Matt Davey, CEO of NYX Gaming Group, talks Pennsylvania tax rates and sports betting opportunities in Canada
Q: Congratulations on your recent Q1 numbers, with growth across the board. Did anything in particular stand out to you?
A: Thanks. It’s hard not to be happy about a 200% revenue increase, but the organic growth rate also remains strong and we are delivering on our promise around integrating the business and keeping costs down at the same time, which you can see in the improving EBITDA .
Q: The Senate version of the online gaming bill in Pennsylvania currently calls for a 54% tax rate. Do you think you can be profitable in that kind of environment?
A: It looks to me like the 54% rate is a negotiating position. We’ve seen that go up and down and I’m not sure where it will end. If there’s a viable business to be had, we’ll invest.
We think we’re well positioned for Pennsylvania. We have a strong client base in New Jersey, and that base has strong ties in Pennsylvania, so we think we’re well positioned both from a platform and a gaming content perspective, especially having demonstrated growth in that highly regulated market. We remain optimistic about that bill’s progress, but who knows on timing. Maybe this year maybe next year. But we will be well positioned.
Q: NYX retained the right to run the OnGame poker network in the US, despite offloading the European rights. Can we expect to see a B2B poker offering soon?
A: We’ve looked at a range of options around poker but right now we’ve decided not to invest in the B2B side in the US because we just don’t see a big enough demand for it. With the opportunities for our platform and casino offering we don’t think it’s a good allocation of investment at the minute.
We also decided to shutter our B2C social poker network, again to focus on our sports betting and casino products.
Q: Do you see any other opportunities in North America?
A: We’re seeing interesting developments in Canada as well as the US. Ontario is going to market for a new platform which is likely to have sports betting capabilities. And that might align well with our new strategy of targeting midmarket operators with OpenBet. We have a long history of working with Tier 1 operators, but we are in the process of developing a next-generation sportsbook to help us reach Tier 2 and Tier 3 operators like lottery brands, or gaming-first companies.
That involves some changes on the product side and some on the business side and we think we can deploy in 2018. The earlier the better from our point of view. We’ve got everyone working on it, so you could be surprised.
Q: You’ve been actively involved in the fight for sports betting regulation in the US; how do you see that unfolding?
A: The AGA has made this one of their cornerstone objectives and we think they’re doing a phenomenal job of trying to repeal PASPA and let states decide on this issue. The fact is sports gambling happens in the US every day and it makes a lot of sense to put a framework in place that can help consumers. There’s a real shifting tide in how people view that activity. We are very encouraged by what we’re seeing; the Raiders moving to Vegas for instance. We’ll wait and see, but we’re keen to exploit our position in the event that PASPA is repealed.
Q: Is it fair to say you are uniquely well positioned with your Nevada/New Jersey links and existing partnerships with the likes of Sky Bet and William Hill?
A: That’s exactly how we see it.