With the Ontario iGaming market going live on April 4th, Canada has attracted prominent online gaming merchants such as FanDuel, BetMGM, & theScore, who have gone live with their platforms in the province. But why is Canada’s online gaming industry important? In the first episode of The iGaming Show, Dave Roe, COO at Paramount Commerce, joins us to answer: what merchants and their affiliates should understand about Canada and why it could become one of the most important iGaming and sports betting markets in the world.
The iGaming Show, presented by Paramount Commerce, is a podcast that will analyze gaming industry trends with experts from various gaming organizations.
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Read the full episode transcript:
Varad Mehta: Hello everyone, and welcome to The iGaming Show presented by Paramount Commerce. I am your host, Varad Mehta. In this podcast, we will analyze gaming industry trends with experts from various gaming organizations. In today’s episode, we will explore the benefits of expanding into Canada’s online gaming market, more specifically, Ontario’s iGaming market, with Dave Roe, the COO of Paramount Commerce. So without further ado, let’s get the show rolling!
So Ontario’s iGaming market has officially launched this past Monday. So how’s the overall atmosphere in the industry right now?
Dave Roe: I think the atmosphere is an exciting atmosphere. We’ve been waiting a long time for the Ontario iGaming market to launch, and we’re very happy that it finally has.
VM: Yeah. And I think a lot of work has been happening in the background at Paramount Commerce. Could you give us a little bit more details about what the Paramount Commerce team has been doing to prepare for the iGaming market launch?
DR: Yeah, sure. So we’ve been working extremely closely with both the AGCO and the international iGaming merchants who are looking to get regulated in Canada, Ontario specifically. And in terms of those regulatory requirements, the team has been actively consulting with those parties mentioned, ensuring that the necessary information has been provided and that they have the tools to really get started and move into the Ontario market. On top of that, we’ve been making a lot of changes and updates to our suite of products, ensuring that things like account ownership and the location of players and our ability to support our merchants to be compliant with these regulations are certainly in place. And yeah, we’ve been working with our merchants every step of the way to this point and obviously moving forward as well.
VM: Moving on. As someone who has sort of worked a long time in the online gaming space, could you maybe tell us what are the biggest benefits for international merchants who are moving into Canadaor who have moved into Canada? Because as we look at the figures that were through the province-run sportsbooks, it indicates there’s a strong revenue growth, there’s a strong player base in Canada. So could you tell us what are some benefits for international merchants?
DR: Sure. So first and foremost, it’s a billion-dollar industry. That’s a huge benefit for any operator entering or maximizing the market. And it’s probably the largest segment of Canada’s entertainment industry. So absolutely huge opportunity for those operators. The actual playership is already extremely active and with the right focus, the right level and focus on player acquisition and experience, this is a very active gaming population. And with that increased regulation, that brings things like new sponsorship opportunities, the operators can partner with various organizations like the CFL or the Canadian Elite Basketball League, which we’ve seen how these kind of partnerships work extremely well in other jurisdictions, especially south of the border in some of the US states. So I think there’s real opportunity there now for these operators to participate in some of these types of partnerships. And we’ve already seen some announcements already.
VM: Yeah. And I think I’m sort of a newbie to CFL, but I love and enjoy watching it. So I think messaging is so important for anybody moving into Canada because people need to understand that Canada has sports like lacrosse, and football is obviously more of an American thing. But we have CFL. So I think having these sort of leagues and sports highlighted would help reach Canadians better. So sort of moving on from that. Are there challenges to moving into Canada for international gaming merchants, or will there be any challenges for international gaming merchants?
DR: I think one of the things to note from the get-go is that Canada is quite different from the US in that it’s an established market. So any operators coming into the Canadian market from the US only will need to do their homework first. And any operator that is starting fresh, then they’re going to be tasked with taking market share away from the existing grey market operators. And I think that those operators that already have some kind of customer base, whether it be in daily fantasy sports or whether it be in more media style organizations where they have eyeballs on a specific, very popular mobile application or something like that, then these operators will have an advantage because they’ll have a clear upselling capability that they can take advantage of. So first of all, that’s going to be very important. Another key factor, of course, is payment acceptance. Canada is the same as many countries that has very specific payment trends, payment methods that are typically used by Canadians. And like many other countries as well, the acceptance rate on credit cards is particularly low. And actually consumers can be charged a cash advance fee quite often on a credit card transaction when they’re paying to an online gaming operator. So there is definitely a need for alternative options such as the likes of INTERAC®. which is pretty much the most popular payment method in Canada. And of course,the e-wallets and especially bank-based products are particularly popular in Canada.
VM: Yes, I fully agree with that. I think whether it’s rules, whether it’s payments technology or messaging, these are things that I think any gaming merchant will need to keep in mind when they’re moving into Canada. But I think something that you touched on which is really interesting is payments technology. I think payments technology is one of sort of the underdogs of the gaming industry, and it really benefits many merchants. So could you possibly expand on what role does payments technology or what role will payments technology play in the online gaming expansion of Canada?
