EEGReport Magazine: Since our last interview, your daily fantasy football platform is now available to consumers in the UK. How big of an impact has this been to your user base?
Valery Bollier: Following Oulala’s launch back in 2013, we engaged in a discussion with our customers for 2 years with the purpose of adapting our concept in accordance with what they wished for. Additionally, this time was utilised with the purpose of demonstrating and proving that Oulala was indeed a true game of real skill as opposed to a game of luck falsely advertising itself as a skill game. The fundamental factor contributing to our future success is actually delivering on what we promise our customers: “With Oulala, for the first time, you can prove that you know football better than your friends!”
October 2016 saw the launch of the monetised version of Oulala, marking the next logical step in the road for us: breaking into the UK market. This is significant for a number of reasons, namely that besides the strong passion its people hold for football and playing money on it, the English Premier league itself is indubitably the most popular football league in the world. More importantly, however, is the fact that the current fantasy sports leader in the European market is none other than the UK itself. While season-long fantasy football games have long been a cultural activity that people have been accustomed to so far, one can expect the transition into a more appealing daily format to go quite smoothly.
So far, Oulala has successfully attracted over 25,000 registered users (free and monetised). Our next goal to focus on is developing Oulala in BtoB. Recently, we launched a white label version of our game, including a turnkey solution version and an API version. Moreover, we have already begun building partnerships with iGaming operators in numerous countries such as Italy, Australia, France and Cameroon, among others, allowing them the possibility to offer our game to their own customers. The surprising response from the iGaming sector towards our offer has spurred us on into focusing all our energy into our BtoB offer.
EEGReport Magazine: How does the Oulala platform differ from the already competitive market? What are your platforms’ unique points? It amazes me that so many things have happened in the DFS industry, since our last interview.
Valery Bollier: Oulala is currently the most innovative daily fantasy sports platform in the game right now. We put in 6 months of work alongside a team of statisticians in order to create a mathematical matrix that would render the results of our game as close to the reality of a football match as possible.
Our scoring system comprises 70 different football statistics, as compared to the approximate total of 10 to 16 from our competitors. The criteria is weighted respectively based on the player’s position (goalkeeper, defender, midfielder, and striker)thus producing a total of 275 ways to lose or gain points. These points range from the regular goals and assists to the more complexly detailed shots on target and successful tackles, to name a few, thus rendering it as close to football reality as possible.
Being a European game, playing on Oulala means that rather than only having a limited selection of players in the Premier League to pick from, as is the case in most DFS games, there is also the option to pick players from any of the Italian, Spanish or French league teams. The game becomes much more interesting with a pool of over 2800 players from 80 different teams to choose from.
Furthermore, Oulala is the first Daily Fantasy Football game to be a real second screen game. The customary process involved customers creating their teams before the matches began and then returned post-match in order to see their results. In an effort to bring forth the closest experience to reality, we brought forward an innovative process that enables customers to make live substitutions during the matches.
During the process of building a team on Oulala, there is also the option to pick six players to remain on the bench. For instance, if Lionel Messi is currently playing however his performance after 28 minutes proves to be unsatisfactory, a quick look at the bench offers the customer the choice to sub in someone such as Olivier Giroud instead, who will be playing with Arsenal in 2 hours. Thus, in 2 hours’ time, the system begin to take Giroud’s stats into account from the 29th minute of his match. For this reason, Oulala’s customers tend to be rather active during the matches, constantly accessing their team on our site in order to keep up with the live results of their players and sub players if necessary.
EEGReport Magazine: Another headliner that made the news is that you guys have managed to score a partnership with Premier League football club, Leicester City. This is a big deal for a newcomer DFS website such as yours, how has it been taken?
Valery Bollier: Having already experience a similar partnership with AS Monaco in France last season, we have begun to understand how to effectively form a partnership that will be mutually beneficial for the parties involved.
Certainly, it is imperative that football clubs provide stimulating content for their online fans in order to make visit their site regularly. The partnership that we hold poses a fine example of how a club may engage with its fans successfully. In a strategic move to provide entertainment, fantasy sports games offer real-time, second screen experiences that further encourage fans to watch more sports. Through our offer of a white label version of our game directed at their customers, LCFC is swiftly reaching that very goal.
