Rivalry Corp.

Q1 2023 Earnings Conference Call


spk00: Good morning, ladies and gentlemen, and welcome to the Rivalry Corp. First Quarter 2023 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on May 24, 2023. I would now like to turn the conference over to John Vincic, Investor Relations of Rivalry Corp. Please go ahead.
spk04: Thank you, Joanna. Good morning, everyone. Our speakers on today's call will be Stephen Saltz, Co-Founder and Chief Executive Officer of Ravelry Corp, and Kata Corey, Chief Financial Officer. Before we begin, I would like to remind listeners that certain statements made during this conference call presentation may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of rivalry corp and its subsidiary entities or the industry in which it operates to be materially different from any future results performance or achievements expressed or implied by such forward looking statements. When used in this conference call presentation such statements use words such as may will expect believe plan and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation. These statements involve known and unknown risks, uncertainties, and other factors, including those risk factors identified in the company's annual information form dated May 1, 2023, under the heading risk factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under securities legislation. And now, I would like to turn the call over to Stephen Saltz. Stephen?
spk06: Thank you, John, and thank you, everyone, for joining us today. Today's first quarter 2023 results are very exciting, setting all-time quarterly records for betting handle, revenue, gross profit, and our narrowest net loss yet, making that five quarters in a row now of narrowing net losses, charting a continued path to profitability. Given that we released our preliminary Q1 results last month, I will take the opportunity to spend a little bit less time talking about the numbers and more time drilling down into the strategic choices that have enabled us to continue delivering consistent growth year over year. I'll briefly go through some of the first quarter highlights since Cato will be discussing the results in more detail shortly. Betting handle was $120.2 million, tripling year over year. Revenue of $12 million increased 150%. Gross profit of $5.4 million was up 8x. And a net loss of $3.3 million was 50% lower than Q1 2022 and our narrowest net loss since going public in 2021. Each of these figures are in line with the accelerated growth we've been delivering for years now. And as I said on our Q4 investor call, rivalry is at an inflection point where the operating leverage created through our market strategy is meeting scale in the business. And if we continue to grow as we have been, profitability is within our sights. For now, I'd like to take a step back and speak to some of the ways in which our first quarter results validate our strategy and highlight what is driving our growth. First is the audience. We are executing against a targeted demographic of millennial and Gen Z consumers, which accounts for 97% of our active customers. It is this focus on next-generation betting and entertainment that guides the vision and direction for the company. This is a fast-consuming, digitally native customer cohort with unique consumption habits and entertainment preferences. Everything from our product to our brand and marketing caters to this core audience. This allows us to tailor the online betting experience from the ground up with this specific demographic in mind, and avoid the challenges of pursuing a much broader and mature audience that is oversaturated by our peers in this industry. Technology and design is a cornerstone of this approach, arming the company with significant capacity to continuously innovate on product and further create a betting experience on rivalry, which is original, engaging, and entertaining. The byproduct of engaging in fun products is increased user activity and satisfaction, translating into enhanced player values and margins. Whether that's exclusive casino games developed in-house, or original sportsbook features that separate us from competitors. This represents a material competitive advantage in our eyes. Next is building a great brand, organically loved by an audience of the Internet. Our leadership position among next-generation users allows us to acquire customers profitably through organic, word-of-mouth marketing and retain them through an affinity for our brand and pairing that with an incredible original product. We have demonstrated quarter after quarter that this approach can grow the business in such a way where increases in marketing spend are not linear to top-line growth. This was demonstrated quite clearly in this quarter, where we delivered multiple 100% growth on all KPIs year over year as compared to Q1 last year, with a 5% reduction in marketing spend and that loss being 50% lower. Content and media underpin this brand strategy, fusing world-class creative and entertainment with over 100 esports and gaming partners to engage online communities globally. In Q1, we added several new partners from top esports teams to influential gaming creators, establishing authentic touchpoints between our