On May 7, 2021, Real Luck Group (TSXV:LUCK, OTCQB:LUKEF), a fully licensed, award-winning esports betting platform available in over 80 countries, announced a CEO transition. Former Chief Customer Officer Thomas Rosander was promoted to Chief Executive Officer of the Company and appointed to the Company’s Board of Directors following the voluntary resignation of former CEO Quentin Martin. We recently chatted with Mr. Rosander to understand how his transition is proceeding, how he is adjusting the strategic direction for the Real Luck Group (“Luckbox” or the “Company”), and to better understand his growth strategy for the Company in 2021 and beyond.
Luckbox CEO Thomas Rosander
Q: Thomas, before we delve into how you’ve positioned Luckbox, tell us about your background.
A: Sure. I think it’s fair to say that online gaming and betting are in my blood. I have over 15 years of professional experience in the igaming and video gaming industry, having built and operated online poker sites, sportsbooks, and casinos. Prior to joining Luckbox, I was Chief Executive Officer of Dunder Casino, Chief Product Officer at Mr. Green Online Casino (acquired by William Hill in 2019), and Section Head Business Intelligence at bwin (acquired by Entain (LSE: ENT), formerly GVC Holdings, in 2016). I was also the Engagement Director and Business Intelligence Director at global game developer Electronic Arts (NASDAQ: EA) where I built up Electronic Arts’ free-to-play publishing business.
Q: What brought you to Luckbox?
A: I was particularly attracted to how the Company had positioned itself to capitalize on two major growth trends: 1) the increasing popularity of esports, which is the largest entertainment industry in the world, and 2) the betting industry. Betting is the most efficient way to monetize the esports industry. When I was at Electronic Arts, I constantly thought about the massive opportunity of combining the large, growing esports audience with betting. Luckbox is a young company in growth mode doing just that, and driving revenue is what I love to do. So, I came aboard as Luckbox’s Chief Customer Officer with a mandate to scale players leading to gaming revenue.
Q: Having the Board appoint you as CEO a few months in must have been a surprise for you.
A: To be candid, yes, but this didn’t actually change much from a business perspective, as I was already running the Company operationally. Quentin is an amazing leader in the industry – one who has a solid strategic mind and marketing skills. As CEO, he was tasked with laying a foundation for Luckbox, thinking about how M&A could benefit the Company, and expanding Luckbox’s platform beyond esports and into traditional sports betting and casino games. All in all, Quentin’s leadership set the course for the Company to succeed by putting in place enough capital and the right team to take advantage of the large market in front of us. Part of Quentin’s contribution was also getting Real Luck Group’s story known in the investor community so that Luckbox could raise capital and go public. I joined in February 2021, and the Company was able to close an oversubscribed $17.8 million financing deal in March 2021- a lot quicker than the Company had anticipated. So, with the foundation in place along with a solid balance sheet, I’m looking forward to lead Luckbox through its next phase as a growth company.
Q: Can you elaborate on what the foundation you alluded to is that you can build upon?
A: So far, in 2021, the Company launched betting on 105 traditional sports, marking an expansion beyond esports. Real Luck Group grew its overall team, adding to its product development and marketing talent. On the platform front, we added a leading igaming affiliate platform, Income Access. The Company also added new payment processors, including Neteller, Zotapay, Trustly, Ecopayz, Rapid Transfer, and Paysafe Card. The Company built on its foundation of being an esports betting thought leader, by joining the Canadian Gaming Association – as Canada steadily advances towards the legalization of sports betting. In addition, Real Luck Group launched betting on the new esports game Valorant. On the capital markets side, as I said before, we closed a nearly $18 million financing in March and had a cash position of around $19 million as of March 31. With this cash balance and the platform framework in place, we can now start to seriously scale up the Company’s revenue growth strategies. Finally, we also listed in the USA on the OTCQB under the ticker symbol (OTCQB: LUKEF).
Q: As CEO, have you uncovered any surprises within Luckbox?
