Subscribe
Share
Share
Embed
A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:02.806)
SBC News has exclusively reported that Scandinavian gambling PLCs are cautiously supportive of Nordic Compass. Formed as a cross-industry alliance representing major businesses in Norway, Sweden, Denmark, and Finland, Nordic Compass seeks
Charlie Horner (00:23.988)
SBC News exclusively reported that Scandinavian gambling PLCs are cautiously supportive of Nordic Compass. Formed as a cross-industry alliance representing major businesses in Norway, Sweden, Denmark, and Finland, Nordic Compass seeks to persuade Nordic governments to support a unified stock exchange, deepening liquidity and improving access to international investment. The project is backed as a stock market rival to UX exchanges, in which this decade Europe has been left behind.
As 130 businesses have left the home markets to join UX exchanges, a heightened economic concern shared across the economic bloc. 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 operators. I'm Charlie Horner, and to discuss this with me today, I'm joined by our editor at large, Ted Manmuir, and SBC News editor Ted Ormclay. Ted welcome back to the pod. How's things?
Ted Menmuir (01:23.246)
Very well, Charlie, back from my short breakout in Marrakesh, recovering from the Lisbon flu. But to the audiences, I'm back to 100%. Yes, that energy bar has gone back up, yes.
Charlie Horner (01:40.44)
Very good. It's nice to see that you're recharged. Ted L C, how are you?
Ted Menmuir (01:43.168)
Yeah.
Ted Orme-Claye (01:45.008)
I'm alright thank you Charlie. I've not been to Marrakesh unfortunately, I've not had as exotic a few days as Ted has but yeah, similar to him I think I'm well recovered from the Lisbon flu. Definitely put that behind me now and yeah interesting hearing more from Ted about this story he broke for us this morning.
Charlie Horner (02:01.229)
Yeah, absolutely. It's a it's an interesting one. and and Ted you you have been tracking this one for some time. How about you give us the the overview of this? what what is Nordic Compass? Who forms the alliance and what are they proposing?
Ted Menmuir (02:16.021)
Okay, the Nordic Compass was revealed around about April, May, and it's a working alliance or a working group of the Scandinavians' 30 biggest enterprises, and they've kind of joined forces and will propose to the governments of Denmark, Sweden, Norway and Finland
that they create a merged pool or a unified stock exchange that will present kind of a deeper liquidity and kind of better roadmap to the access of public markets for Scandinavian countries. And essentially what they're trying to do is they're trying to say that, yes, with the deepening kind of capital of...
Nordic markets, but also they're trying to kind of maintain Nordic enterprises at home, in their home territories and counter this kind of migration that has been witnessed at a European level by businesses choosing to go and publicly list in the US in particular, but also in Asia and Australia. And this is viewed as an
Yeah, an economic liability for Europe and one that has to be, that is impacting kind of productivity and competitiveness of the Eurozone block.
Charlie Horner (03:47.064)
So th the the compass has a number of economic objectives, but I guess the the common Nordic stock exchange is is at the centerpiece of of that project. What why do you think why do you think the exchange is the the overarching ambition of the compass?
Ted Menmuir (04:02.227)
Okay, this is where it actually gets interesting because we're going to see kind of a clash with the vision of Europe, where Europe thinks that it has to answer in terms of its competitive liabilities and economic liabilities. Now, this is very much a project for Nordic and Scandinavian businesses. It's represented by the 30 biggest companies in which we have Nordea, SEB,
Nokia, Ericsson, and the pharmaceutical giant Nova, Nova Nordisk. And I guess, or in my view, these companies are very proud of their establishment or the foundation in Scandinavian markets. However,
to an extent they have even outgrown that position and operate across many geographies. And that is actually reflective of the companies that we reached out to in iGaming, Beard Betson and Better Collective about how they viewed their position as international companies to what is offered by being in individual markets such as Stockholm, Copenhagen or the Oslo Bulls.