target audience and our brand that enhance our ability to activate customers around 10-pole events and tap into significant cultural moments in esports. And as of recently, we surpassed 85 million followers across our own media properties and creator partners combined. Collectively, these initiatives speak to our broader thesis and ambition to become the global leader in betting entertainment. Rivalry behaves much differently than our industry peers because we don't look at our business purely in the context of sports betting. Instead, we take inspiration from other great consumer products and category leaders, which wrap entertainment around the product and brand experience to create something unique for fans. We believe this is foundational to success for any consumer product targeting the next generation of consumers. The product transactionally or functionally working well is only one piece and expected from the customer. The real key is how well you can inject entertainment into the experience as a whole and ensuring there is connective tissue between that on-site or on-product entertainment experience and the outward facing brand you create through every marketing touchpoint. Truly doing this well is incredibly challenging and importantly, not something you can just buy. It takes time, a talented team, and a relentless year after year focus on honing product, brand, and marketing into one unified experience. The results of striking this balance speak for themselves and is the operating leverage we speak to so consistently on these calls since going public. I'd like to spend a minute providing one specific example of this product, brand, and marketing unity. Rivalry stands out from many sportsbooks by not being a combination of plug and play white label solutions as is so commonly utilized in our industry. The majority of our technology, as mentioned earlier, is built in-house, giving us the freedom to create custom features for almost everything, which we take advantage of as often as possible. During the launch of our cash-out feature, we wanted something that fit our brand more closely, so we introduced it as an animal-themed feature called Chicken Out. This is our version of cash-out, but rather than a sliding bar of your cash-out value on a bet, it's a chicken that starts as an unhatched egg and eventually turns into a rotisserie chicken, depending on how much of your bet you cash out of. To market this new feature, we created our own extended cut of the Are You Winning Sons, which is a popular internet meme among our demo, which introduced a new character to the mix, the chicken guy, who comes in to save the day. Chickens are also a visual motif of Counter-Strike Global Offensive, also known as CSGO, one of the top three esports and bet on titles at Rivalry, as they appear frequently throughout user gameplay. The next marketing campaign was to send a very muscular guy in a chicken suit to attend the biggest CSGO event of 2022, IEM Rio. The brand activation successfully hijacked the event for free as a rivalry chicken guy appeared live on global streams in front of hundreds of thousands of fans, featured on the official Twitter account of the event with over 1.2 million followers, and even making his way into the much-hyped after-event video on YouTube. But it's not over yet. Just when we thought the chicken train had slowed down, the muscular chicken made another appearance during a popular Twitch stream live in front of 15,000 plus viewers. It turns out that the CSGO community of this streamer liked the chicken guy as much as we do, so much so that a user handcrafted an in-game sticker for him. This is an in-game item in CSGO that now features our character, which again is tied to our product cash-out feature, Chicken Out. And it's still not over. Recently, we recruited some of South America's biggest CSGO content creators, bringing a combined audience of over 2.3 million fans into our network, and officially launched our partnership with them in a video that became Rivalry's most watched piece of content in 2023, with nearly half a million views in just a few days. In this video, we turned this chicken character, Chicken Guy, into an even deeper character IP of Rivalry's where he features as a mob boss. This character is increasingly becoming beloved in the region. And as of just last week, our chicken guy and new content creator crew headed off to Paris for the 2023 CSGO major, where they created a ton of incredible content and entertainment for this community of fans. So all this may sound a bit crazy, but really that is entertainment. And that is just one piece of marketing for one game in one region. We do this everywhere. And that is product connected to brand and marketing. And this is what we do and how we've increasingly found strength as a brand that is translating into results. It is my belief that our ability to do this at scale with the completely beloved brand now is beginning to set the industry precedent for betting entertainment and demonstrating that we have been able to carve out a powerfully unique position in a highly competitive sector. At this point, I'd like to turn the call over to our CFO, Keita, to review our financial results in greater detail.
