Interview with a gambling investment analyst

The gaming industry is experiencing both consolidation and tighter regulation. Investors need new optics: which business models are more stable, where margins are formed, what "kills" multiples and where to look for risk/return asymmetries. We've gathered responses from an analyst who covers public and private iGaming companies on both sides of the ocean.

1) Segment map and model economics

Q: How do you share the iGaming universe for evaluation?

Analyst: Three big baskets:

1. Operators (B2C): online casino, sports book. Revenue = GGR - bonuses - GGR taxes; operating margin is sensitive to cash register approve-rate, RG constraints, and license coverage.

2. Content providers (B2B): slots/live/aggregators. Income is more stable, multipliers are higher with royalty models and long contracts.

3. Platforms/payments/CCM: orchestration of methods, anti-fraud, identification. Correlate with the volume of transactions, benefit from regulatory complexity.

2) What drives multipliers

Q: Why do some companies trade at 6-8 × EV/EBITDA and others at 12-18 ×?

Answer:

Jurisdictions and tax predictability (stable markets → higher multiplier).
Mix B2B/B2C (A larger proportion of B2B is usually → higher multiplier).
Onboarding and checkout quality: high approve-rate, low share of manual cases → higher FCF conversion.
RG/compliance track record: no fines, transparency of reporting.
Debt load and repayment schedule.
Organic growth vs "bonus inflation": Holding growth without aggressive promos is valued higher.

3) KPIs an investor looks at

For operators: GGR growth by jurisdiction, NGR/GGR, D7/D30 withholding, payer conversion, ARPPU, approve-rate/ETA deposit and withdrawal, share of manual cases, RG indicators (limits, night deposits), marketing expenses as% of NGR.

For providers: the number of releases/quarter, the share of the top 10 customers in revenue, the contribution of live content, the tail of royalty, pipeline certifications by market.

For platforms/payments/CCM: take-rate, share of merchants with> 2 years of life, SLA/uptime, p95 box office latency, share of fraud/chargeback, churn customers.

4) How to read iGaming reporting

Question: Where are the problems most often "hidden"?

Answer:

Marketing as% of NGR: a short burst of growth as traffic rises in price.
Changing bonus rules: One-time savings can hide the deterioration of retention.
Cash and fraud: the increase in the share of "manual" cases and chargeback hits FCF.
Jurisdictional mosaic: "mixing" regulated and gray markets - increases the cost of risk.
Debt covenants and R&D capitalization - affects the "quality" of profits.

5) Regulatory risks and how to discount them

Q: How do you factor regulation into the model?

Answer: We make a scenario discount for key markets: basic/stress taxes on GGR, advertising restrictions, increased affordability. We apply haircut to growth and increase WACC by 50-150 bp for aggressive geo. In cases with the risk of fines - one-off and a higher probability of negative events.

6) Scoring models: DCF and multipliers

Q: Which is better - DCF or comps?

Answer: Both.

DCF - when the company is on the verge of changing the mix (entering new licenses, shifting B2C→B2B). Sensitive to WACC (10-14% typical) and LT growth (2-3%).

Comps - for reality check: EV/EBITDA, EV/Sales, P/FCF. For providers with high royalty/digital gross margin, EV/Sales 4-7 × is often applicable with a growth of> 20% YoY.

Sum-of-the-Parts - if the business is multilayered: B2C, B2B content, payments.

7) M&A abstracts: where are the synergies

Question: What do they buy and why?

Answer:

Operators - licenses/market share, local payments, media and affiliate networks.
Providers - content studios, live platforms, aggregators for "entering" new geo.
Platforms - KYC/orchestration/antifraud to increase take-rate and reduce churn.
Key - integration discipline: unified API/SDK, GGR/NGR reporting, RG policies.

8) Incidents that break the cost

Question: The most expensive management mistakes?

Answer:

Bonus race without uplift models → marginal erosion.
Weak control of affiliates → fines/channel blocking.
Cashier without statuses/ETA and fallback → a surge in tickets and churn.
Technical debt and missing trace → long incidents, drop in conversion.
Unreasonable crypto channels without AML/sanction screening.