Charlie Horner (05:17.025)
Yeah, Ted Ossi, I'll bring you in now because I think Ted raises an interesting point, doesn't he, that w we have these individual Nordic nation stock exchanges. but do you do you see the do you see the benefits of pooling that liquidity together considering you know the all of the cultural and and like linguistic similarities across that region?
Ted Orme-Claye (05:39.858)
I think, yeah, it makes a lot of sense from both like a cultural and an economic standpoint. I think something like this has probably been in the works for a while, you know, maybe a long time coming just because of the trend that Ted has noted of many heritage European companies and particularly large companies that carry a lot of capital with them and have very large valuations.
looking to shift either primary listings or just their sole listing entirely overseas, particularly to the United States, to Asia, Hong Kong exchanges, exchanges in China, maybe even Australia, as Ted mentioned earlier as well, just because these are like the European markets and exchanges of maybe the old guard and these ones are, mean, obviously the US exchange has been around for a while and extremely lucrative, but.
Ted Menmuir (06:05.495)
Mm-hmm.
Ted Orme-Claye (06:29.169)
They're like the new frontier, I guess in a way, unlocking opportunities with new investors.
more capital coming through and that is a worrying sign for lot of European economies, it's a worrying sign for lot of these exchanges. Obviously like you said Charlie, these different sole Nordic exchanges are all very well established and significant in their own right but if you just compare them to the size of the US and some of the Asian exchanges and the
and just like the populations and the investor populations that are present there, these Nordic countries are not the same size, are they? So think pulling it all together to create a bit of like a, almost like a block, you know, a geographic block.
to better compete with some of the bigger international ones. There's some sound logic behind it. And obviously as Ted wrote this morning, this is something that will be of significance to our industry, to the industry we report on. Firstly, just due to the amount of companies that are both in the B2C and B2B side of things that are founded in the Nordics, are still based in the Nordics, have a strong presence there. And also because this trend of companies moving overseas is something we have seen in the gambling space.
moving their listings overseas I should say know away from Europe is something we've seen it's something we've talked about on this podcast before and reported on on SPC News before.
Ted Menmuir (07:49.773)
Mm-hmm.
Charlie Horner (07:56.43)
Yeah. Well Ted, let's let's talk about the reaction from from iGaming. y y you referenced it a couple of minutes ago, Betson and Better Collective as two of the of the
Ted Menmuir (08:09.569)
Go again.
Charlie Horner (08:17.255)
Ted, let's let's talk about the reaction of our industry. you've been talking to to Betson and Better Collective as as two of the headline companies that are based and listed in in in Scandinavia. What what was the reaction that you've you've heard for about this news?
Ted Menmuir (08:36.713)
I think overall it's positive, but there are some tentative aspects of what is being proposed. And I'll take for example, Better Collective is an incredibly proud Danish company. It's, you know...
very much recognizes its Danish roots. And it also kind of sees itself as a company that's been from the ground up and it's expanded internationally. So it recognizes that it's gone through that kind of transformation of we're not just Danish anymore, but we have to be reflective of our South American audience, a huge North American audience too. And it certainly has had kind of like its pull towards why are we still here when so much of our customer base is based out in the U.S.
in a much more liquid market. Speaking of the ESPER, mean, these are kind of considerations that any leader of international business has to go through, and especially when a industry is kind of fast-chased, fast-moving, and as aggressive as iGaming, in which, you know, the capital is needed, you know, you up from capital is needed so much to kind of fund these projects. In regards to Betson, Betson are very much aware of it, but...
They again kind of notice that it doesn't they don't kind of view this as a panacea to all the issues that Europe faces in terms of its capital flights. A lot of Europe's problems is that it's too difficult to invest in companies, especially kind of small to mid cap. And it's too difficult for these companies to kind of access kind of pools. There's still too much fragmentation and kind of investment in individual markets or businesses in individual markets, you know, either if you're in Poland or Greece or Sweden.
itself, right, is too restrictive. There's no kind of overall kind of binding laws between each market. And this is actually a factor that the Nordic Composers can have to see through. There are differences between the Scandinavian territories.
