GMB - It is impossible today not to start an interview asking how the coronavirus crisis is affecting the industry. What is your opinion?
Juan Ignacio Juanena - The expansion of COVID-19 has affected everyone, and the gaming and betting industry has been no exception. The suspension of sporting events has had a very strong impact on the online and offline gaming industry, and affects not only betting operators but also all sectors that are directly related to the activity and that are also affected by their income as a result of this suspension. Operators, payment gateways, sports clubs, television channels, newspapers, software providers and hundreds of related items have seen a sharp drop in their income.
On the other hand, the operators of physical casinos live an even more worrying situation since the closure of the operations has left their income totally paralyzed, with thousands of workers sent to unemployment insurance and without a clear estimate for the reopening of their operations.
In online gaming, are there winners and losers in the pandemic or do all lose?
Undoubtedly, some specific providers have had growth in their activity due to the search for alternatives by online betting operators, but these are few cases and although today they may be seeing growth in their income and an increase in customers, the economic crisis generated by this pandemic strongly impacts the volume of game available by customers, generating a retraction in consumption. Although the bets in some verticals have grown (virtual games (+ 200%), casino games (+ 20%), poker (+ 85%), bingo (+ 30%), online lotteries (+ 20%)), in the long run I think we have all lost with this situation.
How much longer can small and medium-sized companies endure without sporting events?
Although today the whole world has been paralyzed by this pandemic, in many countries it has already begun to speak of the return to sports activity in 2 or 3 months. And although both Spain and Italy, which have very strong leagues that are very attractive for the Latin American bettor, the reality is that as other leagues or other sports begin, it will be possible to begin to resume the activity and the game offer will be recovered. I believe that all companies during this period have seen the need and the obligation to reinvent themselves and diversify their gaming offer, thinking not only of getting out of this specific situation but also as a contingency plan in the face of a probable similar scenario in the short or long term.
Is the growth of betting on eSports something real as it is said? Is it here to stay or is a momentary trend during the crisis?
The profile of the eSports bettor is very different from the traditional sports betting one and although today a minimum percentage of traditional bettors have turned to this type of betting, the reality is that after this crisis the volume of bets will return to its more traditional verticals. This does not mean that eSports is something temporary, the growth graphs of the eSports industry reflect the opposite but it will continue its upward trend within the estimates provided by its own public and not due to an increase in the volume of bettors with another profile that will undoubtedly return to their favorite sports.
Is the percentage of bets (at the collection level) on eSpprts large or marginal compared to the traditional sporting events of the world?
Today the volume of eSports bets is minimal compared to the rest of the strong verticals such as Casino and Sports Betting and even less than Bingo and Poker. But without a doubt the eSports offer allows capturing a different audience, a new segment of gamblers difficult to attract with other verticals, younger, with less purchasing power but with a great passion for teams.
Can we already see or have a certain glimpse of the consequences of all this paralysis? Do you think there will be a closure of companies or a wave of layoffs in the world?
Without a doubt, we are already seeing a large number of companies that have closed or paralyzed their activities and have sent their employees to unemployment insurance in order to minimize their fixed costs and try to avoid bankruptcy given the current uncertainty scenario.
In this context, how do you think Latin America will come out this situation? Will it suffer more than the European and U.S. markets?
No, I think that Latin America is positioned strongly as one of the great options for global operators that today are looking for alternatives to mitigate the blow they have suffered with this pandemic and will undoubtedly go out to look for different business opportunities to limit their loss of income. Emerging markets will benefit as they become a great growth opportunity in a hit industry.
In the USA and Europe, industry associations already denounce that banks do not want to lend them money and governments, instead of helping to save them, want to raise taxes. How do you analyze this situation?
We have to analyze each case on time. Without a doubt we are going to have many companies that are going to need government help to overcome this crisis and mainly so that the workers who are the first cut that companies always make are not affected. As in any industry, there are companies that need support to survive, but we will also always have companies that, in a crisis situation, will seek help without having a real need beyond a drop in their income. Governments and banks should analyze case by case and also be clear that the lack of support always has an impact on workers and, consequently, on the country's income as it generates higher unemployment and decreased consumption.
What was your vision of the Brazilian market before COVID-19? What do you think about the known details of the government's sports betting regulations? (tender for 30 companies)
The arrival of COVID-19 should be the boost needed by those countries like Brazil that have not regulated their online gaming industry to gain strength and generate an alternative business opportunity for the sectors that have been heavily affected by the pandemic today. . Casinos, lotteries, bingo and instant games generate thousands of employees in some countries in Latin America and today they are in a complex situation. Brazil has given signs contrary to the regulation of casino games despite having approved sports betting and from what we know of the draft project, it is not very attractive from a tax point of view. In a country like Brazil, limiting licenses to only 30 operators when there are hundreds of operators willing to pay for an operating license is inconvenient and unreasonable.
Is it crazy to think that the need that the Brazilian Government will have after the crisis can help the legalization of physical and online casinos to generate more tax collection? And that the same can happen in other countries in the region?
Undoubtedly, several countries in the region are beginning to accelerate the process of regulating online gaming as well as analyzing alternatives to generate new channels of tax revenue, and the online gaming industry is an important partner of any government to generate contributions to health and the education sectors.
How is Enjoy going through this moment? Does the group have enough back to avoid strong measures or are they unavoidable?
Enjoy is going through this situation like the rest of the physical operators in the region, with great concern and analyzing what are the best options to sustain itself over time as a leader in the entertainment industry. All companies need to adjust their budgets in times of crisis and Enjoy is not oblivious to this situation but always thinking of measures that guarantee the sustainability of the business in the future, which is the source of income for thousands of employees.
As manager of the Interactive sector, is Brazil an attractive market for Enjoy? What plans did you have for the rest of 2020 and how were they modified with this situation?
Brazil, Argentina, Uruguay and Chile are the main markets where Enjoy participates, either in person or with a strong presence of public from them. Brazil is an attractive market both for Enjoy and for the main casinos in the world, and as leaders of the entertainment industry in the region we closely follow the regulation of gambling in Brazil as well as in the rest of the countries of Latin America.
Source: Exclusive Games Magazine Brasil
