[00:00:00]

Charles: There's no room for denial, you can't negotiate with it. You can't finesse it.

It is an absolute change and you've either got to accept it and adapt to it, or get out and walk away. 

​

Charles: The closest I can explain is, it was a feeling of sea sickness, a complete nausea. Because you suddenly realise that everything that you have assumed,

everything that you are doing and all the promises that you've made

and all the people that you've hired,

and everything,

no longer applies. 

​

Charles: The lesson that I took out of it ultimately is: you don't learn anything on the way up. Everything you learn, you learn on the way down. All the valuable lessons 

​

Charles: We would have these conversations at the boards when we were doing fundraising, why don't we just do a desktop version of it? At least to generate the revenue? And I always resisted it.

It felt to me that if we were going to build real value in this business we weren't gonna achieve that if we were just a different version of what everyone else [00:01:00] was doing.

This is mobile first, mobile only, and that's the bet that we're placing on the future. 

​

Charles: All this Silicon Valley horse shit about defining the future, It's just complete nonsense.

You can not bend the arc of the universe.

You can react to it and you can try to influence it to some extent,

but your job is to be aware, be rational and be decisive when you need to be.

Leo (2): Hey, welcome to the iGaming Leader Podcast I'm your host, Leo Judkins, founder of the iGaming Leader Mastermind. And on this show, I sit down with some of the most inspirational and forward thinking leaders in our industry, diving into the real challenges, high stakes decisions and lessons. That shape our 

industry

If you are a VP director or an executive in iGaming, this podcast is built for you.

Before we dive in, a quick thank you to our sponsor Sum Sub, the full cycle verification platform. Trusted by top iGaming operators worldwide, sum sub helps onboard players quickly stay compliant and prevent [00:02:00] fraud all without slowing growth.

More information in the description. .​

Leo Judkins: Hi everybody. Welcome to the iGaming Leader Podcast. My guest today is a man who's lived through the highest highs and the most isolating lows of the iGaming industry. Charles Cohen is an Oxford PPE graduate who went from writing policy at the UK Parliament to building one of the Internet's first digital currencies, beenz.com, raising, almost a hundred million dollars and hitting a $3 million, valuation in three years before the.com bubble burst. He then pioneered mobile gaming with probability, when the rest of the industry was still focused on desktop.

We were just talking about that. And he took that company public, eventually selling to gtech, for about 20 million. He spent the next seven years as vice president of IGT leading their global mobile and US sports betting expansion following the PASPA repeal. And today's the founder, again with Department of Trust, while serving as an industry expert for [00:03:00] the uk gambling commission and a board member for, uh, vow, dunno how to pronounce that properly actually.

Charles, sorry. 

Charles: I think technically it's a fake house but the thing that I've learned about finishes is it has a lot of valves 

Leo Judkins: how's that for an intro? Did I miss anything?

Charles: that was good The only thing about beenz it was a $300 millionvaluation but that's okay What's a couple hundred million between friends

Leo Judkins: 2 9 7 we're, uh, yeah, we're fine. Nice little gap. Uh, let's, uh, let's actually start there because that's the thing that always everybody wants to talk about. And you know, it's such a long time ago, and I, know, everybody focuses on that kind of $300 million evaporation because of the headline. That's what I'd love to hear. What happened in the room the day you realised that's kind of that.com bubble burst and it all kind of went wrong. 

Charles: The closest I can explain is it was a feeling of sea sickness a complete nausea because you suddenly realise that everything that you have assumed is the underpinning of everything that you are doing and all the promises that you've made [00:04:00] and all the people that you've hired and everything no longer applies So a real paradigm shift there's no room for denial You can't negotiate with it you can't finesse it It is an absolute change and you've either got to accept it and adapt to it or get out and walk away And obviously walking away was not an option And we'd seen it coming it really didn't take very long But you move from a position where people weren't just reducing their usage Of the service they were just stopping entirely and disappearing because the client clientele so the businesses that were transacting the currency with the consumers and with each other They were all.com businesses themselves 

Leo Judkins: Yeah. 

