Pulse

Scientific Games & Authentic Gaming: Collective Power

By William - 7 December 2021

The combination of Scientific Games and Authentic Gaming offers the opportunity to capitalise on a growing stateside market expansion and the ‘collective power’ of live table games and the OpenGaming platform.

Jonas Delin, Authentic Gaming’s founder, and Rob Procter, VP Game Development at SG Digital, discuss the strategy and timing of the deal, together with their respective ambitions going forward.

Jonas, could you tell us more about the acquisition – how long was the deal in the making and were there any major sticking points in the negotiations?

Jonas Delin, Authentic Gaming: Scientific Games has played an important part in Authentic’s growth over the years as many of our tier one operator clients in regulated markets take our content through SG’s OGS platform. We have also worked together on a couple of bigger strategic projects that will be announced during 2022 but weren’t necessarily part of the acquisition.

During these past few years, we have discovered a lot of synergies between the companies as well as a similar culture, one that is driven by a strong focus on producing high quality content in an entrepreneurial environment. Our successful cooperation and development of a strong relationship over the years culminated in us entering M&A talks earlier on this year.

Ultimately, two companies with lots of synergies and similar attitudes but with completely different skill sets that complement each other perfectly was the driving force behind the deal. We covered a lot of ground during negotiations, which meant we were able to progress with the execution of our new strategy on the very same day we signed the deal.

From the outset of founding Authentic, was being acquired part of your long-term planning, or was the offer simply too good to refuse?

Jonas: The objective from day one was to create truly differentiated and innovative live casino games and to lead the way in Live Roulette. Over the years we have become masters of live roulette with a large catalogue of successful tables that are distributed to the largest operators in the industry in virtually every regulated market in Europe.

The new vision of Authentic is to lead the way in the other core table games and replicate our success with Roulette in Blackjack and Baccarat. This vision also includes an aggressive expansion in regulated markets with particular focus on the burgeoning U.S. market. Our existing client base means we can move into new markets quickly and efficiently and in Scientific Games we found the perfect home for this vision.

Rob, Scientific has its fingers in many gaming pies. Why is now the right time to move into live casino?

Rob Procter, SG Digital: Live casino is a vertical we have been carefully considering bringing into our product portfolio for some time. We’ve kept very close to what’s happening in the market and there is a tremendous amount of excitement from operators and players about the future of live casino.

It’s the fastest growing segment in the iGaming space and by 2026 is expected to be 30 per cent of the US iGaming market. With only a couple of providers in this space already, now is absolutely the time to bring Authentic Gaming’s innovative live casino offering to operators in the US.

We have a tremendous heritage in table games and producing some of the world’s leading slots and we know that our IP and Franchises will resonate with players within the live casino space. We are excited to work with the Authentic Team to bring new and immersive experiences to players.

From the roster of live casino providers out there, why have you chosen to acquire Authentic Gaming?

Rob: This was a match centred around the perfect alignment of product and culture. Authentic have built a very strong quality-led reputation in the products they provide to the market today and had already built an innovation pipeline that we knew players will love. There is a massive amount of additional value we can create together, and that’s a journey we are eager to accelerate.

Authentic Gaming has a culture centred on innovation and has a passionate and engaged team. This was evident from our early conversations, and it was a culture that we wanted to embrace and further develop. The care and love they show for their products are evident and it mirrors what we are building here at SG Digital.

How much independence will Authentic have now it is under the SG umbrella?

Jonas: We will continue to operate fairly independently, but will look to draw on the areas where Scientific Games is incredibly strong. These include unparalleled relationships with U.S. land and online operators, the leading distribution network/platform in the U.S. market and an incredible infrastructure and team in the U.S. and Europe that will speed up and make our U.S. market entry more efficient.

Scientific Games also has a very strong talent- base in supporting areas of the business such as HR, legal and compliance, for example, which will help us scale at the speed we intend to.

Rob: Authentic have built a great business for themselves over the past few years. They know the market inside out and know how to make products that will succeed. They will continue to set their own vision and our role is to enable that process, while also pushing the accelerator.

That means providing additional support where and when it is needed and guiding them to expand into new markets. The United States and Canada is the most obvious and strategically important. Helping Authentic land the US will be a gamechanger for the industry.