More importantly, however, is finding the most appropriate business model than will enable clubs to monetise their massive customer database. This is where Oulala can prove to be a highly innovative partner.
Our choice of Leicester for a partner was based on the corporate culture they are immersed in that is very similar to ours. Naturally, we incredibly pleased to be partnered with the current leader of the Premier League, however, we are more impressed by the excellent quality of their management team. Alongside them, we are confident that we are headed in the right direction.
EEGReport Magazine: How do you think the markets in Europe are reacting to DFS in terms of licensing? We see a lot of talks that some countries might categorize it as gambling and grant 1st tier licenses.
Valery Bollier: As anticipated, the market moved at a far quicker pace than the legislators, meaning that Europe’s national regulators have yet to adapt to the new reality coming into place. More often than not, DFS tends to be considered a ‘pool betting’ activity, therefore in order to safeguard our young industry, it is crucial that we push for a legal frame adapted to our specific function from the Gaming authorises.
In a Kafkaesque twist of events, if the goal is to operate a DFS game in the UK then offering your game in the USA will not be permitted. Considering how huge DFS is in the USA, the current situation seems rather ridiculous.
Evidently, our industry requires a tailor-made DFS license, one that should only be granted to companies who are successfully able to prove that theirs is a real skill game. It is imperative that legislators exert caution when selecting operators, basing their decision on the quality of their game and the scoring system, holding the accuracy of a DFS game as the factor of paramount importance.
A DFS license should only enable proven skill games to offer white label version of their game to third parties. Oulala is currently one of the few that offers one available to the market, however other companies will soon follow suit, hoping to launch their game through partnerships.
It is in the interests of both the operators and the players that there is proper legislation in place. This would help the system from following the same path that poker did, in that the system should not allow any unfair advantages to the professional players over casual players.
We have already spoken to European legislators about our sector’s needs. Unsurprisingly, Malta was the first country with a positive reaction towards our suggestions, following up with a specific game license being launched by the MGA later this year. This will be undeniably be a huge step forward in the development of fantasy sports in Europe, also placing Malta at the centre of action for DFS operators.
We are currently working on creating an International Fantasy Sports Association (www.infsa.org). The goal is to highlight that by offering a specific license for our sector, European countries will reap the benefits that emerge from the evolution of this new sector.
EEGReport Magazine: What is the current global size of the DFS market?
Valery Bollier: Fantasy sports are an estimated €23 billion industry in the United States, with around 57 million fantasy sports players in the US and Canada. It is anticipated that market leaders Draftkings and FanDuel will respectively pay out over a billion dollars in prizes to fantasy-obsessed players this year while also putting tens of millions of dollars into advertising that will keep building the market. There may only be a small group of traditional players that play daily fantasy sports, however Eilers Research shows that daily games will generate almost €2.3 billion in entry fees this year and continue to grow 41% annually, thus reaching an astounding €12.8 billion in 2020.
The DFS landscape in Europe is only beginning to rise, with the UK as the leading market for fantasy sports in the EU. With the English Premier league as the most popular season-long fantasy sports operator, it gains an immense amount of coverage by newspapers that follow it including Sky Sports, The Sun, the Daily Mail and the Daily Telegraph.
The total number of players stands at approximately 5 to 8 million season-long fantasy users, a number this is significantly smaller than the US. With only 3 to 5% of these currently playing DFS, the situation presents a potentially substantial market to tap into. As mentioned earlier, other countries have already begun to open their doors to DFS, with the influx of new operators being a direct result of that.
An even bigger market that present itself to DFS is none other than sports betting. Morgan Stanley’s research last year revealed that legal sports betting is valued at over $100 billion annually. Thus, current iGaming operators shouldn’t think of DFS as a substitute to sports betting but rather as a good opportunity.
