Abstract
An Interview with Kim Lund, Chief Executive Officer and Director at Aftermath Interactive AB. The Interview was conducted by Jamie Salsburg. Jamie is a responsible gambling advocate and consultant and the founder of Dyve Agency, a firm dedicated to “Assisting stakeholders in navigating & improving responsible gambling efforts.”
I mean the industry didn't think it would happen either. Just like here, they underestimated what happens when things get regulated, it really enters the public domain and people start talking about it. And so here in Sweden where we've had state-run gambling forever and we're one of the most gambling-friendly people in the world, but once it got regulated online, it already existed online forever. Once it got regulated, once those ads started showing up in subways and everything, it just became too much and suddenly it became this pariah thing. And suddenly it wasn't cool to work with anymore. It was actually real negative. People started leaving brain drain and then it just sort of escalates from there.
Yeah. It always made sense, but I mean I recognize that what we can do here and what's natural to us is never going to fly in other countries. I mean I saw just today with New Jersey announcing their sort of new initiative and people reacting to the fact that the regulator would be getting all of that personal data on people and that being a negative. We can talk about that because I think it's an interesting approach that I'm for and against, but that specific angle is like, oh, I'd rather the government have my data than a private company having it. And in the U.S., I think the natural reaction is, oh, I'd rather a company have it than you are giving it to the state to study. Yeah, I think it's just in that sense different.
The affiliate side of this business, it's not fishy in any way. It's proper and regulated, but it is such a minefield that I'm not surprised that it hasn't gone as well, at least as well as they have been suggesting that it would, given how much they hyped and how much their stock prices soared and how an analyst said it would go to the moon. And then obviously we're not at the end game yet, but I don't think this was supposed to happen.
And then there's still angle shooting left and center to try and get out of it. And when that doesn't work, suddenly they're all sort of focusing on Africa.
That's how I ended up in it, I knew something, I knew poker, I knew the rules and I have sort of been in it. That's how I ended up getting that job and then that just sort of escalated like crazy. It was a 10-year or seven-year insane journey of slowly obviously being one of the few people who actually had any experience of the game and as such ended up in operational roles and sort of building that site up, which was really big at one point. It was very U.S.-focused. It took a huge hit when the UIGEA (Unlawful Internet Gambling Enforcement Act) happened, rebuilt, but the brand was, in many ways, sort of ahead of its time. It was very community-based, very community-focused, it did a lot of things. And those were sort of hard to replicate when you suddenly have a fractioned European market where half the people speak French, some speak Hungarian.
It was a very U.S.-ish brand in that sense. I don't know actually who owns it now, but it was fun times. But already then, I mean I always joked that I started the company on the same day that they decided to outsource the technology and start a poker network. Basically outsourcing the technology and inviting other brands to run, use the same sort of skin software. And that was sort of my initial where I realized that, okay, well I should have realized what I thought should be a game design and product-focused industry ultimately maybe needs to be, I don't know, a marketing industry. Where I thought we should evolve what the game was, how it was played, how you monetized it, all of these things. It was basically about how can we become more efficient at sending people text messages, right? But I learned so much, I had the fortune of being in a position where I quite quickly figured out how the poker economy actually worked and made a bit of a name for myself by publicly explaining how that worked and how backwards everything was run.
And I think once I left by 2010, I was like, everyone is going to start doing this now. And it took eight years before the industry, I completely turned around and now it's sort of backtracked a bit because it didn't quite really understand what it was doing. Yeah. I left, I've had a blast, but I was always sort of product game focused and I thought poker was this fantastic genius game that deserved to be played and enjoyed in other ways than as a gambling game. Having had the experience that I had from a real casino, having been a dealer, I've had chips thrown at me. I've had ladies tell me, just so you know, the bet I just made, that's her college fund, right? I've had people win jackpots and two weeks later being told, oh, that guy suicided because he blew it all, right?
All of those experiences when you've actually worked in a casino, you've seen, I've had people sort of lose all of their money trying to count despite the fact that we were using six card deck shuffle masters, right? You can, right? It's the shuffle master. There's no card counting possible. They still try. You've seen the people try to martingale a baccarat game, which ultimately adds, right? You've really seen how nasty it is, how horrible it is. And you've sort of learned how you go from that sort of happy, innocent, all entertainment gambler to the full-on sort of, there's no limit gambling addict that's just ruining their lives. And when you worked online, there was so many people pouring into the industry that didn't have that experience. It didn't really recognize or wanted to recognize, I always said this industry is full of people who are strategically ignorant, right?
They know, but they choose not to know. And for us who have that experience, I think we just can't choose not to know. I always knew that what we were doing, even though it was mostly poker, I mean we were leaving, it was having consequences to people. I always wanted to find a way to do it differently, right? There're all these sorts of things specifically about poker that make it sounder financially than other games. There are all reasons not to sort of offer high limit games. They're not really financially viable anyway. There're all these sorts of reasons to scale back and limit and try to contain and just exploit the fact that at the base it's a fantastic game that people enjoy to play even though the stakes aren't that big. But in an environment where everyone else is pushing and everyone else is utilizing or playing into the addictive elements of it is really hard to be the one who doesn't.
