Gambling.com CEO Charles Gillespie gives Gambling Insider a tour of Gambling.com Group Plc, explaining the business decision to diversify into sports betting and revealing his thoughts on future expansion areas for the affiliate industry.
What do the bookies.com acquisitions add to the Gambling.com Group Plc that you did not already have?
As a business, Gambling.com Group Plc was almost exclusively focused on the online casino vertical until 2016. In 2017 we started doing more and more with sports on the Gambling.com website. We aim to grow sports into a meaningful share of the overall business and the Bookies.com acquisition will help us achieve that. In addition to Bookies.com we acquired two additional websites: Bookmakers.co.uk and FootballScores.com. We also acquired the domains Bookmakers.com and FreeBets.net.
As a result we now have a lot of quality, raw material in the sports space. The Bookies.com website is a performer and a respected site in the UK. The other assets also perform but not at the same level. These assets will require a lot of attention from our side to realize their full potential but we are excited to put in the effort. When we acquired the Gambling.com domain, the website referred no players to the operators. Now it is one of the biggest individual affiliate sites in the industry. We plan to deliver the same kind of growth with the ancillary assets from the Bookies.com transaction.
Does the company plan any further acquisitions in 2018?
Yes, the affiliate sector should expect to see Gambling.com Group announce more deals throughout 2018. That said we plan to spend significant time to integrate the four already completed acquisitions.
How is the additional €16.0m investment in the company helping your business to grow?
Having access to these funds has enabled us to undertake more frequent and larger acquisitions of companies throughout the affiliate sector.
Your two latest corporate acquisitions have included conditions relating to earn-outs and deferred compensation, why do you favour this sort of method when making acquisitions?
The main reason is risk management. We want to ensure that we pay a fair market price for assets. If an asset underperforms, especially if it has been advertised as a high growth asset, then that must be reflected in the total purchase price. Furthermore deferred compensation is helpful with cash-flow. Our business generates substantial free cash and by deferring payments we can do more M&A activity sooner.
You recently launched a US version of your affiliate site, how is this going and what are your impressions of the US affiliate market?
We really are excited about the US affiliate market. There finally seems to be meaningful momentum toward regulation and there already are good opportunities now in the US. We put a US version of Gambling.com online at the end of 2017 which focuses on the regulated market in New Jersey. Due to the power and stature of Gambling.com, the site quickly ranked favourably on Google and is delivering players already.
What criteria do you use to assess potential acquisitions?
We look at a variety of things, such as: percentage of revenue which is regulated or unregulated, percentage of revenue coming from CPA vs revenue share agreements, how concentrated the customers are and the sources of traffic (SEO, PPC, Social).
Do you think that the introduction of GDPR in May will ultimately lead to a contraction of the Affiliate industry? If not why?
It may reign in the affiliates relying on database marketing but for the big affiliates who drive most of their traffic through search, it won’t be as big of a deal as those affiliates do not handle the sensitive, personally-identifiable data that GDPR really protects.
It has been almost a year since you rebranded KAX Media into Gambling.com, how has that rebranding added to your business model and would you do it again given the same circumstances?
The rebrand has been a great success and we should have done it sooner. In conjunction with the rebrand we launched a corporate site at gambling.com/corporate which has really helped raise the profile of the company. We are doing so many interesting things these days and working with so many great people we needed a proper place to highlight and distribute all of these stories. We are also recruiting heavily and a sharp corporate website is key to getting people excited about working with our Group. Everybody wants to be part of a winning team!