Talking to CEO of Enchant Affiliates: markets, business approach and perspectives
We all know that gambling is one of the fastest-growing and most competitive niches in online business in 2024. Many investors see great potential in the entertainment business, as it will always be relevant. At the same time, while this remains unchanged, requirements for gaming brands and trends in this market are constantly changing. Keeping up with the rapid pace of industry development and not only staying afloat but also earning more than before is the goal of every product in iGaming. How do they manage this? The way is surely different for everyone. Today, we will delve deeper into this topic with the guest of our interview, who knows firsthand how to create successful online casinos.
Today we host Nikita, CEO of Enchant Affiliates, a company that creates iGaming brands for Tier-1 markets and has achieved significant results. Satisfied partners, successful projects, and a good track record in the industry (company grew by 1.5 times in 1.5 years). A reason to be proud, right?
We will discuss with Nikita their brands, nuances of working in today's challenging conditions, and prospects he notices in the near future. He started in the industry as a support agent and gradually became a CEO of the company. This means he has thoroughly studied all the strengths and weaknesses of the product and have what to share with us. Well, we are ready to ask all the questions that interest our audience.
Q: Nikita, hello! We are glad to see you for the interview. Today we will discuss a lot about the industry, but let's start with you.
Enchant Affiliates have 3 successfully operating products in Tier-1 and Tier-2 GEOs. Please tell us more about your brands. What should we all know about you?
A: Hi! I'm also glad to be here. Let's start with the fact that we already have 4 brands. We are constantly setting up new products.
In our dynamic market, you are always looking for that perfect product+source combination so everything will take off for success. Looking for that market where luck, timing, and place will align to achieve the desired figures, and now this is more important than ever. For example, PAGCOR issued around 30 licenses during 2023-2024, which is significantly more than in previous years. And each of these licenses can hold conditionally up to 10 brands under it.
Q: What should be the main focus today creating a good iGaming product?
A: Well, you have partially answered your own question: the focus should be on product. A good product is easier to sell, to advertise, and to retain players, but how to create a good product is a commercial secret that each developer keeps to themselves. However, I certainly have some recommendations: go through the player's journey, even up to the 10th deposit, and identify the most important aspects of that journey. Just be careful — don't get hooked! :)
Q: There is an opinion that players have changed, become oversaturated, and are not as easy to engage as before. Is this a reality?
A: If you look at this from a product perspective, you can draw an analogy with stores, the most ordinary grocery stores.
Here, people need food, but they also constantly need entertainment. By the same analogy, when more stores open in the neighborhood, buyer begins to choose between them more carefully based on various criteria: price, selection of goods, quality of service, atmosphere, interior design, and product layout (in the case of digital products — content presentation). This is precisely why the store with the most balanced combination of all these parameters will win. Yes, player behavior has changed according to market trends, but people remain the same, they have just become more demanding.
Q: Which markets, in your opinion, are the most promising now? And why?
A: I would rely on business reports from analytical companies and major players in the market who conduct QBRs and share results with investors. Therefore, despite the fact that we mainly work in Tier-1 markets, we plan to gradually transition to working in others as well. I would highlight:
- Africa: In some African countries, such as Nigeria and Kenya, online gambling market is showing growth at the level of 10-15% YoY. Smartphone sales in Africa have grown 8 times in just 3 years, indicating a growing audience base to work with.
- Asia: Southeast Asia, especially markets like Vietnam and Indonesia, is showing growth at the level of 15-20% YoY. Mobile gambling and growing interest in esports are the main drivers of this growth.
- Latin America: Latin America, including Brazil and Colombia, is growing YoY of around 20-25%. This region stands out due to the expansion of online gambling legalization and the growing number of internet users.
Q: But you do not operate in Brazil and, in general, Latin America. Why so?
A: We used to make great products with high-quality standards that are loved by our players. So we wanna keep that level.
These GEOs are growing too fast, which indicates huge competition, so entering there means directly competing with the big players in these regions. Either you offer something unique, or you have the financial means to subsidize the market. Then others will refuse to play with you in this risky game with constantly increasing stakes. There is, of course, a chance to go all-in and win, but it is more likely that you will be fighting with weak cards in hands and lose. It is better to approach the choice of operating market wisely and weigh all the pros and cons. We have postponed this until we have a limited options for development in our current GEOs.
Q: At the same time, you are currently in the process of launching two new iGaming products. So how do you choose potential target GEOs?
A: We try to stick to certain timelines for setting up brands in local markets, but we also work with more universal ones — this is more complicated.
Evaluating markets is a very complex and meticulous process. It all starts with researching market volume, growth rates, population, number of players in the market, cost of initial investments, and some other factors, such as payment solutions.
After the theoretical part, the product undergoes A/B tests with test groups, and only then we have a clear strategy for entering this market and scaling options. If the projected results are insufficient (do not match the analytical forecast), then the product development goes into a second round.
Q: Do you have your own set of metrics, or you rely on what competitors are doing?
A: Everything is aimed at achieving a financial benefit, but how to get there is another question. You can focus on CPA, LTV, NGR, ARPU as high-level indicators (complex), which in turn are formed from many low-level indicators such as: deposits per player, check per player, bonus share per player from the welcome package, and others. In general, if you want to describe it in more detail, it would require a separate article.