Charles: they were all living off VC funding And in a funny kind of way when the AI bubble that we're currently in bursts it's going to be a very similar set of experiences for the people that are working in that sector because they will suddenly find [00:05:00] that nobody's around to use their subscriptions anymore

Leo Judkins: Yeah, it makes sense. Uh, Charles, so,let's talk through that. I mean, it, it was one of the first digital currencies in the world. lot of parallels, like you said, with ai. Of course. So let's talk a little bit about that, kind of up to the steep down. how did that trajectory go from starting to building up to being at your highs to being down at the lowest lows?

what did that journey look like?

Charles: It was incredibly quick for one thing I mean I think I started it in kind of 19 97 98 and you know started gathering people together Friends that you know people that had been working with me on my business that I had started at the time which was a web design business And Just it you know a rising tide except this was this was this was a an extraordinary moment when you could for the first time go from being a a completely unfunded startup from zero and raised money from very very serious [00:06:00] investors And we you know the I mean it went from me funding it on the back of my credit card to meetings with really top tier venture capital funds in New York probably within about six to nine months and closing several rounds of funding and I was very very lucky because with each round we sort of got More skilled more capable people better networked people who could go up to the next level 

but of course the strange feeling was that we didn't really need to do very much in order to be considered to be more successful It was an entirely I guess nowadays you'd call it a momentum play so the success wasn't so much in the traditional virtues of building an organisation building a business It was more in okay but putting more fuel in burning it getting more fuel People going oh you've managed to burn all that fuel That's fantastic Have some more 

you know, your, your behavior starts to get influenced by the metrics rather than the coal So the metric [00:07:00] was how much money can you raise So we took money from a Japanese fund and the condition was we had to open an office in Japan which was great but you know it was never gonna be a good market But for beenz just because of the way that the the Japanese economy and the Japanese consumer worked you know we we had a similar thing in in in South Korea you know we opened an office in Seoul for no reason that I could tell other than the fact that it was there and and investors were interested And so they said okay well you know create beenz Japan or beenz beenz South Korea and and we'll give you some cash and it was it was the most extraordinary thing to to end up with you know staff in 13 countries I think or 12 countries 13 offices you know 

Leo Judkins: Yeah. 

Charles: the whole thing was probably within about 18 months

Leo Judkins: how did you manage to keep your feet on the floor? Did you, I mean, is that, does that, I mean that 

Charles:

Leo Judkins: rise, right? Like that 

Charles: the question is which floor The floor that my feet were on mostly was a Boeing 7 4 7 

what happened [00:08:00] was that my first daughter had been born about a week or 10 days before we went live with beenz And so there was all of that going on at the same time and that was extremely difficult for all of us but you know this was one of those things where you just had to keep going And so it was on a plane for a significant amount of the time And it's all a bit of a blur you know to be honest and it was a long time ago but you a lot of people listening to this podcast will know that feeling of waking up in a hotel room and you usually use the same hotel chain you know it's always like a Hilton or something and you wake up and the rooms are always the same regardless of which country you're in and you actually don't remember where you are 

Leo Judkins: Yep. 

Charles: And that's a somewhat sobering experience but it happens to you rather than because of you at that point

Leo Judkins: Tell me more about that. what do you mean with that? 

Charles: Well these things kind of take on their own momentum 

Leo Judkins: Hmm. 

Charles: and you become a passenger on your own train was one point where I had to go to a [00:09:00] meeting uh, with investors actually in New York and the flight was delayed And so I landed very early in the morning and I was wearing jeans and a t-shirt and I called the CFO and said look I'm gonna be late cause I've gotta go and get changed put my suit on for these investor meetings And he said no no no don't put the suit on We need you to come in looking like the crazy English techno guy that came up with the idea We don't want you in a suit 

Leo Judkins: Yeah. 

Charles: I'd taken the role of CTO So I was in charge of the product cause I didn't wanna do the corporate stuff 

and so they kind of put me in that role and I just okay well there you go I'm playing that role now That's what I'm gonna I'm gonna do

Leo Judkins: so then, bubble burst. you said you saw some of it coming. Tell me about that. 

Charles: It was like a tidal wave that and you know it started with there was a couple of public companies that where the suddenly the the the air went out of their valuations 

Leo Judkins: Mm-hmm. 

