Q&A: 888 CEO Itai Pazner on the Wire Act and the power of the WSOP brand
Pazner discusses the firm's forthcoming Poker 8 client and plans for the US market
888 last week reported a 6% rise in its group revenues for the first part of the year, on the strength of growth in the UK market, particularly in sports and casino.
Following the results publication, EGR caught up with group CEO Itai Pazner for his view on the recent Wire Act opinion ruling, and how the firm plans to turn around a struggling poker vertical.
The Poker8 client
EGR: How is the US progressing? The recent Wire Act ruling looks to be a boost?
Itai Pazner (IP): I can’t comment specifically on partners but there’s a lot of interest because of all our capabilities in different verticals. It is going to be a sports-led market and we have the capability to lead with sports.
The latest news around the Wire Act is extremely positive. If there was one area we were worried about there it was poker because we know the effects of splitting liquidity. I hope that decision puts the nail in the coffin of that negative agenda that we saw last year and we can run ahead and continue developing the poker market in the US. Poker isn’t the biggest market but it will grow as more states join. The WSOP is the strongest poker brand in the US, so backing that with our technology is a very powerful position in that category.
EGR: Poker was down some 28% in the early part of the year. Is there a concern about a spiralling effect where liquidity drops, and more and more players start leaving the platform?
IP: We’re seeing stabilisation in Q1 compared to Q4 last year. We’re very aware of the spiral effect in poker, but we took a lot of action in H2 to stop that spiral and its trading better in Q1. Then we have some things in the pipeline to change the direction of trend imminently. We will launch poker in Portugal in the next few weeks which will really support Spanish poker through a shared pool. We are also looking at going back into France potentially and other international markets.
Elsewhere, the sponsorship of the WSOP in Vegas [happening now] is one of our strongest poker assets and its always a positive period for us. We’re also investing heavily in the product. Now Orbit is done, our new Poker 8 client is being released in parts which will end early next year. Once that’s done we’ll have a fully revamped poker product that fits into consumer expectations today and appeals to the recreational market and a younger generation of mobile players, not the traditional grinders.
Obviously it’s been a challenging category but we have turned poker around in our past through product and marketing enhancements, and if there’s one big technology project we’re focusing on, its that one.
EGR: Some analysts questioned whether growth was sustainable as it came with an uptick in marketing spend. How would you respond to that?
IP: An important part of our strategy is appealing to the mass market and being less reliant on VIPs. We made a massive shift to our strategy, product, operations, and in that respect I think it’s a more sustainable kind of business and marketing is important. The growth in marketing came with a decrease in average CPA, through being more effective in things like online performance, programmatic buying. We are not splashing money on sponsorships and high-end TV ads. If we can keep spending effectively, decreasing CPAs and getting good players, I’d invest even more.
EGR: Is Orbit continuing to deliver on the promise it showed last year?
IP: It’s been amazing. We’re seeing 70% growth in FTDs in UK, 100% growth in Italy, and really strong KPIs in casino. Historically it’s been our strongest vertical so when you take the strongest component in your business and grow it, it’s very positive.
In my view FTDs is best predictor for future growth. If you bring in good FTDs, manage them well, revenues will follow. Orbit versions 2, 3, 4 and 5 are all in development so we are very bullish about casino products.