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The next frontier

Insight | Analysis

As the sportsbook business booms, online casinos continue to spread in the States, thoughmuch more slowly than sports betting. Bragg Gaming Group’s Richard Carter tells Cole Rush why he believes his business is well-placed for success as the vertical grows further, however.

US gambling markets may look at sports betting with dollar signs in their eyes, hoping to cash in on much-needed tax revenue. But as the sportsbook business booms, online casinos continue to spread in the States, though at a more measured pace than its quickfire sports counterpart.

Though many yet-to-launch markets are cautious with online casino legislation–it often follows sports betting legalization by months or even years–the space still proves successful. Online casinos could be the next frontier of US gambling. Bragg Gaming Group, helmed by Chief Executive Officer Richard Carter, is ready to take the US by storm. Fuelled by an impressive track record overseas and a handful of key M&A plays, Bragg is poised for success in crucial US markets.

Acquisitions Adding Value

In 2021, Bragg has logged two major acquisitions targeting the US online casino market. First came the company’s purchase of Wild Streak Gaming, which closed in June. Next on the docket is an agreement to acquire Reno-based Spin Games LLC, a deal expected to close by the end of the year.

“I believe the acquisition of Spin is a game-changer for Bragg,” says CEO Richard Carter. “It massively accelerates our entry into the U.S. market and creates a vertically integrated tier-one B2B supplier. Spin’s existing state gaming licenses and established integrations with leading online casino operators, which comprise the majority of the U.S. market, uniquely positions Bragg for future growth in the region.”

Just as important, Carter says, is Spin’s US market know-how. Spin brings, “valuable product, technical, regulatory, and compliance expertise. I know from my time at SBTech how important local knowledge is if you want to be successful.”

Spin and Bragg’s wholly-owned subsidiary, ORYX Gaming, will add new content to the mix. “There is a big opportunity to bring exclusive content to the US and to roll out [our] FUZE™ player engagement tools such as tournaments and quests.”

Further, Spin will deepen Bragg’s well of expertise by fortifying the combined business’ in-house content strategy.

“Additionally,” Carter says, “the acquisition deepens Bragg’s global production resources with Spin’s existing development center located in Chennai, India.”

Earlier this year, Bragg further cemented its US position with the acquisition of Wild Streak Gaming, a Las Vegas content studio. For Carter and Bragg, that acquisition is “equally as important.”

“Wild Streak is a leading game studio specializing in premium casino slot design with an existing library of more than 40 titles and a strong pipeline of upcoming content,” Carter says.

Wild Streak has a long list of big-name clients and loads of experience from which Bragg now benefits.

Carter continues: “The Wild Streak team has over 20 years of experience with the founder, Doug Fallon, having worked at Aristocrat, bringing a track record of building many successful land-based slots for the likes of IGT and Scientific Games. More recently, Wild Streak is behind very successful online games such as Dragon Power which is a leading slot in the New Jersey market.”

The acquisition, though somewhat small by industry standards, offers plenty of upside. “From an organic perspective,” Carter says, “we have access to multiple levels of revenue growth.”

New revenue streams need to flow somewhere, and Bragg has its sights keenly set on the ever-evolving US jurisdictions.

Making Moves In The US Market

Like many before it, Bragg looks to snowball its European success into a strong US offering.

“An important part of our growth strategy is entering new jurisdictions. In the near term, Bragg is expanding into new markets which had a combined online casino addressable market value of $10.8bn, representing 80% of the total European market, where many of Bragg’s existing clients operate.”

The United States market, even with its piecemeal legislative approach, represents a big opportunity.

Carter says: “The US market currently has a run rate of over $3bn for 2021, which is set to materially grow as more states regulate online gaming over the next few years.”

Bragg’s imminent acquisition of Spin gives the company a new puzzle piece that slots neatly into the big picture.

