Gambling.com Group CEO and Chairman Charles Gillespie sees a “clear, strong positive” for the affiliate company when it comes to prediction markets’ expansion into sports.
At a time when Robinhood and Kalshi are teaming up to offer March Madness markets, Gillespie was asked on an earnings call on Thursday about the potential opportunities that may arise from sports events contracts.
“This is an even newer kind of segment and it’s super exciting,” Gillespie said. “I mean, this is a clear strong positive for us, I think, for multiple reasons …
“It’s basically new competition for state gaming regulators. To the extent that the regulation gets clarified in a way that this can grow quickly, I think it certainly will.”
Gambling.com talking with potential partners
Clarity from the Commodity Futures Trading Commission (CFTC) is still needed. The CFTC is continuing to review the legality of events contracts, which extend across sports, politics and more. The commission is holding a roundtable on the topic.
Meanwhile, the Nevada Gaming Control Board (NGCB) this month became the first state regulator to try to force Kalshi to shut down its operations in the state.
While predictions markets’ positions remains up for debate, Gillespie suggested that his company is already in active discussions about working within the vertical.
“There’s a lot of interesting companies, big-name companies with big balance sheets, that are looking to enter this or already have. And we are talking to all of them. It’s an obvious way for us to expand the TAM and grow the business. So we look forward to seeing how that develops this year.”
Later on the call’s Q&A, Gillespie said he was not concerned about the possibility of prediction markets cannibalizing the business of Gambling.com Group’s existing operator clients within sports betting.
“It could cut into the traditional local state-based regulated sports betting operations, but I think it will grow the market more than it will impact them,” Gillespie added. He opined that more money could flow through predictions markets versus highly regulated and taxed state gaming revenue.
“And I think the big operators in the United States understand that. Why would they not put it through that channel if they could, and if it was legal?”
Gillespie preaches more caution on sweepstakes
Gillespie’s comments about prediction markets stood in contrast to his remarks when asked about online sweepstakes casinos. He said Gambling.com Group is taking “a very cautious approach to the entire category,” which has come under intense scrutiny from state regulators and lawmakers so far this year.
“It’s not exactly the most mainstream product, but it’s a product which consumers really want,” he noted. “The operators of sweeps casinos are very aggressive, they’re very happy to buy traffic, and there’s a lot of them …
“It’s growing, but we tend to focus on regulated markets and doing everything by the book. So we look forward to more clarity on how those products are regarded.”
Firm forecasts 35% revenue growth
Gillespie was speaking after executives discussed the company’s latest financial results.
Q4 revenue was up 9% year-over-year to $35.3m and Q4 adjusted EBITDA rose 39%. For the full year, revenue was up 17%, adjusted EBIDTA grew 33% and net income surged 68%.
The firm has shown perhaps the most resilience of any gambling affiliate in North America amid industry challenges. Asked how it managed that, Gillespie said the company expected 2024 to be a tough year for sportsbooks and invested in other areas of growth, such as prioritizing iGaming revenue, making multiple acquisitions and expanding its product portfolio.
On Thursday, executives forecasted that revenues will grow 35% and adjusted EBITDA will climb 40% in 2025.
