Striding out

Having grown Aspers’ online presence from zero to a multimillion venture in six months, Stride Gaming is on the lookout for fresh partnerships. Hannah Gannagé-Stewart reports

Stride Gaming chief executive Eitan Boyd has pointed towards an increasing focus on B2B partnerships going forward as he seeks to defend the AIM-listed operator’s track record of double-digit growth.

Boyd launched Stride Together, the operator’s B2B arm, in May 2017 as part a joint venture to deliver Aspers’ first online casino.

The partnership, which is structured round a 50/50 revenue split, has exceeded expectations in its first six months and Boyd is already looking for new partners to replicate the model with.

“We wanted to make this work, so it had to be a win-win for both sides,” he says of the Aspers deal. “We’ve taken our risk, we’ve got skin in the game so and it’s worked well”.

He attributes the success of the JV not just to Stride’s platform but to the strong brand recognition of Aspers’ side and the casino’s “optimum player base”.

“These are players that play in the casino. And if you can get those players to play online which has never been easy or anyone; Genting struggle, Rank struggle, but if we can just bridge that gap and reach out in digital, we’ll do fantastically well,” he says.

However, it’s not just casinos that Boyd sees as having potential to partner with Stride Together, and he is clear that Stride Together is not a white label arrangement but a true partnership.

He is currently in discussions with a number of media companies and also hasn’t ruled out retail partnerships, which is just as well as the Aspers deal bars Stride from partnering with a competitor for the first 18 months.

Stride Together currently consists of three people; Boyd, business development manager Sara Lelli and newly appointed head of international development Richard Sager, who are responsible for the Aspers relationship.

Boyd is conscious that they will need to staff up to take on other partners. “We’re still not bulked up enough to go the full shebang, the full B2B,” he says.

As a listed bingo-led business with investors to answer to, Boyd’s necessarily focused on carving out new growth opportunities.

In the UK, that will be ramping up the B2B casino offering and adding extra verticals, starting with sports betting.

“People have seen how we’ve been growing in the last five years, we’ve been growing double digit year on year so I think it’s a strong indication that the platform is solid,” he says.

An internal restructure is in the pipeline to ensure that the new B2B arm is fit to duplicate the success of the Aspers JV with new partners in future.

“Stride Together will get more love this coming financial year. It will have more visibility and will be marketed better,” Boyd adds.

However, he is conscious that pumping more resource into B2B must not be to the detriment of the rest of the business. “We’re doing B2B, but we don’t want the shoe maker walking barefoot,” he says.

“People ask if going into casino will harm our margins and what I say is ironically it won’t because the infrastructure’s already there – it’s easy to add an extra site or two efficiently”.

A deal earlier this year with sportsbook provider Amelco was secured to help the business leverage its position in southern Europe over the coming months.

Boyd says he expects Stride to be live in Italy by the end of the year, and will then turn his attention to acquiring licences in Denmark and Spain.

In the six months to February 28, 2018, Stride’s net gaming revenue (NGR) grew 14% to £44.9m, compared with the same time the previous year. The firm’s proprietary platform grew 25%, “so the thinking going forward and the ethos in the group is to focus on our core,” Boyd explains. 

Boyd’s philosophy is simple but effective, act as your own affiliate to draw as much traffic into the profitable core of the business as possible.

Creating a structure that can drive that traffic itself lowers the cost per acquisition of each player, and Boyd hopes that the service once they are on the platform increases their lifetime value too. “We dominate more of the search engine, dominate more of the affiliate sites, so our brands appear everywhere,” he says.
Stride’s multiple brands may seem like a lot to manage, but Boyd concedes that 121 of the sites are effectively trawlers searching for players and feeding them back into the Stride ecosystem. “Fewer than 40 of them generate most of the revenue,” he says. “They produce 90%, so that’s what we focus on”.

What Stride’s multi-brand set up may lack in brand recognition, it more than makes up for in scope. With just under 160 brands in the Stride stable, Boyd says even if a player stops playing in one part of the portfolio, the likelihood is they have jumped to another.

“We can be unique and stand out from the crowd as far as content is concerned,” Boyd explains. “For example the Queen’s birthday last month was an opportunity to make content around that, the World Cup has been as well. You’re not reliant on a third party to generate content for you”.

Despite all this, Stride is faced with a change when it comes to the fact that the bulk of its business comes from casual gamers.

It’s a niche Boyd’s pleased to be serving but not one that can sustain growth in isolation. “We are still a dwarf among titans,” he says.

“So we are going to be replicating this model going forward in other markets, and replicating this model in other verticals in the UK. This is very much a bingo-led environment and we know the bingo market grows at best in single digits. So to continue growing in double digits, we can’t rely solely on bingo”.

The joint spectres of increased regulation and compliance burdens are also not far from Boyd’s mind as he plans the future. He expects higher taxation and the more draconian compliance legislation to cause a slowdown in growth.

Can Stride mitigate the risk? Boyd says the acquisitions the business has made have created cost saving synergies and, with some homing of analytics, there are more savings to be made from better optimisation of marketing spend. “So yes, there are ways,” he says.