spk01: Thank you, Stephen. Our first quarter 2023 results were largely consistent with the preliminary results we announced a month ago. Q1 represents a very strong start to the year for rivalry with record highs across all our key metrics. Betting handle was 120.2 million, 43% higher than the previous quarterly record of 83.9 million that we just set in Q4 of 2022. Handle was split roughly evenly between the sportsbook and gaming segments. Sportsbook benefited from the busy esports calendar, which has typically resulted in a seasonally strong first quarter for our business. Sequential growth in Gaming Handle reflects the ongoing expansion of our casino product offering, as well as continued adoption by our user base. Q1 was the first full quarter of our casino.exe platform, which launched in November. We also introduced table games and live dealer in January and brought casino.exe to Ontario in the final weeks of the quarter. The build-out of our product offering has resulted in sequential increases in Gaming Handle of roughly 20 million per quarter in each of the past three quarters, taking us above 60 million of handle in Q1. The addition of a new revenue stream is reducing, but not completely negating the impact of seasonality in the Sportsbook segment. First quarter revenue of 12 million was 2.5 million higher than our previous record established in Q4 2022. Sequential revenue growth was driven entirely by the Sportsbook segment, which delivered 10.3 million of revenue, up 3.2 million or 44% from the previous quarter. Sportsbook accounted for 85% of revenue in the first quarter, despite representing half of our betting handle. The difference is partly due to normal variability of winning percentage within each segment. In general, we're seeing less volatility as the volume of betting grows, and this will lead to greater margin stability. In the case of the gaming segment, we've made a deliberate decision to offer casino games with higher RTP or return to player to be consistent with our overall brand and the customer experience we choose to deliver. The offshoot is that a given level of gaming handle converts to a smaller amount of revenue dollars in gross profit for us relative to Sportsbook. However, as noted previously, it is the consistency of this revenue profile that supports the overall growing stability in the business. Gross profit was 5.4 million in the first quarter, up from 5 million in Q4 2022, a sequential increase of 9%. As a percentage of revenue, gross margin of 45.5% was slightly below the record high margin of 53% in Q4. Gross margin was still well above the 31.4% we saw in full year 2022, which included a 14.3% margin a year ago in Q1 2022. We're pleased with the overall trend, which we believe is due to operating leverage as the business continues to scale. We're also encouraged by the trend in our operating expenses. Total operating expenses increased by 1.8 million, or 25% from Q1 2022 to Q1 2023. This compares to $7.2 million increase in revenue and a $4.8 million increase in gross profit over the same year-over-year period. Two line items accounted for the increase in operating expenses. General and administrative expense was up by $2 million due to the increased headcount and professional fees associated with running a larger organization. And technology and content was up 0.8 million, also due to the scaling of the business, which drove higher fees for odds providers and technology support. The remaining OPEX line items were down by 1 million year-over-year. Share-based compensation accounted for most of the decrease, and as Stephen noted earlier, marketing, advertising, and promotion was also down by 147,000. Discipline management of expenses is an important component of our path to profitability. The net loss of 3.3 million in Q1 was half of the 6.6 million net loss we reported a year earlier. It also marked the fifth consecutive quarter of narrowing net loss for us, assuming we used the adjusted net income figure of 4.9 million we reported in Q4 2022 to make the results directly comparable. Once again, operating leverage is driving the improvement. Turning to our balance sheet, we ended the first quarter with 8.5 million of cash plus restricted cash of 4.5 million totaling $13 million, and we remain debt-free. In addition to this cash figure, the private placement we announced subsequent to the end of the quarter has further strengthened our balance sheet, totaling approximately $7.3 million closed in our first two tranches. At this point, I will turn the call back to Stephen to discuss our outlook.
spk05: Thank you, Keita.
spk06: We are entering a new phase of the sports betting industry. The initial rush to acquire customers through endless player subsidy is quickly transitioning into long-term economic strategies to engage and retain customers. More than ever, the focus is on product innovation, media, and brands. Shifting the industry on a course rivalry has been charting for many years and signaling the value in an approach we pursued since our founding. We have a number of exciting initiatives planned in 2023 to build on our current momentum and unique position in next-generation betting entertainment, including Expanding our esports offering to deepen our core product, attract new customers, and establish the most comprehensive esports betting product globally. Launching our mobile app in Ontario to increase the accessibility of our product and grow the esports betting category in regulated markets. Evolution of our iGaming product with the introduction of additional third-party games, as well as developing new exclusive casino games in-house, which could further cater to our core users. Continuing to partner with top esports creators and influencers to extend our brand reach and engagement to new regions and audiences, and geographic expansion of our products and a possible expansion into new markets. All of these are designed to create long-term value for Rivalry. In the near term, we expect the second quarter to continue the pattern of triple-digit year-over-year growth across the majority of our key metrics, although we don't expect to see the same kind of sequential increase as in recent quarters. As Kata described, seasonality is still a factor in esports, which represents approximately 90% of our sportsbook handle and the majority of our revenue. And the timing of major esports tournaments has always made Q1 and Q3 our strongest quarters. We expect to see continued growth in casino, but at a much more stable rate as the offerings settle into our product suite. I didn't address our recent private placement because we covered it on the last call, but the injection of cash provides additional fuel to fund the growth initiatives I've described. I'll stop there and open up the call for Q&A. Operator, can you please provide the instructions?
