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SBC Leaders Podcast is a series of interviews with CEOs and decision makers at some of the betting and gaming industry's biggest, best and most innovative companies. SBC's Kelly Kehn is the host who asks the questions.
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Welcome, my name is Sue Schneider. I'm vice president of growth and strategy for the Americas for SBC. And this is our Leaders podcast and we're happy to welcome Scott VanderWell, who is CEO of Pointsbet Canada. So happy to have you on here. Thank you, Sue. I'm happy to be here. You come from a little different aspect of industry than many people in gaming. So can you talk a little bit about your background
you know what your experience has been and how you made that transition. all started, I was a beautiful baby. we'll start then, no seriously, I was first introduced to this industry three years ago and so in the context of this industry and you know in the presence of great leaders of this industry like yourself it's a very short.
duration of time to be in this space. But it's been a fascinating journey and we're going to talk a lot more about that I'm sure. Prior to this I spent about a decade in the telecommunications industry at a company in Canada that's one of the larger organizations called Rogers Communications and they have a large number of sports assets, large number of media and telecommunications assets, broadly some physical assets. I spent
half of my time there in strategy, half of my time there in operations and digital. Prior to that, I spent 15 years as a consultant, kind of working around the world on strategy and management consultant topics for large companies all over the globe. So talk a little bit about how you kind of got drug into this industry then, because it's, you know, I think when you look back, everybody has
wide variety of backgrounds. my, spent 12 years running a not -for -profit agency and it's like here I am. So, but you know, how did you get recruited? How did you even consider making this transition? Sometimes you're in the right place at the right time and that's very much a piece of the story here. I, at the time when I entered this industry, this industry was just forming in Canada. You you know, the gray industry and stuff has been in Canada for a long time, the provincial.
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solutions have been in Canada for a long time, but there was an awful lot of excitement around this industry emerging in a regulated way in Ontario at a time where I was looking to do something more entrepreneurial, do something less corporate than what I had been doing up until that point. And, you know, I happened across the opportunity with PointsBet.
the opportunity to be one of the very first employees in the Canadian marketplace and really an opportunity to build something leveraging all of the capabilities and knowledge that exists around the world but to put my stamp on it and build something sort of from scratch. I mean that's a little bit of an overstatement but very much in market. We didn't have a lot here when we started.
So that opportunity doesn't come along that many times in someone's career. I felt like you have to go and try it. And to be honest, when I first approached the opportunity, it was with that attitude. It was like, have to give this a try. I don't know if it's gonna, if the suit's gonna fit, if it's gonna agree with me or not. I'm still here three years later and
grown to really appreciate and love the dynamics of this industry, the complexity of it, the regulatory dynamics, the consumer dynamics, the advocacy dynamics. I feel not just like I have been given an opportunity to lead points bet, but also been given a voice to help shape this industry to become what it deserves to be here in Canada.