I ended up leaving because I just felt to me that solution was always innovate the product, innovate monetization, find a way to do differently so that you still retain the qualities of the game, but you don't end up with those effects. But I ended up leaving and consulted for all sorts of companies and then slowly started to create the company that I now am the CEO of, which is called Aftermath Interactive. We sort of pride ourselves, we say, that we build games that bridge the gap between gaming and gambling. We try to find the best of two worlds and monetize it in a way that isn't as exploitative and well dependent, if you like. And through that, try to find maybe these types of products is what can be the foundation of a more sustainable future. Because through product innovation, obviously you get stickiness, you get retention and retention benefits that then means you do not have to spend that much on retaining customers. And that way maybe there's a sustainable business there.
The derogatory view on slots players like, oh, they've all come here and play our slots. We think you're all suckers for doing it, but hey, better you play ours than someone else's. I think again, I think it's much better now across the industry, but there's this sort of general idea that we have no idea, we do not understand, we do not care why you think this is entertaining, right? But we're just going to serve it to you because we know some people find it entertaining for some dumb reason. Here you go and enjoy, and we'll take all your money. And that to me is obviously the hallmark. That in itself means you are in a marketing-oriented industry instead of a product-oriented industry because you have no desire or interest in even understanding what makes roulette fun, what makes slots fun.
Even though I think it's better, I still think that is where the industry still isn't fully connecting and fully understanding sort of maybe that there are things here that lead to a more sustainable future if we just understand and respect what makes these games fun. I always take this example. For me, it's unbelievable that slots boutique developers spend so much creative energy, time and effort to build sort of amazing, thematic games. Whether it's their own IP or their bot or license, some TV show or movie franchise or whatever it is. They built this sort of amazing slots experience. Audio, visually, it's compelling. And then they go like, well, you can also speed play it. And well, you've just given them a way where you say all of that we did, who wants that, right? Of course, you don't want that. Just bypass all of it and just get the results.
And that sort of lack of pride and faith in your own production is what I don't understand. I mean, I understand it from a business sense. I understand it from the given sort of the environment we're in, but still, you go like, I built all of this and now I'm basically hoping that you bypass all of it because then you get a few more spins in, I can get your money faster. Then you're like, well, you are actually not committing to what you're building. You do not actually believe that the sounds and the graphics and the experience and the graphics, and the experience, and the game mechanics, the specific game mechanics of this, you actually don't think that's worth anything. You just think it's worth it as something that drew someone to start playing your slots. And as soon as they're playing it, you don't think it has any value whatsoever. So, it's much better for everyone involved if it's just skipped.
And that, to me, is sort of like one where you go, there's never going to be what I call cheap product-based retention when that is your mentality. You're never going to. For me it's like Apple saying when they release the iPhone, “We have created this navigational button device that you spin on, but you can also just turn it off and do some other thing.” No, no, no. You believe that that is going to change how people interact within a device. It's going to be really weird initially, but then it's going to become the standard way in which you interact with all things and we're not going to give you an alternative, because this is just how it's going to work across all products done. So, that's where it is still to me, even though again, I think it's become much better. I think there's so many people building and creating, for example, great slots. And they're probably agreeing with me. They think it's a shame, but still, that's where it's like, it's still not the product-oriented industry.
And I still stubbornly believe that maybe that's what it needs to become in order to be sustainable, where you can monetize it better because it is actually engaging and entertaining. And we obviously, have all sorts of ideas. We have concepts around sports betting, around slots, and obviously, the poker game that we have in the last stages of developing, all of these are often in the form of cross breeding some type of element from a video game with some sort of element from a gambling game. And then see what happens when you combine those two.
If you want those, you can go find those either somewhere else inside the site or at another operator. But it's really brand. It's reputation. Because what you're saying it highlights is they have 95% commitment, but that last 5% is where you just lose all authenticity in player protection when you're offering these things. Just like canceling withdrawals. I mean, we know that that is a prime marker of harm. I mean, it shows that somebody needs to get the money back in.
So, maybe there's a different way. Maybe when that's the type of behavior that you have, which you can obviously track, you can see well, oh, this player is now whatever slots they're playing, they're just completely ignoring the theme, the sounds, the experience, everything. They're just fast playing through. They're not even interacting with it. They're just passingly looking at the screen. They're just waiting for things to happen. Maybe that means, okay, this is something we have to deal with in a completely different way. But the benefit that they clearly seem to enjoy playing slot on some level, but the way they're playing it is they're not getting the full experience and it's extremely expensive to do it. So, maybe there's a completely different way we can do it. But I always bring this example up. There was a couple of years ago this huge wave of gambling companies in Europe latching on to what was then the trend in gamification.