spk00: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Adhira Kadavi at 8 Capital. Please go ahead.
spk02: Hey guys, good morning. Thanks for taking my questions here. I just want to talk about the casino product a little bit more. So we did see a pretty good sequential growth in the handle, but revenue was kind of down a little bit more. Can you just kind of just unpack that? Is that mostly because of the win margin? And I think Keita might have touched on it, the return to player. Is that kind of the explanation there? Just kind of looking to unpack that a little bit.
spk06: Yeah. So the RTP or return to player of the games that we've chosen, which are mostly like instant games, they're called in and table games. Um, it's like 97%, 98% even meeting the inverse of that is theoretically our margin, like two to 3%. It's a bit lower than other games. You could definitely select, um, But as Kate mentioned, we do that deliberately just because a big part of our brand is the way that we handle and treat users in a manner that is more consistent with this being a casual product that we are trying to operate at volume and have an even distribution of revenue, I guess you could say. So our intention is really just to have stuff that people want to play where they're winning relatively consistently. We're taking a little bit as well, obviously, along the way. and just increasing their overall dwell time on the site. Because if you pick like a low RTP game and users are losing relatively consistently, they're just more likely to churn. So you may make a little bit of money quicker upfront, but I think you risk them churning a bit faster. We talk about Rivalware a lot as like an entertainment product intrinsically, which is what we're trying to do. So the more dwell time, i.e. times people spend on the site, the better for us. So yeah, it's really that the average margin in our casino product is like half that of our sports book or even sometimes less depending on if we have a good month, let's say here or there on the sports book. So yeah, sports book was, let's say 75 to 80% of total revenue, even though it was only, you know, 50 to 60% of, of wagers. So I think we'll probably continue to see that distribution if I had to guess more or less.
spk02: Okay. Um, very, very helpful. And then just maybe on the mobile app, I think you mentioned last quarter, you know, you had a you had the users on your users in a in a soft beta, just kind of like, want to unpack how those user trending what are their what are you know, some of your learnings from those users? Are they betting more? Are they are they betting less and maybe just a timeline to the full launch of the mobile app in Ontario?
spk06: Yeah, I don't actually have like those exact data points on hand, I'd say um you know if you go to the app store and search rivalry you may or may not find our app um but uh so i think that the full launch is very soon i would say yeah um but yes if you go to the app store and search rivalry it is conceivable you may find it right now okay gotcha um and then you know on on measurability you know you guys have a very good uh
spk02: you know, social media campaign. Clearly it's been working as we've seen with the results. Just maybe, can you touch on how you guys kind of have, how you look at measurability? Is it easy to kind of, you know, pinpoint, like for example, you talked about Chicken Guy this quarter. Is it easy to kind of pinpoint that that was a reason for like an increase in betting? Just kind of thinking about measurability of your campaigns. How are you guys thinking about that?
spk06: Yeah, we've been pretty good sense in terms of the breakdown between attributed acquisition, which is somebody using, let's say like a referral code that a partner gives out and then unattributed just because we've been doing this so long now. I'd say if you asked us that question, like 2019, 2020, we probably would have been so sure. But now we've just repeated this so many times. We've worked with literally like hundreds of influencers and creators, you know, a dozen plus e-sports teams. We've put out, you know, many, many, many campaigns like chicken guy. that are very, like, content, very word of mouth, kind of looking for morality driven. And I'd say that, like, we have a very good sense now of the relative impact of a thing like that in terms of how it represents a betting handle acquisition, all that kind of stuff. So, yeah, I'd say we're pretty dialed in on that. Like, we – We have almost like an internal formula now where we're quite efficient on knowing the return. So yeah, there's not a lot of wasted spend. I think part of why marketing spend was down 5% in Q1 this year, despite growing so much relative to Q1 last year, is just the effectiveness of that targeting and the effectiveness of our internal model in terms of understanding what the potential outcome of something like a chicken guy showing up on a stream may actually do for the company.
spk02: Okay. Gotcha. And then just last one for me, you know, bolstered balance sheet, you guys finished the, the financing last quarter. I know you touched on this, but maybe just give us a sense of your capital allocation priorities based on the, the criteria you guys laid out before, where are you kind of thinking to like, you know, call it one to five, like where are you really thinking of spending that money?