A: Nothing significant or unexpected. I spent my first two months at Luckbox developing strategies to increase player growth and gross revenues. As CEO, that’s still my main focus.
Q: And how do you plan to increase Luckbox’s active players and gross revenues?
A: We will apply the same proven methodology that I have used successfully in the past. I call it agile marketing, but it is essentially “below the line”, data-driven marketing. We measure every player’s performance or predicted performance against the cost of the campaign. The Marketing investment is continuously re-directed to the campaign or traffic source performing best at that particular moment.
Q: “Agile marketing” sounds similar to traditional marketing methods.
A: It is, but it is far more data-driven. In fact, “agile marketing” is a lot like trading and hedging used in capital markets. You place an advertisement at an attractive entry price and hedge by adjusting the campaign spend to ensure the best return on that marketing spend. Data drives the decisions, and this is constantly iterated upon. In many traditional marketing methods, you have to decide on a marketing spend in advance and a lot of the decisions are often made by hunches rather than data. We close the loop faster and thereby minimize risk and optimize the return on investment.
Q: Is “agile marketing” new for you?
A: Implementing agile marketing to grow the customer base and revenues is something I achieved at several other companies. It is a proven method to grow certain companies. What’s required for success is time, money, data, and patience. I believe, we can soon apply this more nuanced and measured approach to marketing at Luckbox. We have the tools in place to do so and, more importantly, to really lay an emphasis on strategies that we determine are working now that we have the cash to do so.
Q: And how will you know when “agile marketing” is working for Luckbox?
A: Our goal is to be able to acquire players profitably this year. Once we reach that milestone, we’ll know the model is working. However, there are key internal processes and metrics that drive achieving that goal. To that end, we’re applying an approach pioneered by Google, laying emphasis on OKRs (“Objectives and Key Results”). OKRs are a collaborative goal-setting tool used by teams to set challenging goals (objectives) with measurable results (Key Results). These goals are set each quarter, which allows us to benchmark and monitor how we get to our objectives. These goals are internal (meaning not investor facing) and are meant to be aggressive yet realistic. Most importantly, they are measurable and verifiable. This gives us, as a company, three to five key results the organization can focus on, which are aligned with our overall company goals.
Q: What could be some key OKRs in regard to your agile marketing strategy that you plan to focus the Company on?
A: That’s a great question. Naturally, for competitive reasons, neither us nor our competitors can get into the specifics. But, at a broad level, think of it as a marketing funnel. At the top end, we have visitors to our platform, who we acquire via various marketing channels. We then attempt to intrigue visitors so that they become registered users on our platform. Registered users then need to be converted into depositors so that they can then wager on our platform with their monies. The bottom of the funnel produces what in our business is referred to as Net Gaming Revenue (“NGR”) which is bets placed by users, less user wins, less licensing fees, less chargebacks and player bonusing. Player retention is an important data-driven aspect as well, and it refers to the amount a player bets in say month two versus their bet placed in month one. We now have the frameworks in place to measure these OKRs and invest accordingly in order to maximize the NGR that is generated. But, as I said, these programs do take some time to yield benefits. We expect to begin sharing the qualitative results of these programs in the second half of 2021.
Q: On your marketing approach, who are the people that Luckbox wants to attract?
A: One third of all people – some 2.7 billion – play video games. About 75% of them are over 18 years old, meaning they can legally gamble. Although only a small percentage of them gamble, they represent the next and largest generation of bettors in an industry (esports) just in its infancy. The average age of our current subscriber is 32 years-old, which means the esports betting market does not have to wait for gamers and esports enthusiasts to reach adulthood. There is a market for esports betting now.
In Part 2 of our interview with Real Luck Group’s CEO Thomas Rosander, we’ll discuss:
- his strategy to turn Luckbox visitors into bettors;
- how M&A targets fits into Real Luck Group’s future growth strategy, and;
- the Company’s four core priorities as it capitalizes on the intersection of betting and the rapid growth of esports audiences.
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information.
The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.