One of the good guys in the iGaming industry, Tim Heath, joins us today to discuss what they are up to over at Coingaming.io! He discusses his career path, life transitioning from an affiliate to an operator, future plans and more. Don’t miss this show and listen until the end for a “giveaway opportunity” from Tim and his team.

Show notes from Tim Heath Interview

Ryan Knuppel: All right, welcome back to another episode of the KNUP Sports Show, I’m your host, Ryan Knuppel, here with you each and every episode. Appreciate you giving us a little bit of your time today to hear what we have to say, what we’re talking about in the world of sports, especially during this crazy, crazy shut down time with this pandemic going on. Hopefully things are getting back to normal. But I definitely appreciate you giving us a little slice of your time. Today we’re joined by another guest, we have the CEO of CoinGaming.io, the co-founder of OneTouch.io, Tim Heath on the line with us. Tim, are you with me?

Tim Heath: Ryan, good to speak to you. How are you? Thanks for having me on.

Ryan Knuppel: I’m doing well today, I’m doing well. Thank you for asking. I really appreciate you being here with us. I’ve been hoping to have you on for quite some time. So thank you for carving out a little time for us today.

Tim Heath: No problem at all.

Ryan Knuppel: So how are you doing through this … I have to ask first. I mean, this seems like the common question on these types of episodes lately is, how are you holding up through this COVID-19 pandemic? And how has that affected your business, I guess, before we get started here about what your business is, how have you been holding up personally?

Tim Heath: Personally, I’ve been loving it. I’ve been working 16 hour days. And I think it was Winston Churchill who once famously said, “With every crisis comes opportunity.” And the message I sort of went out to the company with straight away when shit hit the fan, figuratively speaking, was that, right, we’re all at home, we’re all here to work. How do we find solutions outside of the box, and how do we make the best of a bad situation? There’s no point complaining about the situation. We need to control the controllables, and get on with it.

Tim Heath: So very interestingly, I never thought table tennis would be our highest turnover sport, especially Ukrainian table tennis. And I was actually lucky enough to [inaudible 00:01:47] the studio before the COVID-19 [inaudible 00:01:49] started, and saw it all in action, and saw all these table tennis tables lined up the gymnasium there in Kiev, and they’re all playing with all the live streaming cameras.

Tim Heath: But yeah, look, it’s quite amazing. The table tennis has been great, [inaudible 00:02:06] Russian football has been obviously of great interest. And then the real interesting one for me has been the E-FIFA. Not necessarily the E-sports being your CS:GO, and your Dota, and whatnot. But the E-FIFA, and the E-NBA 2K. And we’ve actually just launched an E-cricket product for the Indian market.

Tim Heath: And seeing the take up of that has been quite unbelievable. It just shows you that people want to bet. I’ve always thought people were very much interested in trying to gather as much information about a sport, and be really knowledgeable, and do that stats, and go through it all. In the end of the day, people want to be entertained, and they want to use their time, and enjoy their time. And if that means watching an E-FIFA game, and putting a few bucks on it, that’s perfectly acceptable for vast majority of recreational punters.

Tim Heath: So it’s been good to provide our players with content that they’re really enjoying. So that’s been from the sports betting side. And then obviously from the casino side, our live dealer has gone bananas, and all the slots. And there’s a story, I had one of the Asian operators ring me up. And he said, “We’re all in lockdown in Manila.” And the dealers couldn’t go home because of the lockdown. So they put bunk beds into the back of the studio so the dealers could sleep in the studio.

Tim Heath: Then he said that’s been now canceled. And he said, “Do you know of any European studios where we can have a live dealer?” And I said, “Well, we’re opening a land based casino in about a years time.” He goes, “No, I need something now.” So I said, “Oh, give me a month.” And as it turns out, we launched our live dealer studio in Estonia last Friday with 20 tables. And we’re now working with them, and helping them run a full studio.

Tim Heath: So in that sense, the opportunities which have come, we wouldn’t have normally done this, but there was an opportunity there, so we took it. And [inaudible 00:04:08] 16 hour days and made it happen. And so to sum it up, I’ve really enjoyed the lockdown period, and I think it should last for longer.

