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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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iGamingDaily's magical mystery tour of gambling conferences continues as we bring you today's show live from SBC Summit Tbilisi in the heart of Georgia. As 2000 professionals gather to discuss the Central and Eastern European and Central Asian markets, we will assess the potential of the region and ask what operators need to do to make the most of the opportunities they offer. And it wouldn't be a week of iGamingDaily this autumn without talking about what is happening in the UK, so why are both evo-
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and Entain both threatening to divert investment from the UK to other markets. Welcome back to iGaming Daily, supported by Octomove, the creator of positionless marketing and the number one player engagement platform. I'm Charlie Horner, and today I'm joined by our editor-at-large, Ted Menmure, and our media director, Martin Elliott. Ted, how's things? Very well, Charlie. Glad to kick off this podcast, having me kicked out of the interview zone by...
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Italian World Cup winner, Alessandro Nesta. So a bit of drama guys. iGamingDaily versus a World Cup winner. think there's only one winner, I think. Yeah. I mean, judging by the standard of our office, five-a-side team, I think we have to bow down and just take that really, don't we? So I will say this though. Nice to be back on the podcast after a bit of a break and nice to be here in Siblisi, which is my first time here. It is stunning. It really is one of the most beautiful cities in Europe, I think.
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Well worth visiting. I would highly recommend it. And we're not even sponsored by the Georgia tourist board. Yeah, absolutely. No, it's a beautiful city and I'm very jealous that you get to spend a bit more time here later this week. Let's dig into things then. You know, on the podcast in recent months, we've had a lot of doom and gloom stories and about Western Europe. We'll talk a little bit more about it later. But what are the vibes here at the Sheraton? Is it more of an upbeat mood to help offset?
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doom and gloom of Western Europe. Ted, what do you think? I'd summarize it as, uh yeah, it is more upbeat than Western Europe, but that's not difficult as kind of markets stand. I think what the general kind of EE public recognizes is that, look, a lot of markets, even in Eastern Europe, are in flux and they are facing kind of generational revisions and they're at a point of which... ah
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Which route do they take and what kind of new compliance factors are they going to add in? Again, it's one thing that I don't like to do, especially when it comes to Eastern European markets, is kind of generalize because they're so different individually. However, there are kind of binding narratives. One of them is kind of a key protections of players under the age of 24, especially because these are younger economies.
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and with a different profile to Western European markets. And then the other is again, taxation, which policies they go around. It's not necessarily all negative there and also how they're going to apply kind of new rules that affect the competitive makeup of each market. uh Again, you have to kind of look at this individually from market to market and just sections jurisdiction, but they are kind of bounding narratives there.
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Something I really like about these regional events is that you get to really dig deep into these smaller markets that we don't get to talk about as often on the podcast. And it's interesting to see some of the intricacies of it. Martin, you were em meeting plenty of people on the show floor yesterday. What sort of vibes were you getting? Well, mean, looking at things from a slightly different perspective from Ted, because my job tends to be working a bit more with suppliers and so on.
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One thing that really stood out is the number of startups or companies less than two years old here. All of them have got, mean, everyone we spoke to had a pretty impressive tech offer. Some of it's around KYC, you know, lots of gamification type tools, other marketing tools, various platform providers who I've not come across before, but it looks like a great culture here to start a business. And I think part of that is
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There's a lot of countries in this region who almost reset their uh education system maybe 20, 25 years ago to focus more on technology and rather than traditional education. So they've got a massive advantage in terms of the skills they've got here. So it's a great place to invest and it's quite encouraging to see the number of people who are investing and starting businesses here in our industry. So yeah, exciting times.
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innovative region, probably something that we could learn a lot from back in the UK, and you see different cities across the region become hubs of iGaming. There's plenty of offices in Sofia, there's Tbilisi in Yerevan, and there's plenty of companies that are setting up in this region. So if you start to look at things a little bit more deeply, what are the biggest and most
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competitive markets in this region. What makes them stand out above the rest? So a lot of interplay is going on at the moment. The one that for me, actually the markets that stand out for me, we've been reporting on these Romania for starters. It's been a problematic year, say the least in Romania in terms of its governance. There's been pretty much a scandal month to month and there's a real kind of loss of kind of regulatory trust in uh
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the remaining governor of the ONJN, the gambling office. And from there, there is a lot of uh issues that have to be sorted out in terms of the licenses, taxation, and also who manages the governance, whether that gets transferred to a different ministry. ah We've seen remaining come under a new government.