For instance, our BtoB platform provides a plug and play white label solution for iGaming operators that are hoping to enter our evolving sector by proposing DFS games as complementary products to their own existing operations. I anticipate an abundance of sports betting punters and poker players that will have direct access to DFS through their usual iGaming sites before the year ends. I am certain that the market will truly benefit from this BtoB strategy and will go on to boost the European DFS evolution.
EEGReport Magazine: What is the most popular DFS product for players?
Valery Bollier: American football remains the reigning, most popular sport in the USA with the largest fan base as well as an extensive history. This is the reason behind the increased marketing focused on American football rather than fantasy leagues in any other sport. 2015 saw 73% of DFS players playing Fantasy NFL at least once throughout the year.
Other sports they play also include NBA, NCAA, NHL and MLB. The rising number of soccer players may have leapt from 12% in 2013 to 20% in 2015, however local MLS teams still remain the main focus in fantasy sports.
Nevertheless, when taking DFS on a global level outside the US, football (soccer) undeniably reigns as the number one future sport. Europe remains the center of the world when it comes to football, with the best players from all the over the world playing in European teams. This offers DFS in Europe a major advantage over our American competitors. While they have offer multiple sports in their domestic market, Europe has a unique sport with a popularity that spreads worldwide.
Following the consolidation of the market, other sports such a tennis, basketball and hockey will follow suit. Passionate DFS players in Northern America much prefer their American football, basketball, baseball, car racing and hockey, however football remains the top choice in Central and South America as well as Asia. Another DFS game gradually gaining attention is Daily Fantasy Cricket, particularly in India.
EEGReport Magazine: Demographics wise, is the DFS player the same as traditional online sports bettor?
Valery Bollier: DFS players can be considered the younger generation of sports bettors. They brought up in a generation that emphasised playing video games. Now that they have reached adulthood, there is a strong desire to play in monetised games. However, they also hope to play games that are capable of offering them a similar kind of experience that they had on their own game consoles, thus hoping that rather than eradicating the experience over the financial rewards, they would be able to retain both. This is why DFS may well be the perfect product for them.
EEGReport Magazine: Is DFS open to cyber-crime in the same way as match fixing in real games, given that you can search on YouTube and no doubt find a video to ‘hack’
Valery Bollier: DFS may be a monetised game, however it is also a social game. People will be playing with their friends, people from their community, colleagues even, and so it should remain. At Oulala, we believe that our industry needs to cap the amount that may be deposit in a league. By imposing such a limit to maintain a reasonable amount, such as the €200 limit on Oulala, we are able to avoid most issues linked to cybercrime, including money laundering and match fixing.
EEGReport Magazine: What are the future plans and are you guys getting ready for the EURO 2016?
Valery Bollier: Technology is what brought about our sector’s revolution and it has only just begun for us. Currently, we are able to obtain live stats from the ball owner and the player facing him. We hope to be able to go on and obtain the live stats from all 22 players on the field.
Technology will also enable us to acquire vast amounts of personal data about the players. For instance, the partnership between the German national team and software giant SA during the last world cup allowed them to get live data on their players. Satisfied with the results, they are aiming to go even further for the next world cup, such as obtaining the players’ brain serotonin levels that indicate stress during the matched. It may seem like science fiction however this is the direction that sports is taking and soon DFS will allow everyone to be part of this revolution.
As for Oulala, our intention is to further develop our network of iGaming partners in the near future. A number of operators have shown interest in our BtoB solution and we have gone on to sign various important deals that will come into effect next season. Our aim is to continue along this path in order to evolve and become the leading Daily Fantasy network for football.
About the author:
Valéry Bollier has over eleven years of experience in the iGaming industry. He is a regular speaker at industry conferences and seminars, as well as a contributor to various BtoB publications. Equipped with a passion for Daily Fantasy Sports (DFS) and ”Big Data”, Bollier is the co-founder and CEO of Oulala, a revolutionary fantasy football game which was launched three years ago.
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Vahe Baloulian- EEGaming Interview – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport Magazine: During 2015 and even in these few months of 2016, legislation in some Eastern European countries has been amended with new regulatory acts. For example, software suppliers need to apply for a second class license, etc. How do you feel this has impacted BetConstruct’s operations?