Charles: you started to see funding drying up for startups people weren't able to get their follow on rounds We we [00:10:00] had cash and were actually in the quite late into the process of planning an IPO there were various issues with that including we needed to make some changes in senior management and that actually had slowed us down And it's just as well it had because I think if we'd have been listed at that point we would've been a real bubble stock and and it would've been horrendous for everybody but you could tell that everything that you'd assumed about the growth of the online world was just about to either stop completely or at least take an extended pause And so we you know we all met and decided right well there's no IPO was gonna happen For sure We had cash in the bank but we were burning at a heroic rate So we decided that we were gonna really do what we could to scale down the business There wasn't a clear and obvious What I would I called like the Phoenix plan you know changing the business model or anything like that Yeah There there wasn't anything obvious that that could have been done because there was so [00:11:00] much uncertainty out there that you just didn't know what was gonna what was gonna happen and so you know and I I was incredibly lucky at this point as well to have such an experienced senior team particularly the the board members who had been around the block a few times 

Leo Judkins: Yeah. 

Charles: And we made some pretty quick but solid decisions to first of all reduce the headcount dramatically you know and and Steven the CFO basically went on a plane round the world firing people and closing offices 

which was unpleasant to say the least and we We started looking for someone to buy the technology and buy the brand 

Leo Judkins: Yeah. 

Charles: And then I got on phone call saying uh, you know congratulations we sold the business your redundancy payment will be made at the end of the week You know fun enough I was standing outside what is now the Hippodrome Casino in Leicester Square when I got the phone call and it was actually a relief 

Leo Judkins: Yeah, I bet. 

Charles: apart from anything else there were people who you know where these firms went bust And there was a real destruction of [00:12:00] value We at least returned some cents on the dollars to people And we did everybody got what they were entitled to and there were no legal issues It was all done entirely honorably and by the book and it was acquired by a company called Carlson who were big in the sort of loyalty and CRM business 

Leo Judkins: Right. 

Charles: then about I don't know it must have been a week or two later it was nine 11 

Leo Judkins: Wow. 

Charles: I think that that was just you know horrendous for them in many ways And and the whole thing just went into a finding cabinet and became a tax write off

Leo Judkins: it must have been so sickening just to see it happening as well. It, the revenue's evaporating, so you know, you've gotta reduce the burn rate by reducing costs, but you also know that that's not gonna solve anything.

It's just gonna be a slower death. 

Charles: you can't negotiate with reality 

Leo Judkins: Yeah. 

Charles: you've also gotta keep these things in perspective right Especially when you see real buildings collapsing 

Leo Judkins: Yes, 

Charles: it is important to stand back Bango is just a business 

And okay we [00:13:00] were closing down an office in San Francisco We weren't shutting down the mill in a small town upon which everybody's livelihoods depended 

Leo Judkins: yeah, 

Charles: was gonna be able to get another job fairly quickly maybe in another sector and move on with their career And this becomes a really interesting CV point So you do have to keep perspective on it

Leo Judkins: how much of your identity was tied to that though, Charles? did you feel that that was a loss of identity or was it, it

was just that you were part of? I mean, you lived that business for a long time in a plane mostly, 

Charles: Yeah well it I mean not to you know it was only a few years and so I'm guessing that in terms of my own kind of personal herm I what my type thing I I'm I'm quite I was quite sanguine about it I mean the whole thing just seemed completely bizarre to be honest you know my wife and I were sitting in a pub I think on like New Year's Day or something and there were these people at the table next to us reading the newspaper and one of our shareholders like a small cut his father and son duo that were investors and they'd bought some [00:14:00] stock in an early round and they were floating their business They'd floated their business it's called Jelly Works and all the buzz was about the fact that this was the first stock that you could buy that had a share in beenz.com And these people were sitting at the table next to us talking about it and going oh I've gotta buy some of this This is amazing And we and I just thought oh and then it took a while before the penny drop that they were talking about what I was doing And I just thought okay no this is now this has just become a a a you know it's like watching a play It doesn't make any sense 

But I think the one thing that I've I must suppose a bit like a broken record but the lesson that I took out of it ultimately is you don't learn anything on the way up Everything you learn you learn on the way down all the valuable lessons

