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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Fernando Noodt (00:04.824)
340 people are reportedly being cut loose by Bed 365 across Stoke on Trent, Malta, and Gibraltar. Amid increasing tax and regulatory pressure in Europe, the company is facing a striking contrast between Europe, its European and North American businesses. While struggling in Europe, the operator expands into new markets across the US and Canada, raising a clear question: Is this a sign of retrenchment in Europe?
Or a deliberate shift towards the next major growth opportunity. Welcome to iGaming Daily. I'm your host for today, Fernando Nott, Media Manager for SBC. And I'm joined by two of the greats in SBC Media. Tom Nightingale, how are you today?
Tom Nightingale (00:50.804)
I'm very well. Even better after that billing. Thank you for
Fernando Noodt (00:53.986)
Yeah, absolutely well deserved. and Patrick Killeen. Patrick, how are you today?
Patrick Killeen (00:59.278)
I'm great, thanks, yeah. We're a bit light in the UK office today but I've managed to make a bit of time to come on here and I'm glad I have.
Fernando Noodt (01:09.902)
Absolutely. yeah, busy time ahead of HVC Summit in Lisbon at the end of the month, at the time where we are recording this podcast, of course. so yeah, really looking forward to that event. But a lot of other things are going on, and like we said, some major news coming out of Bet 365. But first, let me thank Optimove, the creator of Positionless Marketing and number one player engagement solution.
For iGaming and Sports Betting operators and proud supporter of iGaming Daily. So big shout out to Optimob. But now let's get on with the news. Bed three six five has traditionally be a s been a success story in the UK betting industry. So Patrick, how significant is this reported move to cut three hundred and forty jobs across Stoke on Trent, Malta, Gibraltar, some of its main main main
Offices.
Patrick Killeen (02:10.391)
Yeah, it's big but what I will say is that it's kind of joined the leading pack in the UK and become the last to announce cuts or obviously it wouldn't be physical shop closures because Bet365 is online only but it's been the last to announce it after Betfred, Entain, Evoke, trying to think of Viles Flutter with Paddy Power.
340 staff is a big cut but when you look at the size of Bet 365 with the fact that it has over 10,000 employees it's not majorly significant, it is significant in the sense that 340 people are losing their jobs and that it's another kind of ominous sign for the UK market at the moment but
It's kind of following a trend rather than coming out as the only company to announce something like this really.
Fernando Noodt (03:15.137)
Yeah, of course it's always sensitive when we talk about people losing their jobs, but yeah, it's it's a fair point you make there. major company like Bet three sixty five maybe when you look at the bigger picture is not as significant, but it is news. It is something that to to to look into, of course, and especially in the in the general context that
that the the the gaming industry is going through. So does the location, Stoke on Trend, like we said, Malta and Gibraltar, of these cuts tell us anything about where the business is under the most pressure?
Patrick Killeen (03:52.688)
I wouldn't say it tells us more really because we kind of all know that the state that the UK market is in at the moment since the announcements of the autumn budget last year. Same with the fact that they employ over 5,000 people in Stoke-on-Trent so that was always the likelihood is that job cuts were going to come in that area.
The market is in a bit of a bad place at the moment, as I said, since the budget and it proves, I wrote this morning about projections around a tax increase wouldn't really massively impact jobs and that the BGC were over-exaggerating now.
The BGC did say initially that up to 40,000 jobs could be lost and now we're probably still a long way off that but it's yet another example of one of the UK's biggest players who are reportedly going to benefit off this tax increase because they'll be able to eat up market share. It's another example of one of the biggest players in the country, probably arguably the biggest player in the country, forced into cost-cutting measures which...
kind of shows that whilst there needs to be regulation, it's an industry that does obviously need to have constant regulation and some sort of tax needs to be implemented. It does show that maybe this...
kind of massive increase that occurred last year is seriously starting to show what sort of impact it's having on the entire market at the moment really.
Fernando Noodt (05:43.404)
And of course it's safe to say this is hardly an individual issue of bet th three six five, looking into what ha what's happened with our gaming companies. So to what extent or how much does this this this issue, this this decision to to to do three hundred and forty layoffs reflect wider pressure on the European bathing market?
Patrick Killeen (06:09.423)
Well, yeah, I suppose, like you say, across Europe, kind of this tax increases in places like France, there's more kind of this heavier, more stringent regulation in places like Spain. But I mean, Bet 365 have kind of been pushing on. I know we'll talk later about their US expansion, but they also launched in France relatively recently. So there is pressure, there also clearly seems to be room for the company to grow.
