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Exclusive Interview - Q&A with Tsachi Maimon, CEO of Aspire Global.

Roundhill recently did a Q&A with Tsachi Maimon, CEO of Aspire Global. We discussed the company’s recent expansion, how they’ve responded to COVID-19 and the related lock-downs, and more!

Q: Thanks for making the time to speak with us! To get started, can you please tell us a bit about your company and the market opportunities you are tackling?

A: Thank you for giving me the opportunity to speak to you. I’ve been the CEO of Aspire Global since 2013 and I’ve become increasingly enthusiastic about our opportunities in the exciting iGaming market. We are a leading supplier to iGaming operators and operate in Europe, the US and Latin America. Our offering comprises a market-leading technology platform and a complete suite of managed services such as multilingual CRM, payment and risk control, support call center, VIP management and acquisition optimization

We are a true powerhouse for iGaming operators with a huge market know-how which we have gained since the foundation of the company in 2005. Over the years we have created long term customer relationships and I’m proud to see leading brands such as 888, Codere, GVC, Caliente, BetVictor and on our list of partners.

Q: So far this year you have entered three new markets – Portugal, Romania and Switzerland – could you elaborate more on your market strategy?

A: Our recent progress in broadening our market presence and expanding the customer base to tier 1 and 2 operators makes me even more confident today about the future. The progress is to a high degree related to our acquisition of Pariplay, the leading game studio and aggregator that we bought last fall. Pariplay offers today 101 proprietary games and thousands of games from third parties. Our strategy is to expand into regulated markets and Pariplay has so far this year entered three large, quickly growing markets by significant partnerships with leading operators. This is important progress since Pariplay will open the doors for our platform and managed services offering. We held a virtual Capital Markets Day on 18 September where we elaborated on how we see the industry developing in coming years and what we do today to be a winner in 2025.

Q: We’re beginning to see parts of the world undergoing varied stages of re-opening following the COVID-19 related lock-downs. During the lock-downs, there was quite a bit of discussion around increased activity within online gaming. How did the pandemic impact Aspire Global and what are you seeing as the world begins to re-open?

A: Our revenues and EBITDA reached all-time highs in Q2 2020. Revenues grew 33.5% from Q2 2019 with organic growth of 21.3%. This strong development is reflecting a continued good business momentum as well as players’ preferences during the pandemic to choose online entertainment over land-based. The conclusion from the pandemic is that the trend where we see players move from land-based to online entertainment is now happening faster. When societies opened up, a substantial number of players preferred to stay online or to combine online entertainment with land-based offerings. In July, revenues increased by about 19% compared to the average month in Q3 2019. I see this, together with the fact that FTDs (first time depositors) increased by over 58% in Q2 2020, as good signs for the future. It is important to monitor the development of FTDs since the full contribution of a new player is realized over time.

Q: How were you impacted by the cancellation of sports events during the lock-downs?

A: Sport is a growing vertical, however not yet a major part of our business, so the impact from the cancellation of sports events did not impact our performance.

Q: In the fall 2019, you acquired Pariplay, a gaming studio and aggregator. Since the acquisition, Pariplay has increased revenues by 39.9% and EBITDA by 93.4%. Pariplay has also as you said extended its market presence by entering three new European markets and the US since the acquisition. What do you attribute this strong performance to?

A: The two main drivers for Pariplay’s success are its strong offering combined with a clear strategy to establish a presence in recently regulated markets with strong growth potential.

One of Pariplay’s key strengths is its aggregations platform which makes it easier for operators who want to offer games from several different suppliers to integrate them. With Pariplay’s platform they do not have to go through laborious integration processes every time the operator wants to buy, for example, a casino game from a new supplier. With Pariplay’s aggregation platform, only one integration is required. Today Pariplay offers games from 34 vendors, which constitutes a huge content portfolio.

Pariplay recently launched a tool that they call Spin-That-Wheel. Spin-That-Wheel enables operators to promote any game provider they want with the option to reward players for each bet. Such high quality and unique tools increase the stickiness of Pariplay as a key supplier.

