Group CEO Jordan Levin's exclusive interview with Nicole Macedo of EGR North America on FanDuel tech migration and expectations in 2021
EGR North America (NA): How much of the FanDuel platform is now powered by SG?
Jordan Levin (JL): What we’re delivering for FanDuel in the US now, having started with West Virginia, is very analogous to what we’re doing for Flutter with many of their other brands across the world, including Sportsbet in Australia and Paddy Power Betfair and Sky Bet in the UK, and that is really at its core. There are slight differences per brand because they all come from legacy acquisitions, but at the core we’re delivering the sports betting engine into that technology stack. The same engine which supports the 60,000-plus bets per minute that we delivered for Sportsbet in Australia around the Melbourne Cup. To our knowledge, that is the highest volume ever supported by a B2B supplier on a single event. It’s the same engine that we’re now delivering for FanDuel.
EGR NA: Has Flutter’s migration of its account and wallet functions had any impact on your integration with FanDuel?
JL: It’s worked well. Anytime you replace multiple elements of a technology stack in a dynamic market, it’s like changing the tires on a bus while it’s rolling down the motorway. There are complexities and challenges and the slight delays that happen along the way are inevitable in any type of technology transformation project. We’ve been partnering with Flutter all along the way so we have experience with them, especially Paddy Power Betfair. When those two businesses came together a few years ago, OpenBet had independently been providing the key sports betting engine to both companies and there was a bit of a migration that had to happen. We do have experience with many of the same people in working through these types of challenges.
EGR NA: Is it likely that SG will eventually power the Fox Bet sportsbook given that it now falls under the Flutter remit?
JL: I would hesitate to speculate on that at this present time. We have had a very good relationship with The Stars Group side, Sky Bet is one of our key customers and we’ve been with them since the start in the UK. We have relationships already existing with Fox Bet and it’s natural that there are conversations, but I would stop short of speculating at this point.
But we do feel very good about our momentum beyond the US market, really the North American market. Some of the things that we’ve done with the British Columbia Lottery Corporation (BCLC) and Loto-Québec in terms of rolling out sports, extending our solutions, including the PAM, the wallets, the bingo solutions, and the trading and the risk management. We feel very good about the momentum of our products and for enterprise-type customers, like a Fox Bet, we feel like we have a very good proposition. But I would stop short of speculating at this point.
EGR NA: Considering the recent governmental support for single-event betting in Canada, are you bullish on SG’s opportunity in that market?
JL: Currently we provide everything to British Columbia Lottery Corporation and Loto-Québec who are the provincial sponsored operators in those markets, and then we also provide various elements to all the others, from the Atlantic territories in the far east, to Ontario and beyond. As we look at the Canadian market there are two things that are happening: one is the legislature on a federal basis is currently considering adopting a relaxation of the sports betting rules.
The other thing that you’re referring to is in Ontario province, specifically there’s a potential liberalization where it would become more like a Denmark or Swedish model with a state-sponsored operator analogous to an Ontario Lottery Group but also licenses will become available to anyone that can qualify. If that happens we already have a very good relationship with all the provincial operators, but we also have global relationships with everyone from Europe through to the Americas, so for anybody who’s entering a liberalized market, we feel we would be able to deliver lots of solutions across the piece.
EGR NA: What are your three predictions for the North American market in 2021?
JL: Well, one would be, I do expect more states to liberalize and pass laws for sports and igaming. I’d also predict that while the blistering pace of growth this year, especially in igaming, is probably not sustainable and it’s buoyed by Covid-19, staying at home and brick-and-mortar venues being closed in some cases, I do believe that there’s a higher plateau. In some markets what we’ve seen was betting levels and gaming levels going back to where they were pre-Covid-19. We’ve seen that in the UK for instance. But in the US and in Canada we’ve seen a higher plateau. What that means is there is a bigger digital player base that is attracted to playing on their cell phones. I think there will be a continued fast pace of growth in the market as more players have joined.
I do think you’ll see ongoing capital markets and M&A activity. There’s been a fair amount of it if you look at the IPOs and the SPACs. And then you’ve seen some of the big operator corporates like Penn National Gaming and BetMGM raise capital for online and sports. Then there’s been some M&A activity like Caesars/ William Hill and Evolution and NetEnt, with the US being a large reason behind it. I think you’ll continue to see a quickened pace across capital markets and M&A activity. I wouldn’t call it consolidation at this time because consolidation usually means that markets are starting to mature, so I don’t think it’s consolidation yet, but I do think there is going to be a lot of people taking advantage of the capital markets and the investor enthusiasm around all things digital sports.
First published by EGR and written by Nicole Macedo.