DR: Well, having spent nearly two decades in payments, I don’t feel like it’s an underdog, but I hear what you’re saying. I think that the role of payments in the iGaming industry is always seen as a partnership with the operators. And the operators have to be extremely careful about who they set up these partnerships for. Because when the operators are either entering a new market or putting new focus on a market, then that will mean that they’re effectively spending a significant amount in marketing dollars. And in order to acquire a customer and then for them to become a profitable customer, they have to be able to make a payment. So it’s extremely important that operators have the right suite of payment methods in their cashier so that upon spending those marketing dollars that they actually equate into a profitable customer. So the last thing you want to be doing is causing that frustration at cashier because there are alternative places they can go to. So payments is very much part of the overall customer experience that the operators have to get right. And it’s not just from the paying into the operators, at some point it is also paying out. I mean, there was a TrueLayer report that showed that 8 in 10 players said that fast payouts are an important factor when choosing which payment operator to work with. So they need to get both sides of that right, for not just acquisition, but also retention of the positive players. From a Paramount Commerce point of view, the products that are offered within our suites, such as iDebit, INSTADEBIT and our INTERAC products are absolutely key to that player acquisition and retention. And we ensure that operators have high conversion rates for their customers, that they’re not hitting their bottom line in terms of costs and chargeback returns, all of that kind of thing. So it’s really important that when looking at the payment landscape from an operator perspective that they are looking at what do consumers or players use today in the market.
VM: Yeah. And interestingly, one of the most important things that I read about on Twitter with Ontario’s iGaming market launch was payouts. Essentially, people are tweeting about how quick they want their winnings to come into their account. So I think this is probably one of the most important options or maybe things that people look out for when they want to signup with some merchant. So I think it’s absolutely true. I guess payment technology is no longer the underdog. It’s probably well higher than that, it is probably the favourite now.
DR: Just to pick up on what you’re saying, I think that with that payout side of things, that’s where it becomes even more emotive from a player point of view because the operator has their money and that can really make or break the trust element of that relationship between the player and the operator. And without that, then the next time the player comes to next weekend when the next games are on, are they going to choose the operator that pays them out straight away or within a reasonable time frame or the one that didn’t? And again, referring back to that report. I think that was pretty clear. What we’ve seen as well with working with operators that payout piece is very important.
VM: It’s true. No, I definitely agree with that. A point that you sort of touched upon is bank account based payments. That was earlier in our conversation. Could you maybe expand on that idea, how can bank account based payments be a game-changer for Canadian merchants and players?
DR: I think bank account based payments have always played a significant role in the payment space, especially in gaming, and that’s across multiple jurisdictions, they’re typically the first alternative, if a credit card were to fail or they didn’t want to use their credit card, then bank based is often the next option that the consumer or player will actually choose. And there’s been a lot of work that’s gone into taking what is effectively a clearing system like EFT in Canada or INTERAC, and taking that and really making it work in today’s world where people are looking for that ease of use, that simple, effective customer experience that they are used to. When you think about other experiences in life, whether it’s paying for an Uber where you don’t even have to touch your wallet or the single click check out on Amazon, this is the expectation of players. And the real kind of game changer is to ensure that these bank based options are meeting those expectations of the users. The less extravagant side of that, of course, is managing risk. That certain payment rails do come with additional risk compared to, for example, credit and debit. And there’s been a lot of work gone into ensuring that that risk is managed so that operators are not hit with large bills at the end of every month from any fraudulent transactions or money that couldn’t be retrieved from a consumer’s bank account or anything like that. So we have a very strong track record in managing bank based transaction risk and a dedicated team. That’s what they live, sleep, and breathe every day. So it’s really a game changer in terms of ensuring that bank based payments also hit the mark in terms of risk management.
VM: Lastly, I would like to ask, what innovation do you foresee in payments and how do you think it will impact iGaming whether it’s in Canada or whether it’s internationally, maybe we can just focus on Canada?
DR: Yeah, sure. Our core purpose at Paramount Commerce is to simplify payments, and that’s both for our merchants, in this industry they are referred to as operators, but also for consumers, the actual end-users of our products. And one of the biggest and most exciting trends impacting payments right now, not just in Canada, but across the globe, is this concept of embedded finance. In a nutshell, this allows the operator to have a payment journey that’s much closer to the overall customer experience in typically their native app in this case. And we’re really looking forward to offering these types of payment services in the near future to really ensure that we’re offering best in class payment services to our customers. And then the second thing is probably the more well-known innovation in payment right now, which is cryptocurrency. It’s become obviously a very popular currency to invest in, but also it’s starting to gain more traction and actually buying goods and services and ultimately funding a player’s gaming account. So there are already many foreign gaming operators who allow players to use cryptocurrency for online gaming. So crypto payments in the iGaming space is set to become much more widely used, I would say.
VM: Yeah. I think one of the more popular uses of cryptocurrency and online gaming is through a site called Stake and I think it is more known or sort of more known now it’s because Canadian rapper Drake is now associated with crypto gambling, I guess it would be the term. So I think that’s absolutely true. I think crypto gambling is soon becoming such an important part of the gaming industry and I think we probably might see it sometime in Canada as well. So. Yeah, that’s really true. So Dave, I want to thank you for your time. It’s so important for everyone to hear from an industry expert such as yourself in what is now one of the most important weeks in Canada’s online gaming industry. So thank you so much for taking the time to speak to me. And I hope everyone gets to learn and understand why Canada is essentially one of the most important markets in North America.
DR: Great. Thank you very much. Happy to be here.
VM: Thank you, Dave. With province-ran gaming platforms raking in millions in revenue last year, Canada showed true potential to international merchants who want to move into the Great White North. As more provinces go live with their iGaming markets, Canada is shaping up to be one of the most significant international gaming markets. I want to thank Dave Roe, the COO of Paramount Commerce, for joining us today. If you enjoyed today’s episode please like, share, and subscribe to our channel. If you have any questions for us or Dave, please comment down below. Thank you for tuning into The iGaming Show. I’m Varad Mehta. Keep Gaming!
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