Ryan Knuppel: Well, man, that was quite the answer there. You touched on quite a few things there. I want to echo what you said, and I truly believe that you have to see the good in things, and especially running a business, and operating a business, that you’re doing that the right way. Because you can go one of two ways on that, right. You can go either positive or negative. And I always choose the positive mindset, which will get you further in the end. So props to you on that.

Ryan Knuppel: So you touched on a lot of things with business, and kind of touched on what you guys are doing. But give us an overview of what CoinGaming.io is, and OneTouch.io, whatever you want to touch on. But give us just 100 foot view of what that is.

Tim Heath: So I’ve been in the industry about 20 years now. I was a poker player back in the day. I was lucky enough, or I got lucky enough to win the Sunday Millions back in 2005 on Stars. And love my poker, and worked in that industry for a long time as an affiliate, and as a master affiliate, and as a rakeback affiliate.

Tim Heath: And it all came crashing down in about 2012 when some networks couldn’t reconcile money. We were an operator then as well. So we were left to foot a rather large bill of money not being reconciled to us. So we’ve sort of managed to pay out all the players, borrowed money from my parents actually, and paid out all the players. And we were having a Christmas dinner, we were about 20, 25 people back then. And I always give a toast over Christmas dinner, and said, “We’ve got a bunch of smart people here, and we can do anything we want, if only we control the money, then we’re not bound by what other people, how they’re going to control where the money flows.”

Tim Heath: And my CTO said, he said, “Well, what about Bitcoin?” And I’m like, “What’s Bitcoin?” And everyone started Googling about it. And he said a few words over a vodka. And I think it was in a month, we had our first, what was actually a Bitcoin poker network. It was back when [inaudible 00:06:18] was actually doing quite well back in the day.

Tim Heath: So we started a Bitcoin poker network, but we put a few slot games up on the side of it. And people started playing these slots. And I’m like, being a poker purist, I was very much against casino games, I thought, “No, I think if we can rent a poker table, it’s a lot better.” But all of a sudden, people were playing the slots. And we started making 10 grand a month, and then 20 grand a month, and 50 grand a month. And I was like, “Okay, I think we can forget about the poker now, let’s focus on making a casino.”

Ryan Knuppel: Sure.

Tim Heath: And that was the genesis of bitcasino.io. And now these days, it’s obviously the biggest Bitcoin casino in the world. And we were the first licensed one as well. And I was out lobbying with [inaudible 00:07:08] and Evolution, and all the tier one suppliers to try and teach them about Bitcoin, working with all the compliance people and legal councils, and saying how it’s actually even more transparent than using credit cards or bank transfers to understand the flow of the source of money from an AML perspective.

Tim Heath: You can see more where the money is moving, and you can have a much clearer picture of player funds as it enters the site, and exits the site. So yeah, we pushed forward with that, and got to understand … There was a lot of the Primedice, and those types of sites back in the day, which were sort of, I used to call them backyard operators run by a couple of people, and very successfully no doubt. But they lacked the professionalism of a fully blown casino.

Tim Heath: So that’s where we saw our opportunity to really come in and run a proper licensed casino with all the top slot providers. And we did that. And our goal, very simple thing, was that we wanted to pay everybody within two minutes. Because, now, as a poker player, I hated having to wait four or five days for my payout to come when you had a win on Stars, or Full Tilt, or whatnot. I know it was [inaudible 00:08:20] and Absolute Poker, they weren’t the best or the quickest payers in the market.

Tim Heath: So I sort of said, “Well, from a player’s perspective, this is what we want, and this is what we should give our players.” So as it turns out, if someone won 10 bucks, or they won a million, or half a million, we would pay them within two minutes. And we built our whole strategy around that under the knowledge that, within six hours, that money would come back into the site. Because in essence, it’s a digital poker chip, or a digital casino chip. And all you want to do as a player is hold those winnings in your hand, you’re not actually going to go and buy the bread and the milk with it. You can if you cash it out through an exchange. But just holding those winnings, it means they’re yours. And that’s one of those great things, as a player, to do that.