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And then if we go further kind of east, the other thing that we're seeing is that we're seeing huge ruptures in the bulk of the market. Croatia and Serbia coming up with new gambling laws. Montenegro has just relaunched their gambling regime and Bosnia and Herzegovina are looking to settle that in time before the end of year. Again, it's funny how there's kind of interconnections between every market, right? But at the same time, they're all kind of individual.
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And they're all kind of answering their own issues and their own concerns regarding gaming. uh These are kind of subjects that are always kind of close to home and they do kind of like blend in with what we see in Western Europe. However, I think that there is a different approach to how they tackle them. do find it incredibly impressive Ted, how you seem to know exactly what's going on in all of these different markets at the same time. And listeners can keep up to date with that on on SBC News. oh
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One thing that I find really interesting about this region is that they are all very separate, smaller markets, m but the big global groups like your Entains and your Flutters are in this region. They've taken a slightly different approach to it. They've mainly getting market access through M &A deals. We've got Maxbet and Ajarabet, Supersport, STS. m Why do you think that these brands are looking to acquire these local hero brands to get
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podium positions in these markets? I think it's fairly simple. It's money, really. I don't think you can underestimate how difficult it is for foreign company to come into any of these markets, understand the culture, recruit staff effectively, build a business from scratch. That takes a lot of time, a lot of investment. These guys have got shareholders to answer to. want not necessarily returns tomorrow, but returns
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They have to, you know, the boards, sorry, the C-suite has to be able to say in 12 months time, our entry into X market is paying off. So this just makes a lot of financial sense. And some of these deals are big, actually some of them in global terms are really reasonably affordable, I think. Yeah, I'll add to that. And I think the other dynamic here is that there's good value, but
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Again, even with all these issues surrounding these markets and these kind of peculiarities, it comes down to like they are growing. And I think especially for the European PLCs, the Western European ones, is that I think that when you look down at the macro level of each European country that each Western European economy that you're in, it really comes to play that.
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market to start to stagnate. can't just be in Sweden or the UK or Spain. You have to kind of move abroad and these are the dynamics that are being played out. Yeah, it's interesting that you know, the Entain and Flutter are both going down the M &A route. I was listening in on a panel yesterday where there was a representative from Entain talking about their acquisition strategy and then Superbet were also on it and they have, you know, taken the
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Superbet brand from Romania into uh Serbia and Bulgaria and Brazil. It was interesting to see how they were researching and putting all the work into go from just Romania to Serbia, which is, you would assume, they might have some similarities, but also lots of differences as well. Ted, you mentioned earlier that there's lots of m regulatory evolution in certain markets.
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Does this region risk falling into the same pitfalls as we're seeing in Western Europe on regulation on tax? Yes. And I think that's what I mean when I talk about a market influx. And I think one of the key questions for operators in this region is in what direction do they go?
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Do they, because one of the things that actually concerned me yesterday, there was a lot of kind of easy narrative of like, we should just follow the Western, in the Western play. But another opportunity here is that, look, we're gonna have the Middle Eastern UAE and just a close geography to that region. And if that region comes into play for global gambling and not, know, whatever kind of remit they take, right?
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That's a huge opportunity and they're in a much better position to advance there than I'd say your big tier ones in Western Europe trying to access that market. They've already built the technology. They are very kind of like self-reliant here in terms of their services and their infrastructures. So that could be a huge, huge win. uh There are massive, massive questions to be asked about the compliance and kind of the enterprise and the anxieties there about money laundering.
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and uh how kind of they kind of iron out these issues in the next five years. But the opportunity is clear. It's just what passage do these markets take? Tether summed that up pretty well. I'm not entirely convinced when you look at the industry that eh markets learn from each other, particularly everyone's got their own local dynamics. So, yeah, we will see the same issues that we've seen in more mature markets come here.