Once completed, Bragg’s Spin acquisition will catapult the company into various US geographies. “We will be live in all the key US states,” Carter says, “Including New Jersey, Michigan, and Pennsylvania with a portfolio of casino slot content and casino table games.”

New Jersey and Pennsylvania have long been stalwart markets in the US. Various states look to them when adopting online casino regulation. Michigan is one such example, though now it’s more apt to call the state a top competitor rather than a follower glomming onto tried-and-true strategies.

But Bragg has its proverbial foot in the door with major industry players–not just general markets.

Carter emphasizes Spin’s long list of operators that run the company’s content: “Caesars Entertainment, DraftKings, Penn National, Golden Nugget, BetMGM, FanDuel, and Hard Rock, just to name a few.”

Meanwhile, Wild Streak fills the supplier gap, providing games to IGT, Aristocrat, and Scientific Games. “[Wild Streak has also] shifted to online where its distribution partners include GAN, SG Digital, Wynn Slots, and Leander Studios,” Carter says.

An impressive list, and one that will continue to grow. Bragg’s Richard Carter doesn’t hesitate to highlight how important the US market is.

“I believe that online casino has the potential to be significantly bigger than online sports betting over the medium term, but this will depend on further state regulation, which is always difficult to predict.”

A fair point, considering the various models set loose in different US states. While Michigan, Pennsylvania, and New Jersey welcome online casinos with open arms (after a lengthy regulatory review, of course), other states offer myriad hurdles. Connecticut, for example, only allows for three operators–two with the state’s Tribes and one with the Lottery. Bragg already has plans to offer games in the Constitution state, however.

Thankfully, Bragg can offer its content to numerous operators thanks to its nimble approach and long list of relationships. Carter sees massive opportunity for online casinos in the states.

“If you look at the states that now regulate both online casino and online sports betting, the data so far suggests that online casino is trending on bigger monthly run rate. Based on that, I don’t think it’s hyperbole to suggest that online casino could be the next frontier in the US online gaming industry.”

A Competitive Offering

Consider the hurdles present for hopeful US content providers: regulatory hoops to jump through, the legalization waiting game, and the sheer diversity of laws between states. Bragg is well-equipped to tackle these challenges, but another remains: stiff competition from industry juggernauts.

“There are indeed a lot of larger companies with huge financial resources now targeting the US and size can definitely be an advantage,” Carter says. “However, it is not a harbinger of future success in this industry. When I joined SBTech, everyone told me we would never be able to compete with Kambi or OpenBet but we did and on many occasions, we won deals when we went head-to-head with our competitors. That success was driven by innovation, being quick and agile to changing trends and then making necessary adjustments instantly.”

Carter sees Bragg’s size and industry standing as advantages. “We’re very agile, our technology is extremely scalable, and our code is legacy-free. This allows us to develop and deliver content and products swiftly and to respond to changing trends quicker than our peers.”

“Once we close the Spin deal,” he adds, “our distribution capabilities will be global, so not dissimilar to the bigger and more established companies on the market.”

Content plays a starring role in Bragg’s plans, too.

Carter continues: “As previously mentioned, Wild Streak’s title Dragon Power…is a top-performing game in the Garden State, and that gives me confidence we can grow and prosper. We have a strong portfolio of compelling online casino content that will rival most of the larger companies in the sector.”

Wild Streak also has content coming to US land-based casinos, which according to Carter, “Will ensure our content resonates with the local audience and will help us compete with the larger suppliers that don’t have access to this vertical.”

Another ace up Bragg’s sleeve, Carter says, is the company’s slate of player engagement tools. “The billion-dollar companies don’t have [those],” he says. Bragg offers “tournaments with real-time leaderboards, quests, free spins, and jackpot functionality that is platform agnostic and highly configurable. If we look at most of the larger suppliers, they get a lot of their content from third parties, so I think that the moats around these big companies are not as impenetrable as people think.”

With two major acquisitions under its belt, a wealth of overseas experience, and world-class content, Bragg is ready to take the US online casino market head-on.