As the tribal gaming sector continues to grow and evolve, it becomes increasingly crucial that commercial operators looking to embrace the sector understand the nuances of each tribe.
The relationship between Tribal Gaming and the commercial casino sector was at the forefront of discussions during the SBC Summit in Lisbon, as a decorated panel gathered in a bid to gain a deeper understanding of the tribal gaming sector.
Jamie Hummingbird, Chairman, NTGCR emphasised that each tribe requires a very different approach and being meticulous and gaining an understanding is imperative.
He detailed that each tribe holds different cultures, motives and levels of sophistication, therefore doing research should be at the heart of the approach for commercial operators looking to collaborate with tribes.
According to Hummingbird, ‘tribes are protective of their people and sovereignty’ and operators should take note that a licence in one area doesn’t cement an operator’s ability to get a licence in a different jurisdiction.
In its most recent set of figures, the prosperity and potential of the tribal gaming sector was highlighted as the National Indian Gaming Commission reported record annual gross gaming revenue numbers for tribal gaming, declaring $41.9bn for the fiscal year 2023.
Anika Howard, President & CEO of WONDR NATION, also echoed that if commercial operators are to tap into this, understanding tribal sovereignty is crucial.
She revealed such is the importance of sovereignty, commercial operators should understand that tribal disputes will likely be settled in tribal court.
She added that the values of tribal businesses are tied to that of the community, with overall goals for the long term prosperity for the community
When looking to collaborate with tribes, Howard also underpinned that it is crucial that commercial operators develop an understanding of the limitations of each tribe.
The panel was keen to outline that central to a successful partnership with a tribal business isn’t to bombard them with information and new tech, but instead to understand the bigger picture on what the brand is trying to achieve and embark on an educational journey together.
Jason Rosenberg, CEO and Founder of American iGaming Solutions, reiterated that before commercial operators engage with tribes, they simply need to listen.
He added that the tentativeness from tribes stems from their historic treatment by federal governments and states.
Brett Calapp, Chief Operating Officer, NAI, Bally’s, who moderated also cited the importance of the history of tribes in order to develop the best relationship with them and their motivation in the modern gaming space.
As partnerships are formed he added that ‘education is so important with even the most sophisticated retail casinos, sometimes enduring a challenging transition when it comes to moving to online’.
Nonetheless, he lauded the customer service of tribal gaming, with it being an asset that sets them apart.
When questioned by the audience, Calapp also issued a warning over the rise of the sweepstake casino sector: “There’s a lot of money in sweepstakes and that doesn’t always attract the best actors, whilst they are legal there are nuances out there in the regulation that need t be abided by,” he said.
The panel also took a closer look at the state of play for class 2 games and why they are being embraced by tribes too strongly.
Hummingbird stated: “People are still in the dark about what class 2 games are, with class 2 games having at least 2 people playing, not necessarily in the same room. This has led to Tribal gaming leading the way when it comes to server based gaming.”
Meanwhile Rosenberg added that ‘Class 2 games are a driving force in the direction tribes are moving’.
Howard provided a deeper insight into this as she revealed that Class 2 games largely enables Tribes to avoid taxes as they don’t pay taxes on bingo based games, however the sophistication of class 2 games has limited their growth to a degree.
Playtech has been accused of “the most egregious case of shareholder value expropriation in the history of UK public markets” regarding the bonuses senior executives will receive following the sale of Snaitech to Flutter Entertainment.
Last month, Playtech agreed to the sale of Snaitech to Flutter for a cash consideration of €2.3bn, with the igaming provider stating that it will be focusing on its “technology-led offering in high-growth B2B gambling markets with an accelerated growth plan and an extensive portfolio of strategic ventures”.
The company described the transaction as unlocking “significant capital” and in line with the board’s stated strategy to maximise value for shareholders, as once practicable to do so following the transaction’s completion, it intends to return €1.7bn to €1.8bn to shareholders, with the final amount to be determined with reference to the ongoing business’ capital needs.
In addition, Playtech will repay amounts outstanding on its bond of €350m due March 2026, “significantly strengthening” its balance sheet.
However, it is the €1.7bn to €1.8bn return to shareholders that has been criticised, as this features bonus awards for a maximum aggregate amount of €100m to be paid to members of Playtech’s senior team including CEO Mor Weizer and the company’s executive directors.
A separate aggregate cash bonus pool of €34m will also be paid to the senior management team of Snaitech, of which CEO Fabio Schiavolin will be the largest participant.
Playtech also outlined a transformation plan in which “one-off awards will be granted to plan participants (including Playtech’s executive directors) entitling them to share in a pool of value which is equal to up to 10%” of any future shareholder distribution value.
In an open letter to Playtech’s Remuneration Committee Chair Anna Massion, one of the company’s shareholders, Jeremy Raper of Raper Capital, protested against the transaction, calling it “the most egregious case of shareholder value expropriation in the history of UK public markets”.
Raper added that the transaction exemplifies “crony capitalism at its absolute worst”, highlighting how several components of the company’s plan directly violate many aspects of the Governance Code, as well as notifying that he has forwarded the letter to the Financial Conduct Authority as a formal complaint.
Within his letter, Raper also stated that no details are provided on a bonus upper limit or if a portion would be paid in shares, communicating that it is “rather both retroactive and ad hoc; and simultaneously open-ended and tied to any future asset sale management may consummate, irrespective of the fundamental value achieved in any potential transaction”.
He noted: “Management is thus incentivised under the new plans to pull the trigger on any future deal, no matter how destructive to the company, and collect their 10% take, rather than persist in the better course of simply growing the business independently for all shareholders.”
A similar open letter was sent by Palm Harbour Capital Managing Partner Peter Smith on behalf of the investors in the Palm Harbour Global Value Fund, who are Playtech shareholders, to the company’s board Chair Brian Mattingley.
Smith stated that the payment has come “simply because there is a large cash inflow and for no other reason”.
He said: “There is already in place a strong remuneration package with part of it linked to shareholder returns. There is absolutely no need for this additional payment.”
Although no date has been set, Playtech did state that a shareholder circular, required resolutions and a general meeting on the transaction will take place within the next month.
Upon announcement of the deal, the company noted that shareholders who hold interests in ordinary shares representing, in aggregate, approximately 34.38% of the entire issued share capital of Playtech have “irrevocably undertaken to vote” in favour.