VB: Government regulation is important where the industry can’t, for whatever reason, self-regulate. In those cases we welcome it as it makes things clear and levels the field. Unless regulation deviates from its primary purpose of player protection and turns purely into tax collection, it allows us to better understand the jurisdictions where we are planning to become active. Now that some Eastern European countries are doing what many of their European counterparts have done, we are hoping that they will use the reality of them not being the trailblazers to their advantages and will learn from the sustainable regulating regimes. Although BetConstruct is typically prompted to go into licensing or certification processes by our partners wishing to operate in certain jurisdictions, our legal and compliance specialists are also tasked to keep us ahead of the curve when it comes to the upcoming and changing regulations.
EEGReport Magazine: As we know BetConstruct offers a full range of betting software for physical premises. How big is your impact in the CEE region?
VB: BetConstruct has its roots as a retail sportsbook operator. Therefore, we do have a very strong and ever-evolving sportsbook offering for the land-based operators and are fairly well represented in the region through our partners in the Baltics and Balkans. This does not mean we are completely satisfied with our penetration of the region. For historical reasons, we are very well aware of the diverse mentality and culture of the peoples living in CEE region and this informs our conscientious approach to their demands and requirements. However, it is the constant learning process that drives our efforts to identify and take advantage of the new opportunities there. We recently opened our Kiev office and will continue to insistently seek out new partners in this region.
IEEGReport Magazine: Is the online sphere taking over from gaming in the high street in bookmakers and casinos?
VB: The casinos and bookmakers who have not yet expanded online may harbor an intrinsic fear that online will take over the land-based industry. Still, I don’t think it is happening now and I don’t see it happening in the near future. Players enjoy their freedom of choice. They watch movies online but cinemas are still dotting the landscape, they read digital books though printed ones are still being sold everywhere, they buy digital music yet concert venues are still sold-out. Having said this, the land-based operators, regardless of their participation in the e-gaming space, must evolve to retain their allure. We see, for example, some of our partners moving from the run-of-the-mill shop formats to sports cafés and bars with betting as a major part of the offering. I believe that while it is not a matter of land-based being pushed out by the online, it very well can be a matter of those who cling to conventional, slow progressing modus operandi being pushed out by those who are innovative and swift.
EEGReport Magazine: Since the affiliates of some of these newly regulated countries fall into the same licensing criteria as software suppliers, do you think that this is beneficial to the online gambling affiliate businesses?
VB: By and large no, but it depends on the level of regulations that are applied to the affiliates and how the affiliates are defined. Affiliates are marketers, and as such they have to follow the same conventions that govern marketing trade. Every responsible adult oriented industry, whose products are being advertised to general public, should have a code of conduct. Affiliates should be required to adhere to the same codes of advertising as operators. If their efforts strictly fall within the definition of marketing, I think that regulating them as they do gaming technology providers is excessive. I think that while operators cannot take responsibility for their affiliates’ every action, they should carry out their own due diligence of affiliates before signing them up and continue monitoring affiliate activities during their partnership.
EEGReport Magazine: From the information we have, the Czech Republic is going to open its market to remote operators and it is believed that the first licenses are already going to be available at the beginning of 2017. Has your company received orders or requests from operators that are looking to penetrate the market and use your platform?
VB: Even with expected considerable tax rate increases, the pending adoption of a new gambling regulatory framework in Czechia, which will remove the seat requirement, has wetted appetites of a few operators that have contacted us hoping to upgrade their technology before this market really opens up. Our business development specialists too are actively exploring the new opportunities that 2017 will bring if these changes are enacted as expected. For us, as a technology provider, the constant challenge is to make sure our products comply with the new requirements without making the player’s journey more complicating.
EEGReport Magazine: Recent changes to Bulgaria’s remote gambling laws have made the market increasingly attractive to both foreign and local operators, but how is the competitive landscape shaping up? What is the inside info you have from operators that are using your platform in regards to this market.
