Access to the regulated US market is something a number of iGaming companies have been dying for since UIGEA was passed in 2006. With only Nevada, Delaware and New Jersey available to target, it’s difficult to build a profitable iGaming business until additional US states jump on the regulation bandwagon. In the meantime, keen iGaming operators are looking for ways to establish themselves and their brand in America and Jonathan Swerdlow believes his company can help.
Swerdlow is the CEO of Gamytech, a company assisting iGaming operators (and developers) in penetrating the real money skill game industry by providing white label solutions. Gamytech’s specialty is providing iGaming operators with a product that is legal in unregulated online gambling markets that are in the process of changing their legislation favorably.
According to Swerdlow, skill gaming is currently considered the closest form of gaming to online gambling that is legal in most of the US. We have here a golden opportunity to create visibility and brand recognition in markets that will become accessible to iGaming operators in the future.
I learned Swerdlow will be speaking at iGaming North America in a few weeks and wanted to hear more about his company and what value he can provide to iGaming operators. I hope you enjoy the interview.
Becky Liggero: What we’ll do today is talk about the real money skill gaming market and the opportunities that are available to the iGaming industry. I know you think real money skill gaming & social gaming will become a main sector within iGaming and I want to hear from you why you think there is such a large opportunity right now for this?
Jonathan Swerdlow: Thank you Becky, I’ve very glad to be here today and basically what I think from my point of view, today we live in a world where everybody is connected and people interact with each other through social networks, they play social games, they like to actually be interacting with their friends and the people they know. People always love to bet and gamble on outcomes of sports games, golf tournaments or whatever it is people like to bet money and make money out of it.
We believe skill gaming is actually the next step for social gaming because there is interaction that people are looking to have in games. I think skill gaming is the right product to bring this interaction to people who like to bet money and make money out of these games.
So for me you’re looking at a different part of the traditional social gaming player who is used to actually only spending money to get some virtual coins and some virtual achievements, you’re looking to a kind of player who is willing to invest money in order to make money out of the game. So that could be an ideal sector for people who are younger and more into the app games like candy crush, clash of clans and all those social games that are attracting billions of players and have been making huge revenues in the last years.
If you analyse these trends in social gaming it is obvious that something with real money has to happen in this industry. I think nobody has found the right way to combine those two industries until now and we think that we’ve found the best way to bridge the gaming industry – the traditional and social industry and the online gambling industry.
BL: Yea, I think the real money component is the important thing here, it really is. So tell me from a regulatory point of view, what do regulators think about real money skill gaming in America?
JS: Ok, so that’s actually one of the most interesting aspects of our company and it’s part of the reason why we decided to form this company, because we were analysing the landscape of the regulation in the US. If you look at the US market for example, you see that today most of the legislation will define gambling based on three elements- one of the elements is luck, so if you can remove the element of luck from the game, you now have a real money skill game. And real money skill games are legal in most of the states, so about thirty states right now in the US, most of the countries in the world.
For example today you know New Jersey, Delaware and Nevada legalized online gambling and have a regulated market for those types of games. And you know that in the future more states will legalize online gambling – this has to happen- but before it happens, it takes time, people need to sit down and write new laws and think about all the possible issues. So skill gaming is the first form of gambling that you can offer in markets who have not regulated online gambling yet, the closest form I would say to online gambling you can offer in those markets.
There is for me a huge opportunity to pursue in all those markets, especially for online gambling operators who are looking to penetrate new markets and to diversify their offering. Or if you look, for example, at states who are about to change their law, a lot of online gambling operators are already trying to get some kind of presence and some interaction with the people who live in those states.
So what we do, we are offering actually a full portfolio of games which will give [iGaming operators] a presence in those states. So I assume as the legislation will change favorably, they will be the first ones to have a finger in this market, that will have a customer base over there, they will have experience dealing with the people over there, the marketing over there, so a considerable advantage over any other gambling operator who doesn’t have a presence in those markets.
BL: I see, so working with Gamytech for an iGaming company that wants to operate in regulated America, once the states open, is a good idea to get them prepared for these markets.
BL: It’s a great opportunity. When I’m chatting with people at these conferences and events, there are a lot of social gaming companies that are starting-up and they’re showing up at the Pitch ICE and they’re kind of all over the place. So from your perspective, how is Gamytech different from a lot of the social and skill game offerings that we’re seeing in the industry today?
JS: As I said earlier, most of the social gaming operators today, they are monetizing to in-app purchases- basically people who are willing to pay to get virtual stuff. Virtual coins, virtual currencies, virtual whatever. We are targeting a different crowd, a crowd who is willing to get something real, something tangible, something he can put in his pocket and in his bank account.
It’s good that the social gaming market today is all over the place and you see companies such as Playtika, Candy Crush, all those games have been attracting a considerable amount of gamers and what we are trying to do is attract the same amount of players, just monetize them in a different way. Also attract players that are more interested in the tangible side of the real money games.
If you look for example in the real life, people are already betting on golf tournaments, they are betting against a friend who will win the football game, those kind of things are already happening in the real life and all those games have attracted thousands of players, millions of players all over the world. And that’s why we’re different than so many other social gaming operators out there – we are trying to bridge this need to bet, need to gamble, need to be challenged, need to have something more exciting than virtual currencies and virtual achievements with real and tangible rewards such as cash.
BL: Yea, and when I was looking at your offerings, you’ve made it quite easy for iGaming companies to sign up with your white label solution and they have all of the data, all of the backend and the infrastructure they need – developers as well.
If you’re going to iGaming North America Jonathan will be there with his company and Jonathan thank you very much for joining me today, I look forward to seeing you in Las Vegas very soon.
JS: Me too. It was great being with you today and I was really happy to answer all your questions and I look forward to seeing you in Las Vegas.