Leo Judkins: It's so true and it's the same for the macro, right? if the market is propelling you forward and everything you touch turns into gold, yeah. It doesn't teach you a thing. it doesn't force you to make the hard choices to, you know, to make the difficult decisions that have no good. Like, I have [00:15:00]no good option. So, yeah, completely agree. We, let's talk about the next one, which is, let's talk about probability. You, you founded probability when, when people were laughing at the idea of gambling on a phone, right? tell me about that. that market and tell me about the day you thought that maybe you even thought everybody else was right, and, and you were making a massive mistake with, moving into mobile gaming 

Charles: People said why don't you just launch a website like a regular website we had a brand called Lady Lux and we had a couple of sub-brands and what we discovered the methodology for launching a B2B platform which was the I call it the teddy saggy playbook but I didn't know it at the time that what you do is it's very difficult to market a new B2B platform in iga cause it's you know it's kind of the operational DNA of the business 

Leo Judkins: Yep. 

Charles: so getting somebody to re-platform Is a highly difficult thing to do So the only way that you can really do it is by effectively finding n new businesses or new brands that [00:16:00] want to come into the market and are prepared to run it on a on a different Pam 

in many cases the best way to do that is to find people to run a business and basically go into business with them To some extent I mean obviously you have to have independence and you need to maintain sort of Chinese walls between you But we essentially followed the same pattern that Playtech did and everybody else did pretty much AATE eight did with the Dragon Fish fish business and of course the problem was that we were very early cause we were the pioneers in mobile gaming 

Leo Judkins: Yeah. 

Charles: And so the volumes Didn't it was like a rounding error compared to what you were getting on for desktop 

Leo Judkins: Yeah. 

Charles: We would have these conversations at the boards and particularly around when we were doing fundraising which would be well why don't we just do a desktop version of it so at least to generate the revenue and I always resisted it because it felt to me that if we were going to build real value in this business we weren't gonna achieve that if we were just a different version of what everyone else was doing We had to be doing [00:17:00] something very different And so we'd all gone into this going this is mobile first mobile only And that's the bet that we're placing on the future 

Leo Judkins: Huge punt. Right? Because in the, looking backwards, it's, you would describe it probably you, you'd describe it as visionary, right? That's, but that's, that's in hindsight, you must have had 

Charles: is the word

Leo Judkins: Exactly. Because you must have had moments there, Charles, where you also started doubting that punt, right?

Where you also went, well, I'm not sure this is actually the right direction, or were you so convinced about that decision of going mobile first, that like you were unshakeable? 

Charles: In fact to me it wasn't really a realistic option unless we decided to give up on mobile the real inflection point actually came when the iPhone was launched 

Um, 

Leo Judkins: talk a 

Charles: know

about before that, because that was all WAP based or what, what was that like? oh it was so it started out as WA based 

Leo Judkins: yeah, 

Charles: So the first game that we released was a WAP based if anybody knows what WAP is so it was the original kind of [00:18:00] very it was like a micro browser that existed on on that kind of first generation of what they called feature phones And it was clunky black and white eight bit thing It looked like a pocket calculator display and you could do very very primitive animations and render content on a screen 

there was no bandwidth for to do anything with no sound nothing It was just like and it's it was it was really basic to say the least And of course obviously that is the environment in which you want to build a a a a a new a gambling product cause cause why wouldn't you So the first product was a kind of a three wheel three wheel slot cause you could only fit three wheels on one of these screens And it had one symbol and it just was like an animation like a scratch card basically 

Leo Judkins: Yeah. 

Charles: And it went gangbusters It was fantastic we couldn't believe how popular it was because so the hypothesis was that for low stakes instant win gaming mobile was the perfect environment It was the [00:19:00] perfect delivery vehicle for that because it was a complete impulse purchase 

Leo Judkins: Yeah. 

Charles: that you know my problem with the desktop was that you had to go to the computer You had to go to the casino to play the games Whereas if it was on your phone it came to you

Leo Judkins: Yeah, but surely you still had separate wallets. you

had to fund those wallets on desktop, right? 

Charles: no wallets it was pay as you go because there was no method to do stored value you couldn't log in you couldn't have an account And we used to have this thing where right at the beginning so you'd pay for it through your mobile phone bill cause you couldn't use credit cards 

Leo Judkins: Yeah. 