VB: Bulgaria showed a more progressive approach to online gaming with sensible fees and taxes and open-minded legislation. Our partners in Bulgaria are EGT and the Bulgarian National Lottery. Both are undisputed leaders in Bulgarian gaming industry. It’s a market with a few big players, many of which are locally owned. These companies have been competing long before the new rules took effect. One of the major differences is that now this competition has moved into a more leveled field and those without licenses are being blocked by the government.
EEGReport Magazine: Do you think that countries such as Romania, Czech Republic, Poland or Hungary are markets for which operators should be queuing up for a license or lobby to be regulated, or does too much uncertainty remain to make it a sustainable investment given the fact that it’s the CEE region?
VB: We are talking about a combined population of about 80 million people. That’s quite a sizable market to be ignored. With Western Europe markets getting saturated and maturing, opening up new markets by having them regulated is very important. For some operators, I would say, it is vital. Removing uncertainty through regulation will help and if we talk about lobbying the efforts should be directed at making these regulations sensible. Regulations are there to first and foremost protect the consumer. If you look at the programs of the most industry conferences, you will notice that we get so overwhelmed with all the rules and requirements that we almost never discuss how we can better serve our players, their issues are never in the center of the agendas.
EEGReport Magazine: What other trends should we look out for? Where do you expect the European market to go?
VB: There is a lot of talk about e-sports, millennials, VR, M&A, etc. Nobody really knows how all these will play out. BetConstruct has been actively covering e-sports before it became a buzzword. With all the talk about them notwithstanding, millennials have still not being figured out. The real utilization and spread of VR in gaming is a few years away and all M&A activity is not really changing the way the industry functions. We can talk about trends, buzzwords and people doing the things media usually gets excited about, while, many companies, often unnoticed and unheralded, will continue running their casinos, sportsbooks, bingos and lotteries, quietly producing compelling results and serious profits.
Interview with Adv. Tal Itzhak Ron and Aviya Arika [Tal Ron, Drihem and Co., Law Firm] – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport Magazine: How about Germany, which is granting just a certain amount of licenses and modifies this number accordingly every year. A market which has so many potential. In a recent study, if Germany opened its online gambling model to allow every qualified applicant to get a license, only 8 percent of the players would patronize with illegal sites. What’s your opinion on the German market?
Again, we believe that here is no point denying the dominance of online gambling, and jurisdictions that decide to go with this trend and not against it will be the ones who gain the most. It is always better to regulate something than to ignore it, the aim is to protect consumers and prevent fraud and money laundering. Actually, Germany is one of the first countries that is about to regulate specifically DFS by offering “soft” gaming licenses and this is a very wise and innovative step in our eyes, and we follow this very closely for some of the eSports, DFS and Social Gaming ventures that we advise at our firm.
EEGReport Magazine: In your expert opinion, which countries will be an innovation to the current wave of gambling legislations that is sweeping across Europe?
Sweden is discussing new licensing regimes; however we still believe Malta, Curacao and Isle of Man will maintain their dominance in newly established operations, based on statistics of our offices abroad in the last 12 months.
EEGReport Magazine: In our research to create this interview, we have found many interesting things about you (Tal) and I do believe you are one of our most famous interviewees until now. I’ve read somewhere that in your spare time, you are an active participant in the electronic music scene, and you’ve released a 1980’s-inspired electro clash single recorded with the well-known Israeli music producer, Izhar Ashdot (the producer of Late Israeli singer, Ofra Haza). Let me say, you are not the first Jewish professional I met that is active in such entrepreneurial activities…is this something that is really popular in Tel Aviv?
Well, what you heard is true. Generally, Israel is nicknamed the “Start-up Nation” for a reason. People here are very creative. My firm and I are leading the iGaming and financial technology legal profession for over a decade because we think outside the box, we facilitate things for our clients that would not have been possible elsewhere, we contribute to the most sought after publications, and we attend, lecture and co-chair 25 conferences a year. This way we shall always know what’s hot and what’s not and how to give the necessary “X-factor” for the success of our clients.