This is one of the saddest periods of my career and for my company, because it was like we were not doing that, but people thought that that's what was, “Oh, that's how you take video games and combine it with gambling games.” You gamify them with external surface level layers that you just add on top of it. So, I always use this example not to. But so, someone would go like, “Well, when you enter our site, you'll start a magical quest where you will venture through fantastic lands and you try to get to the next level.” And the way you got to the next level was you were playing a kid's branded slots. So, you're just taking something that was not at all in line with that experience. You were just latching on whatever you had. It's like maybe we have a Star Wars slots, throw that in.
And then you think, well, we've taken the idea of a level and we created a world, and then you are playing an avatar, a cool wizard avatar, and that is going to completely make you think that this is now suddenly something elevated beyond what it is. And then you're fundamentally not understanding what games are. And then in Europe, fundamentally it's seen as, well, that didn't work. And those of us who were the representatives of that, even though we weren't, it was like, yeah, no, of course it doesn't work. Because you have to do it properly. You have to get into the games themselves. You cannot just smack bang an achievement program and be like, “Well, congratulations. You spun the slots 10 times. You earned a badge.” That means nothing. It's hollow. It's empty. It doesn't mean anything. So, again, it's not understanding or wanting to understand the fundamental things that make gaming or play enjoyable and then go on from there. And again, I think there's plenty of people in this industry that totally do and are probably frustrated at their companies for not being able to fully do what they think they could.
But it's just another sign of how far there still is to go to explore and be innovative, and trying to change what this is and turn it into something more sustainable. One of the things I could say that the U.S. company seems way better at than the European companies is that they don't seem to be as tied to the idea that there are necessarily gambling companies in the meaning that people are supposed to wager with their money. In Europe, it was like, well, if it isn't wagering, it's a completely different business. But you see in the U.S., they're bringing in free-to-play sports betting games and seeing it all as well. It's sports betting. So, you have fantasy sports and all. And that I think is at least you are recognizing that the way in which you make money should probably not be what defines you as a company. It should probably be what type of experiences you are actually delivering. Then how you monetize them, that is situational and dependent on whoever the player is, and how that player chooses to play.
The amount of money that's being spent at these hobby shops. I mean, this is not an inexpensive hobby. And the last time we were in, I mean the core audience was 20-something, 30-somethings. And they're there, they have a huge room for them to play with all the accessories. So, obviously this is a target audience that if you can solve the equation to figure out what is it that they are interested in, what can you offer them that's a little bit different than what they're already getting either out of gambling or out of gaming. I think there is a huge target audience there.
And it's incredibly profitable and it is tapping into the exact same psychological mechanics. And I am pretty sure it is heavily well dependent in how it makes its money. And even back to FarmVille that Zynga released, they had players who spend $20,000 on that. There is no difference between that and losing $20,000 on a slot machine. So, I think there is this need to broaden that. And if you bring that up, which I do sometimes in free-to-play circles, because obviously, we dabble in that, is a very awkward conversation, and that people don't want to have. But I think that's something to point out because, I mean, Roblox, is massively destructive.
So, you could argue, well, it's a create your economy and kids can learn how to build games, and make some money. But the insane amount of not just it's predatory and you can meet players, all that sort of social effects. But it's such a time drain spent on games that are fundamentally extremely subpar. They're not useless, but there are much, much better games that tap into the same joy but do it much better. So, there's one thing I would like to comment on. There is this sort of weird detachment between those that I think is unfair. In that cross space, there are so many opportunities that are still are unexplored. You can see a lot of, I mean even on that side, it makes you little magic.
The Gathering is a game that has this sort of same type. It's incredibly expensive if you want to buy all the cards and it is even expensive to play online if you want to play the digital versions of all the cards. But there is a thriving community that gathers and plays, and all that, which is really, really fantastic for a game to have. But that game and many other games, similar to gambling games are being hampered by the fact that they have been stuck. They're stuck in this idea that game should be free to start playing and then you need to monetize them through in-app purchases. And you end up being extremely well dependent.
A few percentages of your audience or your playing audience actually pays, but those who pay spend a ton of money. And that's the same imbalance that side of the industry also has to figure out, how can we make that more sustainable? Because you ask a lot of free-to-play developers, do you actually think your mobile game is worth $30,000? Is that experience worth $30,000? They go, “Well, each to their own.” But it's like, no, it isn't. No one should be paying $30,000 to play. It's not that good. It's good. It's not that good. And that's the same with gambling when they say like, “Oh, it's entertainment.” Well, if it is entertainment, is it entertainment worth 25,000 bucks? Is it that entertaining? It isn't. So, no one should be spending 25,000 bucks on it.
So, yeah, sometimes I have more respect for those who go like, “Well, gambling.” And I obviously having worked in a casino, I know a lot of folks who are just like, “Well, it is an individual's responsibility to realize that this can be addictive. And if they want to lose everything they own from this, it has nothing to do with me. I have no responsibility whatsoever.” I don't agree with it, but sometimes I at least prefer that over this trying to wrap it into something using some nice terms. And then in the end, the effect is the same, but I feel better about it. It's like, no, no, no. At least be upfront. Either do something about it or be upfront about what you're not doing.