Charlie Horner (10:40.095)
Mm. Yeah, and it is home to to several other companies as well, isn't it, in terms of our industry in particular. but but what what do what do stakeholders need to buy into to to ensure that this project can actually get off the ground and and and begin? Because is is this something that is quite tentative and speculative or or are we are we heading down the road, Ted, towards this ha actually happening?
Ted Menmuir (11:05.353)
It is, and the buying is important because this could well, and I mentioned this in the article, this could just be another European working group that never gets anywhere. And it's just kind of stagnant in this, trying to solve kind of all these kind of fragmented issues of European investment. And I'm sure Ted, you've come across one or two kind of PRs about Europe and about investment in Europe for tech enterprises.
The other factor is that I think in terms of the buying, it's really now or never for the European, not only for member states, but for Europe to kind of its competition and productivity crisis.
Ted Orme-Claye (11:58.076)
Sorry, had to repeat the question there, sorry mate.
Ted Menmuir (12:06.317)
Ted, just comment on what you've seen in terms of Europe's competition and competitive crisis. Economic flight, yeah.
Ted Orme-Claye (12:16.151)
right, okay. Yeah, yeah, sorry, sorry, sorry guys, I lost track there. Yeah, I know, if I can relate things back to, like we talking about earlier, relating to the industry itself, you know, obviously the most high profile incident, not incident, sorry, the most high profile example we can obviously point to of a European, know, European flight within this industry would obviously be Flutter Entertainment, wouldn't it, a company with...
Irish British roots in a paddy power and bet fair the merge between them two and then obviously acquiring sky bet Since the acquisition of fans you're becoming increasingly us led and that's eventually led to this year them shifting their their entire listing to the US Axing the secondary listing on the London exchange. I mean that was just you know, that's the biggest example from the betting industry, but
We've seen others like it was ARM Holdings or ARM Holdings. forget how exactly you say their name. But yeah, another very prominent company over here that shifted to the US. There's plenty of other examples across multiple different industries of just like we said earlier, just companies seeing this as a way to open yourself up to a wider pool of investment and a bit like what Ted said more importantly.
Ted Menmuir (13:12.564)
Yeah.
Ted Orme-Claye (13:38.434)
environment where investors can invest in you easier rather than in Europe due to fragmented regulatory conditions, perhaps some perceived red tape there. Like we said earlier, this just speaks to a wider issue that Europe is having and is one that stakeholders are trying to address but it's
Charlie Horner (13:50.413)
Yeah.
Ted Orme-Claye (13:59.922)
The challenge I think will be in addressing that fragmentation without also establishing more red tape for companies and investors that just prevents that flow of money and flow of investment around that cycle.
Charlie Horner (14:14.635)
Mm. Yeah, red tape in the EU, often put together. as we famously found found out ten years ago. But let's take a quick break and we'll come back and we'll we'll put this in the context of the European Union.
Ted Orme-Claye (14:24.593)
You
Charlie Horner (14:30.923)
Welcome back to iGaming Daily. I think it's important that we talk about the the the Nordic Compass project in context of of the European Union because Ted Norway isn't a full member of the EU, is it? Does that complicate things at all? And i how does this project coincide with the wider negotiation of of the budget cycle for the EU?
Ted Menmuir (14:55.661)
I don't think Norway's membership, it's a member of the ETA so yes, it's covered in that in terms of the access to the market. This project does kind of coincide with the direction that will be taken by the ongoing negotiations of the EU's 2028 to 2034 budget cycle in which member states are looking to settle terms on a minimum of a two trillion budget.
Charlie Horner (15:01.805)
Mm-hmm.
Ted Menmuir (15:24.095)
for the eurozone and principally this is the biggest negotiation that's taking place or the turning point, the biggest turning point of the EU since the introduction of the euro because it sees kind of
the block change its vision and its priorities. So instead of moving towards kind of common agricultural policies or industry alignment, it's now much more looking at security, tech innovation, the upskilling of the generational upskilling of workforce.