spk06: Yeah, I'd say like we look at the company again in like three really broad pillars and this is how we would think about anything like, you know, M&A or anything like that in terms of from a more biz dev perspective than even internally, which is we have like Rodware Sportsbook or our core product, which is enhancing, as I said earlier, like enhancing the core esports product offering, which is just like R&D engineering efforts, Things like that. And then also just increasing the actual like geographic surface area we can accept as in like new market expansion. The second is like rivalry games, which is enhancing the casino.exe products, investing in original game development, which we are. We're expecting to have more original games out this year. And then the third is like rivalry creative or content, which is everything we do, like the chicken guy, which is investing in, you know, really great creative content, everything that drives like the acquisition strategy. So I would say that we're going to like evenly distribute across those, those three. But if, if, if I had to, if I had to weigh it, I would say, you know, we're probably, um, you know, 40 to 50% would be in internal R and D engineering efforts to just continue developing and building the product, hiring great people, just adding to the team, everything required to do that. And then all the things associated with geographic expansion, which is those kinds of things like bringing in great people.
spk05: Um,
spk06: And then maybe probably another 30 to 40% would be on rivalry, creative and marketing as in all the content efforts and everything that we do. And then, you know, the last 10 to 15% would be in our games team and internal efforts to enhance the casino offering and original product and game development. So yeah, like I think we're pretty fairly evenly distributed among the external facing creative brand piece of rivalry, the internal facing product and engineering and original development and And then, you know, our innovation piece that is maybe smaller capital allocation simply because the team is smaller would probably be everything we do around game development, but it is an important piece, which is probably why we pull it out and talk about it so often. So, yeah, not sure if it's like the greatest answer, but that's kind of a broad swipe at how we look at it.
spk02: No, fair enough. That was good color. And then maybe just kind of,
spk06: know entering more regulated markets how are you thinking about that for fiscal 2023 yeah there's still like one regulated market in europe i think we've mentioned in the past that we we we like it is somewhat capital dependent so i think it depends on like our overall comfort on that side and it's a market where there's not really any net new licenses issued so a lot of it has to do with are there licenses for sale and then the prices there can vary a bit so I think it depends like a little bit on the capital markets environment overall. Um, I think generally we're pretty happy with like our core portfolio right now, our existing regulated markets, the markets we have under the Isle of Man license. And then there is much lower costs like adjacent expansion in our regions where we don't have say like a dedicated team and marketing budget, but we see organic inbound because you know, a Spanish speaking effort that we do in a country in South America is naturally going to bring in other Spanish speakers within South America. So if we start to see an opportunity in a market that is available under our Isle of Man license, staffing a team and installing a little bit of marketing budget there is much lower cost than opening up an entire new regulated market environment. So it's always a balance. I mean, that's why we've got Australia and Ontario in our markets under Isle of Man. I think we're going to continue to just like approach with that balance, I'd say. But yeah, at the moment, there's one regulated market in Europe, which remains kind of our target, the one that we're taking a closer look at and evaluating.
spk05: Excellent. Thanks, guys. Congrats on the results. Thanks.
spk00: Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star 1. Next question from Ken Lester at Lester Asset Management. Please go ahead.
spk03: Hi, Steve. Excellent quarter. Keep up the great work. You know, recently I've noticed that there's articles in the papers that looks like it's possible that this sort of free for all for advertising, you know, gambling sites, especially on TV is going to come to an end. I mean, it's so hypocritical and scary in a way that they allow, you know, Connor McDavid and Austin Matthews, you know, current superstars to be marketing. Anyways, all to say that it seems that this should favor you guys a lot because the, you know, it's been an uneven playing field where they spend, throw tons of money at these marketing campaigns and, you know, hopefully they'll be wrong that, you know, it doesn't come back in terms of profits, but if they're right, that's, you know, very bad for people like us. Anyways, all to say that, what do you think about that? And do you think that if they do put legislation in, you know, how much that could actually help you with, you guys are so good at organic growth and so on?