that combination has made it an incredibly exciting place to spend a little bit of time. It's fun to be when things are fun to be involved when things are in formation. So can you give a little background on points bet because it is an Australian company has come into the U .S. came here. Can you talk a little bit for those that may not be that familiar with points bet. I mean it's a great it's a great entrepreneurial story to be honest points bet. And when it when points that came to the U .S. I think it surprised most people in the U .S. because
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who was this company and where were they coming from, right? But the story actually starts prior to five years ago or so when PointsBet entered the US. It started in Australia. It started in a way driven by the name of the company. If you kind of look at it was an innovation on a relatively mature betting industry where you could basically do points betting, which is basically betting on the outcomes of an event that scale based on the
degree to which an outcome occurs, greater or lower. Anyway, relatively novel idea, quite an innovation, and it allowed PointsBet to sort of, in an entrepreneurial way, sort of strike a flag. And it quickly moved from that innovation towards establishing a position in horse betting and greyhounds in Australia, which is a very popular and scale market, and really differentiating itself by building in technology and starting
think actively about how do they bring North American sports to the Australian market. And so that investment of being kind of unique in the Australian market by having a greater set of capabilities in the product and in its focus around American sports actually set the stage for how Points Bet came to the US. Came to the US post the opening of the market. Grew aggressively in the US. It was early into the market. It was an early
kind of leader. At one point it got desperately close to a 10 % market share in the US and continued to kind of open and progress as the states kind of went through their regulatory process. And it became a bit of a household name from a position of really people not knowing much of points of bet. Some of that's supported by really great deals with NBC and various different sports teams. But a lot of it's supported by
The grit, the hard work of the team, the lessons they had learned in Australia, the product that had been built, has always been a great product and continues to be a podium level sports betting product. And so three years ago when Ontario started talking about the fact that the market was going to open and
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The regulations changed to allow the investment to kind of with confidence enter the marketplace. We started our journey here in Canada and yeah and then the story kind of goes from there. Great. And there was a sale in US that I think has confused some people a little bit. So you might talk about how that has, you know, what the effect has been in terms, particularly in terms of Canada because I think at first people thought kind of the whole package
but if you could talk about that a little bit, helpful. So the way that I would think about points bet at the point in time when the decision to sell the US assets to Fanatics occurred is half of them, roughly half of our business was Australia, half of our business was the US, and Canada was just this thing that was starting.
The Australian business is now competing in a relatively mature market. It's a profitable business. It's got a great set of capabilities and assets. The US had been a very big investment focus for the company. And the decision to sell the US was largely a strategic one. When we looked at the state of competition in the US, when we looked at the investment profile required.
to truly be a leader in that market as it continued to expand, what we realized is that a key for the success in the US was going to be making sure that the assets sat in the hands of someone with the pockets deep enough to compete. And that really kind of set the stage for the strategic process, which ultimately ended with Fanatics acquiring the assets. And
The announcement of Fanatics took place over a year ago. The actual completion of the transaction only recently completed over last couple of months. And in the interim year, a lot of work has gone into figuring out how to deconstruct this asset that was never really designed to be fully modular, to kind of pull it apart and make sure that as we extracted the U .S. from the business,
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that the assets that remained, the Australian assets and the Canadian assets, kind of the Commonwealth assets, that those assets still had the capabilities, the strength, the compliance, the technology, the team, et cetera, to be able to compete. One question I get asked all the time is, why didn't Canada go with the US? And I would say at different points in the conversation, we were absolutely contemplating, should Canada go, should Canada not go? At the end of the day,
I would say Fanatec's focus was really on the US market and we saw value in Canada that was different than what Fanatec saw in Canada and that's largely been proven out. We've been able to continue to grow and strengthen our position here in the country. We've sort of largely been able to maintain a foothold here in North America and that's pretty important strategically in that our product is still
fantastic product for the North American marketplace and one that you want a reason to be investing behind. And so Canada kind of funds the investment to ensure that the product continues to stay a podium level sports betting opportunity. Do you know roughly how many jurisdictions in the US points bet was? We were in 14. Yeah, yeah, it was substantial. So for fanatics, they immediately or in a relatively efficient way, they got access.
to a large part of the market. And it really moved them from being someone who was sort of tiptoeing into the market to someone who is a competitor to be taken seriously. Well, let's talk specifically about Canada
Obviously the expansion and opening up in Ontario for starters and then we'll go a little beyond that based on news we're hearing today. So you want to start about just how that's rolled out here and where you see points bet in that picture. Yeah. So when I'm very proud of the fact that points bet was took the first legal bet from a private operator in Canada is 52 seconds after the market opened. We took our first bet.