And the other, but the main issue or the main impact that is underlining any growth in the EU. And again, we always return back to this is productivity and competitiveness. And again, this is seen in the way of its capital market structures. There is a lack of investment and a lack of ease for investment in European companies that does not kind of subdue.
counterparts in Asia and in the US and that's especially seen in its tech spectrum.
Charlie Horner (16:40.898)
Yeah, a crucial budget that that's coming up in the next couple of years. Ted O C, w l let's let's go back to the capital flight aspect. Why why do you think this is a huge point of defect for for the EU and and its profile as an economic block, really? Because if if you know, the whole idea is that you pool all these companies and resources together but the companies don't see it that way and they're f flocking towards the US or or Asia. what do you think the the problem is?
Ted Orme-Claye (17:12.149)
I mean I think Ted might have already just answered this question earlier. The problem will be that companies just see the US as having more ease of investment. I think that would probably be the simple reason. That and perhaps the fact that the US economy is just so much larger and there's so much more...
individual wealth there, you've probably got a much larger pool of ready and available investors and people who are willing to take a risk with the finances they've got in comparison to Europe. I think it's just probably those two points there. mean, we can create Europe can create a pool of exchanges. It could ease up red tape that could allow people to invest more. But I guess if it doesn't look at the more structural issues around economic growth,
people's personal finances, how much disposable income they've got, which is then obviously tied to so many other different issues around housing availability, price of housing, price of consumer goods and all sorts. There's just too many different factors at play here. It's not an easy time. It's good that they're trying to do something, but...
you know, ultimately, there's, yeah, there's a lot of different things at play here that he's going to be presenting challenges for them.
Charlie Horner (18:33.143)
So do we think that Europe needs to fundamentally change its economic direction in in order to change this? Ted, what what do you think, Ted
Ted Orme-Claye (18:41.009)
Can I just say, you how we always say, as a disclaimer, we are not lawyers, we are not economists, I should say. I just wanna make that clear to my listeners as I'm saying all this stuff.
Ted Menmuir (18:49.069)
Okay. Look, I don't want to be in the European Council. But it's clear that Europe knows where its liabilities are. And it has been a decade of stagnation.
Charlie Horner (18:49.267)
Yeah, well, quite right.
Charlie Horner (18:56.331)
We don't ask small questions on our gaming daily.
Ted Menmuir (19:12.117)
One of the issues I kind of get highlighted, think Ted's absolutely right about this, that you see kind of these headwinds, but they're also soon going to collide with other impacts from around the corner, number one being AI.
So the risk of the workforce is crucial, but also the fact that Europe is a very, very aged economy and its workforce is, compared to the US and compared to Asia, it's much more aged. And even in these initiatives alone, they make economic sense.
Is it enough to kind of carry through kind of Europe across the line and does it create enough of a buffer between China and the US? And it's kind of, you know, yes, let's just call it like the economic threat that they impose on Europe and why a company. So we've seen this and it's not just the case of the gambling firms, but we've seen this, the big ones here being Spotify.
and now Revolut who will likely choose the US, New York as its home. And these are companies that grew up in, know, Revolut itself was born out of London. is, London's a huge loss. So will this kind of continue? Unless they come up with an alternative, it's just gonna be a trend and you're gonna kind of see Europe kind of bleed out on an economic front.
Charlie Horner (20:36.897)
Hmm. Well, let's bring it back to our industry and try and contextualize it a little bit. Because I think some of the conversations that we all have with with different people across the sector is that Europe is a is a is a is a place that you kind of have to be because there's so many mature markets and big markets, but that it's quite hard to to invest in those countries w expecting a return on investment just because it's quite hard to do business there with the regulation and people would rather
Ted Menmuir (20:53.163)
Yeah.
Charlie Horner (21:06.303)
invest in places like Latin America or or Africa where they see much more long term growth. is is is that sort of the vibe that that you get as well, Ted? maybe Ted O C you go first and then we'll we'll bring Ted in.
