Stephen Crystal of SCCG Management joins Ryan on show #69 to talk about his long list of experiences in the iGaming space. Stephen has had his hands on a lot of great projects over the years and now finds himself knee deep in US focused Sports Betting projects and emerging eSports projects.

Show notes from Stephen Crystal of SCCG Management Interview

Ryan Knuppel: Today we hear from Stephen Crystal all about his long list of sports betting experiences plus some new projects he’s involved within the eSports space.

Stephen Crystal: This is … This is … This is …

Ryan Knuppel: Everywhere you turn, it’s the same old sports talk, the same headlines, the same news, and the same boring information. This podcast is here to change all of that. We bring you hot sports takes, winning sports betting strategy and picks, reliable gaming industry news, and breaking interviews with some of the biggest names in sports business. My name is Ryan Knuppel, and welcome to the Knup Sports Show.

Ryan Knuppel: Hey, there everybody. Welcome back to Knup Sports Show. My name is Ryan Knuppel. I’m here with you each and every day almost now for our show. I’m here with another special guest today. I have Stephen Crystal on the line with me. Stephen, are you with me?

Stephen Crystal: Yeah, I am. I am. Good morning, Ryan.

Ryan Knuppel: Good morning. I really appreciate you taking the time on this Friday morning to just sit down with me and talk a little bit about what you’re doing in the iGaming space. I mean, that’s one thing most of the listeners to this show are betting professionals or iGaming people, and we really like to just hear from people in the space. And I thought none other, none better than you. I’ve seen your name pop up multiple times over the last week, lots of big things happening in your world. I cannot wait to dive in and understand a little bit more about what you do in this space and where you’ve been from. So before we really get going and tell us a little bit about yourself, tell us what you do and how it relates to the iGaming space.

Stephen Crystal: Sure, Ryan. So I live in Las Vegas, Nevada for the last 25 years. Although I grew up on the East Coast in New York and over the years just migrated west. Vegas has been my home because I came to Las Vegas to go into the casino business, and, at the ripe old age of 35, we acquired six of the operating casinos on Fremont Street in downtown Vegas. And so that’s how I got started from learning the operations of the casino, we had sports books, we had poker rooms, entertainment, food and beverage, so really an integrated resort experience. Thousands of employees learning the games, the technology and so forth. Stephen Crystal joins the Knup Sports Show

Stephen Crystal: When we sold the casinos in the 2000s, I became interested more as an investor, looking at the emerging technology. So we were big investors in electronic table games, so automating the table game experience. We were investors in companies that did various customer relation management tools and loyalty management tools.

Stephen Crystal: And so after a period of time, I started looking at what would be the emerging trends for the next generation of gamblers, and that’s when I started looking very seriously at iGaming and sports wagering in eSports. And that’s what’s occupied my attention for the last 10 years and in particular the last couple of years, as online sports wagering and eSports have been spreading across the United States state by state. And so that’s what I do now. Basically, I’m on the road 300-plus days a year, mostly in the U.S., although I represent some of the best technology providers in the world in sports wagering and eSports, and I import that expertise and marry it with the expertise here in America to become hopefully one of the leading providers of technology and knowledge about the casino industry, the gambling industry, and sports wagering in eSports.

Ryan Knuppel: Wow, that’s amazing. So Vegas is home, but you’re traveling over 300 days a year or so. So you’re getting to see the United States at a whole nother level. That’s amazing.

Stephen Crystal: Well, it’s a great … look, it’s a big country. Even as many times as I’ve traveled back and forth, there’s a lot that unites us. And I never get into political discussions because I know that at least half of the people will disagree with whatever my views are. But I would say that what’s common about that experience is that we’re a great country, and I like the fact that we love our sports. And I love the fact that we love our eSports, and where I’d like to be is where people are getting their entertainment and their recreation and find ways to build businesses around that.

Ryan Knuppel: Sure, sure. So let’s dive into sports betting a little bit. So are you at all surprised or not surprised at, I guess, the emergence of sports betting in the United States? I mean, I guess a better question is, did you think it would go at this pace? Or is it going faster or slower than you imagined it going once we really started going state by state?

Stephen Crystal: I think most people who are working in this day-in, day-out would say that it’s going much faster than anybody thought. It’s not a surprise. If you think about how, obviously, the Supreme Court decision in New Jersey or regarding New Jersey is what kicked this off. But when you started to see companies like DraftKings and FanDuel spend literally billions of dollars advertising fantasy sites that made no money, then you should have understood that something bigger was afoot.