Even New Jersey, that's a fascinating one. When you start to say, “Hey, the government's going to be studying the data and watching out for you.” That comes with a lot of responsibility. I'm not sure if people have thought it through. So, yeah, I'm with you that we could just be honest.
And it worked like that to the extent that the people it was targeting entered the casino, tapping their one pocket and going like, “Here's the unwashed money.” And then tapping their other pocket, “Here's the white money.” So, they were in on it. They were like, “Yeah, yeah, I'm going to go in there. I'm going to spend it and you're going to take your cut. And then what I get out of it is now clean. I've paid my dues in an indirect way.” And that was, yep, everyone who worked there, I'm going to say most people who worked there, I understood that it is better that the system. Obviously it was better if they just pay taxes and everything worked as it was supposed to do. But in lieu of that, all right, this served a point.
Now, obviously, with new regulations, they cannot do that because every cent that enters the casino, I'm sure, needs to be reported and be told. And when you say the problem is attacking the problem through spending limits, it's just, again, I think it's disrespecting the experience. It's disrespecting and it's obviously highly invasive as well. I mean here in my part of Europe, it's not as invasive because they know everything already. But I mean I guess in other markets it's super invasive. So, I've always said that it is an approach that accepts that the industry will continue to work exactly the way it is.
So once the money enters the system, it's going to get nasty. So, we need to stop the money from entering the system. Well, if we stop people from putting too much money into the machine, there's a limit to how bad it can go. But once it enters, it's going to go bad. And that is the general mindset that I think it needs to get away. And this comes back to what New Jersey just said. I always said detection is possible. The way New Jersey has set it up, I think that seems like as a basic set of rules, that seems to be the sort of signs you go for. Are people playing more frequently? Are they increasing stakes or deposit? You can see that in patterns if you have all the data. And that should be done as close as possible to that player. And that is with the operators. The full responsibility to avoid that people start playing in a dangerous addictive manner should be on the operator level.
The only role of the regulator is to handle all of the cases where the operator fails. So, I played in a regulator market, I cleared, I lost all my money. And I go through the regulator and say, “Hey, they fleeced me for everything I had.” Then the regulator can determine like, okay, yeah, this is clearly a case. This is not supposed to happen. And then you as an operator are effectively dead. You get fined so hard, so harshly. But they have no conditions under which how you operate your business. You can send however many text messages you want. You can offer as many bonuses as you want. You can market whatever you want. But it is up to you to be so good at staying on the right side of the line, that you now have a competitive benefit over everybody else, because you can run this cleanly, and they do not dare to do it because stepping over the line is too costly.
That is to me, where the industry starts to be. You're now giving the operator every opportunity in the world to get the upper hand and they're completely in control over it. And if it fails, well, it is not hard, I mean, I know you have a history as you can talk about that more than me. I have the same tendencies. And obviously, I've seen it in so many people. It's not hard once you get caught in it. It's not hard to backtrack and go like, “All right. Yeah, this was not sound.” The way you played had nothing. In no way you can say, yeah, this was totally within reason for an entertaining product. So, yeah, it's a radical approach, but that's what I always say, to try and see if I can shift the conversation away from prevention to building something that is naturally sustainable with another bunch of rules that kill innovation, and just stops operators from being proactive instead of just trying to follow a bunch of rules and not really take responsibility.
And it's just, right now, everything's so vague. And I know you see this everywhere. It's like even the ASA (Advertising Standards Authority) standards in the UK. I laugh at those as a marketer, because it's like you can't have any advertisement that entices someone to place a bet. I'm like, how do you make an advertisement that doesn't entice someone to take an action? Because every advertiser, I don't care if you're selling soda, if you're selling a hamburger, if you're selling a trip to Mexico, I don't care what it is. It is an enticement to take an offer. That is what an advertisement is.
And one effect of regulation that is incredibly frustrating is that it actually kills innovation. It kills innovation that is designed to actually change the industry in a more sustainable direction. I don't have a specific example with a specific regulatory framework. So, for someone like me, for example, with our program that we have developed, I run potentially into situations where regulators have either vaguely defined what poker is and isn't. Which means I might fall under some vague regulation, even though it's nothing. It has no business being there. So, I end up having to call myself, call what I build something. Well, we don't call it poker. Because if we do, regardless of how it works, regardless of how it's monetized, it's immediately, oh, now it has to be regulated because it's poker.
And there's innovations in sports betting and things I've run into where it's like, oh, this is going to be really difficult to get through because they've specified something that they didn't actually. This is not the intended consequence of having written that specified that way, but it is a consequence. So, I would rather they focused on recognizing situations where rules have been broken and then harshly penalize those who break it. And your idea of giving companies the idea of being like, “Well, we have to provide our plan for how to deal with this.” And the regulator either goes, not good enough or good enough. That is, to me, sounds like a really cool idea because then you get a natural differentiation in the market that can play out in interesting ways.