But in terms of the wider pressure on the European market, that's been there for all to see. think the EGBA have come out recently regarding...
the size of the black market. know that the BGC talk a lot about that. We can keep saying about how tax does need to be implemented, but it does. And as much as some of these trade bodies do keep banging the same drum, it will continuously push players towards that black market and it will kind of give the black market operators the freedom to grow.
when they are not subject to the same kind of measures that these big established licensed businesses are. what needs to be done is for regulators to decide, but there's a lot of steps in between kind of where we are now and where we need to be in terms of having a kind of a framework where
Licensed operators are subject to fair taxes, but also we're actively looking to clamp down on illegal operations in various European markets, which are clearly prevalent and which a lot of trade bodies, a lot of operators have continuously warned about.
Fernando Noodt (08:04.557)
Yeah, absolutely. I think the gaming industry is always an an easy target for for lawmakers, for regulators, many lawmakers who are a bit far farther from from from the actual industry. So it's an easier target for for these politicians to look into gambling and saying, Hey, we need to
This society needs more money, society needs XYZ. So let's target the the gaming industry and I I think that's always an easy an easy role for for lawmakers, but that's where the industry needs to to get in touch with with policymakers and and of course let them know that there's a big industry with a lot of people like we are seeing now that are that can lose their jobs to these to these to these changes. So I think it's it's a very delicate situation that's going on in Europe right now.
Now but moving across the Atlantic, Bet three six five is also doing the exact opposite in the US, where it has expanded into nineteen markets and continues to enter new ones, Tom. So how do you read these two stories?
Tom Nightingale (09:09.302)
Yeah, I mean it's it's the the the contrast is pretty stark, right? Like we had we've in the last week, I don't know, ten days, I think, Bet Three Six Five has launched in West Virginia and in Washington DC. this continues a pattern really for this company. Like I guess, you know, in this in a similar way to how to to how Patrick said about like, you know, if there are five and a half thousand employees or whatever in Stoke on Trent, like
job cuts are likely to affect that area. I would also apply the same logic where like Britain, like, you know, UK, Bet three six five is such a long term staple of online betting that you it you sort of look at it and you say, Where's the how do you grow when you're already for such a high base, right? Whereas in the US for the Bet three six five, I'm not gonna say it's un un sort of untapped
potential or uncharted waters because they've been there for a while now. But the ramp up in the last sort of two years has been really, really, really noticeable from Bet 365. I think it's now to the Washington DC launch this week, I think that they're now up to nine eighteen states plus DC, so nineteen US jurisdictions. this time like eighteen months ago they were at, I think about
eleven, twelve, something like that. So I mean that's a significant increase in US footprint. when you think that like the US has thirty
three, something like that. I can't remember the exact number. Thirty-two, thirty-three states have online sports betting available. that's a represents a pretty significant extension for for for Bet 365 really. And I also think like they've they've signposted this, right? Like, you know, we were talking in the in the first part of this about the pressures that, you know, UK tax and all this sort of stuff have had on operators. Obviously Bet 365 like in the US we follow, you know, Flutter because of FanJul, right? We follow a lot, you know, DraftKings and obviously all these big all these big public
Tom Nightingale (11:01.164)
Companies that give quarterly earnings calls, and particularly on Flutter, every time we've heard so much about the UK and the European tax pressures. We obviously don't get we don't really hear that from Bet365 by nature as like a you know, they don't do that, they're not a public company, they don't do these quarterly earnings calls with people. But in their finan their latest financial report, I think they they specifically highlighted adding you know extra US, adding more US states, as well as continuing to expand elsewhere in the Americas, right? North America and Latin America.
America. they're certainly fulfilling on that that promise, I would say, at the moment, because it's now I think since April, I think it's now four, maybe five new North American jurisdictions if you count Alberta and Canada as well. They went into that new market on day one. so yeah, I mean the difference is pretty noticeable, isn't it? But I guess it's
To my point earlier, it's partly because their US presence hasn't been massive until a couple of years ago. So there's quite a lot of headroom for them, still quite a lot of growth space, I think. And there we've we're fairly frequently seeing them highlighted as like a strong challenger brand in the US now. Like nobody is dislodging FanJuel and DraftKings anytime soon, I don't think, on the state-regulated sports betting side. But Bet 365, I can't remember the exact figure, but I think a couple of years ago they were at about two percent US market.
market share and now I think they're more like five or six, which doesn't sound like loads, but you've got to take into account that Fanjul and DraftKings have the the the significant majority of the market between the two of them. So that's actually a pretty decent increase really over over a couple of years.