Q: Will you pursue further acquisitions moving forward?

A: Yes, on Thursday 17 September we announced the acquisition of the leading sportsbook provider BtoBet. With this acquisition we now enter the sports betting arena with storm strength. BtoBet makes us a true global B2B company which owns and provides an iGaming platform, sports betting, casino games and games aggregator as well as managed services for as many markets as possible. Aspire Global can now compete for any deal, big or small, that exists out there.

Q: The company often says that it is crucial that the company enter new markets in order to continue to grow. What are your plans and considerations when it comes to market expansion, especially for the US?

A: Yes, it is correct that it is key for us to enter new markets. And we are targeting taxed, locally regulated markets. Today we are licensed in twelve markets including New Jersey. We are preparing for license applications in Germany and the Netherlands which we expect to take place next year. BtoBet plays an important role in our market expansion strategy. BtoBet is a leading provider in Latin America and Africa and with the acquisition we will take a significant position in these two growing markets.

We are also preparing for setting up a branch in the US during next year. We have a clear target to become the leading iGaming content supplier and game aggregator in the US. Last fall we signed our first US operator, 888, and as a consequence of our progress in the US we have now made the decision to open up a branch in the US. This will enable us to further deepen our customer relationships in the US as well as to meet new potential partners.

Q: The online gaming industry is quickly changing – we see consolidation taking place among operators and suppliers while new markets are seeing legalization, regulation, and, consequentially, taxation, which can impact margins. Alongside this, technological advancements continue to move the industry forward, thus creating a highly competitive environment for operators. How are you positioned in this market and what do you have to do to successfully navigate this quickly changing environment?

A: As a high-tech online business, we always have to be in the forefront of technology and ensure that we offer unique, cutting edge solutions and managed services. As a result of consolidation and continued underlying market growth, bigger operators will have to handle larger volumes and more complex organizations. For us, as their leading supplier, this means that we have to operate even smarter and more efficiently. Therefore, we have a strong focus on automation and AI-based processes in order to secure operational excellence.

As I said earlier when talking about our acquisition strategy, the increased exposure to taxed, locally regulated markets means that we continuously work on pricing and margin effects. A key thing to us is to own more products in the value chain so we are less dependent on external suppliers.

Q: What about land-based operators, could they be potential clients?

A: Yes, absolutely as we see land-based operators looking for opportunities to go online. This trend is driven by players moving from land-based to online entertainment. The online share of the total gaming market is supposed to almost double in the coming years and this trend is most likely to happen even faster following the pandemic. Our platform, matched with our managed services expertise, is an attractive offering to any land-based operator who wants to go online.

Q: Last but not least, I’d like to talk a bit about responsible gambling, an important topic in the industry. Your company has been in the industry since 2005 and has had a front row seat to the evolution of responsible gaming. What is your take on responsible gaming and what can you do in order to further drive the industry to enhance player protection?

A: Basically, it is about cultural and corporate values. Responsible gaming must be a mindset, a thinking, which includes the whole organization, from the Board of Directors and senior management to customer support, sales and development teams. Responsible gaming should always be there as a natural component in everything we do.

Taking into account our business model, we have a responsibility also to ensure that our partners and the brands that operate on our platform apply the highest industry standards.

Q: And what do you actually do in order to further drive the industry to enhance player protection?

A: Our focus is on technology development and automation in order to be able to earlier identify players at risk and provide them with different control tools and support. In addition, we continuously develop our training programs for our internal organization as well as our partners in order to secure awareness and knowledge about responsible gaming.

I believe that responsible gaming is a key differentiator in the industry and it must be a key part of your strategy if you want to be a sustainable business. I can give an example of how we implement the responsible gaming thinking in everything we do. In July we launched AspireBattle, an industry-first sports betting feature that offers tournaments covering all major sports. Since responsible gaming is top of our agenda, it was obvious for us to include player control with, for example, time out functionality in order to secure a safe player environment.

Aspire Global is an Index holding in the Roundhill Sports Betting & iGaming Index. This post is not investment advice, nor is it a recommendation to buy or sell a security.

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