Following the revenue drop and important reshuffling of its executive team, 2012-founded publicly-traded online gambling information company Catena Media has announced it would revamp its operations and shift the focus on its top products, including the controversial sweepstakes in the upcoming months.
On the other hand, FanDuel is more wary on the topic of sweepstakes, expressing concern over the growth of the segment in light of the recently introduced tax regime in Illinois.
Catena: “Sweepstakes Are the Fastest-Growing Vertical for Us”
During the earnings call for the second quarter, newly appointed chief executive officer Manuel Stan spoke about Catena’s plan to focus on building their brands, databases, and CRM capabilities and position themselves for future casino market launches.
The latter will be achieved by building their brands and databases in the social sweepstakes casino vertical and reaching new demographics by launching dedicated products in new languages.
“This will create a sustainable revenue model independent of new state launches,” added Stan, who further explained their “new strategy is based on three key pillars; people, products, and profitability.”
The old geographical structure that was aimed at local markers will, therefore, be replaced with a new “product-focused operating model.”
The CEO took the opportunity to highlight the “strong growth” recorded by the social sweepstakes casino vertical which accounted for more than a third of casino revenue during Q2.
CEO Stan called sweepstakes “the fastest-growing vertical” for the company, adding they “expect it to keep growing.”
As shown by the company’s Q2 results, the performance of sweepstakes boosted Catena’s overall casino segment’s revenue growth by 3%.
On the North American market, the casino vertical recorded a 13% year-on-year increase, whereas the sports segment suffered a 53% drop from last year.
Focusing on the “Top Products”
After completing “an extensive prioritization exercise,” Catena’s first step will be to clear “many low-performing domains” to enable its teams to “focus on the top products.”
Among them, sweepstakes, as well as the Hispanic market that has been recently given access to the freshly launched Spanish-language version of the Bonus.com platform, which the CEO described as a first step towards the company targeting “a massively under-served market with great potential.”
Further anticipating upcoming online gaming regulations in states like Texas and California, Catena wishes to use social sweepstakes casino offerings as a means of reinforcing its database and increasing brand visibility.
As detailed by the CEO, the profitability pillar will seek to optimize revenue by focusing on core products and strategic investments such as social sweepstakes casinos.
Some of the product growth initiatives mentioned by Stan included subaffiliation, Spanish-language products, Artificial Intelligence, and leveraging first-party data, all defined as “key priorities for Catena to build strong products going forward.”
Flutter, Wary of the Potential Growth of Sweepstakes
Flutter Entertainment’s chief executive officer, Peter Jackson, verbalized his views on the new tax regime in the state of Illinois that could cause a spike in the black market as well as among “unregulated” sweepstake operators.
During the analyst call that followed the FanDuel parent company’s second-quarter report that showed the company’s earnings “outperformed market expectations with significant revenue and AMP growth,” the CEO took the opportunity to criticize the new tax introduced on July 1.
The tax will subject FanDuel and its biggest rival DraftKings to the top 40% tax bracket.
In its Q2 report, Flutter anticipated it would be able to mitigate half of the costs from the tax hike in the Prairie State with the help of “locally optimized promotional and marketing spend.”
CEO Jackson described the institution of “a graduated tax system that punishes those who have invested the most to grow their businesses” as the “wrong” thing to do, as it could potentially cause customers to run to offshore operators or onshore operators handling “unregulated and untaxed prop parlays under the guise of sweepstakes.”
Instead, he proposed “moderating levels of generosity or indeed reducing local marketing” as the best options for customers, adding they did not have any plans to introduce a surcharge for winners.