They are the experts in the live casino field and that is why we sought to make this deal. Rather than building something ourselves from scratch, we can now benefit from a team that is highly skilled, passionate and has huge product expertise.

They will continue to drive their own destiny, but with the added backing of the SG Digital machine to provide support and to push them forward. We have already started on that journey, and we are so excited to watch the next few months play out.

Jonas, what does the deal mean for your current client relationships with the likes of Entain, 888, Betway Group, LeoVegas, and Mr Green?

Jonas: It provides us with a stronger base than ever to deliver fresh, compelling gaming experiences to players at our existing operator partners. We will be able to bring them more innovative products in a much quicker way than we could have done before. We continue to be fully committed to those existing relationships and from a day-to-day perspective, nothing much will change.

What does Authentic bring to Scientific with regards to product development and expertise? What role will Authentic play in augmenting Scientific’s igaming expansion plans?

Jonas: We bring all the operational know-how as well as product development experience for live casino. Interestingly, one of the things we are very excited about are the IPs that Scientific Games owns around table games.

They have developed and own a myriad of side bets for blackjack and baccarat, they own some of the most successful slots and RNG titles and they have access to huge brand franchises such as Monopoly that would be wonderful to add to our product development.

Authentic has a history of providing the European iGaming market with its live casino products, yet the acquisition’s announcement repeatedly referred to the U.S. market. What is the stateside opportunity in live casino? How untapped is this market?

Jonas: The U.S. is a greenfield market that’s set to become a $3 billion market in the next few years. Live casino has a relatively small share of the online casino market, but it’s the fastest growing segment.

At the moment, there’s only one major supplier in the States so the market is primed for a new entrant, and it is the perfect time to expand our footprint. It’s very exciting from that perspective. We’re already in dialogue with the operators and they’re welcoming us with open arms.

Rob: There is no getting away from the fact that the opportunity for live casino products in the United States & Canada is huge. The whole US iGaming market is growing 20 per cent CAGR over the next five years and live casino is the fastest growth segment in there. We have existing relationships will all the key operators.

Through our OpenGaming platform, we are privy to data that emerges from other providers within the live dealer vertical and the numbers illustrate that there is a huge appetite from operators to do more in the live casino space.

From a player perspective, the land-based casino experience is more prevalent in the US as mainstream entertainment than it is in many parts of Europe. Largely, the US casino experience means getting around a blackjack or roulette table with a group of friends and playing games together as a social event. This is something you do not often find within an RNG product.

In the US, the live dealer product is much more valuable than elsewhere, being that it replicates the land-based experience they have known and enjoyed for generations. In every state, the numbers indicate that live dealer games can be as big as we want them to be.

What we bring to Authentic Gaming is product knowledge and expertise within the US, and an open door to key operators. We have navigated multiple state entries across a wide variety of products and how to scale a business to meet the demands of regulators, operators, and players. This is invaluable knowledge and experience, and we can’t wait for our first live casino product to launch in the U.S.

Jonas, Scientific has ambitions to extend Authentic’s product offering stateside by creating new studios based in the U.S. Specifically, how significant is the acquisition for Authentic’s studio expansion and game diversification plans?

Jonas: Scientific Games has long-standing relationships with essentially all land-based casinos in the U.S. because they also supply slot cabinets and casino systems. We see the land-based casinos as key for us to enter the online market and we believe we can leverage those relationships to start the process of creating new studios that specifically target players in the U.S.

The investment from Scientific Games means that we can go into 2022 with a laser-focus on an accelerated US roll-out of new studios, disrupting the live casino market there and becoming one of the key contenders for US operators in this space.

What’s in the upcoming product roadmap?

Jonas: In the short to medium term all focus is on Blackjack and Baccarat which together with Roulette make up the lion’s share of live casino revenue. Alongside building new blackjack and baccarat content based around Scientific Games’ existing brands and IPs, we’re looking at new ways of accessing and navigating live casino.

Video and live content takes up most consumers’ time spent on the internet. When you look at it, the leaders in that field are the likes of Tik Tok, Facebook Live and Instagram who have hundreds of millions of concurrent users. Those are the guys we’re looking at for inspiration and there’s going to be some cool innovation coming from us in that area.