Show #85 – Virtual Sports Are Booming With CEO of GoldenRace Martin Wachter

Show notes from Martin Wachter Interview

Ryan Knuppel: All right. Welcome back to another episode of the Knup Sports Show. My name’s Ryan Knuppel. I’m here with you each and every episode. I really appreciate everyone tuning in to this podcast. We have a lot of fun. We talk to a lot of cool people, and today is no exception. I have Martin Wachter on the line with Golden Race. Martin, are you with me?

Martin Wachter: Yes, hello. Good afternoon from Austria.

Ryan Knuppel: Man, it’s such a pleasure to talk to you. I know you have a lot going on, so I really appreciate your time here today, and talking a little bit about virtual sports and Golden Race. Thank you so much in advance for taking some time out of your day, Martin.

Martin Wachter: More than welcome. Anytime.

Ryan Knuppel: Awesome. So first things first. How in the world did you get into virtual sports? I’m going to give a little bit of a background. You’re the Co-Founder, CEO of Golden Race, who is one of the, I would say, leaders in the virtual sport, the virtuals industry. Give us some background on how you started Golden Race, and just how you got started in this crazy iGaming space.

Martin Wachter: Yeah, actually that’s a good question, and I spent some minutes yesterday to prepare myself about how everything starts. To be honest, after my military service in Austria, I decided to sell insurance for, I think, almost 10 years. But it wasn’t exciting and I had the feeling that something had to change. By accident, an old friend from the past introduced me to gambling and virtual sports in the States. I think it was around 2003, and I started to work for him in Germany, and it was really nice. I understood from the start that was actually what I was looking for. This is the work I want to do. Yeah. But after two, three years, I had to understand that we didn’t have common ground.

Martin Wachter: We had different opinions on how to treat customers, how to work in the business. So I thought what to do, and I remember back in the years when I was selling insurance, I had a lovely boss. A good friend already in this time. I went back to him and I told him, Listen Thomas… That’s his name… I found this great idea about virtual sports, but I want to do it on my own. I have my own dreams, my targets. Do you want to join? And he told me, “Martin, I know if you’re burning for something, it’s something cool and really good. I want to join”. And this was actually the time in 2006 when we founded Golden Race, and it was clear from the start that this is my passion, and this would be something special, and we’d go it for the big.

Ryan Knuppel: That’s pretty amazing. So you’ve been at this for 15 years, which brings up another question that I think a lot of people, when they hear virtual sports or virtuals, they think, Oh well that’s just around because currently we’re in a pandemic and there’s nothing else to do, so people are doing these virtual sports. But what you’re telling me is you guys have been around for 15 years. This has been a thing for a while now, and maybe now some people’s eyes are just now opening to this industry. Tell us a little bit about the history of this industry, of virtuals and virtual sports.

Martin Wachter: That’s a good question. Thank you for asking, because as I told you previously, I can’t hear it anymore. Every day I am invited in webinars and other things because of virtual sports, now the right product in the pandemic, the situation about Covid-19. Now it’s time for virtuals. No, it’s not like this. So actually, if I’m correct, in the early 2000s virtual sports started, and I started in Germany, and in this time, virtual sports was a product that people really liked in the betting shops because it was next to the real sports betting product, and it was a secure income. A few thousand Euros each month. So even if the sports betting was down, you could pay the salaries for your people, the employees. You could pay the rent, and all these important things. So it’s a long history about virtual sports.

Martin Wachter: Yes, mainly Germany. UK. Around 2010 Italy also started to work in more and more countries to follow when it goes in Europe for virtual sports, but for a long time it was not easy to sell because some people didn’t understand the reason behind virtual sports. They didn’t trust in these games and all these things, but as you were saying, it has nothing to do with the pandemic. I’m really happy for the guys from poker that they have a second start because poker was really down in the last years, and now everybody’s playing poker. I’m happy for the Eastport guys that they get some traffic, but don’t get me wrong. Virtual sports was always in Europe, at least, and in Latin America, or Africa. The most important guy if you run a sports book. The most important products, not guys. Sorry.

Ryan Knuppel: That’s really eye opening to me being from the US myself, and maybe some listeners on this show. You know that’s not the way it’s been here. In the US we haven’t always really thought of virtual sports as a thing, and so I think maybe that’s where my mind starts to see it differently. Like, Oh man, this was a thing in Europe, and I know for you guys, you know Golden Race, you guys have become a leader in many of those European countries. Tell us a little bit about. What markets you’re in and what markets you’re dominating. I just heard you talk on the SBC virtual conference… If nobody’s heard that, make sure you go out and listen to Martin on that… But talk about the countries that you guys are in. I want to hear a little bit about where you guys are at, and then I also want to hear what your plans are to come into the United States as we start to legalize sports betting here. What your plans are to be here in the United States.