Stephen Crystal: When you see that the owners of NFL teams are also investors in DraftKings and FanDuel, and even companies like Disney are investors in companies DraftKings, then you should understand that something bigger was afoot. And that, to me, is what explains why state legislatures have been approving sports wagering, and now it’s something that Native American tribes and companies other than FanDuel and DraftKings are grappling with because a lot of companies out there have been doing i-gaming and online sports wagering for decades and decades, and there’s all that experience that hopefully we’re seeing it work here in the USA.

Ryan Knuppel: Yeah, I agree. I mean for as far as we’ve come here in the United States, it feels like we just have so much further to go. Now, give me a little of your insight on we see news every day on, “Oh, this state is proposing this bill,” or kind of like we’re creeping along state by state. I mean, do you ever see a point where, I guess, this one either explodes quickly, right through the States, and we were kind of like all legal? Or is this going to be a long, drawn out process state by state?

SCCG Management

Ryan Knuppel: And then I guess the second question to that is, do you envision the federal government ever stepping in and making this more … kind of coming in after the fact and saying, “Okay, maybe we should take a little control here and make this a United States-wide gaming law or gaming bills around it?”

Stephen Crystal: Right. So on the first question, look, what happens, let’s say in Europe, where on an average day a decent technology provider or just an average technology provider or bookmaker will offer two to 3,000 markets a day, and on the best day in America, when the Vegas books would put up the lines and propositions for the Super Bowl, for example, you might have two to 300 markets. So the first issue is the difference in the amount of offerings, which we will start to see more and more of in the U.S. And a lot of those increased offerings come in the form of in-play betting, so instead of just betting before the match, you can bet during the match. And if you look at New Jersey, for example, where they have these elements, almost 80% of the bets occurred during the match. And so that’s one significant difference and evolution that we’ll see.

Stephen Crystal: The second is technology. The scale of the technology, the amount of transactions and messages that can be handled on a platform that you might see in Europe is amazing because what it allows the operator to do is automate the market. So that requires less traders. But what it really does is it makes it more profitable, and when something is more profitable, you can invest properly in the customer experience. You can invest in new offerings and new technology. So innovation occurs when a business is healthy and profitable. If you look at an old school Vegas book, which we, we ran six of them, your margins might be two or 3% on the best year. European bookmakers can run upwards of 15% margin, and you might think, “Well, that’s just taking it out of our pockets,” but what it’s really doing is providing for investment in the business and innovation.

Ryan Knuppel: Amazing. Amazing. Sounds like you have some great experience.

Stephen Crystal: Yeah, you asked about, this is a federal.

Ryan Knuppel: Yeah. Yeah.

Stephen Crystal: Look, what sports wagering is about is everyone feeling like they get their share of the revenue pie. So you’ve got the professional sports leagues like PGA or NFL or MLB, NBA or NHL. They want their piece of the pie.

Ryan Knuppel: Sure.

Stephen Crystal: You’ve got they want integrity fees. What the federal government can bring, which would be helpful, is dealing with the Wire Act. Right now the Supreme Court has said that as long as you operate within state boundaries, you don’t have to deal with the federal government. So everyone is putting their servers within the state. A lot of the efficiencies that you get from operating nationwide are lost when you have to give consideration to the Wire Act. So if the federal government did away with that, what that would mean is you would have more efficient operation between state lines, and what it would mean is you’d have more margin to reinvest in innovation and the customer.

Stephen Crystal: Now on the other side, the federal government doesn’t do anything that it doesn’t put their hand in your pocket right to get at money, so their interest is less about regulating it because the states do a very good job. Their interest is getting their piece of the pie.

Ryan Knuppel: Very interesting. Very interesting take on that. I mean, some of the points you brought up I never really thought about, so appreciate your insight into some of that stuff that we’re talking about all the time. So I definitely appreciate your knowledgeable insight on that.

Ryan Knuppel: Let’s switch gears, though. Let’s switch gears a little bit and go into eSports. So eSports is definitely one of those things that’s emerging across the United States, and in my opinion is going to be … it’s going to really take over the traditional sports, I think, in a matter of time with all these kids playing eSports and just really engaging with these different games. It seems to be the next thing. And so it sounds like you have your hand in some in this space. I’d love to hear, I don’t know, a little bit about how you’re involved in it and what your thoughts are on that industry as a whole.

Stephen Crystal: Great. So look, first I would say is I agree with the premise that eSports is … Look, it’s where a large swath of demographic from, let’s say, 13 to 40 is spending more and more of their time. If you look at the viewership numbers on Twitch, not only the numbers but the time people spend each day engaging with Twitch, watching other people play eSports or playing video games, that’s all you have to see and understand to know that that’s the trend. However, my view is it’s not a zero-sum game. We don’t need to imagine a world where there’s only eSports and not a traditional sports.

