As it sets its focus on the Philippines, Pronet Gaming is aiming to humbly tap into the Asian market and leverage the successes it’s seen in Africa and LatAm, but with a keen focus on regional nuance. CEO Alex Leese describes why the company can be a boost to large international firms wishing to move in on the space, and its hope to ramp up operations within nine months.
We’re joined today by Alex Leese, the CEO of Pronet Gaming. I know that Pronet turned its focus to the emerging markets in Asia in about 2022, after great success within Latin America and Africa. But what are some of the primary locations within Asia where the B2B or B2C businesses should be setting up shop now?
In terms of the operational locations, that’s the one that’s most appropriate for a B2B provider. So, we went through a process where we assessed a whole number of jurisdictions: everywhere from Vietnam to Cambodia, Taiwan, Philippines. You get a lot of opinions coming out: “We’ll base IT there, because it’s better” and so on so forth.
We really did look forensically and everywhere and assessed everything in terms of the ease of setting up companies, getting bank accounts, how difficult the due diligence is to actually get into the jurisdiction itself. And the one that we have settled upon is certainly the Philippines, which for us offers very much the one-stop shop of all the kinds of roles that we want to recruit there. So that is typically speaking: a lot of IT operations, DBAs, DevOps, as well as some of the account management support, and crucially, the risk management functions.
Speaking of regulations, the Philippines is actually quite evolved within that regard, they’ve not only got the land-based, but they’ve been very progressive within what they’ve done with iGaming, eCasinos, and so on and so forth.
In regards to B2B versus B2C, when you’re dealing with clients: from the B2B side, you don’t necessarily have to be licensed within that region, correct?
That’s correct. Yeah. So you have to be licensed to be able to operate within a specific country. But that means, for example, if your services are more sort of BPO-type services, maybe there’s customer support, then the needs of a special accreditation or license is less. When you start getting into the realms of risk management and potentially trading, then that’s where you need to make sure that you’re set up in the right way.
But yeah, you’re correct. You don’t you don’t need to be applying for a specific B2C license you are, you actually can be licensed anywhere. So in that case, we are actually choosing to be licensed from the Isle of Man.
So looking within Asia, obviously there are the more regulated markets, and there’s this great potential within the gray markets, which are there. So how is Pronet Gaming able to focus on those markets and help the clients develop?
I mean, ultimately, with regulation, the challenge for any client usually comes in the form of the technical compliance. And that’s the same anywhere, whether it’s the US, whether it’s LatAm, whether it’s Europe, that is always the big challenge.
So, how does an existing operator, with a fixed IT platform, how do they then adapt to comply with those local technical regulations? And that could be, for example, limits on the number of bets placed by clients within a certain period: it does tend to be a real pain. And that is the reason why a lot of these operators will look to outsource the platform to companies like Pronet Gaming in that particular scenario.
But equally when you’re servicing the gray markets, the challenge there tends to be that the range of PSPs, of payment services providers, tends to be tends to be much bigger. So, in a sort of regulated market, they will tend to control the specific PSPs that you can use, because that’s obviously key to the whole thing, right with the deposits and the withdrawals. And there’s less need in a regulated market to find the more creative payment solutions, whereas in gray markets you’re getting new solutions coming online every day. So, the challenge is a bit different for each one. But it’s still a bit of a pain from a technical point of view. And that’s why, again, the operators, they want to move reasonably quickly in these markets, they will tend to look to outsource, which is what our business model is based upon.
I’ve been to a lot of these expos and seen a lot of people talking, and they’ve generalized Asia as if it was one region, you know, and that is completely wrong from so many different aspects. But what are some of the common misconceptions that you’ve come across and have tried to help clarify with your clients?
Well, if it’s clients who are based within the Asian region, and they’re facing those markets, the good thing is they then tend to have an appreciation of some of the nuances of what you need. So the idea, for example, of having a sports book with multiple sports books – so many of the Asian operators, now you’ve got three, four sports books to choose from – that is a principle, which, in LatAm, in Europe, in the US is completely alien. It’s just not the sort of done thing.
I think the mistakes, like any expansion into other jurisdictions, the mistake is that you can just roll out the same product and you’ll be alright. And that just isn’t the case, it kind of stands out a mile. And we’ve seen that time and time again, with some of the larger brands who have expanded into the likes of LatAM, for example, with just a vanilla product, and that is what has held them back.