spk06: Yeah, I think like, What's been interesting about the Ontario market from a headline perspective is because I think it's, I think because it's a new regulated market, there is a lot of, I feel like press attention on it. And therefore things that are maybe normal course and more mature regulated markets, something like this, for example, is that like evaluating marketing standards gets like a disproportionate amount of headlines and it gets people questioning in a way that may be more significant than the actual weight of the issue. Again, because I think Ontario is very new. Lots of people are excited. There's lots of eyes on it. Therefore, any kind of whisper generates a headline. So, yeah, we've been somewhat like involved in this process and they put out like a consultation to the operators to discuss and understand these proposed changes. I think like, yeah, I mean... would it make it harder for a more classic vanilla operator to promote themselves in the market that is used to doing these very like top of the line marketing deals with celebrities? It would. I mean, they're going to struggle more to differentiate among each other. For us, we don't really see an impact because as you mentioned, like the marketing is very like social word of mouth and like content driven, even though we do some of our own content creators and things like this. I just think that our entire operating posture, and Ken, I think you know, because you've been involved since we started the company, we just don't really focus on what others are doing. And even if this is a thing that impacts them, I'm not really sitting here thinking this is some win for us, if that makes sense. We operate in such a different way. We market in such a different way. It's such different avenues to them that we're not worried about them encroaching into our space. And if theirs gets smaller and shrinks, we don't really care either, to be totally honest with you. So I think for the consumer, it might be better. You're not going to get completely bombarded by betting ads every single time you're watching a Blue Jays game. So I think that'll be nice. But yeah, I think we're so used to doing our own thing and not really bumping up against other operators that whatever kind of happens in their world that impacts them, we're not overly focused on it, to be honest.
spk03: Well, Steve, I think, I think you're being a little conservative there. I, I, I think, and I hope you're wrong that, uh, I do think that they will be an impact. I think that, uh, you know, once, once you remove that kind of advertising and that kind of, you know, it's amazing to me that, uh, they allow it. It's amazing to me that Gretzky would do it. It's amazing to me that Connor McDavid and Austin Matthews do it and, and many more. And, you know, it's, uh, it's kind of thing, I think in the future, they're all going to regret this. And, uh, They could be selling heroin. It's something that people can be addicted to, as you know. Anyways, all to say that I think it really will help. I think that the organic growth that you achieve and others will then look at you and say, what's rivalry doing? How can we grow that way instead of television ads? They don't even allow cannabis ads on TV. There's really a lot of hypocrisy there. Go ahead.
spk06: Yeah, we're... We're seeing this even in other markets though. I mean, for example, like I think you have, um, you have, uh, drop things created like a 24 seven news channel. We're seeing a lot of these other like media podcast style deals, like essentially large operators are also trying to create like their own independent, um, media channels and categories to do maybe up similar to what we do, but they're trying to own their acquisition channels as much as they possibly can. just stay vertically integrated on that side so i think you'll see more of that i guess like there's other risks where like you know an operator that is spending a bunch of money on that kind of top of the line marketing may redirect it to a different avenue that although less um optically quick you know although it's less in your face like a commercial watching a blue jays game it'll be something you know where they're targeting you perhaps more aggressively over email or something like this so so there's going to be like you know, a give and take here. I think where it nets out is they're going to find some balance. Like there are other markets that have other standards. So for example, in Australia, which is another market that we operate in, there's marketing standards around up until what point you can basically show a commercial for sports betting. So, you know, if you're watching sports in Australia, I think I could be wrong on this, on the exact like precision of it, but You know, basically you can only advertise up until maybe like 10 minutes before the game starts or something like this. And then during the actual main broadcast, you don't really see anything. So there's like different stuff that you can do where they can maintain some ability for the existing operators that already have longstanding deals. They paid a bunch of money for it to maintain them. They're just going to have to tweak it in such a way where the consumer impact of being hit by betting ads constantly in the middle of the game wouldn't really happen anymore. It'll be kind of like bookending it in some way. So, yeah, I think in that, though, maybe something like that in the end. But, yeah, it's interesting to see how Ontario is looking at this and developing their thoughts around it, obviously.
spk03: You know what? I think you're right, Stephen. I think that there will be adjustments, as you say. And it's interesting, the Australian example. I'll just leave you with one thought at the end. I saw an ad recently that said Bet365 is the official NHL hockey betting site. I mean, isn't that incredible that they would pay the NHL money and the NHL would accept that? But anyways, thank you very much, Steve, and I'll say goodbye.
spk05: All right, see you again.
spk00: Thank you. There are no further questions. I will turn the call back over for closing comments.
spk06: Thank you, operator, and thank you, everyone, for joining us on our Q1 2023 results call. And we're happy, as always, to continue the discussion offline if anyone has any additional questions.
spk05: Thank you.
spk00: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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