Ryan Knuppel: Sure.

Stephen Crystal: They’re going to coexist. This is why teams, professional teams, are investing in eSports teams because they know how to run sports. And they bought into the notion, as I do, that eSports is the same as sports, and they want to appeal to a new demographic because that’s important to retaining the value of their franchises that also contain traditional sports.

Stephen Crystal: So I think everybody’s now on the same page. Esports is a real, the viewership, the numbers, the engagement is real. And so the way I approached this was I come from the casino industry. I come from the gambling industry. How do I marry what I know about the casino industry and the gambling industry with the video gaming world and the eSports world? How do I bring that content into the industry that I know and create new forms of monetization and gamification? Because right now, the models for making money on eSports are limited. They’re limited. With teams, you got to spend a lot of money, and it’s not clear that it makes money yet.

Stephen Crystal: With other things like merchandise, it’s a volume game, and that’s not the game I’m in. So what I’ve done is taken the content and the technology, and I’ve teamed up with one of the best operators in the country, GameWorks, which goes back to the days of Steven Spielberg, and I’m creating with them a new brand called Play by GameWorks that will go into casinos across the country.

Stephen Crystal: We’re starting on the Las Vegas Strip with a venue that will open up in the summer, and we’ll have literally dozens and dozens of these across America. And inside these venues, in addition to eating great food and drinking good beverage, you’ll be to not only play peer-to-peer and for money, you’ll be able to bet on eSports, you’ll be able to play games that are built on top of known content that are, let’s say, the slot machines of the future. But instead of it being a random outcome, it would be based on your skill level and ability to create events that make you money.

Stephen Crystal: And this to me, has been my vision for the last five years, and we’ve invested tens of millions of dollars looking for the best technology, some of it in America, some of it we brought to America. In addition to having the venues, we’re going to have the technology stack that allows us to offer this type of gambling and gamification. Now you have to be 21 and older. It has to be done ethically and according to the same regulations that we use for casinos, but there is a demand for it. And so that’s been my focus in addition to sports betting is figuring out how to bring eSports into the casino environment.

Ryan Knuppel: That is absolutely amazing. Any idea, any early look at what cities you’re looking to come into? Just the big ones across the nation or do they have to be-

Stephen Crystal: No, I mean, we’ve had discussions in the New York area. We’ve had discussions in the Midwest, Chicago area, and we’ve had discussions in LA area. We’ve had discussions in Portland area, Seattle area. The good news is there are casinos in 42 States and most major cities, and the truth is what we’re doing can be done in a major city or it can be done in a more rural location because what we do is provide the activation, the engagement with the content. So that can be done in a fancy venue, like we’re doing on the Las Vegas Strip, or it can be done in a simple box that is under utilized in a casino.

Ryan Knuppel: Amazing. Amazing. Well, Stephen, I know I could sit here and talk to you, listen to you all day long, but I know you’re a busy man, so I will let you go here shortly. But, man, I appreciate the insight into these two emerging industries. If anybody wanted to get ahold of you or maybe wanted to ask some questions following up, is there a certain way that they can get ahold of you or learn more about you?

Stephen Crystal: Sure. I’m pretty modern guy as it relates to that. There’s two ways to get ahold of me. You can always visit our website, sccgmanagement.com, and that puts up a daily feed on all the things we’re doing in eSports and sports wagering across America. Or you can just a WhatsApp me, plus one, 702-427-9354. I’m a pretty transparent guy, and I’m open and I communicate a lot. I believe in social media. I’ve been around doing this for 30 years, but I hope to be doing this for another 30 years and being on the cutting edge of sports betting in eSports.

Ryan Knuppel: Awesome. Well, I appreciate all you do, and we will put those links in the show notes of this. There will be a show notes area that will have the links, and we’ll put that number out there so you guys don’t have to remember that, all you listeners. Hopefully you guys enjoyed this interview with Stephen. Stephen, I definitely appreciate what you’re doing. If you ever need anything from me, do not hesitate to reach out. I look forward to being in touch with you for the next 30 years and watching what you know what you guys do and how you guys grow and emerge across these two industries.

Stephen Crystal: Awesome. Thank you for having me, and thank you for the job you do to keep people educated and informed. Thanks, Ryan.

Ryan Knuppel: Anytime, Stephen. Have a great day and listeners, thanks for tuning in. And till next time, have a great one. All right, everybody. Bye-bye.

Ryan Knuppel: Thanks for listening to this episode of the Knup Sports Show. If you enjoyed this podcast, please consider subscribing to our iTunes channel today. Plus visit us at knupsports.com for more picks, previews, strategy, and news. That’s K-N-U-Psports.com.

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