So therefore, it is important really to have that appreciation of the product nuances. Clearly the Asian front and the Asian view, the way in which you display the markets, the way that you access to PSPs, even down to the way that services are provided.
So for example, because of the multiple sports books in the region, many clients won’t necessarily be interested in taking the full turnkey solution, they maybe prefer to take a sports book via iframe or API, simply to expand out the offering to the clients.
So I mean, for me, they would be the main areas. There are many more, of course: different kinds of casino providers, different bonus functions, and so on and so forth. But for me they would be the main ones. And that’s the area where a lot of the established operators outside of Asia who are hoping to go into the reigon, that can often be one of the mistakes that is made.
Do you find that it is more challenging for operators within the sportsbook area or within the iGaming area?
Um, that’s a good question.
I would say that sports book is probably more of a challenge. Because ultimately, if you’re looking to adapt to the Asian region, in regards to casino – like anywhere else, the casino content tends to be quite commoditized. Every operator has the same content ultimately. They get ahead of each other, by how they manipulate it, how they order it, how they market it, how they bonus it, how they promote it. That’s their sort of USP, but ultimately the content is the same, you’re taking an integration from a third-party casino provider.
On sportsbook, there tends to be a lot more bespoke work to do on that one, in terms of the presentation of the markets, maybe a particular operator favors the pricing from a certain provider, and therefore there’s a need to integrate a new odds fee provider. They do require specific functions in there, like over ask, for example, and custom bets, which when you get the volumes that you’re talking about in the Asian market, those kinds of functions are key.
Looking at your expectations for the division of your clientele, are you expecting that it’s going to be more of these operators which are on the ground within Asia, or it’s going to be more of the people who are trying to move into Asia?
We are obviously at a fairly embryonic phase at the moment, we are just opening our operation in the Philippines. And it is important that you don’t sort of dive in until you have everything set up in the right way.
We’ve been very, very clear that, even with the setup in the Philippines, we want to do things in the right way. And that’s why we’ve obviously fostered a good relationship now with PAGCOR, who know exactly what we’re doing. And we obviously would hope to be one of the flagship names who has chosen to enter the Philippines, after what you might describe as a previous couple of years of a bit of turmoil with what’s happened with the POGOs, etc. It’s almost a bit of a sort of new start over there, particularly with some of the new regulations that Chairman Tengco has put in place.
But in terms of the expectations over there, I would say initially it will most likely be some of the international players who want to get into Asia, initially, I think that helps to build your trust. And then you then get the confidence maybe of some of the local operators, maybe people who are running sort of agent systems or retail systems in those countries, they may then have the confidence and to work with you. but they’re going to want to see a decent rollout, which is absolutely fair enough.
And that’s the approach that we’ve taken in all the other jurisdictions that we’ve gone into: be it from Africa, be it from LatAm. It’s easy to run in straightaway, and maybe you’ll get a bigger win sooner. But it is also important to be considered, so that when you do launch the client site, it’s perfect.
What are your expectations, your goals, your dreams, for what’s going to be happening within the next two years?
For Pronet Gaming, in terms of our success plan, we are now in the stages of getting the Isle of Man license. So you’ve got a number of key milestones, really.
So the Isle of Man license, which we’re hoping will be granted in December, it’s quite a long process. But reassuringly so. I think there’s a reason why that license is robust and respected. You have also got a lot of other Asian operators who are licensed out there as well, which certainly helps.
So that is a key milestone for us. And then as we move into next year, when we then got the confidence then to invest in the local hosting infrastructure, to invest in the teams who can give us the same level of service, and therefore success, that we’ve seen in other jurisdictions. My expectation is probably by like the middle of next year, we should be we should be winning some pretty decent deals over there. That will be my milestone, but you can speak to me in in nine months’ time and tell me whether I’ve got there or not.
Well, you mentioned nine months down the road you’re hoping to see more of this ramp up. I’m hoping that it can happen even quicker. But in the meantime, we’re going to keep our eye very firmly on you and see how things are progressing. And I look forward to seeing this success.
Thank you very much. I really appreciate it. Thank you.
Well, thanks again for your time Alex Leese, CEO of Pronet Gaming.