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eh But the advantage operators now have, these big global operators, is they're more experienced in dealing with those issues. So there might actually be better, better place to do that. You know, when we start talking about stricter regulation and higher taxes, all that kind of thing out here. um And they're perhaps going to be better placed to survive that than some of the smaller operators here. Great. Well, Martin, Ted, we'll take a quick break and then we'll talk about uh
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stronger regulation and more tax. Welcome back to iGaming Daily. while we're here in Tbilisi, the political debates don't stop back home. So let's talk about what's happening in the UK because over the weekend, Evoke, there were stories that Evoke were going to close up to 200 William Hill shops amid the incoming tax hikes in the budget next month. em Stella David has also hinted that Entain might divert
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investment away from the UK and into other markets amid those tax hikes as well. What does this tell us about confidence in the UK sector at the moment? On this subject, I really am just at the point where I just want November 18th to come along and just settle this matter once and for all. I think now we're just reading the tea leaves via the media. I'm not surprised that leadership came out and
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put kind of their concerns and anxieties about high street bank shop closures. uh This budget, I've never seen such a buildup to a budget before. Apparently, we don't, if Rachel Reeves doesn't land this, it's the end of the industry, it's shop closures. So I think for just everyone's wellbeing, I can't wait for the budget to be announced.
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It seems like we are talking about this on a weekly basis, if not a daily basis at the minute. So I will be glad when it's settled one way or another. Martin, what do you think? Well, I am with you. mean, we're only one step away from some operators starting to offer a market on what the tax rise will be on betting, I think, because there's been so much debate about it. But this is a lesson in how not to do things. The thing that
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When you have these stories about there'll be this possibly huge change and they drag on for so long, it kills any kind of investment or planning off. It's uncertainty really does huge damage to industries. And I think the government has handled this astonishingly badly. eh Fair enough. You know, I appreciate that it's probably not top of their agenda. They've got one or two other financial problems that they're going to have to cope with that have built up over the past few years.
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m But yeah, their messaging about it and the sort of kite flying and that's out there to see what the reaction is, it's been pretty poor really. Yeah, let's have a decision so everyone can move forward when we know what it is. Yeah, there's no secret that the UK economy is struggling a little bit. yeah, gambling is often seen as an easy target for tax risers and yeah, a new revenue source for government. But I feel like
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the dialogue that we've had as an industry has just been incredibly prolonged. Are threats like this an effective way of lobbying the government or does it come across as a bit of a desperate plea? Is there a more effective way that leadership can get that message across? I think this would happen in any industry where if you have another tax burden added on,
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quite a significant bottom line impact, you would expect leadership to react. Look, we'll see what will happen if the numbers, you know, like the government, PLCs have to budget. They probably have a best, worst, mid-range scenario, I think, that they're kind of pitching in and they're factoring in and I think that this has been planned into the accounts. I'm pretty, yeah, I'm pretty, I am convinced that.
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William Hill and Evoke will make these changes to what is a retail unit that is very much in the ropes. So changes needed to be done. think this kind of just accelerates the next development of UK gambling. And when the government is so focused on growth in the economy, introducing policies that is going to close down retail shops on the high streets that are already struggling.
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immensely doesn't seem like a great use of economic policy, does it Martin? eh Not really, although I will express a little bit of sympathy for Rachel Reeves, which I know is probably something I don't do very often. She's got a lot of tough decisions to make and if we want to continue paying for the public services we have in country and for the huge welfare bill we've got and
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just being able to afford to repay our debts when they come due. She's going to make some unpopular tax choices somewhere along the line. And the betting industry is not a very sympathetic target. No one is going to complain about that other than the betting industry, I don't think. This has happened for last two years. We've had these kind of tax concerns. And what I tell our audiences is that they've got to remember that
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literally when the tax increases get announced, it's only, you know, two or three sentences. It's just a passage, just like a, you know, a blog update on the Guardian or the Sun News. It just passes over. I the other stuff to look at and actually go kind of, I'd tell people to kind of take a wider perspective is what does that budget tell you about the confidence of the UK economy? What is the big ticket stuff?
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Yeah, last year what really affected businesses more was uh the tax increases in national insurance, especially uh for job hires. So I think we need to have a wider lens on what the budget uh is going to tell UK gambling. No, of course. And one of the other main lines that the industry uh likes to use against stricter regulation.