Fernando Noodt (12:39.487)
Right, absolutely. It might be not much as in total, but but when you consider the growth from from one period to the next, it's definitely this something. But the question is with Bet Three Three Six Five, whether it looks like a company that's downsizing with with the layoffs or one that is deliberately shifting resources just away from mature European markets and looking into emerging markets like
the those in in North America, in the US and of course Canada as well. But we won't answer that question yet. We will do a very brief commercial break first and stay tuned to find out the answer to that question.
Fernando Noodt (13:28.439)
Cool.
Fernando Noodt (13:33.62)
And we are back with more iGaming Daily to continue discussing Bet three six five and its decision to reportedly lay off three hundred and forty employees in in Europe while it expands in North America. So the question was does it look like a company downsizing or is it deliberately shifting efforts from European markets and prioritizing the the opportunities in North America, Tom?
Tom Nightingale (14:01.936)
I mean I would be I'd be interested to get I'd be interested to get Patrick's perspective on this as well, but from the US side of things, I mean obviously, you know, as a as a Brit, I'm very familiar with Bret Bet 365 from its long standing UK roots. like I said, in the US, grown pretty obviously there's a lot shorter history of availability of online sports betting in the US, but grown really significantly. I'd I don't I don't know. I don't know if I'd necessarily say that it is deliberately sh sh I don't know if it's like a
a large scale shift away from mature European markets, but there is certainly a heightened focus on I think regulated markets worldwide, they called out, because I know Bet 365 has had presence in in unregulated markets in the past. I know they've said publicly that they are focusing on regulated markets with high return, like high potential returns. Like that does describe a lot of US sports betting states. Cause like we said, we I mentioned briefly there
their their rough market share, you don't actually need to have a very big slice of a like a major US sports betting state, you don't need a big sli a a really big slice of revenue like share to for it to be profitable for you. You could there's a lot of money in US sports betting increasingly. And so I think it's partly just logic, I think really like if there's more headroom, like I said, there's more space to grow
There's more potential for expansion. Like, you know, I said Bet three six five are in nineteen US jurisdictions now. That leaves like another twelve, thirteen that they could potentially seek to enter, you know. Okay, not all of those are available to them because some US states have models where they only have one operator or a certain number of operators, but there are there are fair there are fair few states that have license spots open. I've s heard it was interesting, we heard the Massachusetts Gaming Commission say recently in a in a meeting.
That they are they voted to reopen their licensing process and they said that was the result of a direct request from Bet365, who are not currently operational in Massachusetts. So, I mean, we know that Bet365 are pursuing other opportunities in the US. I think it makes sense for them, and I think they're you know, the the the proof's in the pudding really that like they're having a pretty decent impact as a challenger brand. Whether that means they're deliberately shifting away from mature European markets, I don't know, Pat. What do you think?
Patrick Killeen (16:22.543)
I think you're right in what you're saying in terms of there's more wiggle room in America to go to here and go to here and go to this state. the UK and Europe, I suppose, I mean, I mentioned the company launched in France a couple of months ago, maybe, just kind of from, not from like a journalistic perspective, but just from...
consuming media, watched the Champions League and the Premier League in the past week and both of those programs are sponsored by Bet365 in the UK. So it's not like, to me it doesn't seem a shift to North America or a kind of a winding down or a know moving from one place to another in Europe because
They're by far and away for me and I think for the vast majority of this country, the standout brand, I think for the layman, the betting company that you would be able to name off the top of your head would be 365 and it would continue to be because that's not changed in the last few years. think maybe a few operators in the maybe five or six years ago caught up a little bit in terms of online, but 365 is in the last, from maybe 2023, 2024, they've continually with their sports book.
launch new products, become the market leader, marketed very well across television, across sports. So I don't think that there's a, like you say, Tom, as well with the, it's very hard to gauge compared to a listed company with these kinds of things because yes, we can look through a company's house statements, but compared to, like you said, with your floor where you're looking at it every three months and you're getting a good idea of what's going on at the business, you don't know as much.
with Bet365 and especially going through a company's house statements is a of a minefield, isn't it? But I think as much as maybe we don't know a lot about what the future will hold, especially in the US with the prediction side of things, because I assume that the question over there now is becoming, do you need the predictions platform to operate alongside a traditional sports board? So.
Tom Nightingale (18:30.285)
Mm.
