Since launching its small business strategy in 2021, Elys Game Technology's model to place white label sportsbooks in restaurants and bars has proven a successful endeavor. The approach has thrived in D.C. —where Elys' partner Grand Central Restaurant debuted the district's first restaurant sportsbook last October—, leading to new deals and widespread industry interest. It's no surprise then that the sports betting and iGaming platform provider has grown confident, with a new ambitious plan on the horizon: extending this momentum to Ohio's upcoming market.
With the Buckeye State slated to include Type C sports betting licenses for bars and restaurants within its market, set to launch on January 1, Elys eyes a major opportunity for its small business plan. "Since the gross gaming revenue for the state could potentially reach $300 to $400 million in its first full year, the opportunity in Ohio is certainly one that we could not ignore," Elys Chairman Mike Ciavarella tells Yogonet.
In this exclusive interview, the executive also details the keys behind the full rollout of the Ocean Casino Resort sportsbook in Atlantic City, called The Gallery, an essential part of the company's plans for the casino segment. Moreover, Ciavarella discusses expansion and new opportunities in the US and Canada at large, in addition to Elys' ambitions for the digital betting space.
Elys announced last month it has signed deals to run its fourth and fifth white label sportsbooks in bars and restaurants in Washington D.C. What can you tell us about these partnerships, and in regards to the general development of the small businesses market in D.C.?
With the repeal of PASPA in 2018, the sentiment toward mobile sports betting was remarkable. To give small businesses a chance to participate in the sports betting industry, legislators and regulators in Washington, D.C. truly stepped up to pioneer this market segment.
It’s clear that Ely’s successful small business sportsbook installation at Grand Central Restaurant and Sportsbook has created considerable interest in this segment, not only in D.C., but also in nearby states.
We feel that the Class B sports betting segment is very much in its early stages for all markets across North America. These partnerships could potentially provide small businesses additional ancillary revenue from sports betting along with core business sales which can combine to drive economic growth at the grassroots level.
With the innovative Elys “Build-a-Bet” platform, these locations will be able to offer unique and entertaining experiences for bettors, and essentially differentiate themselves from each other by giving patrons an opportunity to enjoy a meal or beverage while watching their favorite sports events within a vibrant environment.
Grand Central Restaurant
Elys has been an early player within this segment. What has been the reception to Elys’ services within this space thus far, and has this strategy delivered the results the company expected? What role has the Memorandum of Understanding with the New York State Restaurant Association (NYSRA) played since it was signed in September?
Due in part to a transient consumer base, we believe that the D.C. market is unique in that bettors prefer the retail environment in lieu of mobile options, so Grand Central Restaurant has been able to benefit from this model and has exceeded our expectations. Ultimately, Grand Central has set the tone for our future locations in D.C.
Even more importantly, patrons have mentioned that they like the ability to support a local establishment, which is an underrated aspect of this offering. To this end, the early results seen at Grand Central speak for themselves. Elys is very proud to have played a key part in driving this strategy and we expect more of the same as we scale up in multiple locations across the nation.
Regarding the Memorandum, New York, along with other states, are closely assessing the benefits of allowing small businesses to participate as operators in the sports betting industry with the goal of complimenting their core business. From Elys’ initial launch in DC, it’s clear that it can be done, and we feel confident that legislators will embrace the union of small businesses with the excitement of sports betting as a viable contribution to the local economy.
Ohio has included Type C licenses for bars and restaurants once it launches sports betting next year. Elys has already expressed an interest in entering this market, and partnered with Wright Bet to operate sportsbooks in the state. What are your expectations for Ohio? In what ways will the restaurants and bars' space here differ from that in D.C.? How many partners does Elys expect to go live with in Ohio?
Interestingly, by creating a variety of classes in both land-based and mobile licenses, Ohio legislators took a view that makes a lot of sense in the sports betting business. This wide range of distribution gives sports bettors multiple options for placing their bets and closely replicates the European landscape. This strong relationship with Elys’ origins and experience raises our expectations of successfully capturing a significant slice of the market in Ohio. Since the gross gaming revenue for the state could potentially reach $300 to $400 million in its first full year, the opportunity in Ohio is certainly one that we could not ignore.
We imagine a large percentage of the gross gaming revenue will go towards the mobile market, but retail should still see a significant portion. Type C locations will have different standards and procedures dictated by the state of Ohio, but the overall experience will be similar to a D.C. location.