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more tax is the black market argument that if you increase regulation, increase taxes, then it just sends players to the black market. And it's something that the Bettening Gaming Council has come out and said in, I think it was it a front page splash in the Daily Star last week? Does that argument hold weight? And can the industry tell a different story on this? Because it feels like as soon as any regulation comes into play or tax rises, we just
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immediately go to the black market? Well, I think there are two points on this. The first is, is it true? Is the black market a threat if operators have to start sort of cutting their offers a bit, having worse odds because of tax rises? Yeah, that is absolutely, definitely true. But does that make it a good argument for lobbying and so on? Not really, because your average punter doesn't
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really care whether you've got a license, they care if they get paid if they have a winning bet, they care about what their odds are on that bet, the experience they have when they sign up and so on. So I don't think it is an effective lobbying tool. Is it the best lobbying tool they've got? The best argument they've got? Maybe it is. The other one would be how many jobs the industry has and how many jobs might be lost, I guess, against it.
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and then through the supply chain, not just in betting shops, not just in the head offices where they run the online businesses from. But yeah, I think we're just going to carry on hearing this black market argument again and again, because until it hits home. My observation is that it's quite funny how the lobbying came in, the serious lobbying and aggressive stuff came in when at this kind of tax point.
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ah Where was it for the kind of UK gambling review? Does it should started there? And I many, I think many stakeholders in gambling view that the tax judgment will be kind of labor's play on the outcome of the gambling review, which was considered kind of a very soft touch policy by the conservatives. As always in gaming, everything's kind of hyper politicized and politically sensitive. That never changes. uh
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I think that we will look at the first five years of this decade and as a missed opportunity, UK gambling could have been a lot smarter and it could have actually kind of faced the problems or faced kind of those issues. One of them being, and I always go back to this, what are the real problematic aspects of gambling? How does it kind of siphon those off and say, look, we're going to tackle these issues. One of them would have been, you know, your high risk games. Maybe we could have placed a special taxation there. Maybe we could have
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Do we think then that parts of government don't necessarily understand the industry and don't understand the intricacies of those special tax measures?
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things like that, or is it just that the messaging is a little bit off? Parts of government. um I don't think there's a great understanding of the industry. um People are mired in a certain moral view of gambling, where I, and you know, let's be honest, there are problematic aspects that Ted's just been talking about. And so I can understand that. But actually, this is a big tech industry. It gets, you know, it's...
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It's a big contributor to the overall tax take of the economy. 0.3 % of tax take is from total tax take is the gambling taxes. And then you have payroll taxes. Occasionally you have corporation tax. I think this is the the reason the government wants to go after operators for tax is because so many of them are actually headquartered overseas and pay their under sort of international tax legislation, pay their
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corporation tax in lower tax jurisdictions in the UK. Could ah the government be smarter and have some kind of um licensing condition about your paying your corporation tax on British earnings in the UK? um I don't know. um But we are probably too late to do anything about the government's plans at this point. I don't think...
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Go back to your original question. I know I've diverted quite a long way from what you asked me. No, they don't understand the industry. I don't think DCMS is particularly good at managing this brief. Yeah, I agree with so much of what Martin is saying. One of the things that I kind of keep on reflecting is that UK gambling is a British sector. It's got heritage names of businesses that are centuries old and that have come from kind of these towns.
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that need kind of leveling up that can, you you can call them success stories. You you bet three, six fives in William Hills, you lad Brooks, right? And I think that we never kind of pitched that saying like, this is a very British industry. This is, you know, born and bred out of the UK and its roots. And, you know, there's a fear of like losing that and losing its identity. The other thing here is, is for example,
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What's happening in London Stock Exchange now is lots of flutter and you know, maybe a better kind of environment would have been kind of more attractive to tech businesses, which is what the government is always pitching for. And we could have been part of that narrative. There are so many holes that we can poke at and that's another one. Yeah. mean, Ted Martin, we could talk about this all day long and I'm sure we will talk about it again on the podcast between now and the budget because it's still...
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five or six weeks away. Help us all, please. But in the meantime, thank you very much for joining us, Martin. It's great to have you back on the show. And to the audience, thank you very much for listening. And tune in next week for another episode of iGaming Daily for all the latest developments from the global gambling sector.