If you do that, then that type of marketing, which can be, there's no problem with that. Maybe I am marinated in my own narrative for too long, but I always go back to, I don't know the U.S. market enough, but obviously I know some of the players, I know some of the people, and it goes back to no one actually wants to do it, so that's why it's not done. You don't actually want that change. You don't actually want to take that 100% responsibility and accountability for what you're doing.
A, because you have chosen not to fully understand the ugliness of it. Right? It's quite easy as a CEO to be like, “Well, I came from a travel agency and now we're selling digital entertainment.” That's cool, right? Yeah. And I've not really been in a casino, and I've certainly not worked in an environment where I've seen, now I haven't seen the people sitting in diapers that are being supplied by the casino because they don't want to leave their slot machine. They'd rather just pee in the diaper. Real world example. I haven't seen that, and I rather not actually see it. So, this is all great. So, I think that comes back to when I read the New Jersey thing like, “Oh, I love how you could argue whether it should be the operator of the regulator flagging this data and looking for warning signs and flagging them.” But like, “Oh, I love this part.” And then you get to the intervention part and you go, “Jesus Christ, sending emails. What is that?” That's like, it's an instant. If you see the flag, it's an instant stop, right? Stop, investigate, maybe continue. But it's like you can't send emails. Do you understand how addiction works? I've seen cases where basically people have told me, “Flat out.” As a dealer, you hear a lot of stuff. People will basically say like if I gamble one more day, you won't see me the day after. Right? And you say, “Okay, that's it. Bye. Instant ban, you'll never allowed.” And will they say thank you? No, no, no. They'll go for your throat for throwing them out. Right.
So again, it's like, don't you guys understand what this is? I was very public as a representative for poker room in those days, and I had some threats thrown my way. They were very graphic and obviously that was not fun. But again, having been around it's like, “Okay, let's look at the guy's history.” And okay, yeah, I can see where this is coming from, right? It's lashing out at anything that is representing us. Right? So, it has nothing really to do with me or it's not something no one's going to act on or anything. This is what we do to people. So maybe an angry email is, even though it's threatening and physical and graphic, is something, that is what will happen, but then when you work in a company that doesn't see it that way, well, then they will be like, “Okay, so let's get this guy and try to get him in jail.” Right?
It's like there's just that brutality of not being understanding of the human side of what any addiction does and gambling addiction in one way does worse than another. In some ways it's better, but in some ways it's worse. It does come down to this, this willingness to not really, really understand. And I think to a part that is connected to this general view that, well, if you are playing slots, I mean you are a sucker from the beginning, right? You are a sucker. So of course, you are going to do sucker stuff and lose all your money playing. Because playing it in the first place makes you a sucker instead of being like, “Oh, wow, you love playing these amazing slots that someone built for us.”
There's another problem I think with operators and game developers being separate, which in one way is good because it helps innovation. Because obviously as a separate boutique developer, whether it's a sports betting or fantasy sports app or whatever it is, it's easier, right? You don't have to be within a massive operator organization, but it also means that there's a disconnect between the two. The developer doesn't really have to see the consequences of the product they developed because it's an operator and it's maybe the operator's fault that people played your stuff too much and lost all their money, maybe it's the operator that pushed too much, so maybe it wasn't my responsibility.
And on the operator side, you can go, well, they really built these super addictive slots. I mean, I'm only putting it on the front page, right? I didn't build it, so maybe it isn't my fault either. Right? I don't know what they built. So, this convenient way of shifting responsibility, never feeling like maybe it was actually me. And I think that's, again, there's just not that willingness to fully accept what it is. Yeah. We don't respect what the positive of this is, what that experience actually is, and we don't recognize what the bad side of it actually is. How nasty that is.
The intervention stage is so hard. The identification is pretty easy. I think we can all agree that's not that challenging. The intervention's going to be really hard. And so, the more things that we can do to not get to that point, the better. And I think that's really where the game design comes in. And that's where I push back even on some of the RG stuff and the onboarding and some of the strategy behind it. It's like once you get to this point, you're putting a situation where if we bet one out of 100 or one out of 1,000, we're probably doing pretty well on interventions at that stage. But if we move upstream and we can keep people in between the buoys, keep them safer, keep them, like you say, have them play and enjoy the games, have them leave saying, you know what, I didn't just rush through that or come show up in for the right reasons. I think that's really where if it's going to become something that's sustainable long-term, that has to change.