Each operator develops the set of metrics that suits them. I can't say that we come up with something of our own — we rather use all the available developments, both from competitors and partners.
Q: Under which licenses do you plan to launch new brands on the market? Curacao or Anjouan?
A: I would like to answer this question evasively because each operator tries to navigate between licensors to maximize the markets, they can operate in.
I would bet on fast-growing and not overloaded licenses, namely: PAGCOR, Anjouan, Kahnawake.
Yes, we remain on MGA and Curacao with our brands and fight in market conditions and current realities. It's just harder to do here.
Q: There has been a lot of buzz about crypto casinos, while you have fiat projects. Have you considered entering the crypto market?
A: Of course, we have considered it. It's quite simple: on regulated markets, fiat currencies will have absolute dominance, simply at the legislative level. On the gray market, this share has grown, but it will not be significant for some time. Most countries do not like cryptocurrencies due to the lack of regulation of financial flows — why support a tool that allows companies to hide their income from the state? This will be the main stumbling block in the widespread use of cryptocurrencies.
There are some brands that focus their work on crypto, but there is a specific downside: often there is no KYC, and with a minimal win, player immediately requests a withdrawal, and then goes to another crypto project because they won't get lucky twice on the same brand.
Q: How realistic is it to repeat the success of Stake, and is it worth striving for?
A: How realistic is it to repeat the success of Google, Xiaomi, Netflix, Evgeniy Ivanov?
Look at Nokia: here is a global example of market change and a series of wrong decisions, or maybe the right ones, but made at the wrong time. This is too complex question for one interview — but I would be happy to discuss this topic next time.
Q: We cannot miss the traffic, which is the main concern for many operators in gambling. The topic raises debates: which source is better, how to attract, how to retain players, what to do with player churn. Tell us about your approach to attracting and retaining traffic, and how did you come to it?
A: In our industry, there is a popular thesis: "You need to test." So, we, of course, follow the rule: if you don't try, you won't know. This is if we are talking about new sources for traffic acquisition. But the main focus, of course, is on already established sources of traffic, such as SEO/PPC/ASO/FB.
Attracting traffic is good, but perhaps no less important question is how to retain it, how to make the player's experience as comfortable as possible.
In my opinion, you need to maintain a balance and try not to go beyond the established bonus share, stimulate players with tournaments and personal activities. There are also certain cases for segmented groups of players, but I won't reveal the aces up my sleeve.
We have been working towards this model for a long time, conducting many A/B tests and A/A tests from different sources and streams. From the outside, it may seem that you have a product and everything immediately falls into place and takes off. No, unfortunately, this is not the case, resources and time are required to simply make the metrics better by a couple of conditional percentages in one of the 14 GEOs; however, on big volumes, this is an excellent achievement!
Q: Now developing countries are in the spotlight, many projects have turned their attention to growing regions. Meanwhile, the EU is becoming increasingly difficult, especially with the Curacao license, and also with MGA. It seems logical to move to other countries.
A: You always can find a better place, you know.
When the rules tighten in some GEOs, it does create difficulties for brands. But as long as there is regulation and regulated brands, there will also be a more profitable gray market. Let's look at the numbers: are you ready to pay 23% of your winnings to the state? Are you ready for your relatives to know that you secretly gamble in a casino? Yes, this is certainly bad, but that's the reality: people, like water, try to find the optimal path to the end goal, no matter what the issue is.
A wife withdraws money from her husband's card at the supermarket and takes a $50 voucher card there, and then makes a deposit with that voucher in an illegal casino in Australia because she can afford it. That’s it.
Q: Talking about operational markets, we want to highlight Africa. How promising this market it on your opinion?
A: The payback periods for investments directly dictate the desire to go there; it is indeed a promising market.
In the coming years, gambling will likely become the reason for changing the laws of some countries on the continent in an attempt to regulate it or, so to speak, due to the corruption component.
The leaders of countries are making a lot of effort to get their piece of this pie. While this is rather a negative trend, I think this is an intermediate stage of market formation — who knows, maybe in 5 years Africa will be the top continent for gambling.
Q: Of course, we want to ask you about payments. You operate in quite complex markets: expensive and often unstable in terms of PSPs. How do you deal with risks and resolve complex situations with payments?
A: The dynamics of the market means if you lose something, you find something somewhere else.
Yes, it's always high-risk, everything can disappear in one day, everything can fall apart, or worse, close permanently. But we fight day in and day out, if you can call it that, looking for the maximization of AR and providing the maximum seamless gameplay for the player.
In conclusion, we would like to thank our guest for the interesting and insightful answers. We are confident that the professional perspective on the current gambling market will undoubtedly help both: those who are already in the industry and potential investors reading our articles. We would like to add that we unconditionally support the thesis about attracting players is just the beginning, but retention is the process itself. Payment systems, in our opinion, can and should become a strong retention tool for any brand. How to achieve this we discussed in our previous issues.
Although we focus on payment systems, it is important for us to stay informed about the main events in iGaming industry and understand the causes and consequences of various events. This forms the market situation and demand and supply for services. Therefore, in the future, you can expect more interesting interviews and articles on our website that will cover relevant topics for online business and fintech.
