Scaling up: Gambling.com Group's CEO discusses the firm's plans for 2018

It has been a long year for gambling affiliates. Many affiliate businesses are still trying to get to grips with the ever-changing compliance rules set out by operators since national media scrutiny of the sector caused Sky Betting & Gaming to completely sever ties with its partners. The ASA has initiated a crackdown on affiliate ads alongside the UK government, the Gambling Commission and GambleAware, eliminating vast amounts of ‘rogue affiliates’ that caused operators headaches throughout 2017 with unsolicited and unspecified advertorials.

But for the biggest players in the affiliate gambling industry, such as Gambling.com Group, it has been business as usual. The firm has gone from strength to strength in regards to organic growth, while external operations have also increased thanks to strategically planned mergers and acquisitions, which have accelerated talk of a public listing on the stock market in Sweden’s capital city Stockholm. Add to that the success of some targeted hires as part of a sustained recruitment drive in the form of CFO Elias Mark and director of business development Gavin Walters, and the business looks primed and ready for growth.

After rebranding from KAX Media, EGR Marketing speaks to Gambling.com Group CEO Charles Gillespie about the challenges faced by the business over the last 12 months, its ambitious plans to list publicly and the potential for an American homecoming as sports betting looms large on the US horizon.

EGR Marketing: How was 2017 for Gambling.com Group?

Charles Gillespie (CG): It has been a transformative year for us. If you look at where we ended 2016 and where we are going to end 2017, it’s two completely different places. Last year we were quite small – we have always been a big affiliate, but these days there is a big difference between a big affiliate and a listed PLC; it’s on two different scales. Our ambition for this year was to make that leap from super private affiliate to super public affiliate, or at least put ourselves on that path.

Charles Gillespie, CEO of Gambling.com Group

EGR Marketing: How important was M&A for the Group in 2017?

CG: Towards the end of last year we began looking for funding to scale up the business and achieve a greater size in order to potentially list the company at some point. We closed about €7m at the end of February, and at the same time we closed two acquisitions in Svenska Casino.se and also Androidslots.co.uk. Svenska was the strategic one with more of a potential upside, but we also experienced a big jump in our own assets in March, so it was a breakthrough month because we got acquisitions revenue but the business itself made a huge step forward in terms of organic growth.

EGR Marketing: How has that organic growth been achieved?

CG: Gambling.com is doing well and having record months – it has never been as big or as successful as it is now, and that is mostly down to search ranking. We are a search affiliate, we don’t mess around with social media or any of the “darker” channels, and the operators really don’t want that traffic anymore. Our strategy of focusing on the highest-quality search has been vindicated – there are no compliance issues about search traffic; it’s high-quality and everybody wants it.

EGR Marketing: Are there imminent plans for a public listing?

CG: There are no imminent plans for a listing. We intended to raise our first round of finance in Stockholm, so we appointed a Swedish investment bank and virtually all the money came from Sweden, so that should make it pretty clear where we intend to do the listing. The capital markets in Stockholm are booming, there’s a gambling cluster there now. There are almost as many listed gambling companies in Stockholm as there are in London, and it has really made a name for itself in the industry. The biggest online gambling companies are still listed in London, but frankly there is a lot more activity and energy in the Stockholm capital markets than there is in London at the moment. With Brexit and everything else that’s happening, it seemed like the obvious thing to do.

EGR Marketing: What are the major differences between Gambling.com Group and its competitors?

CG: One of the big differences between us and Catena – a great company and our most directly comparable peer – is the focus on acquisitions. Catena has made 27 acquisitions and we have made two. The story I am trying to tell is that we are a fast-growing technology company without acquisitions – we do not need to do them. We are performance marketing entrepreneurs eager to scale up the business through organic growth. But at the same time, we would be fools not to at least participate a little bit in the roll-up consolidation game because you can find some nice assets, and when you bring them on to our platform, it can be easy to grow those assets further.

We would be foolish not to do it at all, but we also want to do it at a very measured pace and make sure that everything we buy we can meaningfully integrate. We communicated to our investors that we plan to do four acquisitions a year. We picked that number because we can meaningfully integrate four a year, whereas one a month would mean less coordination and synergy between the assets as they would have to work independently for a period of time.

EGR Marketing: Is Gambling.com Group excited by the prospect of the American market opening up?

CG: I am most excited about America of all of the markets we will be entering in the future. As an American, I have just been consistently disappointed year after year about the American market but it is clear that New Jersey has sorted out its kinks. The market is growing and has become meaningful and it is definitely worth being in New Jersey. We will be going live in America with a US version of Gambling.com around the end of this year. We have great excitement in the organisation about “coming home”, if you will, as this company was founded by Americans and there are more Americans on the management team than any other nationality, so it’s shaping up to be a really exciting homecoming for us.

Gillespie says recruitment can take the firm to the next level

Sports betting looks like it is going to go in favour of New Jersey in the Supreme Court, so we could be looking at a situation where 15 or 20 states open up to sports betting – that would be the biggest opportunity in online gambling since, ever. We are absolutely positioning ourselves for American sports betting, and that work has already started.

EGR Marketing: What is the thinking behind Gambling.com Group’s sustained recruitment drive?

CG: Recruitment is important in any business, but for ourselves in terms of trying to take the business to the next level, we needed to pad out the management team. We hired Gavin Walters and also a Swedish CFO at the end of last year in Elias Mark. He came in on 1 January and has been great as he helped us to raise €7m in February and a further €9m in November. He has managed the fundraising process with two investment banks and there are 60 different Swedish investors at this point in a convertible bond. He was managing this complicated process, and we needed a strong Swedish national to put out front and he solved the role perfectly. He was the first game-changing hire that we made last year, and then Gavin has come on in November and hit the ground running. We hired him for his experience pre-Catena because he knows a lot of affiliates, and he is helpful on the commercial side as he knows how far we can push it with the advertisers. Gavin has been a welcome addition.

EGR Marketing: Does Gambling.com Group have plans for TV advertising?

CG: We have done two TV adverts over the years and we will put an updated version of our most recent ad out on Boxing Day. It’s not a major marketing strategy for us, but it is a nice compliment to all the other things we have in the marketing mix.

EGR Marketing: Have we seen the back of the regulatory issues that clouded gambling’s affiliate sector in 2017?

CG: I think for the professional affiliates it will be business as usual, but at the moment there is a lot of change in terms of process. The operators are scared of their own shadows now. Their opinion of what is compliant changes on a daily basis. We get an email from them on a Monday and then another one on Friday with totally different instructions, as everybody wants different things. What one operator thinks is compliant is totally different to another operator. It hasn’t directly impacted the business in terms of sales, but in our day-to-day process, we spend a lot of time dealing with constantly changing demands from operators.

Obviously we are extremely keen to implement those and we will always be compliant. But if you build the website up in a certain way, and then somebody says you can’t show the logo, the systems
are all automated so it would have to be done again and that would take even more time. Eventually it will settle down, but I think the industry needs to agree very clearly what is acceptable, so that everyone can operate with a unified set of standards and requirements. Because at the moment, having 10 different operators with 10 different compliance policies is really frustrating for affiliates.