Charles: You know you couldn't pay for it in beenz unfortunately so so when you wanted to withdrawal and you made a request and I got the emails from the system and my wife and I we were just sit there on the afternoons at the weekend with print stick basically printing checks and mailing them to people for their winnings Yeah It was great I mean not scalable but that was the only way to do it you know we basically had a rule that first withdrawal always got paid As quickly as possible because you know I felt if it was me I would [00:20:00] want to see that I got that check in order to trust this platform in order to play again And that proved to be absolutely true you know so we always prioritise that to get new customers in and and then they they loved playing it I mean it wasn't you know I think the 50 p was the most you could bet at that point but but it worked and it was great

Leo Judkins: Love it. and then iPhone came around the corner, And revolutionised how we use mobile phones. So how did that affect you? 

Charles: So by this point WA was gone and it was all Java apples So Java apple But but also for the young young people on listening to this were You would download a program like an app an application to the phone and it would run on the phone And so we were building games in these Java applets and they were becoming increasingly sophisticated The problem was that every single phone and there were hundreds and hundreds of different models of phone had their own quirks and different versions of Java that worked And so what we built an entire infrastructure to support gaming through applets [00:21:00] on every single phone And we were better at it than anybody else And it was it was incredible And then Steve Jobs stands up and goes forget all that This is what you're gonna have right now the thing is that for the first few years of the iPhone nothing really changed because the app store didn't exist and all that the iPhone did was give you give you was a a browser A version of the browser And so we started building games using the new versions of HTML on the browser And you started I mean this is where you started to get the I suppose the merge merging to some extent between the desktop and the phone But there was still some fundamental differences that we we thought were really important about the way that people would interact and what they would expect from these services And yeah it it became one of those things where you had you had this hypothesis you have this theory about how things work and you have to stick to it until the evidence tells you otherwise And I I know that people struggle with this a lot and particularly in the gaming sector when you start to gather evidence that tells you something [00:22:00] about your businesses wrong and you realise you need to change it In our case it was we believe that people would want to continue to use the phone for kind of casual instant win type games You weren't trying to try to develop a game like you know these really immersive slot games with with like cut scenes and all this kind of stuff It was all about speed There was a lot to do with the ergonomics So once the first time you hold an iPhone the one thing that was amazing about it was how big it was 

Leo Judkins: Yeah. 

Charles: compared to a tiny little Nokia thing you know the naturally the way you picked it up was different and the way that because it was a touch screen and the whole thing was an infinite Array of buttons So we started to think about how do you design for this ux And it became we kind of very quickly realised that there was gonna be a specialism in designing games for this environment 

And it wasn't just a small version of the desktop 

and so that kind of happened but it was really the turning point was when the app stores opened 

I think the whole thing was in jeopardy then until it became possible to [00:23:00] have a downloadable gambling app in the app store 

Because up until that point everybody was looking at having to do it entirely through HTML

Leo Judkins: yeah, I remember that. , it was a really, time because there was very, strong opinions on which direction it was gonna go. Right. And it's, again, same kind of thing where you've gotta, running a business like that, you've gotta stick to your guns.

And, at that time, you were no longer using a print stiff to email checks, I suppose, with your wife. You had a team, the business would grow and eventually company got listed, right? so significant growth within the company, but what did that journey look like?

Can we talk a little bit about kind of cashflow, runway challenges there? Being able to still stick to your guns on making sure that there is sufficient. 

lifeblood

left in the business. 

Charles: Yeah so the early days were really really really tough I mean I don't think I've I've spoken about this before but you know there were a few months where we couldn't make the whole payroll and you know when that happened I I was the one that didn't get paid [00:24:00] Maybe one or two other directors I I'm a big believer in I always paying the bills but you would never tell the staff cause you never wanna cause you know obviously people are gonna be worried about their jobs I mean I haven't had that experience again fortunately but there's two things I really dislike in in the kind of UK business culture One is that this thing that if you somehow you've had a negative business experience that that's a mark against you you get the complete opposite and you go to the west coast right But in this country it's like oh I mean I I've actually had this even with with raising money for due trust people have said oh well you know I've looked at your thing and you know you you had this thing 20 years ago where it where it's it wasn't a success I don't you know I'm not investing in people with failures Like what 

Leo Judkins: what 

Charles: You gotta be kidding 

Leo Judkins: Yes. 