Patrick Killeen (18:32.557)
If 365 move into something like that, then you can kind of look towards saying, they making a major focused North American push and moving away from Europe a little bit? for now, I still think that they are by far and away the major player, at least in the UK and throughout several European jurisdictions.
Fernando Noodt (18:56.919)
Yeah and and of course we've we've established that it's not necessarily a shift from Europe to the US but it's definitely looking like Bet three six five are looking at the long term growth opportunity both in the US and Canada. Of course in the US late in twenty twenty four opening major new headquarters in in Denver. so it's definitely looking
promising for for pet three six five in in in the US. Canada as well, Tom. I don't know if you have it in common about that. I I mean it's probably not a a central market or or a or a key focus for for pet three six five but but they're also opening in expanding sorry in Canada, including Ontario and and Alberta of course.
Tom Nightingale (19:47.457)
Yeah, I mean, well, y I I'll say the quiet part out loud, like Bet365 were pretty among people who were already finding ways to bet before Ontario and Alberta opened up to commercial operators. Bet365 were already a renowned name, I'll put it that way. so I think there was a study when that when Ontario opened in twenty twenty two, moving away from the previous government monopoly model, for those who aren't familiar. there was a study that came out and I think Bet 365 were
I think number one in terms of like a app downloads or you know, new you know, new sign ups when the market opened, and it's because they were already pretty well known a as a as a name. Like I nodded along when Pat said like, you know, if the the layman, certainly in the UK, can name one betting app, it's probably Bet 365. Certainly where I am in Ontario, not the only one, you know, you've got like DraftKings and FanJuel Bet MGM, like US giants here as well, but Bet365 are a very, very popular choice here.
and I think that speaks to having a longstand having a fairly longstanding presence, you know, comparatively, compared to a lot of competitors. But also they're they're very prominent. You know, they're now a partner of like the Can the the CFL, the Canadian Football League, as part of their Alberta launch. they went day one in Alberta where they transitioned over to the regulated market. and like you say, I mean like Ontario and Alberta
You you say that they're not be look they won't be looked at as core markets, but I mean Ontario in four years is an absolutely huge market. And the you gotta bear in mind as well, like and this is fairly common in Europe, but compared to the US, I mentioned earlier US has about thirty-two, thirty-three sports betting states, only has seven online casino states. So like you can't in most parts of the US, even if you're a licensee and you can offer sports betting, you can't also offer online casino.
In Ontario and in Alberta, you can. You can offer both of those. And I mentioned Bet365's recent launches. You know, they launched in Michigan in April, Alberta in July, West Virginia in August before they launched in Washington DC in September. All of Michigan, Alberta, and West Virginia are those dual vertical markets where you can offer both online sports betting and online casino. That's a pretty rare opportunity in the US to be able to launch, you know, go in with both products straight away.
Tom Nightingale (22:10.424)
and we constantly hear from the public from the listed companies, people like DraftKings and FanJuel are constantly talking about how the side of their business that's growing the most in the US is the online casino side. So and we've really seen investment from Bet365 in their online casino product in North America over the last year or so. So I think you put all these factors together. The fact as well, they're launching like in Washington, you know, Pat mentioned the partnerships, you know, for like Premier League and Champions League.
We've seen a we've seen an effort for Bet Three Six Five to team up with with sports teams in the states they launch in as well. When they launched in Michigan, they were they partnered up with the Detroit Tigers of Major League Baseball and the Red Wings of the NHL. They launched in Michigan with partners partnerships with the NHL team and the the NBA team in in in in DC, in Washington. So there's clearly there's clearly a sort of concentrated effort to not only land in new US jurisdictions, but you know, really stick the landing.
and come in with, you know, partnerships, come in with, you know, they launched a America, you know, a US specific marketing campaign last year that hit quite a lot of headlines and got drummed up quite a lot of interest. So they there is definitely a clear focus, you know, on I think now they've got that US platform. They're growing the market share. They're also growing their activity. I think I saw a report that said like their their ha their total handle, so their total num you know, total wagering volume in the US.
increased by about fifty percent, I think, year over year in the first quarter of this year. that's partly because they've entered new states, right? So they're available to more users, but it's also indicative of their rise in prominence here. So I definitely think it's a pattern you should expect to see continue because like we said, there's there's more headroom in terms of potential new market entries for them.
Fernando Noodt (23:59.224)
Well right now it seems like there's a bit of a ruckus outside my house. But it's only a reflection of the intense situation of the gaming industry, both in Europe and the America, so let's take it like that. we'll have to hashtag wait and see what happens with Bed three six five in the US. Of course they have their know how from being internationally recognized.