So maybe once you see that behavior that obsessive, I'm just going to get as many spins in as possible, maybe the right approach is to just shut off monetization, shut off prizes and waiters and just let the person just play through whatever Zen state they're in and get out of the other end and be like, “Okay, I got it out of my system. Maybe I can wire you back into a normal state where you can play with wagers for prices without spiraling out of control. I can just look at myself. I play any strategy game I play. I play obsessively. It could be, for example, now I play a lot of Marvel Snap, which is a card game. I'm not that big of a Marvel fan, but it's an interesting design. And I play Magic: The Gathering. And I can sit up, I can play magic, I'm just going to play half an hour. And then I ended up having played all night. And while I'm in it, if I lose a game that means nothing. The computer is on its way out the window, I'm upset, I'm angry and I want to play again because I'm going to get those bastards, all of that. And then ultimately, I hear my kids waking up and I go like, “Oh, I can't do this anymore.” I turn it off. Five seconds later, it was all pointless. It meant nothing. Nothing at all. But when you're in it can be so hard to just be like, stop. Luckily for me, it also had no negative consequences other than losing sleep, which is bad enough. Right?
But once I got it out of my system, it's like, “Oh, why did I do that?” It's just like, “Why? What was the point? What did I get out of that? I got nothing.” So, I think there's, this goes back to this idea of understanding what makes player enjoy things in certain mental states they're in. Understand what is actually addictive about it. So, I always tell this story about roulettes. I ask them, “Why do you think there is a board recording previous numbers?” I once spun 25 red numbers in a row in the casino, and obviously, people were losing their house because they were betting on black. And mathematically, obviously it makes no sense whatsoever, right?
So why is that there? And then when you learn a bit and should leave these to people who know game mechanics and game design on an academic level, which I don't, but you realize, “Well, okay, so the human brain is super incapable of dealing with randomness.” We are not wired. Randomness screws our brain over. So, when you're dealing with an activity that is entirely random and you suggest that there is a pattern to this, the brain will become fixated. It'll be like, “Yes, there is a way to understand this chaos, which I cannot deal with.” So, I will desperately try to see the pattern. I will break this code because my brain, it's a brain disease, otherwise I cannot accept that things just happen randomly. You see it with poker. People cannot for their life naturally understand alts.
Even if I played thousands of hours still I'd be like, “Man, I got unlucky.” And it's like, “Well, actually I didn't, but it just felt like I was so unlucky, right?” We are so bad at it. So, when that board is there with all those numbers, you'll be like, “Yes.” And then that's the addiction. The addiction is to solve that unsolvable puzzle and you'll chase it. And that's again why I said people will try to count cards in blackjack even though you're using a shuffle master because there's a way to solve it. Right? So, understanding those things, everyone in these companies should understand these things so they understand what are we tapping into? What are we positively tapping into and when are we exploiting it, right? When is it positive? We have now left the reign of where it's sound, where it's healthy. Now, we're just exploiting. We know we can push that button in your brain forever and you'll just keep desperately chasing.
And then maybe you can design experiences that work with all of those states they're in. Because I mean, you see them all. You see the person who has just gotten some inheritance or something and suddenly they have money they never thought they would have. And they decided maybe I can spend a bit of that in a casino because I've never been in a casino and had that experience. And they play minimum blackjack and minimum roulette, and they start winning and they have an excellent run, they actually leave the casino ahead. Next day they come back, they convinced themselves that, “I cracked roulette. I figured out how to beat it.” Right? I was like, “You can tell them whatever.” They're like, “Yeah.” Even though there's zero and then obviously they start losing. So, this is weird. This shouldn't happen. I won yesterday and I did the same thing today. So clearly, I just need to double up every time I lose and then eventually, I'll win. And then suddenly that inheritance is gone, and they become addicted. And it's like once you've seen it, once you've been around it. And like you said, online is too detached from it to actually really treat it the way it should be done to say stop when it needs to be stopped, to say you need to go over there when you need to go over there. Because like you say, I mean once you've crossed the hurdle, there is a limit to what one operator can do. I mean, they'll just go to the next site and then ultimately to a black-market site.
Sports betting is another one. You see the game after the game, all the people were either brilliant because they knew that that holding call was going to change the Super Bowl and they were the winner and they got it right, they picked the right side, or they got absolutely screwed and the world is conspiring against them, and everything was out to get them. And they were so unlucky because they had the right side, it just got a bad call at the end.
And so, it doesn't matter what the story is, and that's where part of me thinks we have to go down the route and this is where the RG content would be so much better. I have a 10-year-old and an eight-year-old. I work with them on these things and identifying these patterns where it's just logic, like you said, it's a brain thought that's wrong. And when we can identify, then we can learn from it and almost laugh at it or spot it. And that's where I think until you identify and communicate to somebody what's going on, hey, you're looking for patterns again, and you can almost make a joke out of it, I imagine, because you've done it and you fall for it. I fall for it. We all fall for it. But if somebody that we respected or somebody just stepped in and said, “Hey, you're doing it again. Here it is.” Then it would allow us to take a deep breath and almost casually bow out and be like, all right. Right. Thanks. Thanks for looking out for me.