Tim Heath: But then you get that little itch saying, “Ah, I’ll just have one more game.” And it’s funny how the deposits come back in a Fibonacci sequence. So yeah, we’ve done a lot of analysis around it. But it’s been a really good USP. And we’ve got a business around it.

Tim Heath: Then in about 2016, it was a couple of months before the Euro Cup, the European soccer championships. And I said to the team, “I think we need a sportsbook.” And I love buying my domain names. And I bought sports bet.io back in the day. And so yeah, three months later, we put a sports book out there, and ran it for the Euros, and started getting into sports betting. And that’s been, it’s a real passion of mine. And it’s been great to learn from the other side, the bookmaker side, how to run a sportsbook.

Tim Heath: Obviously you had to bring in a number of professionals who had worked, whether it be at William Hill, or GVC, or Bwin, or some of the big European books, and building the sportsbook out there. And now, yeah, we take some pretty big bets. I think the biggest bet we took was 2.3 million Euros during the World Cup in 2018.

Ryan Knuppel: [crosstalk 00:10:17].

Tim Heath: Fortunately the Chinese fella didn’t win that one. [inaudible 00:10:21].

Ryan Knuppel: Well, that’s quite a career path. Yeah, I mean, keep going. Go ahead, keep going.

Tim Heath: So that’s sort of the B2C sites. And we’ve just really tried to push, and continually grow them, and always putting the customer at the center of the universe, and doing what we can, because [inaudible 00:10:39] we’re pumped as ourself, and we know what the players expect. And a real dedication to looking after our VIPs, but also looking after the smaller punters as well to give everyone a good … We’re asking them to deposit their money with us, we can’t be assholes to them, we’ve got to be good citizens, and a good book.

Tim Heath: If they win, we actually want to celebrate that. And I always say to our customer support staff, it’s very simple. It’s like flipping a coin 100 times. We’re going to win 51 times, and the punter is going to win 49 times. Let’s celebrate that victory, because the maths will take care of itself, but we need to celebrate that victory [inaudible 00:11:18] punter, and be happy for them. And if we, on all levels of our transacting with the customer, and our communication with the customer follows that theme, it actually becomes quite an enjoyable experience. And I think our players really appreciate that as well. And then you’re paid within two minutes. So it’s a win-win situation for all.

Ryan Knuppel: Absolutely, absolutely. That’s a great mindset to have there too. Man, you have quite the background. And I’m going to go a little different direction than maybe you’re typically asked, because I’ve been in this affiliate world as well for quite some time. I don’t know if you even remember, we crossed paths back in 2011, or 2012, or something like that.

Tim Heath: Casino affiliate [inaudible 00:11:55], or poker affiliate [inaudible 00:11:56].

Ryan Knuppel: Yeah, yeah, we had some interactions back there. I remember you working on some sites, and some domains, and things of that nature. So my question really leads, or not my question, but more my statement is, being on the affiliate side of things, you see the industry, I guess, the I-gaming industry, no matter what vertical you’re in, but you see it kind of in a different manner than you would as kind of an operator now.

Ryan Knuppel: Tell me about that transition, I guess the different and the transition from affiliate to now actually an operator, and just some of the pain points, or rewarding activity, or something that goes into kind of that transition, because I think a lot of listeners of this show probably have kind of that affiliate background, or that affiliate passion in them. But that transition from that to operator just sounds super daunting, and oh my gosh, how in the world do you even go about that? So I’d love to hear a little bit about the affiliate to operator transition.

Tim Heath: So being an affiliate back in the day, it was always, we can get an iPoker deal at 62.5%. So we can now move every single player from one [inaudible 00:13:08] affiliate to another one on a financial incentive. And I think affiliates were kind of, they weren’t working in partnership with the site, they were working particularly only for themself, and only on that acquisition path, because that’s where they were being paid.