Tal Ron, Drihem & Co. Law Firm – the award winning gaming law firm since 2003, boasts a team of 11 lawyers and jurists in Tel Aviv, part of a larger group of privately owned companies consisting of alumni of prestigious universities and global law firms. The group, headed by Advocate and Notary Tal Itzhak Ron, focuses exclusively on Online Gambling law, Ad Tech and Financial Technology, representing the biggest names in these sectors and recommended by all leading platform providers as their first point of contact.
Adv. and Notary Tal Itzhak Ron is a General Member of International Masters of Gaming Law (IMGL), practicing in Hi Tech, Mobile Applications law, Digital Media, i-Gaming and Financial Entertainment law. Tal graduated from Haifa University School of Law (LL.B.) and Faculty of Computer Science (B.Sc.), and while working as a software developer at a publicly traded software company, NESS Technologies group, has further obtained a Master’s Degree in Computer Science from Bar Ilan University (M.Sc). Tal established Tal Ron, Drihem & Co., Law Firm in 2003, focusing on Online Trading, Ad Tech, Hi Tech, M&A, Fin Tech and iGaming, quickly becoming one of the first international law firms practicing solely on these areas, advising top-tier international clients in these fields. Over the years, Tal gained extensive knowledge in Financial and Gaming regulation, International Taxation and Payment services. Today his team of highly seasoned attorneys and partnering professionals headquartered in Tel Aviv and operating from 8 offices around the world, offers an international one-stop shop for all legal, incorporation, banking, M&A and licensing needs.
Offshore and Gaming Specialist Aviya Arika is a seasoned gaming entrepreneur who has been involved in the gaming and binary options industries for years. Through hands-on experience combined with legal and financial academic degrees, Ms. Arika’s areas of work extend from offshore and international finance law to regulated licensing and gaming law, while she has a special interest in lottery, fantasy sports and e-sports. Ms. Arika assists many of the leading operators and affiliates in the gaming, forex and binary options industries. Her contributions to the field can be seen in articles published in leading financial and gaming publications, as well as in lectures and panels she has led in main industry events. Ms. Arika’s past work with the state prosecution has given her a fundamental knowledge in AML and other criminal policies, knowledge that enables her to guide clients on best practice, reputable banking and compliance.
Stjepko Čordaš – NSoft and BiH – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport – Magazine: Since Bosnia and Herzegovina, a Southeastern Europe located on the Balkan Peninsula is included in definitions of Eastern Europe or histories of Eastern Europe, we would like to know more about the developments of the online gambling. What is the current status of the Bosnian market in terms of licenses for online gambling software providers and are you running into difficulties at entering new markets?
Stjepko Čordaš: Betting industry in Bosnia and Herzegovina has a somewhat strained relationship with the government. Up to last year (2015) most of the market was unregulated and the government really did not know how to approach the issues. With the current legislation in place, online gambling has been finally legalized, but with severe restrictions. Before going into details, it is important to note that the complex national system is causing fractures in how gambling (in truth, every industry) is being dealt with. First we have Bosnia and Herzegovina, which is a country, where you have the first layer of the government and laws. For example, the VAT law is regulated on the country level. Then you have two entities – Federation of Bosnia and Herzegovina and Republic of Srpska. These two entities, de facto, behave like two separate states. Most, if not all, of the legal framework is separate and these have two separate governments. One of the points where there are differences is the law on betting and gambling. While Republic of Srpska has a governing law covering this matter for a few years now, Federation of Bosnia and Herzegovina just approved their law last year. While both entities laws are somewhat restrictive, one in Republic of Srpska is more open, with cheaper licenses and easier procedures. The licenses are valid only on the territory of one entity, so any operator that wants to cover the entire country has to have two separate companies and two separate licensing. This can cause additional operational expenses, as well as, introduce complexities into how operators run their companies.
When we go back to the recent legal changes in Federation of Bosnia and Herzegovina, as already mentioned, online gambling has been legalized. However, licenses are quite expensive – where the operator company has to have at least 750.000,00 EUR of founding capital, 400.000,00 EUR in guarantees and around 100.000,00 EUR in legal fees for the actual license. Also, there are renewal fees every year. In addition to this, the company has to connect to the central server of the Tax authority and send each and every ticket to the Tax authority in real time. This part of the requirement is especially troubling, since Tax authority servers and software do not have capacity to accept this amount of data in such short time and often their server is basically DDOS-ed by their own requirement.
