This is a guest contribution by Iain Fenton. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
How does Joining Net Gaming Europe compare with your previous roles at Catena Media Ltd and Enlabs AB?
There are a few differences. Enlabs is predominantly an operator and that role was completely new to me and upon joining Catena media I had very little insight into iGaming in general both from an operator side and affiliation. I came into Catena from an advertisement angle, I 
used to run an advertisement agency so that’s my real background. Of course, after learning affiliation with Catena it was a really interesting opportunity to get predominantly into the operator side of things which was very useful and if you look at it, it was a very similar situation to the one now where the company kind of hit a wall and had a few declining quarters and needed someone to come in and spark a change basically and that’s where I came in and that’s why they are similar.
Your goal at Net Gaming Europe is similar to what it was at Catena?
It’s very similar. It is similar to when a team changes coach in that sense they are in need of reigniting the fire – I followed Net Gaming Europe for a while and I felt and still feel that there are interesting opportunities at Net Gaming.
As I am sure you will be aware, Net Gaming Europe’s price on the First North Growth Market began at 0.66 cent and shrunk down to a low of 0.16 cent. It has since risen slightly to 0.22 cent; do you expect this upward trend to continue?
As the CEO of a listed company I should never comment on share prices but obviously my aim is to create shareholder value. What I will say is that if we do a good job as a team at Net Gaming and we are able to improve growth and profitability and then of course it is up to the stock market to value what happens. But normally, when the business numbers are healthy, then the share price is healthy. At the same time, you will always have the other effects of the financial world around you so it is difficult to influence share prices in that sense but what we can influence is the results of the company and all of our brands that our team are working on.
Net Gaming Europe’s biggest markets currently are sports betting, casino gaming and poker, how do you foresee the growth in those markets?
In a sense, Net Gaming has ended up in quite a good composition in terms of the risks surrounding this horrible COVID-19 virus in the sense that we were not that exposed by the halting of the sports betting market. Sports betting is roughly only 10% of our business so from this point of view we were not hit particularly hard. What we have seen is that poker has had a second coming so to speak. Of course, with PokerListings being our triple A brand that we have put a lot of effort into with new designs and lots of featured content, this growth in poker has been quite good for PokerListings and for Net Gaming as a whole. Older poker players are returning, and poker is seen as entertainment again.
From your Point of view, Covid 19 has had a positive effect on iGaming as a whole?
I would say that we have managed to remain stable whilst those that are exposed heavily to the cancellation of sports are quite shook. But then again, it’s not like you can celebrate that we have ended up in the position we are partly due to this virus. I cannot wait for the world to get back to normal and for people to be able to go out and play a bit of sports and everything normalising again. Of course, we are constantly aiming for growth, but we are not aiming to capitalise on COVID-19 in any way shape or form. We want to do good business and the world will return to normal or at least some sort of new normal at some point in the future. iGaming companies may even get a backlash from this when people realise how nice it is to be able to go out to a restaurant instead of sitting at home watching Netflix or being on the computer and that’s what we need to be prepared for by making sure we have the best products so if a backlash does come into play, it will not trouble us too much.
How do you foresee the business developing after COVID-19?
I think in a way it may bring people a new understanding of what we do online. Some people may stop playing once the lockdowns in the various countries end but I think people that have not previously seen our sites and decided to check us out during the lockdown periods will now have a new understanding as to what we work with as a product of entertainment. We have put a hell of a lot of work into user experience and the aesthetics of our products, it is important to us that our visitors have a great time when using our products.
A lot of companies saw big downturns in their revenues even before COVID-19 including GiG who sold the B2C arm of their business to Betsson. Would you say iGaming is still a stable and growing industry?
I think it’s a stable industry still yes. The events over the last couple of years weeded it out, if you will, the easy money guys trying to capitalise on quick wins. I think what we are seeing now is that the iGaming business is entering a more mature curve. Additional countries are drawing up legislation and opening for licensing. I believe stability will come. The last two years, I would say have been volatile in the industry. Some companies have done well for themselves and others not. I think now the trend is starting to even out and looking at the long run, let’s just say that online is still the future.
Which markets do you expect to be key ones for iGaming in the future? Now that Sweden and U.K. are restricting their own markets even more are you looking elsewhere?
We are still present in the two markets you mentioned yes. But what we are trying to do now is expand with our current assets and acquire more and more licenses in the U.S. We actually have good positions with quite a lot of traffic that we cannot yet capitalise on as we have not yet cleared all of our licenses but when we do that’s going to be an upside for us.
You mentioned the USA, do you think the market for both sports betting and casino will become more open in the USA?
In the long term I think so, a sad contributor to this is that potentially following the Coronavirus there will be lots of voids in the budgets of various nations, the USA included, so they may be looking to pen up the market to regulation so that they are able to capitalise on gambling. But this is just my opinion, it is very difficult to predict.
You acquired recently some sports betting sites including MaxFreeBets to add to your earlier acquisition of BettingOnline, do you plan to pursue down the sports betting route?
Of course we are going to continue with that, as I said earlier, the world will normalise again at some stage so what we are going to do is take this time to improve on our products and also add to them. Adding to our esports segment, for example, which is a way to continue making money when professional sports are in between seasons. I hope we are not too many months away from professional sports events being able to be played again, even if they will not be able to take place in full stadiums.
What is the Focus of Net Gaming Europe now?
The focus of Net Gaming going forward is to increase or get back to solid organic growth whilst decreasing debt – that is our focus. We have been able to lower the Net Gaming debt quite significantly ourselves. We have repurchased around 122 million SEK of our outstanding bond debt and we are now exploring opportunities to refinance the remaining and pay off our still existing debt whilst also growing at the same time – this is the core focus. For example, this is one of the reasons why GiG had to sell their business to consumer arm, they needed to bring money in as they had payments to make and that was one of the only ways they could finance it. They had to sell in order to repay debt. During the course of their debt they were not able to reduce it constantly unlike at Net Gaming where we did manage reduce it – you have to remember that you must pay interest on debt, so it is vitally important not to let it mount up.
Do you still consider Malta as the iGaming hub of Europe?
We expect to continue from Malta, however as we see more and more countries open local regulations, you will probably see less of a need for people to go to Malta to start up. You can already see it in Estonia, which is becoming a bit of a gaming hub and in Spain too around the Malaga area. So, newcomers will most likely start up with local licenses in their home countries. The big advantage with Malta is that it has a huge talent pool, the industry is overrepresented if you look at the population, all the best talent is here. Although, this also comes with other problems such as salary increases, poaching of staff and high rental prices etc.
About the author:
Iain Fenton is a freelance journalist from the United Kingdom and specialises in iGaming related news. He is currently collaborating with global brand PokerListings.