Considering the huge number of small businesses that could apply to the Type C market, Elys has the potential of partnering with thousands of locations through our relationship with Wright Bet.
Among rules published by the Ohio Lottery Commission is a controversial provision that states that, unless approved by the director, no Type C host shall have more than two self-service terminals at a licensed facility. Moreover, these kiosks won’t feature the full array of sports betting options that other sportsbooks will. What’s your take on these limitations, and how could they potentially impact operations? Would that number of kiosks be enough for the expected demand?
We don’t believe that these provisions should be viewed as restrictions, but simply a good starting point. Both Elys and our partners can adapt to the possibilities ahead and rise to the challenge. To ensure that sports bettors and business patrons have a fair sportsbook offering, and that operators can provide the product in an economic manner, we will work closely with the Ohio Lottery and have no concerns about the current provisions for Type C licenses. We also believe that there is always an opportunity for public feedback on the limited bet options and potential amendments to these initial boundaries in the near future.
It's not unusual to see one or two kiosks in many successful European retail locations, and because we estimate several Type C location points of sales, the limit of two kiosks is not expected to create significant ques or bottlenecks or limit the revenue expectations for Elys or our partners.
The company has also recently gone live with the full rollout of the Ocean Casino Resort Sportsbook in Atlantic City, called The Gallery. What options does the new space offer in terms of sports betting to its guests, and what added value do Elys’ offerings bring to the venue? What has the feedback for the sportsbook been like since launch?
We have a strong partnership with one of the first owner-managed sportsbooks in the US at Ocean Casino Resort and are both very proud that our two teams combined strengths to launch The Gallery in time for the summer sports season.
Elys is providing the entire backend infrastructure for sports betting, risk management, and support. The new venue offers patrons of The Gallery to enjoy a wide variety of entertainment options including multiple televisions for unobstructed viewing, a redesigned bar space, and a new VIP lounge, as well as table games and traditional casino games. The strong relationship with our partners at Ocean gives Elys the opportunity to work on improving our product, filling any gaps as our relationship builds, and offering the best possible experience for players.
Although it is still quite early in the launch, we’ve seen a significant uptick in handle at the new sportsbook and the feedback has been excellent in regard to the lounge experience, along with the entertainment. We expect the start of the coming professional and college sports season with football, hockey, basketball matches to result in a significant increase in handle.
Atlantic City is one of the top sports betting and resort destinations in the country. What does this new launch mean for the company and its wider strategy for the casino segment? How is the company currently expanding its presence in the US retail landscape at large, and what other states could offer an opportunity going forward?
The new casino launch is a key component in Elys’ strategic expansion plan. After deploying our small business architecture in D.C., this product represents our large venue build for casino and racetrack venues. Since the US and Canadian markets have many casino venues speckled throughout the territories, compared to the Italian market, for example, the casino segment is an important market sector for Elys in North America. For this reason, we wanted to create a specialized, fully automated sportsbook in this product build for future expansion.
Elys’ approach has always been methodical and prudent, particularly in terms of product preparation, which we expect will be adopted by a large number of operators seeking a cutting-edge end-to-end solution across the country over the next phase of growth in the U.S. sports betting market. To that end, we will always be interested in jurisdictions that allow retail and mobile sports betting in any size venue and we are creating a road map of states with sustainable tax models for Elys to expand into.
Elys announced earlier this year a deal with Lottomatica to develop a North American-focused sportsbook platform. What can you tell us about this partnership and the company’s digital rollout? What synergies do you expect from Elys’ omnichannel strategy going forward? And lastly, what can you tell us in regards to opportunities in the Canadian market?
As mentioned, we are proceeding prudently in both our small and large land-based architectures and the same holds true for our digital offering. Both Elys and Lottomatica are very focused on launching in the market with the best possible product, as such, our design build is on pace for first testing prior to the end of this fiscal year and we expect to have a public launch soon thereafter.
The synergies that bind Elys and Lottomatica are firmly rooted in our common core experiences in the highly competitive European sports betting space where players can get their bets in through both online and land-based channels. The more our respective teams are engaged in the product build, the better the customer-facing ideas are fostered.
The Canadian market is, as one might expect, a long-game prospect for Elys. With the competition aggressively jumping into the new space, we believe that its very early in the cycle to constitute a gainful business case to immediately enter the Canadian market.