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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:01.87)
Sweepstakes casinos have been one of the most talked-about verticals in the last two or three years. They offer a new way of engaging players as an alternative to real money gaming and have surged in popularity, particularly in the United States. At SBC Summit next week, Alexandra Tomic, founder of Alea, will reveal exclusive insights about how players interact with sweeps. Taken from data on the Alea platform, the presentation will reveal where growth is coming from and what it means for new studios and live.
Charlie Horner (00:33.943)
do you lose me again? Okay. Cool, I'll I'll go from the top.
Charlie Horner (00:40.334)
Sweepstakes sweeps Sweepstak casinos have been one of the most talked about verticals in the last two or three years. They offer a new way of engaging players as an alternative to real money gaming and have surged in popularity, particularly in the United States. At SBC Summit next week, Alexander Tomick, founder of Aleya, will reveal exclusive insights about how players interact with sweeps. Taken from data on the Alea platform, the presentation will reveal where growth is coming from.
And what it would mean for studios and live casino providers. Today on iGaming Daily, we speak with Tomik to preview the session and to chat about why sweeps are so popular. Welcome back to iGaming Daily, supported by Optimove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming platforms. I'm Charlie Horner, and as I said, I'm joined by Alex Tomic. Alex, how are you doing?
Alexandre Tomic (01:36.963)
Hey Charlie, thank you for having me.
Charlie Horner (01:40.174)
No, it's great to have you on. Thanks thanks for joining me. And as I said, sweepstakes is one of the most talked about verticals and and growth areas in the industry over the last few years. I guess just to kick us off, wh why do you think there's so much talk about sweeps? And could you tell us a little bit about why Alea has positioned itself in this nascent vertical?
Alexandre Tomic (02:02.195)
I wouldn't say it came by accident. I've personally discovered it by accident, but the business team was pushing for sweeps for a long time. it it it's just a question of numbers. I I think that
We've seen new operators that didn't or want didn't want or couldn't go into real money gaming and that are very creative at finding way to to the markets and not tweaking too much the game. So basically they they came with social casino revisited.
added the sweep stake layer on top of it, using more or less the same game providers and doing very big numbers. That that's how we noticed them because when we started being approached by these operators, to be honest, we
didn't have very high expectations, and then we saw the numbers, and then other operators came and other and again they were making big numbers, and quickly it became a significant share of of our business. I I did a presentation was in April, like with four months ago, and sweeps were already representing around 12% of Alias GGR, more or less. I I don't have the exact number.
but it was something like eleven point five twelve million euro GGR monthly back in time and this has significantly increased in in just four months
Charlie Horner (03:52.034)
Yeah, it's it's a particularly fast growing vertical in in the industry. And I'm sure, you know, there's there's gonna be another presentation that that you'll be delivering next week in Lisbon. That's that's gonna be on on Wednesday, the thirtieth of September on on the global and emerging market stage. I believe it's at twenty-two twelve. So if people do want to to go and join, that's that's where you can find the presentation. But as I said, that's using
Alexandre Tomic (03:56.749)
Yeah. Yeah.
Alexandre Tomic (04:02.862)
Yes.
Charlie Horner (04:18.283)
data on the LA platform, you you've given us a bit of an insight into how how much GGR and how much of a percentage of of LA GGR that that it represents. But how much data have you gathered since rolling out your sweeps platform and in terms of maybe the number of players and how much interest there is?
Alexandre Tomic (04:30.317)
Yes, and
Alexandre Tomic (04:39.353)
To to give you a sneaker peek in in the new presentation, because a lot of things have changed in the past four months, we've more than doubled this these numbers in in in four months. I think that today we're on twenty-five million GGR. we did grow also the GGR of the Alea platform, but I think by twenty percent, and and this is a growth of approximately one hundred percent. what we've seen also is that the providers
That were the winner back in time are being challenged by new providers. And this is consistent with the data that we've analyzed before. It's a market where
Providers have a very big share of the lion. So logically, the new providers that were on top four months ago are now challenged by new providers that we didn't see. So I'm not gonna name them now, but we we see a bunch of new providers that are coming and and and that are becoming significant on the market. From what I remember, we've analyzed.
It's two years of data, it's billions of bets, and the player base was around 50-55 million players. So it's it's it's a lot of data, and it is significant because it's a lot of data. Why why I I I insist on the fact it's significant, we we we need to take also in consideration a bias that an aggregator has. We don't have usually the entire floor of a casino.