Furthermore, RNG games are illegal online with the current legislation. Although, the idea was to limit virtual games (for example, this would be NSoft’s Lucky Six or Greyhound Races), the language of the provision makes it seem that all RNG games are illegal online. Which of course makes no sense, since most of the online casino games are RNG based.
Other than this the government introduced fees on players, where for sports betting players have to pay a 5% fee on their bets, and every prize larger than 50 EUR is taxed with a tax rate of 10%. There are plans to introduce the 5% fee for every type of game and to introduce tax rate for any prize.
So, as can be read the current legislature in Bosnia and Herzegovina is swimming against the current of the recent industry developments and at least from my perspective is severely limiting the open market economy in gambling industry. This is why NSoft is mostly focusing on gaining more international clients. A bit more than 60% of our current business is international as of this moment. The target is to have this number to at least to 80% by the end of this year.
EEGReport – Magazine: As we know you were born and raised in Bosnia and Herzegovina and your first touch with the iGaming world started back in 2013 when you took on a Project Manager role at NSoft, a company at which you are currently in the role of CEO. How much has the iGaming industry evolved in the recent 3 years, but especially have you seen significant growth in Eastern and Central Europe recently?
Stjepko Čordaš: Well, this is rather an interesting question – especially since in the last three years the iGaming industry is seeing a new renaissance. Web and web based technologies are finally enabling faster delivery to operators, easier communication with the punters, real time access do data and habits. In this sense, NSoft now has an edge. Since the start of the company some eight years ago, NSoft started all development on pure web technologies. At that point of time this was rather exhausting because other frameworks had already solved many issues and development in them was faster and easier. It didn’t help that most of the clients we had at that point were retail based. So web technologies and retail caused a lot of frustration then. However, now when the operators recognized that you have to be everywhere in order to stay competitive, web technologies are the bridge that enables this. Punters want seamless experience in retail (shop and terminal), online and mobile and the only way you can provide this are web technologies. So, a lot of issues that a lot of the software operators are now facing, have been already solved by NSoft, which can be seen in our Seven platform. Seven platform enables this seamless experience where the operator can control their entire operation from a single interface – be it retail or online environment.
When we look to the markets, Central Europe is a more conservative market with higher barriers to entry – the operators are well established, the punters have clear habits. However, Eastern Europe is just now experiencing the possibilities. One market in particular, Romanian market, is the current ‘gold rush’ setting. Romania has a lot of online infrastructure, there are a lot of people, market is being regulated, there are a lot of operators – which means that there is a lot of opportunities for us.
EEGReport – Magazine: You are a specialist in Secured Transactions Law and European Union Law. What would you change or add to the current frameworks?
Stjepko Čordaš: Unfortunately, I do not have much time to focus on these topics, but I really have to mention that reform of Secured Transactions law is my personal passion. Although, it may seem a bit boring at first – the Secured Transactions law is the one which the economy is really based around and one that enables the economy to function. Without going into legal details, I truly support the way the US has done this through their Uniform Commercial Code Article 9.
Regarding the EU law, I really don’t think anything needs to be added to this framework. For me, it is just fascinating how this supra-national framework is functioning and developing. What is currently lacking is the complete support from the different country members. But this is more of a political issue and I really try avoid to talk about politics. What I can add to this is that betting and gambling industries in the EU can really profit a lot from the principles that are set in the Treaty on the Functioning of European Union and especially on the principles of the free movement of goods, people and services. Some operators have recognized this, but I really believe that it should be used a lot more to push for more open markets.
EEGReport – Magazine: How big is the impact of having gaming software providers being present in Eastern Europe? Do operators feel “at home” by knowing they are entering markets where certain iGaming software providers have offices?