9) 12-36 month growth themes

Localization of licenses and "whitewashing" of revenue.

Live content and show formats with the best LTV/integrity control.

Payment orchestrators/stables (where allowed) → above approve-rate, below CAC.

AI personalization and RG analytics → retention with "ethical" interventions.

Integration marketplaces (content, KYC, payments) → time-to-market acceleration.

10) Due diligence investor checklists

Operators (B2C)

Regulated revenue share, GGR taxes, license card.
Retention by cohort, "growth without bonus inflation."
Cash: approve-rate, ETA, share of manual cases, chargeback.
RG metrics and sanctions history.
Debt/covenants, FCF conversion.

Content Providers (B2B)

Pipeline releases, live/studio contributions.
Customer concentration (top 5/top 10).
Certification by market, integration time.
Royalty model, contract term, outflow.
SLA and integrity telemetry (RNG/studios).

Platforms/Payments/CCM

Take-rate and churn, unit-economics of the client.
SLA/SLO, p95 by critical paths, uptime.
Antifraud: device/behavior/graph.
Compliance with GDPR/AML, Travel Rule (if relevant).

11) Portfolio strategies: public and private-deals

Question: How to collect a portfolio?

Answer:

Core: sustained B2B with> 15-20% YoY growth, low risk concentration.
Satellite: operators with catalysts (new licenses/box office/content), but with limited weight.
Private: early-stage live content studios and payment infrastructures with a focus on SLA/compliance.
We hedge regulatory risks with geographical diversification.

12) Cases (generalized)

Case 1 - "Box Office as a Catalyst for Multiplier"

The operator has implemented a payment orchestrator with transparent ETA/statuses and fallback routes. Result: + 7-10% of completed deposits, − 25% of support tickets, FCF conversion ↑, the EV/EBITDA multiplier expanded by 1-2 × over 2-3 quarters.

Case 2 - "B2B mix vs. volatility"

The content provider increased its live share and expanded its royalty base in the top 20 operators. Revenue volatility decreased, EV/Sales rerating from 3. 5 × to ~ 5 × with a growth of 20% +.

Case 3 - "Affiliate Penalties"

B2C without a register of affiliates and pre-moderation of creatives has a series of sanctions and temporary blocking of channels, which added a risk premium and squeezed the multiplier.

13) Risk and hedging

Regulatory swings: scenario analysis, geo exposure limit, cross-licenses.

Tech: SLO contracts with providers, log/security audit, incident plan.

Dependence on attraction channels: portfolio of affiliates, creator-marketing, SEO/content.

Reputational: public RG/integrity reports, crisis protocols.

Liquidity/debt: repayment ladder, covenants, stress tests.

14) 12-Month Investor Roadmap

Q1: Screening of the universe (B2C/B2B/platforms), building comparative tables of KPI and regulatory maps.

Q2: Deep DD across 5-7 candidates, DCF/SOTP modeling, customer/vendor interviews.

Q3: Portfolio core formation, option positions for catalysts (licenses/product).

Q4: Rebalance on reports, check of RG/compliance track, profit recording/averaging, preparation for tax/regulatory changes.

15) Mini-FAQ

Is it worth entering before the market receives a license? Only as an option and with a confirmed compliance plan.

B2C or B2B? For a conservative profile, more B2B; for aggressive - mixture with B2C catalysts.

How to consider AI? Not paying for "words." Validate by effect on KPI (hold, cash register, SOC).

Crypto payments? Only where permitted and with AML/sanction screening; look at return/ETA.

Investing in iGaming is about working with regulatory predictability, operating machine quality and data discipline. Businesses that show growth without bonus inflation, keep a net cash register, manage RG risks and build B2B flows as a cycle shock absorber win. For an investor, this means: combine DCF + multipliers + scenario risk, diversify by geography and bet on teams whose technology and compliance are not slides, but operational reality.