But they have a a long way ahead, fighting giants like like Trafkins, for example. like you mentioned Tom, they have a small market share so far. Let's see if they can improve that. Let's see if they make it into prediction markets. But before we go, little question for both of you. What do you think this Bed three six five story tells about the the general direction the global betting industry is heading? Pat, you wanna go first?
Patrick Killeen (24:52.951)
Yeah, think that it shows that with 365, we said, as Tom said at the very start of this, it's one way and then the other, right? It's job cuts, but it's expansion in another place and that kind of reflects.
maybe not just the iGaming industry but quite a lot of industries across the world at the moment in terms of cutting roles but expanding the presence. For Bet365 I don't see this as much as it will worry certain people, it might worry leadership a little bit, it's kind of something that they'll have had to be forced into and they will continue to expand, I can see them continuing to market as they do and...
I can't exactly see that this will bump Bet365 down the rankings in somewhere like the UK and I can't see that it will sort of kibosh any sort of state.
expansion in America or in Alberta or in Ontario or Canada. I think as much as it's definitely a massive story for the UK gambling industry, it will not have as much impact as losing 340 jobs might initially seem. As you said at the start, the impact of 340 people losing their jobs can't really be understated, but in terms of the bigger picture for Bet365...
it's 3 % of the workforce and there's still avenues for scaling the business in several parts of the world.
Tom Nightingale (26:35.798)
Yeah. I mean in terms of like the the sort of zooming out a little bit like the in terms of the the whole industry. we mentioned about the the Betting Gaming Council and their prediction for like job losses and everything and how that was that was some people thought that was sort of, you know, fear mongering or whatever. Like, you know. tax hikes and and and tougher economic conditions for businesses like
Unfortunately does lead to layoffs. It's a tale as old as time, right? And we've seen, you know, we've seen like like we talked about earlier, we've seen Bet365 are very much not alone in this. and I think it's the the thing I'd leave it with, I'd leave us with is, you know, on the tax point, it is almost always like we're listening to the public, you know, even from the US, you listen to listed companies like Flutter and whoever, like
Almost always tax is one of the topics that is
highlighted by leadership of companies like tax increase, particularly in the US, right? There are so many the the the the the the regulatory framework is fragmented state by state and there's always at any given time there are multiple states considering raising their their gambling tax rates if not actually doing it. they got off pretty lightly actually this year. Like I think only there was only after a flurry of tax hikes last year it slowed down a little bit. But it's a constant concern for for for gaming companies. And I sort of think that you
You mentioned this earlier for like for legisl state legislators or legislators in the in the UK, in the US, whoever, the gambling industry, in their view, is kind of ripe for tax hikes, right? Because it's kind of you know, it's a it's a hobby/slash vice, you know, it's it's an entertainment product, it's something that you can you know, it's not like it's a public service or anything like that. It's something that you I think a lot of pe legislators and politicians look at and think if you're gonna raise taxes some.
Tom Nightingale (28:32.984)
where online sports betting is probably a pretty prime target for raising taxes, considering especially talking from the US perspective, the amount of money that it raises for state governments, even on a relatively modest tax rate. I think Ontario, for example, has a twenty percent tax rate and it's made about I I think it's made about it's made a over a billion dollars in tax revenue. and it's so you know you're always gonna have that as a threat.
And then you're always going to see companies like Bet Three Six Five respond to this. And I think in terms of where the betting industry is heading,
the idea of tax changes and more restrictions on an industry like betting and gambling is probably never gonna go away, to be honest. So for operators it becomes how do you, you know, how do you navigate those? And unfortunately one of the ways that you do it is by making yourself to use company jargon, you know, leaner, more streamlined, more efficient, all of that stuff, you know what mean? So
Fernando Noodt (29:32.972)
Yeah, absolutely, absolutely. And if you want to keep up to date with everything these companies are doing to navigate this regulation and tax changes, make sure you are subscribed to all SBC media newsletters, SBC News, SBC America's Canadian gaming business, etcetera, et cetera. so you can keep up to date with all the global betting news. we'll cover of course the main industry news. L let's repeat that.
so make sure you are subscribed to all SBC media newsletters. Make sure you follow iGaming Daily on your preferred podcasting platform and social media. And thank you very much, guys. It's been a great conversation, a lot to think about Bet 365, both in Europe and the North American markets. But right now we have to go. So thank you very much, Pat, Tom, thanks very much, Ania McDonald for producing this episode. I'm Fernando Nott, and to our listeners out there, we'll see you in the next one.