Charles: and we had it in probability as Oh same same thing You know people said no no no And the other thing is this is this idea of who's taking the risk Right And I think that this idea that the only people who take risk are the people that put in their money their capital is is misguided because everybody is taking a [00:25:00] risk because they are choosing to work for your company rather than another opportunity that they might have 

Leo Judkins: Yep. 

Charles: they can't get that time back you know So the process of going from kind of bootstrap startup through to listed company was excruciating And but we got there I mean we had all sorts of crazy stuff It was the guy that was a chairman that we had to fire because he basically turned out to be a let's just say not entirely honorable or honest That was awful And then we got another chairman who was fabulous And we got listed and we had some great shareholders and some real characters And then just after we listed was the 2008 financial crisis which was just challenging And then you had UG happened which obviously took the took the air out of the whole sector and it was another one of these feelings that everything is happening to you and 

Leo Judkins: Yep. 

Charles: you're not in control of events And I I kind of reached the conclusion probably 20 years later than I should have done that You you're not in control Your job [00:26:00] is not to not to this All this Silicon Valley horse shit about defining the future You don't you you You can not bend the arc of the universe It's just complete nonsense You can You can react to it and you can try to influence some it to some extent but you your job is to be aware be rational and be decisive when you need to be

Leo Judkins: I love that. Wise words from a man with battle scars to, prove them. Right. So I love that. Charles, tell me a little bit about, what you just said. You said process was excruciating, chairman that you had to fight. Tell me a little bit more about those things. I think there's probably gonna be some powerful lessons in that.

Charles: We all have to put our trust in other people when we bring them into a business it's very easy to take somebody else at face value you don't really ever believe that you're being lied to or deceived in any way And sometimes it's not even deliberate it's just this is how this person is or does And sometimes it's trivial and sometimes it's significant And in this case it was significant because we were trying to get a gaming license in Albany And I got a phone call one day [00:27:00] from Michael Ellen who's in charge of the gaming control board down there Lovely man Really really great guy And he said look I'm really sorry to tell you this but we can't give you a license with this guy as your chair and he told me the reasons why and I said okay fine leave it with me And we asked for an explanation and that explanation was not forthcoming and that was the end of that and then he spent the next x number of years trying to sue us which was astonishing I'd never been sued before it was a solitary experience you have to strike the balance between trusting somebody because you've met them face to face and you think great person can be relied on and then actually finding out that maybe it's not all it seems or worse than that that there are character issues that you weren't aware of or don't see until you're in a situation where it matters this is probably obvious to most people I just maybe was a bit naive about it but in a business context it can be devastating especially in a regulated business You know you do see this a lot in banking in financial services as well I think for the [00:28:00] same reason because they're regulated that character issues behavioral issues with senior people can have a really outsised impact on the company 

Leo Judkins: it, 

Charles: you know

Leo Judkins: have been so awful also from, because it's not just a business thing, right? that becomes a personal thing as well for you, right? , It's a, You trust someone, you then go through that process, the whole situation afterwards. It, that must have weighed so heavily on you.

Who, like, who do you talk to about those kind of things as you go through it? Your wife, I assume those are things that, you know

you can't really share with your staff, right? 

Charles: you can't because you want to insulate them from those sorts of issues interestingly I had a there's some companies that we've been talking to recently who we're partnering with and one of them their founder Suddenly popped up as at the center of a money laundering investigation And this is a regulated business right And it was almost like the first thing that they said to me is look we need to make you aware of this problem and this is how we're dealing with it And the transparency was tremendous and really [00:29:00] encouraging you know so they'd obviously taken the view that okay that's what we're gonna do But I mean in a situation like that where you're talking about you know potential criminal activity that's obviously something you can't keep from people 

Leo Judkins: Yes, yes. 

Charles: but you know the senior team obviously needs to know 

Leo Judkins: Yeah. 

Charles: the directors because it becomes a governance issue but below governance issues You want people to be getting on with their jobs I mean you can't you can't lie to them if someone asks you 

Leo Judkins: Yeah. 

