Q&A: Bragg Gaming on changing the stakes

Artificial Intelligence service provider Breaking Data hit the headlines in August, when it concluded a deal to acquire egaming turnkey operator ORYX Gaming in a multi-million dollar deal.

This acquisition proved to be a watershed for the firm, which embarked on a period of transformation from Breaking Data into the Bragg Gaming Group. It saw the appointment of a new executive team and several high-profile board members including Jim Ryan and Paul Pathak.

The company is also in the process of restructuring its subsidiary GIVEMESPORT, a sports content business, which has over 26 million followers on Facebook.

Bragg Gaming Group recently announced a 239% year-on-year increase in its group revenues for 2018, with revenues topping CDN$29.2m. Its ORYX Gaming acquisition, which was only concluded in August 2018, contributed 13.6% of these revenues.

Bragg Gaming CEO Dominic Mansour discusses ORYX, GIVEMESPORT and the impact of the company’s decision to switch its long-term business plan.

EGR Intel: What prompted the “complete pivot” in your business strategy?

Dominic Mansour (DM): That was always the plan, if you rewind back to ahead of the transaction we were looking for a vehicle to take ORYX into. When we looked at the Breaking Data business, it essentially had three divisions: the GIVEMESPORT media assets, the AI division and an advertising agency called Formation. The latter two of these businesses were losing a lot of money. I like the technology involved in the AI piece, but we couldn’t see the relevance of it and it’s got no place in what we are trying to build here. It was always the plan that we would close these businesses down. It was only the media assets that we felt had a lot of potential in it and then combining it with the ORYX brand was the best use of the business.

EGR Intel: Do you feel vindicated in making this decision now Bragg has experienced “faster than anticipated” growth?

DM: I’d love to take all the credit for it, but the reality is it wasn’t a difficult decision. We knew the numbers that ORYX was producing and we knew what was being put in behind the scenes there in terms of non-public information. I wouldn’t want to overplay it, but what we were excited about the chance to acquire a fantastic high growth B2B gaming business.

EGR Intel: ORYX contributed 13.6% of overall group revenues during the nine months up to the end of December 2018. Was this in line with your expectations and did you account for this sort of growth in preparations for the acquisition?

DM: Yes and no. It’s a funny one because we were in the cockpit for 10 days of the entire year and were reporting results on a business largely with the historical business that wasn’t of much interest to us. ORYX’s contribution is incredible given the short period of time in which we’ve owned the business, but for me it’s all about the go forward position. The year-on-year comparables do make for good reading but they are apples and pears to a certain extent.

EGR Intel: Do you plan to announce any new tier one customers for ORYX in the near future?

DM: Yes, nothing I can tell you about now I’m afraid, but the pipeline is really healthy. The signed contracts to be delivered is long and the next category of contracts agreed but not signed is even longer.

EGR Intel: How is the restructuring of GIVEMESPORT going? When do you expect to complete this?

DM: We are midway through the process. Any business that has an intimate relationship with Facebook is in a tough position publicly speaking. GIVEMESPORT aren’t the bad guys. Although we are the leading sports media publisher on Facebook, all we are publishing is sporting content, so we’re a million miles away from the likes of Cambridge Analytica. The point is the changes that Facebook are implementing is making it a tough world for anyone involved in media publishing on Facebook. What we’ve done is started a process to move away from them and look to drive more organic growth and traffic, looking for other sources of customers who are interested in content.

The way we are doing that is starting with content. We’ve dramatically changed the frequency and the quality of the articles we produce. We produce far less content but of a much higher quality and this has had a really big impact. We’ve seen our dependency on Facebook drop by double digit percentages, which is a good healthy sign of organic growth. The funny thing is as we’ve done that the number of uniques on Facebook has gone up, increasing by 23% this year, which is purely down to the quality of content.

Why that has happened is down to engagement, whatever Facebook defines as positive engagement helps propagate your content when you push it on Facebook. By definition its four things: liking, sharing, commenting and reading with a different weighting and the weighting is the part that nobody knows the details of. Our part has come from not paying for traffic any more on Facebook through the fact that people now comment, share, they like, they read as they have never done before. A lot of it is really positive in terms of articles and this is a reflection of us making this step in the right direction.

EGR Intel: Did GIVEMESPORT’s social media audience go for GIVEMEBET? Has the cross-selling strategy worked?

DM: It’s early days, the challenges involved in getting GIVEMEBET on Facebook alone are time-consuming because now you are in a category that Facebook is conscious of and wary of not accepting any old betting app. It’s almost like in the old days, when we were all excited about getting iOS apps into the App Store when you had to go through the approval process. Facebook has the same thing and it’s really challenging because it takes time. We’re live now and have all approvals complete. It’s early days but there is some cross-over. We still know the audience likes to bet and we’re seeing some good interaction and revenues beginning to filter through but it’s still really too early to pass judgment.

EGR Intel: Do you have any further enhancements planned to GIVEMESPORT?

DM: Phase one was all about content and quality, and that I would say is well underway. Phase two is a complete relaunch of the public facing side (the WWW), bear in mind most of the traffic goes through social media sites like Twitter and Instagram. We are going to relaunch that at the end of the summer with a completely new look, which should help our organic growth. Between now and then while we’re working on it we are going to continue the content strategy and looking for other channels. Twitter has been a very interesting success story for us recently, so has Instagram where again positive engagement has reflected the quality of content which has been produced.

EGR Intel: Could media partnerships be the key in the US, ESPN, Fox etc, or is it too complicated politically or due to conflict of interest?

DM: If you were able to rewind time and ask the same question to Sky 15 years ago, they would have said yes, it is complicated. People can build betting sites, people can get licences, smart people can do that. What is consistently going to be the challenge for anyone is how to get customers. Media partnerships are going to have a big role to play but will they be the same as the Sky/Sky Bet relationship? Probably not. But there will be a whole lot of other similarities that’s for sure.

EGR Intel: Are any other acquisitions imminent?

DM: At the heart of our strategy is two-fold growth firstly to acquire growing businesses such as ORYX, which is growing in the right direction and two is to acquire new companies which have similar characteristics to ORYX in that sense, that are either complementary or competitive too. Complementary in terms of game studios or direct competitors where we can strip out some costs and merge them together.