Martin Wachter: Okay. First of all, the story was not a story of success. In 2006 I would say we started. We had not much experience about it, and the first few years were learning years, and we had to understand there is competition on the market, very driven on, I would say, in graphics and animations. So some companies they believe that the only way for virtual sports is animation. But we had one night, and we sat together and we were saying, is this the right approach about virtual sports? Do we compete with PlayStation or other export consoles, and their tend to be on graphics. And we decided, actually no, that’s not the right way. We have to find something else. And we were thinking that in the end of the day when the player is playing, he’s not playing for the graphics, he’s playing for the gaming experience.

Martin Wachter: So we had to find something which is going close to sports betting, and I’m sure, up to now, we are the only company who understood it. We went for realistic arts. We put bookmakers in our company. So we took it very serious. We didn’t see us as a slot machine, but was a virtual soccer animation. So saying that, the story starts to become a story of success. If you see Golden Race in the States and especially in Europe, Latin America and Africa, everybody knows that we are the market leaders. I would say in Africa we’re selling around… At least eight tickets out of 10 are sold by Golden Race these days. 15 million tickets a day in virtual sports in Africa is quite a big number. We are becoming the market leader in Italy, which is maybe the most adoptive market in Europe for virtual sports. In Latin America, everywhere where it’s regulated, you can work.

Martin Wachter: We are the biggest operator. For example, Peru has 3000 betting shops. I think 80% are with us and the numbers are growing, so it’s an ongoing scenario. When we see US, we have to be careful. US is a new market and ,virtual sports, as you were saying before, it’s something really new, and if you go in a market with a virtual product you have to be sure it has to be simple in the beginning. A really simple learning curve for the players. I know some competitors, they went there with American football, a crazy, amazing game but players didn’t understand how to play it, and it was a fail up to now. So we see the market different. We want to go with simple games as we started in the early 2000s, with some popular racing games where people also understand in US. Simple games to play and to start, and then to grow on the content.

Martin Wachter: How we see US? I see US in three directions. First of all, the digital business. I’m not sure if you’re aware, New Jersey will be our first hit. We finished all the paperwork. We already signed the first two clients, so I think the transaction waiver is about a few weeks to go. So this will be our first step in US, and I’m not the kind of guy who wants to go state by state. Like Napoleon, I want to be successful in one state. I want to understand the US market, and then go forward for other States. Saying that there are other directions. We are speaking a lot with Indian tribes at the moment, which is another way to work. It’s a casino. It’s a land-based business. The product has to be adopted. It’s not like sports betting behavior. In researching, I was already in a few States in Colorado, North Carolina, Kentucky, Washington. We’re talking with the lottery boards because I also believe if you adapt your game in a certain way, you can also work with lotteries. So I see the US as a huge opportunity, but to be honest, I don’t expect to make a lot of money in the next month, two years. It will take some time, and I’m willing to go this time.

Ryan Knuppel: Well, congrats on all the success there, and also congrats on getting into New Jersey. I think it’s very clear from listening to you and talking to you that you know what you want. I mean that’s what I respect a lot about you guys and what you’re doing at Golden Race is that you’re not just conforming to what the market’s doing or to what everybody else is doing. What your competitors might be doing. You have a plan, you have a vision, and if it means maybe not launching a million new games and having all this new stuff out there, if it means taking one and really perfecting it, and like you said, helping the audience learn what virtuals are, you may have to take a little bit of a loss at first, like you said here in the United States educating, but you’re looking longterm obviously. That’s what I really respect about what you guys are doing a Golden Race. I think, in the business world, that’s something that everybody can take out of this discussion with you, is thinking for the long term is sometimes very key and critical. So congrats on all of that.

Martin Wachter: Thank you.

Ryan Knuppel: So what’s the next… I mean obviously you guys have a ton going on. You’re worldwide. Virtuals are really hot right now as we already mentioned. Anything next that we haven’t already touched on? Is there any specific new game you guys might be working on that you can touch on, or just anything in general that you guys have coming up down the pipeline here?

Martin Wachter: There are a lot of new games in the pipeline, but you know, it’s on a top secret status at this moment. The most important… What I want to say, as you mentioned already before, and I think this is something virtual companies have to understand, we should stop this competition of having more content. More, and more, and more, and more. Like it’s usual in slot companies to have 1000 slot games, 500 slot games, and there will be a few great, and a few not. I had a mentor and he told me, listen, why you don’t go in your bus and watch the games which are working really well, when you know that the people really like it, and improve these games and make them better and better, instead of going for new ways and new games. That’s one of the points.