Tim Heath: And it’s funny, these days, given my experience with affiliates, I’m trying to say to them, “We’re not going to go out and give you some ridiculously high affiliate deal. But you know what? We know how to make the lifetime [inaudible 00:13:39] of a customer, and we know how to retain the customer a lot better than other sites do. So in the long term, you will make more money with us at a 35% deal rather than with that other group at a 50% deal, because they’re, wham, bam, thank you, ma’am.”

Ryan Knuppel: Mm-hmm (affirmative).

Tim Heath: So I think the mindset from an affiliate, they’ve been screwed by operators that many times. [inaudible 00:13:59] you get a whale on board, and then you’re thinking, “This is fantastic, of my last 100 sign ups, and all that content I’ve written, and all the back links I’ve done, and I’ve finally snagged a whale.” And then you log into your, what was it? Stats Remote, I remember was the software we used to use. Where’s that whale gone? Because some bastard of an operator, sorry, I’m not sure if I can swear here or not.

Ryan Knuppel: It’s okay.

Tim Heath: But the asshole of an operator, they’ve gone and snagged that one for themself, because they know, why would they give away 50% of someone who is worth half a million? Because that could be their KPIs, their numbers. Everyone becomes very, very selfish when the model is sort of drilled down like this. And people forget about the partnership aspect of it.

Tim Heath: So I think the other thing with being an operator, there’s so many different parts to running a site. It’s not just focusing on the acquisition tunnel, and [inaudible 00:14:54] converting a registration to a first time depositor, and a second time deposit, and whatnot. You need to worry about your payment processing, you need to worry about your customer support, you’ve got different languages, you’ve got marketing creatives, you’ve got onsite SEO, you’ve got offsite SEO, you’ve got fraud, you’ve got reconciliations with game providers and suppliers, you’ve got VIP management. It’s a bigger business.

Tim Heath: And as an affiliate, we were 20 people. Five or six programmers, who are all still with me to this day, a support team, and some accountants, and whatnot. And now we’re 380 people, which is, it’s a completely different business. It’s harder, but I would say more rewarding. And I don’t know what operators feelings about affiliates are these days. I’ve got a soft spot for them because I was, and I [crosstalk 00:15:51].

Tim Heath: I think the affiliates also hurt themself a little bit when they become sort of, “Right, well, we’re now controlling all your traffic.” So your [inaudible 00:16:03], your rate tax, your [inaudible 00:16:05] brought up everybody, and basically debt funded their acquisition spree. They then control that traffic. So if you want to go in the Swedish market, or the Scandinavian market, you’re going to one of three operators, and they say, “Our terms are $200 CPA, and the 40% rev share. And if you don’t like it, we’ve got seven other white labels lined up who want a piece of the action.”

Tim Heath: Now, the danger here as an operator if you’re using a white label, you can end up only clearing 15% of the net margin because you’re paying the platform, you’re paying the game providers, you’re paying the payment processing, you’ve got fraud, you’ve got affiliates, you’ve got fixed costs on the CPA as well. There’s not that much left over at the end of the day. So you’re controlled by the affiliates, which again, it’s not working in that sort of same partnership model.

Tim Heath: So I think there’s a real clash of goals between affiliates and operators. And I’ve enjoyed becoming an operator, but then trying to look after my old affiliates who I used to work with previously saying, “I know where you’re coming from, guys. This is how we do it. If we work together, this is what we can do together.” And just being honest to affiliates. And one of the big things when we build our own affiliate software, I wanted to show all bits in real time so people couldn’t be removed from a program, because it’s about showing trust, and reputation, and honesty in what you’re doing. We want affiliates to trust us, because heck, that’s what we do. So here’s a real time [inaudible 00:17:41] transaction. We’ve got it from an operator perspective, why shouldn’t the affiliate have it?

Ryan Knuppel: Sure. Absolutely, absolutely. Love that, love that story, and everything about it. And affiliates listening, I mean, Tim and CoinGaming, and what they’re doing at Sportsbet IO, I think no better team to work with than Tim and those guys over there. So, Tim, where are you guys-

Tim Heath: Especially if you’ve got Japanese traffic, I’ll [inaudible 00:18:05] very, very [inaudible 00:18:05] affiliate with Japanese traffic at the moment.