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And ever since then we've kind of been kind of growing the business in a very methodical, orderly way. perhaps not surprisingly, PointsBet's origin is as a sports betting led company in North America. And that's been the way we've participated in the Canadian market as well. Our partnerships reflect that, our marketing dollars to date have largely reflected that. And we've built...
position in the sports betting marketplace which today is on any given month kind of hovers between three and a half and five percent. So we're not the biggest player depending on the month we're kind of in the top ten but we're kind of squarely in that middle tier of operators in the Canadian marketplace. We've had a casino business that we inherited from the investments that had been made in the US relative to the few markets that had casino opportunities there.
But it hasn't been an area where we as a company have had the same amount of focus. So for us, a big part of how we grow from here is continue the journey we're on on sports, double that business every year, but really dig into the opportunity that sits in front of us in Casino. And that opportunity in Ontario has really proven to be immense. 75 % of the Ontario marketplace is iGaming, not sports.
and 75 % of that marketplace is slots gaming, not table. So, PointsBest to date has largely participated in the sports business and by crossover sale, the table games part of the casino market, but there's this massive opportunity that sits in
general iGaming slots marketplace which we think we have a right to be able to participate and gain our fair share in as well. So that for Ontario, that'll be an organic growth catalyst that'll take us through quite a little while and a large part of my focus over the last couple days here has been really strengthening our casino ecosystem with our vendors and our partners and establishing what we need to be able to be successful over time on that part of the business.
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We can talk more about where we think this market is going, the main piece for PointsBet is we've always operated and regulated markets. And so our pace of expansion in Canada to date has been dictated by how quickly will the rest of the provinces decide to regulate and produce a framework that we feel we can compete in. There's been lots of excitement at this show around what Alberta might do. That's probably the most topical one.
everybody I've heard every piece of speculation on how quickly it will come to pass so I won't speculate further on that but what I will say that is incredibly positive about the noise over the last couple days with respect to Alberta is that the framework being exposed in Alberta seems to model the framework that we've already invested behind in Ontario and that is brilliant news because
Ontario has sort of set a platinum standard framework. We've learned some things, but for the most part the framework is working. It's channelized a large part of the gray market activity that existed in Ontario prior. Alberta is 25 % the population of Ontario. So if it were to say go down a path that was dramatically nuanced and dramatically different.
who will choose to make the investment to go after the market will be severely constrained and they won't get the gray market results that
And the channelization results that we know produce benefits for player safety and all that type of stuff Let me ask you because you mentioned something about your sports partnerships. You have some partnerships that are uniquely Canadian Can you talk a little bit about? Like curling yeah, I'll talk about I'll tell you I'll talk about a couple of my partnerships that I'm very very proud of so a couple things that have really been a part of our footprint here in Canada is from day one
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the vision of our leadership was that you needed to be local. You needed to be on the ground, boots on the ground, team here. So we have an office, know, 100 meters from here, 500 meters from here, just up the block.
We have 60 people that support both our Canadian operations but also now our kind of global operations that sit in that office. We have our pulse on the market here. So that local dynamic has been great from an employment perspective. It's also been great because we were early into the marketplace and had that local orientation. We went after a bunch of assets that we thought could really help us build our business. And those relationships have really...
been a part of what's created the DNA of Pointsbet in the country. Curling was one of our first deals of any magnitude and might seem like a weird deal but at a time where where we didn't have a lot of you know kind of brand recognition or kind of credibility in the marketplace I give the team at Curling Canada a lot of credit for believing in the vision that we were talking about. The reality is 130 Canadians watch Curling.
And so by.
being very visible in the curling broadcast, which occupies hundreds of hours of television time here in Canada, we very quickly became a brand that people recognized. Now, that's only one part of the marketing journey, but when people see your brand and they know that it stands for something credible because it's associated with a sport that we know and love as Canadians, it's a good first step. We follow that up with a series of other partnerships, but one of them that
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I think has been very differentiating for us has been our relationship with Maple Leaf Sports and Entertainment. And for those that may not know Maple Leaf Sports and Entertainment are the owners of the Raptors, the Toronto Maple Leafs, the Toronto Argos, is a CFL football team, and the Toronto Football Club, which is our local soccer team. So that relationship actually covers a lot of the premier properties in Canada. Canada only
one NBA team, it's the Raptors. The Leafs are one of the original six. They're a very popular team despite them being a heartbreaking team sometimes. And so being able to kind of line our brand up alongside those assets just sort of further built the trust and credibility that was so important in the early days of us being here in the marketplace. And so these are multi -year relationships. They're relationships we continue to invest in and refine.