Martin Wachter: One important point. But the other point, what is important, and this makes Golden Race different to the competition, and I can give you a lot of examples for proof. If I go to the US, I know I’m an Austrian from a small village in Montafon, so I know the Austrian business. I know the Austrian players, the mentality of the players, but I would be arrogant to go to the US and say this is the game. Take it or leave it, and play it. This is not how it works. So usually the success, also in Africa, was that we were there. We made some case studies, we were discussing with some players, we were discussing with some partners to find out what they really like, how the game has to be. If you see my games in Africa, you will understand they are completely different than, for example, in Italy, and they’re slightly different to Peru or Colombia.

Martin Wachter: So that’s actually the main point. But if you want to be successful, especially in our industry, and the beauty is that we can be flexible, we can adapt it, then you have to understand the market. And this is my goal. I am fully focused on the US. I am sure within five, six years we will be the market leader also in the US because we do it with passion. It’s not only a job, it’s not only a company. We have a dream, we live the dream and we will go forward and there is no one who can stop us because we are leading by innovation and the others have to follow and copy, and this will continue like that.

Ryan Knuppel: I love that confidence. And there’s definitely something cool about a business that knows the direction they’re going, and feels confident in what they’re doing. There’s definitely power in that. So I look forward to seeing how you guys do emerge here in the United States, and I just crossed my fingers Florida comes along and legalizes here. I’m living down in Florida, and we’re still one of those States that really hasn’t moved forward yet, so I’m crossing my fingers every day that we move the needle here on sports betting and Florida.

Martin Wachter: Yes, I crossed for you. But on the other hand, from my perspective, I am happy if it slows down a little bit, state by state, because first of all it takes time for us. It’s very expensive. Every state has its own regulation, it’s background checks. It’s a cost effect. You know, I think also many companies have to understand that to go to the US is not just to go there. Also, we are a 100% private owned company, and we want to remain like this. So it’s also financial risk too to just go everywhere. But we go state by state, and lead state by state. I’m sure it’s going to happen like this. It’s just a matter of time, not if it comes or not.

Ryan Knuppel: Sure, sure. Amazing. Well, I don’t want to keep you too long. I know you’re a busy man. One question I had for you though, before we get going, this is more of a fun, lighthearted question. What’s the one thing you miss the most about your life pre-Coronavirus, pre this pandemic. What do you miss the most about that life you had before this all hit?

Martin Wachter: You know, I hope not everybody is listening to this podcast because to my close friends and family, I always promise in every new year that I will travel a little bit less. In my strongest years I had 160 flights a year, and a lot of flights to US, and actually I’m very unhappy because the last flight I just canceled was to New Jersey and New York. By the way, the people from New York listen and I cross my fingers, everything goes so good for you. I see you’ve been hit hard from this coronavirus. So I miss the traveling. On the other hand, I’m born and raised in Austria, but I live in Cyprus, and my friends are on the Island. I’m in Austria after spending a few months now with my family, which is nice and good as well. I would love to go back and also have some beers with my friends. I love some beers in my free time.

Ryan Knuppel: That’s a great answer. I don’t think there’s anything wrong with that answer. We all love our families. We all love spending time with them. That enough is enough. Sometimes we need a good balance, right? We need to be able to travel, plus stay home a little bit more. So I think that’s a great answer there. And next time you do get up to New Jersey, New York, I definitely hope to be able to meet you and say hello. I’ll be heading that way, hopefully, for the December SBC conference, if it happens in December. So hopefully we’ll be able to cross paths there, Martin, and buy you a drink, and sit and just say hello in person. So I look forward to that day.

Martin Wachter: Yeah, the same to me. I hope that in December we are fine, and I hope that soon everything goes back to normal, and I will have a beer ready for you when I see you.

Ryan Knuppel: That sounds amazing. So where can the audience, everybody that’s listening, where can they get a hold of you, or find out more about you in Golden Race?

Martin Wachter: So first of all, you can join our website, goldenrace.com. You’ll find all the details of the company. You’ll find our demo link for our demo version. You can always reach out to me, Martin at Golden Race dot com on my email, and I’m 24 seven ready to talk to you. We have also partners in US ready to chat with you at any time. Looking forward to working with every one of you, but if not, we wish you good success with your business, and stay healthy with your families in this special time, and we’ll make it happen. We will be stronger.

Ryan Knuppel: We’ll make it happen. Amazing. Martin Wachter, thank you with Golden Race. Really appreciate you being here. One of the great guys in this industry, and it’s my pleasure to be able to have you on and talk to you. So Martin, thank you for being here, and have a safe and good rest of the month. Have a great one.

Martin Wachter: Thank you very much. Same to you, and thanks for the call, and all the best for everyone. Bye, bye.

Ryan Knuppel: Okay. Talk soon. Bye, bye.

Relevant for Martin Wachter Links

• Learn more about GoldenRace and virtual sports at: https://goldenrace.com/
• You can connect with Martin on LinkedIn at: https://www.linkedin.com/in/martin-wachter-1a76a519/

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