<<David Katz, Analyst, Jefferies LLC>>
And maybe, if I could ask about sort of some of the footprints and how thats going to enlarge over time, the size of the markets, do you
have a view on the size of the markets in the medium-term, long-term, any term and which areas youre going to concentrate in. And then just think about the shape of these markets as you get into them, is it sitting again, in Europe, Im
hearing, year one loss-making, year two breakeven, year three target margin and what that target margin might be.
<<Richard Schwartz,
President>>
Sure. Ill start maybe, Ill let Kyle should have jump in as well. I think a lot of companies right now are
really heavily focused on the sports betting market, but we think ultimately, the casino markets going to be larger and a larger total addressable market than the casino and the sports group will be. And by the way, the players in our
database, who play casino spend three times more with us than a player play sports betting, and because pretty standard that youll see that the disparity.
So, in our view, the casino will be larger and theres a lot of companies in the market that really dont have a casino first
strategy, theyre really marketing strategies and even the branding and the products are really kind of aimed towards a cross-sell the sports better to a casino player, which by the way, we do that as well. But we also have a casino
first strategy that appeals, for example, to female players that like to play online slots, which is a category thats very, very significant in size in this country, in fact, its online slots may be competitive in terms of market size alone
with the market of sports betting.
So, we think having a our diversification of being strong and bold and having a product that
appeals to females and males equally alike. In fact, our casino play volumes are as high of a high percentage of female players and most of the other companies you hear from. And so I think thats a big part of our future strategy is to
continue to appeal, to both strategies, sportsbook players, who convert to casino as well as casino first slot machine players, who maybe, arent going to want to visit a brand that doesnt speak to them in terms of their gender or the
type of products that are available there.
<<Kyle Sauers, Chief Financial Officer>>
Yeah. Maybe, just on the margin part of the question. We havent really given commentary around first-year investment, second-year
breakeven, three year kind of harvesting target margin necessarily on the timeframes. I think weve demonstrated, as recently as Q3 being having an EBITDA close to $10 million that we can demonstrate profitability pretty quickly in some
markets kind of maybe, referring back to the one of the previous questions. I think its likely that we will choose to invest more end markets that are opening up and some existing markets since we have more flexibility on the balance sheet. So
that might change the cadence a little bit, but it also probably changes the ultimate returns that you get and the size of that profitability.
In terms of EBITDA margins, what we have talked about in our investor deck is, expectations of our B2C model being in kind of the low-30% type of range. Our B2B, B2C model being a little bit lower and probably, a blended margin in the mid-to-high 20% range as we
get to maturity in end markets. Obviously, how that turns out in any given year is going to depend a lot on the cadence of how States go live and all the different parameters that Richard talked about, whether casinos involved and tax rates, and
things like that.
<<David Katz, Analyst, Jefferies LLC>>
Maybe, I can just check [indiscernible] (24:44) and ask about Columbia, perhaps you could just give us a faith of saying whats going in
that market. Thatd be great.
<<Richard Schwartz, President>>
Sure. Yeah. Now Columbia is the market that we decided to strategically to invest in many years ago as of market that we thought had some great
potential in its own, right, would give us an entry point into the Latin America region. And of course, would also give us a chance to prepare early for the U.S. market for sports betting, not knowing when and if the powerful law would be returned
which of course, it happened maybe, an earlier rate than many people envisioned. So, weve built at a time we our senior teams spent a lot of time in that market. Its not an easy market to get into, its complicated. A lot of
the regulatory things are even more sophisticated in some ways and the backgrounds of companies involved there is very sophisticated, because of the history that company had, 20, 30 years ago, its a very stable economy.