Stjepko Čordaš: Actually, at first operators are more distrustful to software providers from the Eastern Europe. It is probably in our culture to be like this, and this can be seen even on the punter side. For example, when we tried pushing localized versions of some of our products to our clients, the players would simply stop playing. Their notion was: “OK, this is local, it probably is not good at all.” And this extends further than gambling.
However, when we manage to overcome this first distrust, every client is amazed on what we have and what we have built. The real selling point for our product is when we manage to bring the client directly to our headquarters in Mostar. When they actually see a company with 150 young and motivated people, in a middle of ‘war-ravaged’ Bosnia and Herzegovina, everyone wants to use all of our products. In the last two years, this distrust is disappearing, since NSoft already has an established reputation in the market.
EEGReport – Magazine: As we know, the success story of NSoft is not something that happened by chance. A combination of great products, great people, and great culture played a key role in your growth. What are the future plans for the company?
Stjepko Čordaš: As already mentioned, one major goal is to export more services. The target is to get to 80% of exported services by the end of this fiscal year. Also, I can get into details on how we plan to grow 50% in revenues, expand to this and that market, but I will focus on something different.
The major goal for NSoft is to create 1000 workplaces. And this is how we measure our success. The key ingredients in the NSoft success story are our employees and our culture. We are trying to create opportunities in a country where youth unemployment is more than 50%. Working at NSoft is a privilege for every team member and we treat each other like family. I know it will be hard to translate this to an organization of 1000 people, but this is our goal and the most important plan for the future.
In order to facilitate our plan, we have started a start-up incubator and a programming school. The school is of major important to our goals, since it can fuel the knowledge required to have more quality employees. The school is completely free of charge and anyone can attend. The school already has around 300 active students and the incubator has 15 start-ups.
I could write essays on how we try to create and do things differently, but really, the only true way to experience this is to visit us at our Mostar headquarters. It is a bit hard to get to, but once you are there, you can understand the things I’m trying to write about. So, I am extending an open invitation to anyone who wants to come and see how we do things.
EEGReport – Magazine: Do you see an opportunity for young software developers, which are at a rather high number in Eastern Europe, to start new companies and maybe innovate the already known platforms?
Stjepko Čordaš: Yes, and yes. As already mentioned, we are trying to create this culture since there are a lot of opportunities for software developers and not just in gambling industry. For example, a few years back, the European Union declared that Eastern Europe is a strategic goal for the outsourcing of software development services. Why? Well, there are developers that are of reasonable quality, the mindset is similar to the rest of the Europe and the prices are cheaper. My personal belief is that we (Eastern Europe) should use this goal best to our abilities, but also shift this from simple outsourcing services to developing full-fledged products, as NSoft does.
EEGReport – Magazine: In your opinion, which are the most popular ways of online gambling in the Eastern and Central European region? Casino, sport betting, online poker, virtual games or maybe bingo?
Stjepko Čordaš: Traditionally, the most popular ways of online in the Eastern and Central European region is sports betting. However, if we move more to the Eastern part, online is just becoming a real trend and most of the business was focused on the retails sports betting and virtual games. From our business, I can say that countries like Bosnia and Herzegovina, Serbia, Montenegro and Romania are really crazy about virtual and bingo games. These types of games are generating most of the revenues on some markets and some operators could not function without these.
EEGReport – Magazine: Looking further afield, where are the major emerging opportunities in Eastern Europe and the Balkans for operators at this moment?
Stjepko Čordaš: If we are looking in the future, online and sports betting is really the opportunity for this market. As more connectivity is introduced, more punters are becoming aware of the different approaches and more opportunities the operators have to innovate. For example, UK is a classic well established market where in order to sell your product you have to have a product which punters already know. However, in the Eastern Europe and in the Balkans, operators can innovate a lot, since punters want everything but did not experience it before. So, in the next few years we can expect a lot of rise in the online segment in these markets with a lot of innovation and turnover being tossed around.
– Born on June 1, 1987 in Metković
– Attended primary and secondary school in Mostar
– Undergraduate degree in Service Management from RIT Croatia, Croatia
– Graduate degree in Law and Economics from CEU, Hungary
– Passion for technology and innovation which pushed me to NSoft
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