there are relationships that allow us to kind of be a bit creative. In curling we have our own event, it's called the points bet invitational. So when you, one of the five events in the season, the first one, when you turn on curling for the first time in the fall, you're gonna be watching an event that looks like it's been painted with a points bet brush. It's a March madness style, single elimination bracket, it's a way to get the curling teams into the season. It's incredibly exciting.
and it's an asset that we've created alongside Curling Canada that's been pretty good for points bet but also good for the sport of curling. I would think so, yeah. And we still need to figure out how to get curling activation at this event. Well, we've talked about that a couple times, right? we have. We're going to figure out a it enough times and we'll do it. We'll do it. Let me just get personal for a minute. What do you like to do when you're not working? What's fun for you?
Yeah, I guess the first thing I would say is, know, like any, I'm a father, a father of two kids, happily married. So, you know, obviously a big part of my non -working time is focused on how do I, how am I there for and supporting my family and being where they need me to be and making sure that I'm kind of finding the right balance on that.
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My boys are 17 and soon to be 15. They're active athletes. I spend a lot of time in the summer at baseball diamonds and soccer fields because they're quite competitive in those arenas. In the summer I'm a cyclist so I spend a lot of time on the road in the mornings and on the trails when I can on the weekends. And in the winter, and if you ask me what my true passion is recreationally, I'm a skier. I've been skiing since I was two years old.
I'd be skiing right now if it were snowing outside and I weren't doing this interview. It's really where, recreationally, where my passion lies, but I'm lucky in that my family has followed me into that passion so we get to do it together.
and that kind of ticks both of those boxes. That's great. Well with kids that age, they're going to be off into the world at some point in the future. I keep seeing 20 -somethings like kids that are here that are startups. How do you see the whole startup and innovation side of the industry? Is it adequate? Do we need more? How do we support them? Well my general theory on innovation and startup ecosystems is that there's always
wait for more. And this industry has been fun to watch because there have been places where you've seen innovation start. You know, we have, I watched a panel today on Gen Z and there were some great, some great stories that were emerging there from affiliates and the kind of next generation, very youthful entrepreneurial ventures there. And so you see,
This industry has been one that's been willing to allow that to happen. Most of the companies that have booths here were startups not that long ago, like maybe a bit before my time, but certainly inside of the tenure where you've been focused on this industry. And I think this industry respects that it's had to kind of find its way and it's had to be innovative and it's had to kind of go through those startup lessons. there seems to be a willingness.
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from the operator side, from the supplier ecosystem, from the regulator side, to produce enough space for startups and innovative ventures to kind of get a foothold. And I like that. There's always something to learn. Exactly. And some really good ways, I think, of appealing to a younger audience, because that's their peers, and they know what will work. And it's an industry that has its challenges. It's come so far.
but it still has inefficiencies and it still has things that don't work perfectly. those are, whenever there's a problem, there's an entrepreneurial opportunity. And I think you're seeing that kind of emerge. The representation of the startup community here in the Canadian show.
is not the same as it is when you go to some of the other SPC shows. So if you go to the New Jersey show or you go to other shows that have a little bit more scale, then I think you see that community is a bit more on display.
But if you step back and say, how's the industry doing? I think you got to be pretty proud of this industry's willingness to embrace the entrepreneurial mindset. Right. Great. Well, thank you very much for joining us. We have been talking with Scott VanderWel, who is the CEO of PointsBet Canada. And we've been very happy to have you on. I'm happy to be here. Thanks so much,