As a student at the University of North Carolina, Charles Gillespie considered several career options. He figured he would probably end up as a management consultant, working for McKinsey & Co., Deloitte, or some other top company, like many of his peers. When Gillespie was a senior at UNC in 2006, he instead decided to follow his passion for sports and building websites, starting a business initially helping online gambling companies attract football fans in Asia.
Today, this company, now known as Gambling.com Group, is focused on expanding into the US and is listed on the Nasdaq stock exchange after going public last year.
In the second quarter, Gambling.com Group generated $15.9 million in revenue, up 53% from the same period last year. The company had revenue of $6.2 million in North America, up 342% year over year as it capitalized on an increasing number of states legalizing online sports betting. So far this year in North America, the company has generated revenue of $16.8 million for the first two quarters, compared to $7.5 million for all of last year.
Gillespie declined to disclose whether the company is profitable in the US, but the company had total adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $3.6 million in the second quarter. For the year, the company expects EBITDA to be between $22 million and $27 million, which would increase from $18.4 million last year and $14.6 million in 2020.
The company’s stock price closed Friday at $7.90 per share, down 4.2% from the July 23, 2021 IPO price of $8.25 per share. The Nasdaq is down 21.2% in that span.
Gambling.com Group is a so-called performance marketing or affiliate betting company that owns and operates more than 50 websites in seven languages and 10 countries. The company reviews and compares online sports betting and casino gambling websites and has a large editorial team covering the industry.
When people search for sports betting or other gambling-related terms online, Gambling.com Group sites usually appear in the top hits. The home pages of the Gambling.com group of websites contain rankings, lists and reviews of the top sports betting providers such as FanDuel, BetMGM and DraftKings and promote deals offered by these providers.
Gambling.com Group earns revenue when people sign up and deposit money on the websites of these sportsbooks, known in betting jargon as New Depositing Customers (NDCs). For example, Gambling.com Group sportsbooks pay a flat fee per NDC, enter into a revenue sharing agreement whereby Gambling.com Group is paid each time an NDC bet is made, or a combination of both.
“We help big online gambling companies attract customers,” Gillespie said. “We’re basically just helping people on their journey to getting started online gambling… There’s a pretty serious competitive dynamic among online gambling companies to get the traffic that companies like Gambling.com Group control. This way we have pricing power with these online gambling companies to sell them our traffic at healthy prices.”
Growing up as a sports fan, Gillespie also built several websites, although he never seriously considered getting into sports and technology until late in his college career. He said UNC didn’t accept him into their business school, so he majored in political science and minored in entrepreneurship.
Early in his senior year of college, Gillespie recalled speaking to a UNC grad who worked in management consulting and told him a few things he plans to do after graduation. At the end of their conversation, Gillespie mentioned an idea to develop sports betting websites.
“He said, ‘Charles, when you started talking about that last thing, you came alive. That was more important to you than anything else, so do it,” Gillespie said. “It was very good advice.”
When Gillespie founded the company in 2006, it was known as World Sports Network (WSN) and focused on covering football to people in East Asia, bringing them news, live scores, statistics and betting odds. Back then, online gambling was illegal in the US, so Gillespie thought Asia would be a good destination as there were a large number of players there who could wager legally.
In 2007, Gillespie brought in Kevin McCrystle as co-founder and chief operating officer, a role he still holds today. Gillespie and McCrystle met in high school at Providence Day School in Charlotte, NC and attended UNC together.
“It’s a small miracle that we’re still working together and didn’t kill each other,” Gillespie said, laughing. “It’s a very effective partnership. He’s good at certain things. I’m good at other things. There is an incredible trust between the two of us.”
In 2009, WSN was rebranded to KAX Media and soon shifted its focus to online casino games in Europe, mainly the UK and Ireland. The company bought the Gambling.com domain in 2011 for $2.5 million and rebranded to Gambling.com Group five years later.
When the Supreme Court overturned a rule that banned sports betting in most states in May 2018, Gillespie knew the company’s future lay in the United States
“We turned the ship around and aimed it at the US because it was clear at the time that in a few years the US would become the world’s largest online gambling market,” Gillespie. “That’s basically what we’ve seen since 2018.”
Today, the UK remains Gambling.com Group’s largest market, followed by Ireland. Although Gillespie says “we are fully focused on the US” and anticipates that the US will eventually become the company’s dominant country from a revenue perspective, he still expects healthy business in Europe.
“Right now everyone wants to talk about the US,” Gillespie said. “Of course the US is growing super fast and is the future of the industry, but Europe is great. There is absolutely nothing wrong with these European online gambling markets. They’re still growing. You are profitable. It’s good business, so we’re very excited to have a presence in Europe.”
Today, Gambling.com Group operates in more than a dozen states, including Kansas, which introduced online sports betting on September 1st. The company expects to expand into Ohio on January 1, 2023 and later into Maryland and Massachusetts next year.
The company has increased the number of editors and writers it employs across the US in recent years, attracting several newspaper and online veterans of traditional sports websites and newspapers.
“In order for us to provide end users with a compelling and useful website, and to give them a reason to visit us in the first place, we need to produce quality content,” said Gillespie. “That includes lots of news, data, reviews, tips, tips, odds – anything even remotely related to sports betting or online gambling is fair game for us to produce content.”
In addition to owning and operating its own websites, Gambling.com Group has a partnership with McClatchy Co., a media company that owns newspapers such as the Miami Herald, Sacramento Bee and the Kansas City Star. The Gambling.com Group’s sponsored content appears on the websites of these newspapers and the companies receive a share of any revenue generated.
“We like this model and are looking at other potential media partners,” said Gillespie.
Earlier this year Gambling.com Group made two acquisitions, buying BonusFinder, another associated gambling company, and RotoWire, which specializes in fantasy sports. RotoWire generates revenue through subscriptions, but Gillespie also sees an opportunity to add an affiliate revenue model.
“The real reason we bought (RotoWire) was to add a performance marketing business to RotoWire,” said Gillespie. “The reason that makes sense is that RotoWire, with its history and content, has quite a bit of power when it comes to questing. It’s a site that we can use to get more and better search rankings for our content in the United States… We’ve done a lot of work on RotoWire. The big reveal about how well everything is working will come when the NFL starts. Assuming things go as well as we envision, we may very well look at similar transactions to RotoWire in the future.”
Over the next few years, Gillespie would like Gambling.com Group to expand its US operations more into online casinos, a lucrative, high-margin business in Europe. So far, only five states have legalized online casino games like slots and blackjack.
“The online casino is really the heart of the business,” said Gillespie. “It’s a much more lucrative activity for the online gambling site owners, just like when you go to a casino in Las Vegas, the slot machines are 25 times bigger than the sports betting. This is intentional. You simply make a lot more money playing slots than you do with sports betting. It’s no different online. The online casino is really where the money is.”
He added, “We’re heavily involved in the launch of sports betting in the United States, but we see this as a harbinger that hopefully we’ll have a nice casino business in the United States one day.”