Ted Orme-Claye (21:20.077)
Yeah, I mean, was going to mention this earlier, so I'm glad you brought this one up, Charlie. I do think a big challenge for gambling PLCs in Europe is going to be that a lot of investors, not just in Europe, but globally, are going to be looking at it and thinking, well, we're seeing stricter regulations coming into play, whether that's the changes to aim to permit in the UK, advertising clampdowns in the Netherlands, total advertising ban in the Netherlands.
the continuing sort of advertising restrictions in Italy and Spain, the advertising ban in Belgium, I'm talking about advertising a lot here, but then, know, taxation, we've talked to death about the taxes in the UK, the French ones are known for being quite high, Germany is often cited as a difficult case on both the regulatory and the taxation front. And then on top of that, you know, we've mentioned the EU budget, there's quite a concerted effort by a group of...
Ted Menmuir (22:08.813)
Mm-hmm.
Ted Orme-Claye (22:19.095)
EU level policymakers, legislators to implement a proposed 1 % like pan-European gambling tax.
So I think a lot of investors are going to be looking at that. Yeah, are rightly going to be looking at that and thinking, well, these companies are going to be struggling to make any profit. So why should I put my money there? I think maybe the one you mentioned this, Charlie, you know, people will see more prospects overseas, perhaps in Latin America, maybe in North America as well. know, Alberta opening up, for example, prospect maybe of some more US states opening up in the future as well. The companies in Europe that will
that will be able to ride this out will be the ones that have assets there, surely, know, who people can look at them and go, all right, well, they've built up a strong presence in Europe, that they will be able to withstand some of the regulator and taxation issues, and they've got growth prospects in the Americas or in Africa or in Asia and so on. But I guess that the negative side for then a lot of the industry here is that what I've just said does point towards
Basically just a continuing situation where the biggest players are the ones who stand out and the small to medium sized firms just can't keep up with it and can't attract investment because they don't have the capital and the resources to expand into those new growth markets.
Ted Menmuir (23:42.784)
I'm going to keep it simple and just point to the map of the EU. 27 countries, 27 headaches, 27 ways of doing business. And for gambling, it's 27 different perceptions of how gambling should be governed. We've spoken so much about cohesion, about harmonization.
Ted Orme-Claye (23:46.523)
You
Ted Menmuir (24:10.167)
But I think these are just pipe dreams for observers. Europe will always, there will always be a sovereignty for gambling in Europe. And the idea that we can ever have like a unified framework of rules, I don't think will ever happen. I'm sorry to disappoint anyone who's tuned in.
Charlie Horner (24:33.697)
Well, yeah, I mean, that is right. I mean th th there is twenty seven different really complex situations and add into that basically zero economic growth and you can see why it's a difficult case to make for investors to to put their money in Europe. just very, very quickly before we go, w d do you think a a common y unified European exchange or Nordic exchange will will actually put a dent into things, Ted
Ted Menmuir (25:02.229)
I think it's worth the pitch, it's worth the risk. needs to do something cohesive for capital markets and it needs to kind of prove a point that this is an economic block, that you can preserve the status of companies inside its block, that it can stop this bleeding from PLC migration.
And for that alone, I think that it's worth it, especially in terms of these companies that do kind of have, you know, a shared culture to a sense. I don't want to kind of comment for Denmark or Sweden or how people feel, but I think that there is kind of a common kind of business condition there that they can kind of align towards. And yeah, I think for that, should be the politicians should back this. It should be a project that should be heard. And I can see why a company like
Bettson and Better Collective, they've looked at what's been proposed and they like what the good vibes have been put forward. Can it become a reality? I don't know.
Charlie Horner (26:14.487)
Well look, Ted, fantastic story, really good read on SBC News. We'll put the links in the show notes. But for now, to Ted and to Ted, thanks for joining me. To Optimove, thanks for supporting the show as always. And to our listeners, 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