Ryan Knuppel: Japanese traffic. Okay, if you have Japanese traffic, [crosstalk 00:18:11]. So where are you guys heading? What’s the future look like for you guys? I know you said the live dealer stuff is exploding right now, and I can attest to that as well. I mean, it’s just something that’s really hot, especially with everybody being home.

Tim Heath: Mm-hmm (affirmative).

Ryan Knuppel: What’s new? What’s coming up after that? Or where do you expect the market to go maybe after COVID-19 has kind of fizzled out, and we’re back to a, I’ll call it a normal routine, where do you guys see the future and the opportunity for you guys?

Tim Heath: So for us, we’ve been very lucky being on board early with the crypto equation. Sort of, we got to a stage we’re doing very well, and very happy. And it’s like, what do we do next? And so in the end, we’ve set up a venture capital company, and put a few bucks into that. And we’ve been heavily investing into our ecosystem. So I think we’re invested into five different slot companies. We’ve just invested into a bank in Europe, because I like to control the money, as I said earlier.

Ryan Knuppel: Sure.

Tim Heath: We’re invested into an insurance company, we’re invested into a Chinese sort of livescore.com, it’s [foreign language 00:19:23], an app in China which has 50 million daily active users, which would you believe? It’s quite crazy. We also decided to sponsor Watford Football Club in the English Premier League, which has been fantastic, and also Flamingo, the ones in the Brazilian Serie A.

Tim Heath: So we’re trying to create a brand which is … We’re not here just for a short term pick, we actually want to create something really long term, and have an ecosystem around it which supports what we’re doing. One really good example, we had live chat software on our site. And it was Polish company called livechatinc.com. Really, really good software. And I rang up the CEO and I said, “This is really great. Can we inject our data warehouse information, our business intelligence into the chat so our customer support can have all the relevant information that the customer is speaking to, and do some machine learning, and work out how many free spins we should give to this customer?” To improve the efficiency.

Tim Heath: And they said, “That’s a great idea. Maybe we can do it next year.” So I turn around and said, “Right, let’s put a team together.” And we’ve now built our own live chat software called coms.io. And we’ve built that from the ground up exactly to our needs.

Ryan Knuppel: Sure.

Tim Heath: But it’s also exact to the gaming industry needs. So we can now take these products out to market, firstly on a B2C basis with ourself, but also on a B2B basis, and hopefully generate some [inaudible 00:20:59] revenue, and we can incubate a company within our ecosystem to give it enough fuel and customer distribution that we can take it to market, and actually let it grow its own legs. So that’s where I’m finding it’s a really interesting part within the gaming industry, is sort of those supporting services and companies. And how do we build something better for ourself that, well actually, we can sell to the market to help other operators, or other affiliates with what they’re doing?

Tim Heath: Because in today’s day and age with computers, we should just be using the smartness of a computer. Our job needs to be fine tuning them and guiding the computer. But 90% of the decision making should be done by the computer. So if we can build that efficiency ourself, then let’s spread it out there and charge a few bucks for it.

Ryan Knuppel: Sure. Totally makes sense. What about on the sports side? What is your vision for sports when it returns? I personally think it’s going to just explode. You alluded to earlier, we crave that bet, we crave getting out there and having a little bit of action, and just watching live sports. I mean, I think we all see this now, how much we actually miss sports. You may take it for granted some days. But now it’s like, “Oh my gosh, I need it, I need it, I need it.” Is that how you feel, that when sports comes back, it’s just going to be an onslaught of activity in that space?

Tim Heath: So two things here. I’ve watched the Jordan thing on, The Last Dance, twice now on Netflix just because I’m so excited to see real basketball being played again, and by one of the greatest out there. And it’s a real pity they didn’t give Luke Longley, who is an Australian basketballer [crosstalk 00:22:46], they didn’t even do him. But watching sport again, it gets the emotions up and going.

