After Yolo Group announced it would shift away from its unregulated crypto casino model to operate in only regulated markets, B2B CEO Lara Falzon explains how the business is instead invested in creating a robust, high-value proposition.
“As a group, we’re deliberately shifting away from that short-term cash mindset,” Falzon tells iGB.
She says the company is leaning on its “truly unique” technology platform to drive its new strategy.
“It’s highly agile, allowing us to enter new markets quickly and deliver exactly what customers want,” Falzon tells iGB. “We believe that, combined with our ecosystem of live studio, slots and aggregation products, this agility gives us a strong advantage.
“In the regulated space, this means we can move faster than competitors, adapt to local requirements efficiently and provide a superior, compliant experience for players.”
In September, Yolo announced it would incorporate its Sportsbet and Bitcasino brands into the single Yolo.com brand, which it would utilise to target Tier-1 regulated markets.
Yolo has already secured two gaming-related vendor licences for its Hub88 Holdings and Live Online Gaming Services subsidiaries in the UAE. These licences will allow Yolo to supply iGaming content to the regulated market in the UAE.
With Yolo having enjoyed a hugely successful period as an unregulated operator, the move away from grey markets raised questions over how exactly the company would manage this seismic shift.
Shift from quick-buck mentality
In its announcement the company said it had a responsibility to bring the crypto casino experience to regulated domestic markets.
This has necessitated a cultural shift for Yolo, and Falzon describes the strategy change to one of heavy regulatory compliance as “by far the biggest hurdle”.
“In terms of changes, I think the biggest one is mentality,” Falzon explains. “I’m not saying we’re done yet.
“Historically, our business has operated at a pace of speed, speed, speed – let’s get the money, let’s move fast. But when you’re dealing with regulators, it’s a completely different world.
“There’s a lot of paperwork, processes and procedures that we have had to implement. It requires patience and discipline, and it changes how people think – some initially resist because it doesn’t feel immediately revenue-generating. But that’s part of the regulated environment and embracing it has been a major shift for us.”
A long-term financial outlook for Yolo Group
Falzon raises an interesting point on margins, with iGaming and sports consultant Stefan Kovach previously telling iGB that Yolo’s strategy change could “significantly impact” its profitability, at least in the short term.
But this is something Yolo is well aware of, says Falzon, and it has formed a large part of its strategy.
“I believe it’s about more than just margins – it’s really instant cash versus long-term valuation,” she adds. “It’s the million-dollar question that many business owners ask themselves: do you prioritise immediate cash and dividends, or focus on building sustainable, long-term value?
“We’d rather invest in creating a robust, high-value proposition that positions Yolo for growth, stability and leadership in regulated markets over the long term.”
Will Yolo Group face increased scrutiny from regulators?
In the announcement of its plans, Yolo acknowledged domestic regulators “are not keen” on operators continuing activities in other pre-regulated markets.
Elizabeth Dunn, partner at UK law firm Bird & Bird, suggested Yolo’s previous position as a grey-market crypto operator could raise concerns among Tier-1 regulators.
“Regulators in most Tier-1 markets continue to struggle with the idea of operators directly accepting cryptocurrencies and/or being funded through cryptocurrencies,” Dunn previously told iGB.
“Yolo’s history as a crypto-first operator is, therefore, likely to come under scrutiny when regulators are assessing its suitability to hold a licence.”
But while Falzon emphasises the strategy change hasn’t been an “easy ride”, Yolo’s collaboration with regulators has made the transition smoother.
“I believe proactive engagement, transparency and collaboration is paramount,” Falzon says. “We are not shy of our crypto origins; it defines who we are. However, at the same time, we want to collaborate closely with regulators, educating them about our platform while learning about their concerns.
“By working together as a team, we can find a middle ground that ensures player protection, transparency and compliance, while allowing our technology and ecosystem to deliver the best possible experience for our players.”
This week, UK Gambling Commission CEO Andrew Rhodes warned the government cannot ignore crypto gambling.
However, he stopped short of saying the UK could soon issue licences for crypto-based betting, instead stating the government must take steps to regulate the activity.
Yolo Group’s B2B CEO Lara Falzon says pivoting away from its previous focus on speed and making money is “a completely different world”.