So, the idea that you could actually, that's the one game where you can actually beat the odds, right? Leaning into that, which we did. I did. Every way it could. You can become the new blah, blah, blah. All of that was so easy, so appealing, and so short-term effective because obviously that played into something that played into a certain type of competitive person that resonated so well. The problem financially is not everyone obviously could live up to that idea. And once you didn't, then why the hell were you in this thing? What poker should have done, I should have done, everyone should have done is be like, “Look, the idea that you can actually control your own outcome and actually become a winning player if you're really good or get lucky or whatever, doesn't need to be sold. It totally sells itself. It will be evident for everyone. They will discover this and love it for what it is and go for it.”
What the industry needs to do is frame and create a narrative that means this is a sensible undertaking, even though you're not one of those few who actually manages, for whatever reason, to beat the odds, right? What are they for? Here is this idea. If you cannot spot the sucker in 20 minutes, you're the sucker, right? That's what we did. And then we didn't realize, “Oh, man, we're turning out eight out of 10 players. We're telling them they're suckers.” So, once they gave up maybe on the dream and be like, “Ah, I am probably not going to be the next Daniel Negreanu. I'm not going to become a millionaire from this, so why the hell am I even playing?” Right? The industry should have spent every dime. I was like, “Look, look, look, look, look. This is about sitting down with strangers playing for five bucks, trying to beat those and enjoy it for what the glory of that is.”
That will resonate with some people and some not. And play crazy hands, make some cool plays. If you win, great. If you didn't, you lost five bucks, right? Who cares? Right? That's the story. All the other stuff that naturally comes with poker, again, will take care of itself, right? You don't need to market it. It will take care of itself. So that's why the poker industry fell out of favor business-wise, because it couldn't maintain its mainstream appeal in that sense because it basically told all the people it relied on for deposits that why are you doing this, right? Why are you doing this, right? So again, this is an example of there is sustainability to create, right? But if you approach it the wrong way, you end up what the state industry is in now.
You talked about going wider from gambling to gaming. If you go to that, this is what we do as humans and understand that and educate people. You can bring more people in to say, “This is something we want you to come and blow off some steam and have a good time, just like you go to the game and expect to lose.” I don't think we've done a good job of telling that story. And so, we're attracting way too many people that were me at 22, which is, “I want the shortcut. I don't want to have to put in the work at the time at work. I don't want to do these things. I'm going to use poker as this quick little win.” And I had enough success that I could point to those couple of months or sessions where I could say, if I just do that and I get rid of the sessions where I lose my mind and blow through my entire bankroll in 20 minutes, then I'll be okay. But that's the danger. And that's where we really, it's kind of a public education of just the general public on how to take on risk and how to not take on risk.
And then there's also this general idea, and this, it goes back to tradition and you shouldn't break what isn't broken, but this idea that evolving product means giving more choices. You can now do parlays on three-point throws or whatever. So, we just need to stack more stuff in there that people then have to create their own experience from instead of us saying like, look, if you are player type X, it's fundamental marketing, then you are driven by Y, Z, H. You are here to experience this, and we have packaged something together that actually delivers that and that is for you. Buy it, enjoy it, you're out. Not having to be like, here's everything we have to offer. Find your own enjoyment in it.
It's like this disbelief in you as an operator unable to understand your customer to a level where you can't even figure out, so you go, oh, personalization, right? We'll do personalization, but that again is based on the same mentality. We do not know what you want. So, we will tell you what you want based on what you've told us that you've so far wanted. So, our ability to show you something new or intrigue you even more we don't believe in, so you're just going to be stuck in a loop of your own prior preferences and that's just so like how is that innovative? How is that changing anything?
So again, there's just this mentality that people don't, you see a lot. There's a lot of fun stuff done in fantasy sports. I think you've seen much more people taking that concept in all sorts of interesting directions trying to simplify it or do something creative with it, which I appreciate. There are some sports betting free-to-play games that do some fun stuff, but I still think there is across the board so much more that could be done to be like, here's what you're here for if you are this type. If you are someone else, well, you should be playing this. The conditions for playing this are completely different. You are a winning sports better, we know this. And we can shut you off completely. We'll just close you down or we can try and see if maybe there's something we can build where our common interests can be. We can get something out of you and you can get something out of us, right? I'm sure there is. But then you have to, instead of having this completely open streamlined product where everything is available to everyone, and you get all sorts of problems stemming from that.
And to your point, the free-to-play, you can try it, see if you like it, if you enjoy it. We think this is a natural extension of what you're doing with your friends when you show up at those places. Like I said, the in-person gamers that are playing all sorts of different things.
So, when that started, I can't remember what market that regulated, but now there's actually an opportunity to partner with Zynga and just see it as an acquisition tool. We try to acquire players from Zynga Poker and then we monetize them, and it turned out that completely failed, which the reason being that playing free-to-play poker on Zynga Poker is fundamentally a different experience. Not a worse experience. It's a different experience from playing real money poker. So those people were like, oh, you can't win anything, that's crap. But it turned out, I wasn't because at that point I was already, I learned my lesson. It was like, well, they're not going to convert because they actually are getting what they actually like. They're not playing this because the other thing isn't available. They're playing this because this is what they like and that is still free-to-play poker, is still like a $400 million a year industry. I know in 2021 pretty much all of the top 20 social poker apps in the world grew, right? It's a thriving functioning business that has a revenue stream that is completely, mostly separate from what gambling poker sites have. So this is an example, like you're saying, if that's your customer, number three, that's what they need to be doing. That's how you need to monetize them and then something else works for someone else.
