Catena Media CEO: Sweepstakes are our “fastest-growing vertical”
Manuel Stan says sweepstakes casino deals accounted for more than a third of Q2 revenue while outlining his three-pillar strategy to repair the business
Catena Media CEO Manuel Stan has declared that sweepstakes are the firm’s “fastest-growing vertical” and one that is showing no sign of slowing down.
The Malta-based affiliate released its Q2 results yesterday, 14 August, which revealed that sweepstakes casinos were responsible for more than a third of the €10m ($11m) in revenue Catena Media generated from online casino.
In other words, at least €3.33m came from deals the affiliate has with sweepstakes casinos.
Online casino accounted for 78% of Catena Media’s total revenue in the three months to 30 June, with the vertical ticking up 3% year on year (YOY).
Breaking that figure down by region, the North American market was responsible for €9.1m of overall casino revenue, representing a 13% YoY increase, largely driven by the influence of sweepstakes.
New depositing customers across all markets rose 5%.
Speaking on an earnings call, Stan explained: “The overall comment on sweepstakes is that we see this as the fastest-growing vertical for us, and we expect it to continue growing.
“We are very well-positioned to capitalize on that growth, our products are focused on growing the sweeps vertical. I think it’s twofold.”
Stan went on to highlight that Catena Media is also primed and ready to take advantage of any future regulatory updates in some of the biggest states in the US.
“Right now, we see [sweepstakes] generally overall in the industry being one of the fastest-growing verticals and we capitalize on it, but also, we position ourselves for post-regulation in the bigger states in the US where we will be able to have built our databases around our brands to capitalise when the likes of California and Texas will be regulating,” he said.
Sweepstakes casinos and sportsbooks have exploded in the US in recent years, with sweepstakes laws allowing users to redeem coins for prizes.
However, some industry figures have publicly criticised the model for essentially allowing unregulated sports betting and igaming.
In fact, Flutter Entertainment CEO Peter Jackson said the tax hike in Illinois would pave the way for gains to be made by both the black market and sweepstakes operators.
As made clear in Catena Media’s results release, casino revenue grew in all of its regulated US states other than New Jersey, a drop that has been attributed to the revision made to Google’s search policy.
The changes meant websites that included third-party content looking to take advantage of a strong domain reputation were hampered, while underwhelming media partnerships also impacted the firm.
Overall, Catena Media posted revenue of €12.8m for Q2, down 14% YoY, with the business undeniably hindered by May’s Google update.
Despite the slight rise in casino revenue, sports revenue plunged 47% to €2.8m, down from €5.2m in Q2 of 2023.
While Catena’s adjusted EBITDA slumped 67% to €680,000, that total still surpassed the €500,000 figure that was predicted internally two months ago.
Stan, who was appointed CEO in March but officially began on July 1, went on to explain what people can expect from him at the helm as he attempts to turn around a company that has seen its share price crash 49% so far in 2024.
He said: “I think our strategy right now is based on the three pillars: people, product and profit. From a people perspective, the new organizational product base was a massive undertaking for the company, but it is the right thing to do to position ourselves to focus on the right products.”
The Romanian continued by reflecting on the recent additions to Catena Media’s team and how all new arrivals will be in position by the end of the year, before discussing how different things will be under his watch.
“In my opinion, the group has previously tried to do too many things and spread its resources too thinly, resulting in under-optimisation of core products,” Stan remarked.
“One of the key exercises we’ve done in the last few weeks was to do a thorough framework for prioritising both our projects and our products.
“From a product perspective, now the entire company is focusing on a number of key products for us, we are reducing our website portfolio massively in the next few periods to reduce it to a number of properties, a number of products that we can manage well.”
The CEO continued: “From a project perspective, we’re turning all stones, trying to understand where the inefficiencies are and trying to capitalise on the opportunities. That three-fold pillar will be the core of our strategy going forward.”