We have between one and ten providers on a casino, so we cannot see everything. But due to the amount of data we've collected on a long period of time and due also to the fact that on sweep stake operations we do have more the the
Alexandre Tomic (06:41.57)
Biggest part of the flow. We have 80% of the flow usually, 80-70% of the of the floor. What sweep stake operators do, and also this is consistent with the data we have, they sign direct agreements with some big providers. Pragmatic not being in the game anymore because they withdraw a couple of months ago. it leaves them with very few big providers, and all the other ones they go through aggregation.
And why they go through aggregation? Because as I've said before, there's always newcomers, and you can't, as an operator, keep coming, adding adding all these new studios all the time. You can't you need an aggregator. It's it's interesting actually that sweepstak is a is a vertical.
Where aggregation makes a lot of sense actually because of the fact that you need to be able to discover who is the new kid on the block and being able to already look at the new one coming up.
Charlie Horner (07:51.03)
Mm. And with the amount of data that that you've said that you you have on your platform, it it's clear to see that operators understand that they need an aggregator involved in in their in their operations for sweeps. and with all that data, Alex, I think we can start to paint a a picture of of what the market looks like. And of course that that's the the idea behind the presentation. But as a as I guess a bit of a preview or a sneak peek, what what are the main differences between real money gaming and sweepstakes? And why do you think
players find sweepstate casinos a compelling alternative.
Alexandre Tomic (08:26.624)
So
I think we're talking about two very different demographics, and we see it in the way they consume the product. mobile is king on both verticals, whether it's real money gaming or sweepstakes. But the in real money gaming, what we see is that the big bets are placed on desktop. So the time of consumption is mobile, let's say 80-90% of the time they spend is on mobile, same in sweepstakes, but then in
In real money gaming, most of the big bets are played. The GGR is mostly placed on I don't have the numbers right now. I'm trying to remember, that's why I'm struggling. and most of the best are the bets are played on desktop, which is not the case on sweepstakes. On sweepstakes, what we see is that they play big on mobile. There's another thing that we're seeing is that
And actually it it continues now even more. Live Dealer is not that prominent, is not that important. We do have higher bets on Live Dealer, it's normal, same as on desktop, but we have much less live dealer GGR on sweep stake than on mobile, and it's going even down now
Numbers that we have from from August. so to wrap up, I would say that sweepstakes players are very different demographic. We believe they're younger, but we don't have that data. This is just assumptions that we make. We see that they spend more time and more money on mobile than they do on real money gaming, they're not as interested in
Alexandre Tomic (10:17.014)
in live dealer than real money gaming players and they're only looking at new games they start with legacy games with legacy studios they are they are attracted like any other players at big names big studios but very that then they're not they have no loyalty to them very quickly they move on to new type of games and we start seeing a trend the
We we we we're trying now to understand what type of games are appealing to to sweepstakes player. That's also an interesting one. We will publish another report about the s the specificity of the type of game. when I'm talking about that, I'm talking about the the especially the volatility, which is more low volatility, but also the spread of the
winnings let's say more than ten times you win, more than one times you win, more than one thousand times you win. We we we we're looking into this basically high hit frequency ratio and low volatility games.
Charlie Horner (11:30.999)
that's yeah, that's really interesting. That and that that was something I was going to going to ask actually is do you notice a ma a major difference in the types of games that that work well on on both verticals? It's it seems like sweepstakes players enjoy new and varied experiences compared to maybe traditional slots players, but is that something that that you're you're seeing a lot of, yeah.
Alexandre Tomic (11:52.652)
Yeah, yeah, yeah, completely. Yeah, yeah. I mean that that that was the main takeaway from the typology of game that that they were playing is the the low level of of loyalty towards big brands compared to real money gaming. basically they play anything. a new provider comes on the market. Back in time it was booming games.
We we saw so three oaks and a Haxo were the number ones. they they took over when Pragmatic left the market. Booming Games was 10% of our numbers in just two months. and now w the one we see I'm I'm I'm gonna massacre their name. It's Penguin Something.
Another brand that's but that's behind it. Playson is also very strong. We see another color correlation also, but we we see it from the background, and that that that doesn't come from the numbers, it comes from our own experience. Is that the providers that
Are taking the share for the lion in sweepstakes, have very strong account management teams. They are literally harassing us. they're pushing the games, they're extremely aggressive. And I think that's that's an interesting lesson, interesting takeaway for for game providers. If you want to succeed in sweepstakes, you
You need to be very, very aggressive. You need to to have account managers that are contacting this operator. The game is pushed by the operator. But if they do that with us, they do that with the operator. And these operators, they're a different type of piece than the real than the normal real money gaming operators. It's not the same type of organisms. They're much smaller organisation, much
Alexandre Tomic (14:03.826)
more agile, much more reactive. So if you keep calling them pushing games, it's gonna work much better than with an old school gaming company.
