tech stack, we could do that.
We could equally build out a team of 30-50 people quickly for extended projects. That worked very well and that’s why we had Tier 1 and long-standing clients. Some would use a chunk of resources and some would use more surgical, strategic deliveries.
Since 2016, a lot of operators have taken their development in-house and there’s also been a proliferation of white-label platforms. However, I have still not met an operator that will tell you they can satisfy the various demands of their Chief Product Officers and get through all the priorities on their development roadmap. I’ve also never met a sportsbook director or CMO that will tell you the things at the top of the roadmap are the things they need to drive the business.
There is a demand from certain areas of the business to get something moving more quickly and in a more agile way. If you’ve got an experienced outsourced team that knows how to build a business, knows exactly what the challenges are, and has worked with pricing feeds, odds, event management, casino carousels, RMGs and all the things we deal with, that’s a valuable piece.
Paddy was building something with The Unit and I thought I could come in and help him scale it. We had six people at the Grand Parade, and then four years later we had 250. It was about understanding how to scale that sensibly and cost-effectively.
SBC: I can see The Unit currently lists nine partners. Are you particularly targeting the US as part of the efforts to scale?
AC: No. Some of the clients like SportCaller/Bally’s and PlayStar are US-based, but geographically it’s agnostic. All the development work will be done in Eastern Europe. They cross igaming and sports betting, and these guys have been in the industry for some time.
It could be that they build a front-end, a dashboard for client services, parts of a sports betting engine or something as simple as a landing page. Anything that needs a betting or gaming specialty is their area, and they can do that in any language or jurisdiction.
SBC: We saw in the US there was a mad rush for in-house proprietary technology right across the board and that’s slightly switching now back towards third-party as operators look to cut costs. In light of that, do you think the timing is right for The Unit?
AC: I do think the timing is right. Grand Parade started in late 2007 off the back of the financial crash, and we weren’t sure what we were going to be building at first, but we ended up supplying a good line of experienced people into companies that were looking to keep costs streamlined. It could be that we need four people to do something strategic for three months or it could be a project without a set timeline that may need four people or 24 people, but we can scale it with the client.
Both those things come into a more 2023 approach where it’s not all about growth but more about operational efficiency. With the current bloodbath of tech redundancies across the globe and especially in the US, I do believe having specialist, scalable, reliable, trusted outsourced teams will be back in vogue.
SBC: Is there potentially a challenge of developers needing to work from briefs word-for-word as opposed to collaborating on projects? How does The Unit work around that issue?
AC: That’s why it’s important to have people like Paddy, Rob and a couple of others in Ireland who have all worked in this space for a long time. That’s what I found at Grand Parade. Even though we had a large development shop in Poland, it was four or five top-level individuals who had worked as product staff for operators that made the difference. They were the people that would take the requirements, write those up in a way that would work and then sit with developers and make sure they were that connection.
The Unit doesn’t have a development shop in Ukraine alone. It’s primarily experienced people in Ireland who then take that work on and produce that out of the Eastern European shop. That’s why I was keen to get Rob Egan in, because he really helped build the business at SportCaller.
He understood what the customers wanted and managed to get the requirements from them. You can have as many sales and good developers as you want, but you need people who can project-manage to completion.
SBC: You’re involved in a few other projects across the industry and are also an investor at Tekkorp Capital. Where are you particularly seeing opportunities for investment at the moment?
AC: The M&A world has been depressed for a while. Once the value of listed companies had started to plummet, it was only a matter of time before the malaise seeped through into the private world. There has been a lot of talk in the last 12 months and not much action, but as owners and founders have adjusted to the new reality, we can see the cogs turning again. There’s a lot of action coming; just maybe not in 2023.
I was very focused on the US market since before PASPA was overturned in 2018, but I’m now flying to more exotic places again. LatAm has been hot for a while. We’ve been involved in European and African projects. My world is mirroring The Unit in that sense. The US is still huge, but with consolidation there and state rollouts slowing, there are only so many suppliers that can make a real difference to the bottom line of the large operators. In this gargantuan gaming industry of ours, everyone was US-focused for a time, but eyes are wandering. That’s interesting, but you just have to do some phone calls at very odd times!