So, it's having this understanding of each one and figuring out what is the best way to monetize you in a sustainable manner and some ways are more efficient than others. So obviously, you are going to try the efficient and most LTV (lifetime value) potential ways first and if that's sustainable and you can do that without too much risk, then go ahead. But if you can say like, oh no, no, no, no, this is not going, this is going overboard, then maybe you can find another way to do it. Maybe there's a subscription service you can provide that means you get $20 off of them and they get to play their brains out and they get all of their fixes and you at least get 20 bucks from someone who otherwise would've gone across the line and ruined their lives. So, I think that's where so much of the discussion needs to be again, about what does the sustainable future of a gambling operator in the U.S., in Europe, what does that look like?
The problem in the U.S., I would say, isn't that lifetime values have turned out to be less than people thought. All the problems are in acquisition. All the problems are in acquisition or that's where the problem is. That is the affiliate, and I don't get popular for saying this, but the affiliate model, the affiliate system, you cannot have, if you have a system where the stocks of the operators are tanking and the quarterly reports of the affiliates are saying like, oh, we had a great year. You have to recognize what's wrong here. Isn't this supposed to be a win-win? Wasn't my success supposed to be your success?
But it turns out if you buy a player for a massive CPA (cost per acquisition) and you do not have a product differentiation, you do have some brand loyalty maybe, but you don't really have a product differentiation because you're sourcing the games from the exact same companies and the affiliate then goes, and I'm simplifying, then immediately sells that player to the next place once the bonus is cleared. A, it's going to hurt, that by itself hurt your LTV that you thought you were going to have and it's just not going to create a win-win scenario.
And then look at what they're paying, look what they're spending in marketing and there's so much that could be shaved off there. Again, gambling sells itself. It's one of those things. You don't actually have to market it. People just need to, yeah, you have to market it because you want the market share instead. You want them to gamble with you instead of someone else. But fundamentally, you do not need to tell people that they need to do this because the section of the population that has that in their genes or in their DNA will want to do it. So that is where so much of the issues in the U.S. lies, and it was the same in the Europe and I am notoriously anti-affiliate or anti how these deals are structured and how they play out.
And then you obviously have the effect in the U.S. also of people taking the scorcher approach of saying, I'm just going to dump so much money into this, I'm going to basically kill all of the others so I can get the monopoly and oops, maybe it turned out that I wasn't successful enough at doing that fast enough, so now I'm in trouble and I basically burned the market. I burned the margins, I killed the margins for everyone involved and now the entire market is in trouble. And that's what unfortunately is what draft games tried to do.
And it turned out unfortunately that companies like FanDuel, etc., could hang on and be better and be smarter. So now obviously they didn't get that dominant market position, so now it's just a clown show. And I don't care. I've no investment, but I think I care for the position of what I see, what it does to the market as a whole, and I think that's a shame. I don't think it helps the market. Because, again, it means they're chasing revenue. In the last quarterly report that DraftKings just released, they probably announced that they've increased revenue. And I tweeted that is the least, if you want to operate responsibly, fine. It's not negative for you that your revenue's increased, but that's the least important KPI (Key Performance Indicator) that you want to increase because that increases risk. This means you've taken more money from players that ultimately may have lost more than they can afford. The KPIs you want to increase are the margins and things like that, which means, okay, we can make a sustainable business without sucking so much money out of the market. So that's why I've always cared about that. I just think it's a shame and I don't think it helps movements towards this more sustainable vision when companies are clawing just to stay above water. I don't think that's going to make them more responsible.
Because like I said, I don't think there's anyone in the industry who is so critical of it who still is able to talk so passionately about it. And I can talk for hours about why slots are fun, why I'm playing roulette this long, why poker is one of the most amazing games ever created, why gambling makes sense, etc. I just happen to have a naturally critical approach to things and focus on the things I think within the industry I think just needs to improve. So yeah, hopefully we can have a similar talk again and cross paths.
Thank you for hanging out for another episode of The Dyve Agency podcast where we chat with experts that have a wide range of views to add much needed depth to these important conversations. If you enjoy the podcast, remember to subscribe and to like and share the podcast with other people so that we can expand these conversations out. And if you want to be a guest, hit us up. Let us know and we'll be glad to have you on for a future episode. And finally, if you want to learn more about Dyve Agency and how we can help you create a strategy to navigate and improve your responsible gambling efforts, be sure to check out dyveagency.com where we have a blog as well as following us on LinkedIn and Twitter. That's all for today, and I look forward to seeing you in another episode where we have another deep dive discussion.