Charlie Horner (14:15.341)
That's absolutely fascinating. But Alex, we'll take a very short break and we'll come back and we'll talk a little bit more about the impact and also take a look towards the future of sweeps.
Welcome back to iGaming Daily. Alex, I just wanted to to pick up on what you said before the break there because I thought it was really interesting that the the main takeaway for providers and and developers f when it comes to sweeps is is the account management side of things. that's I think that's a an i really interesting takeaway. But are there any technological or game development takeaways that you think people can can look at when it comes to the sweepstakes vertical?
Alexandre Tomic (14:57.313)
We we didn't see yet a anything significant there to be honest with you. I'm thinking no, I I don't I don't think that
Alexandre Tomic (15:11.521)
No, not really.
Charlie Horner (15:12.693)
No. Okay. No, that's so it's it's more it's more about having that that support and the account management side behind the scenes.
Alexandre Tomic (15:21.993)
No, yeah, and have it gr and have it great games with specific type of volatility that are appealing to players. I mean we we've we've said that before, that's very important. you you need to have the games that appeal appeal to this demographic.
Charlie Horner (15:37.656)
Sure. now we know that sweepstakes has attracted some regulatory scrutiny, particularly over in the United States where there's been moves to to ban the vertical and things like that. do you think that that growth in this sector is sustainable given that uncertainty in the background? Or does there need to be a you know, a resolution in s in some kind? I know that a lot of this pertains to the United States, but maybe maybe this will will happen globally as well.
Alexandre Tomic (16:06.36)
That's a very good question. And we've been hearing for years that sweepstak about to end and it's it's still growing. So to be honest, I don't know what to tell you, but there's there's something I can tell you. Sweepstakes are moving, I've already moved from the US to Canada and Australia. Now they're moving to Europe, especially in Germany.
which is probably gonna be the biggest sweep stake market in Europe. And we're seeing, and that's the most important takeaway, we're seeing new emerging verticals, which for example is parimutual slots, slots that are based on data from horse racing, whether it's historical data or live data or car racing. the
the cards I forgot the name of this the card w rip card I don't know you you buy this this this package of cards and
You open them, and for example, you i it it has different prices. it could be 10 Euros, 100 Euros, etc. And then you look at your cards, and let's say you paid 100 euros and the value of it is 150 euros. So you won 50%, let's say. And now they can ship you the card home.
Or you can sell the card back to the website for 10%. Okay, and that's basically the RTP. So this is the collectible card inside. This is a very interesting vertical that we're seeing. We see another vertical which is skill-based P2P games like Thunder, which it's my favorite
Alexandre Tomic (17:58.549)
studio yeah in this area. We see live a AI studio like iconic twenty one I think if I'm not mistaken there's Aventi X guy from Leo Vegas that has done a really really cool product. what else do we got?
prediction market, but it's another beast, it's it's more to a financial markets. we we we are looking at a lot of this new emerging vertical. So what and it's the same companies, the same operators that are asking us for these contents.
So basically, if sweepstakes goes down, they're gonna go for the next thing. And the regulator is gonna take two, three years to shut it down. They're gonna go for the next thing, etc. etc. And what we notice, and it's it's it's I find it very interesting, is that Americans usually are are the first in everyone, and and in Europe we copied them. they came late on the on the i gaming bandwagon and
I remember ten years ago when Europeans were going in Asia and we were talking about GGR and GR to Asian people, they were looking at us like we were gods. You know, they have no idea they had no idea what it was. You you you would come with industry terms like I don't know, LTP, volatility, and they will literally look at you like this guy knows everything. it was the same with Americans a couple of years ago. We were talking to them and they had no
clue and and they were hiring a lot of these European guys in into their operations and they got huge huge problems with bonus abuse because they didn't know how the market would go and now
Alexandre Tomic (19:56.877)
They're so creative. They they what did we do in Europe in A gaming? We actually it's not A gaming. We had cryptocurrencies, so crypto casinos that had a big impact, and we had crash games that basically were existing before, but with crypto casinos blossomed. Nothing more, I think in terms of real strong in product innovation. On the other side, Americans created fantasy sports. That was
big thing and now all these new emerging verticals and geos are limited there there's as many geos as the this countries in the world they're all getting regulated and with some of them killing the business like Brazil and Brazil may even close too soon it's it's it's not a let's say a pretty market but
With new verticals, it's literally endless. And maybe it's endless. And that vertical that was making money, let's say it's sweepstaking today, is gonna die in one year. There's a new one coming out. So it's it's literally endless. If we could keep them all better, but even if they're dying, new verticals are popping up all the time. There will be a new loop all the
Charlie Horner (21:16.7)
Do you think
Sorry, do do you think that the it is the the proliferation of local regulation that is fueling the the increased demand and the innovation on on these new emerging verticals? Do you think that's a direct correlation?
