The online betting and sports markets are on the cusp of exceptional growth in Canada. Ontario is the first province to legalize traditional sports betting and NorthStar Gaming (TSXV:BET) is well-positioned for expansion.
NorthStar owns and operates a casino and sports book gaming platform in the most sport-fueled province in Canada. The platform provides real-time news, statistics, analysis and scores directly in the betting environment along with the most popular online casino games. NorthStar delivers high-end editorial content, featuring expert in-house sports and gaming journalists.
Joining us today is Michael Moskowitz, the CEO of NorthStar Gaming.
TMH: Let’s start with NorthStar’s focus – player acquisition and journalism. You state that your writers are the “secret sauce.” What sets you apart on the story content side of your business?
Moskowitz: NorthStar’s uniquely positioned in that content is directly part of our experience. All betting- and content-related items remain within our container. Players can read relevant articles and build their bet slip simultaneously. Our competitors may provide insights but it’s within a different platform causing friction for the end user as they have to swap between apps. Additionally, NorthStar does not strictly write about betting content. We’ve engaged leading writers such as Chris Johnson to provide hot-off-the-press sports insights and updates in real time, which is not found anywhere else.
TMH: Your writers are based right in Ontario and they’re experts in what they do. Tell me about how that benefits the company.
Moskowitz: Our teams are local, and they’re here, and they’re significant fans as well. They write about local sports and insights, and they live and breathe all these experiences. So for our players and our readers, they can really feel that difference that they’re part of the action because they’re here, not just writing from a distance, but they’re fans themselves.
TMH: Tell me about the exclusive TorStar deal and how that benefits NorthStar.
Moskowitz: TorStar is a significant partner. Not only are they an investor but a significant partner. TorStar’s got 150 media properties, which are leveraged over 60 million page views monthly. This provides us with tremendous exposure, helps build our NorthStar brand, drives new customer acquisitions to the site each and every day.
TMH: Let’s talk about the growth market – a projected $8.5 billion in Canada and $3.8 billion in Ontario – what makes this such an attractive market?
Moskowitz: I think the attractiveness of the market is just the growth itself. IGO which is the governing body in Ontario, released their first report. Ontario produced $35 billion of the wagering and $1.4 billion in revenue for gaming operators. It ranks the fifth largest jurisdiction in North America and it is just growing, so many more years of growth ahead. I also say that Ontario, its population, rivals many of the U.S. states, and we’re very sports oriented here with major teams and then just over the border with the Buffalo Bills and the NFL. We’ve got a true focus on fans, and we’re here to delight them. It’s interesting because 85% of the grey market that was here before has actually transitioned into the regulated market since Ontario went regulated and so things are going very well.
TMH: Are we in the infancy stages of this market and what are some of the challenges of being in the infancy stage?
Moskowitz: The challenges of the stage of being in infancy is just that. Is that we are looking to build the market, expand the market, educate the market at the same time, and it’s growing significantly. One is about the market itself and the other is as a company our size and growing at rapid speed, how we scale and expand our business accordingly to meet the needs of the growing market and our great experience to providing our players.
TMH: NorthStar and Playtech signed a software and services agreement that provides NorthStar the right to expand across Canada. How does Playtech’s investment – over $16 million – accelerate NorthStar’s growth?
Moskowitz: Playtech continues to support our NorthStar business. There’s two reasons. One is they’re a strategic investor. They’re the largest B2B operator that is a global leader in digital casino games and platforms, a massive company with tremendous reach. And the second is Playtech supports us on the managed services side. Their experience in other jurisdictions really helps us support our business here as we ramp and we learn, we grow and we develop. So their insights globally combined with our local insights, their technology coupled with our expertise, has made an incredible combination and match, and it’s working extremely well.
TMH: And how does your acquisition of Slapshot Media – a Canadian gaming marketing company that provides services to spreads.ca – advance NorthStar’s goals?
Moskowitz: Slapshot Media is an acquisition that we made and essentially that expands our business to the rest of Canada. So we have Ontario, which is a regulated market, and then we’ve got the rest of Canada, which is all other jurisdictions. Really a significant opportunity, we’re providing managed services to First Nations, and with that under Slapshot, we’ll be rebranding our NorthStar Bets under a dotcom platform. And that will give us access to the markets of the rest of Canada. That is two thirds of the overall market in Canada. So Ontario is about a third and the rest of Canada is two thirds. This acquisition will give us access to the rest of Canada, which is significant for us in our growth. We expect to launch the new platform in the fall time, which is really exciting, and then begin that second tranche of our expansion in our journey which is significant and as those markets become regulated, we will then move into the regulated environment as such.
TMH: Your Q1 2023 results show an upward trajectory – total wagers are up 24% from the previous quarter – what have been the drivers behind this increase?
Moskowitz: Primarily the growth is attributed to a steady increase of awareness of both our brand and our product. I think unlike many other competitors and other operators, we didn’t operate in the grey market beforehand. So we started right from the regulated market out of the gate. We underwent an extensive amount of campaign and development of our brand awareness in a very short period of time. And then we combine that with our journalistic content and our premium user experience and since that experience has come to light, we’ve seen a steady increase in sales and player values. It’s quite remarkable.
TMH: What’s next for NorthStar Gaming and what would you like investors to know about the company?
Moskowitz: There’s tremendous growth ahead. I think the best days remain ahead for NorthStar. Last year we dedicated to launching the business. This year we’ve turned to focus on operational excellence. We continue to improve our product and our experience and our integration of our insights. I think the impact of our business will be significant. You’ve seen that in the reported financial results and we will continue on that especially as we expand to the rest of Canada with our new platform. So 2023 is strong and I think beyond that is going to be significant increases as we expand our business and our players and our value.
For more information on NorthStar Gaming visit www.northstargaming.ca.
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