Tim Heath: We found last weekend, when the Bundesliga came back, we’ve been doing very nicely with our turnover during the COVID-19 time, 60% growth as soon as the Bundesliga came back. Now, we’ve got a lot of Brazilian players who normally are betting money on Brazilian, especially Flamingo because we’re sponsoring them. Half the Brazilian players are now betting on Bundesliga. Now, they would never have bet on Bundesliga last year, but now these guys are hungry for it.

Tim Heath: So I think the day when, whether it be basketball, NFL, the football, or soccer in Europe, it’s going to go bananas. The cricket, when the cricket comes back for the Indians, for the IPL, I think the whole industry is in for a huge shock how many people have been waiting for this time to come back, and they will vote with their pocket, and they will come in very, very heavy with the turnover and the betting on that.

Tim Heath: Look, we’ve used the time to do a bit of housecleaning, to improve our sportsbook, we’re getting our apps ready to … It’s a chance to do that housekeeping that you wouldn’t normally do when the business is usually, and it takes some time to really clean up the site, and make it better, and make it faster. We’re doing a lot in the Asian markets. So making sure our language supports there. When that sport turns back on, watch out, it’s going to be huge.

Ryan Knuppel: Agreed, agreed. Well, Tim, I know I could sit here and talk all day, and I know you have a lot of stories, and a lot of information, so I definitely appreciate your time being here. But for sake of time, I think we better cut this off. Any last words for the audience here? Or I guess, give us a little bit about where they can find more about CoinGaming, and Sportsbet IO, and things that you’re doing. We’ll put all the links in the show notes. But any last words for the audience?

Tim Heath: Well, one thing is interesting, obviously we’re sponsoring Watford, we’ve got a lot of the Watford football shirts. And we’ve got about 1,000 leftover. So if any of the listeners want a Watford shirt, which has a Bitcoin logo in the side of the sleeve, drop us a line, and we’d be very, very happy to send you over a T-shirt from one of the English Premier League clubs.

Tim Heath: But no, look, I’ve always said, “Bitcoin won’t change, it won’t turn off American dollars. It won’t turn off Euros. It’s simply a parallel digital currency that has huge benefit for those who want to use those seamless benefits, which it prevails.” And especially from those guys who love to have a gamble, Bitcoin is perfect. It’s like when you go to the casino, it’s a bit of clay, but it holds value that you can seamlessly move across borders. So if you don’t have a Bitcoin wallet, go and get one, try it out, and it’s a bit like using Uber for the first time, you’ll never go back once you’ve used it.

Ryan Knuppel: You’re 100% right about that. I was just showing my brother the other day how to go through Bitcoin. I’m like, “I can’t believe you haven’t done this yet.” And he’s like, “It’s this easy?” I’m like, “Yup, it’s that easy.” No, it’s very simple once you do it, but it’s a little intimidating to start.

Tim Heath: Yeah, it is, it is. But using Uber for the first time is also intimidating until you’re forced to do it. Then you go, “Why wasn’t I doing this before?”

Ryan Knuppel: Exactly.

Tim Heath: It’s an interesting world to be a part of, and especially from a gaming and a gambling, sports betting, and casino perspective, it’s certainly the most beautiful digital gambling [inaudible 00:26:17]. So I’m very proud to be a part of this niche part of the industry, and I’m going to keep pushing out, and trying to onboard as many people to Bitcoin as I can.

Ryan Knuppel: Amazing. Tim, I definitely appreciate your time. Hey, if all these listeners want that shirt, who do they get a hold of, or how do they find you guys to kind of learn more, and ask questions?

Tim Heath: Ping our chat on sportsbet.io, and tell us where you’ve heard about from KNUPs podcast, and we will organize that for you.

Ryan Knuppel: Awesome, awesome. Well, Tim, I appreciate your time here. Definitely, if you ever need anything, let me know. And you stay safe there, and good luck going forward in the future.

Tim Heath: Perfect, mate. Lovely to speak to you.

Ryan Knuppel: Have a great day.

Tim Heath: Cheers, okay, bye.

Ryan Knuppel: Cheers.

Tim Heath: Thanks.

 

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