Alexandre Tomic (21:32.48)
Yeah, th th that's a big driver and there is something about human creativity, how to make new games that are gambable, where where you can bet money.
You know, and that that's tip typical something coming from the American spirit. I I I I I want to insist on that. the this creativity that they have. So the the the creativity is fueled by regulation, but I think they would have it anyways. Why they would have it anyways? Because if you have a couple of big players that are established in let's say sweep stake now, and now it's very hard to penetrate that market, and you want to tap
into that market you come with another product you come with another vertical so whether or whether whether the whether or not sorry the regulation would be here we would we would see that happening but i think that the regulation is even pushing more towards that
Charlie Horner (22:36.663)
Sure, sure. just as we come towards sorry, go ahead.
Alexandre Tomic (22:39.264)
But remember, sorry, s r remember fantasy the fantasy, fantasy sport, fantasy that that's exact exactly what happened back in time with DraftKing and FanJuel.
Charlie Horner (22:51.755)
Yeah, and and we saw with the likes of Prize Picks and and Underdog as well that they they took the the DFS model and and took it to to another level as well. just as we just as we come towards a bit of a close then, Alex, I just wanted to look towards the future of sweeps. And I know we've just touched on lots of different emerging verticals that might continue to grow if if there's some sort of regulatory resolution when it comes to sweeps, but
Alexandre Tomic (23:00.937)
Exactly.
Charlie Horner (23:18.561)
But let's put that debate to the to the side and and focus on the the consumer experience and the technology and and everything that we've spoken about pertaining to your presentation next week. What what do you think the the the recipe for success will be for operators and providers in sweepstakes and and how do you think that vertical will continue to develop?
Alexandre Tomic (23:39.108)
I mean the the key will always be marketing. That that's that's for sure, or where how and at what cost you acquire your players. You need to start by that. product differentiation. Sweepstake is a tricky beast. We didn't go into that, and and I'm certainly not an expert. people that are more qualified than me to talk about it, but the conversion ratio between the
two types of coin, the real coins and the the the sweep coins is very important how it's triggered. So the the the the product development I think is very important and sweepstakes and
At at the end of the day, it's it's I I think it's gonna go back to one point, it's regulation. If the regulators allow the sweepstak operation to continue existing sweepstakes will definitely blossom because there is a different demography for that. We see it. i it's it's it's like crypto.
Unfortunately I'm I'm I'm I'm not w I I I believe that it's it's not gonna last forever. For sure.
Charlie Horner (25:06.359)
Yeah, it it often comes down to to regulation and you know, if listeners of of this podcast will know that regulation is is one of the the the biggest storylines of of the entire industry this year. for for for good or for bad.
Alexandre Tomic (25:19.049)
Yeah, yeah. And and and and what just one thing actually another market I forgot to talk about is Brazil. And Brazil was already a big market for sweepstakes a big future market. I don't have lot of numbers on Brazil yet, but with
The rumors of the l regulator about to shut down the the Brazilian market, it could become a huge sweepstakes market.
Charlie Horner (25:50.039)
Yeah, d certainly one to keep an eye on, particularly next month with with the election coming in Brazil. And yeah, who who knows what's going to happen with the result of that election and then and then the the future of the regulated market there. But yes, it certainly could be sweeps that that is that is the big winner there. But Alex, look, it's been fascinating talking to you about sweeps today. and I'm sure people listening are certainly
Alexandre Tomic (25:55.975)
Ex exactly.
Charlie Horner (26:15.091)
In intrigued by by the presentation next week and the details of that is is it's taking place on Wednesday, the 30th of September at 11:40. It's called Beyond the Hype, What the Data Really Says about Sweepstakes, and that's on the global and emerging market stage, Western Europe on stage two. But Alex, thanks ever so much for joining me today. Really appreciate your time and your expertise. Thanks. thanks to Optimu for supporting the show as always, and to our listeners.
Alexandre Tomic (26:36.405)
Thank you, Charlie. Thank you.
Charlie Horner (26:42.53)
Thanks for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.