Charles: but a lot of the time with these situations you can't talk about it because There's potential legal implications

Leo Judkins: Yeah. Or even the cash flow, right. That you were talking about. The runway thing where you're not paying, you can't tell your stuff because they think they're not gonna be paid. Right. 

Charles: Yes exactly Yeah Yeah But that's a judgment call 

Leo Judkins: Yeah. 

Charles: you know that was very very early on and I suppose where do I take that from I would've got that from the family members I had family members particularly my father and some uncles who all had their own businesses 

I worked for my father's brother he had a property finance business so during the school holidays and his rule was [00:30:00] he had this incredibly elaborate phone system installed I mean this was in the kind of must have been in the early eighties in his office where when a phone call came in if it wasn't picked up within a couple of rings by the person whose phone number you were calling it rang every phone in the building right And his rule was nobody waits more than three rings 

Leo Judkins: Hmm. 

Charles: And I yesterday found myself moaning in somebody that we weren't replying to emails quickly enough And of course you know in the environment that we're in now with Slack messaging and teams messaging and we have clients you know all of our clients are connected to us via these channels It's like the phone ringing to me it sort of sets off this kind of Pavlovian response in my brain that someone sent a message through it it must be replied to immediately Even if you don't have anything to say you just pick up the phone 

And you know that that's the kind of thing that you absorb I think without always knowing where you saw it first

Leo Judkins: Crazy how that goes. It's, um, yeah, the, how our behaviors really kind of, they come from our past and [00:31:00] from things that we've done and good connection there. And then you took the company public. So let's talk about that for a second. That's all of a sudden everything, you know, the performance, the failures, they are there 24 7, right?

It's not just you and internally, share prices go up and down. Like, how did that feel? How did that change things for you?

Charles: so we listed on the AIM market which is the junior market of the London Stock Exchange and there was a brief window of time Where you could do that as a tech startup what we call a micro cap stock So anything below 50 million is considered a micro cap the reason that we did it were all sensible the number one reason was for reputation And we were dealing with regulators We were dealing with big gaming operators We were dealing with multiple countries And if you are a PLC that comes with a certain degree of cache and seriousness everything is out in the open You've obviously been through significant [00:32:00] due diligence processes and people will trust you You're not about to disappear 

Yeah. 

in a world in what we were doing on our B2B business where we were trying to convince big operators to use our platform for their mobile gaming strategy That obviously was important and valuable actually raising money was a secondary consideration We didn't 

raise. 

Very much at the IPO and we we did a couple of placings I think afterwards not significant but we were in that early stage growth mode So it wasn't all about the profits it was all about the growth momentum around user numbers and technology and jurisdictions and the the kind of general building of an asset which had some potential value for acquisition 

and then the third reason for doing it was that we then had paper that we could use for m and a of our own 

Yes. 

We acquired a company in Switzerland that had clients in Italy and Italy became our second market

Leo Judkins: did that go? how did you [00:33:00] feel about that whole process? \\\\\\\

Charles: if you asked uh so you know some of the people that were involved and, and Robin.Were involved around that process to them this was the sort of thing they do they'd done loads of times Now 

Yeah. 

I'd only got this file once and it certainly would've been different listing on AIM versus the NASDAQ if I'd have ever done that But I dodged to bullet bullet on but it's it's it's one of those things where it's not done until it's done 

Hmm. 

and it could easily go wrong or not be viable for all sorts of reasons often completely unconnected with you it's I I I think about it actually the nearest I can say is that listing a company is a lot like meeting the person you're gonna marry could be the right person but you meet a completely the wrong time 

Hmm. 

or it could be the right time but the wrong person 

Hmm. 

Or you're meet in the wrong place and it just doesn't work And the number of different things that need to come together in order to have a successful listing even a small one is extraordinary And the [00:34:00] fact that it happens at all is quite surprising actually considering But you know it was really well it felt to me like it was very touch and go but with hindsight we got it over the line you could say it was always gonna happen 

But 

I think that would not be true

Leo Judkins: exactly. Um, and then you sold later on 2014, you sold for 19 19 million to gtech or IGT. 

Yep

people think that that's the, that's the jackpot, right? They think, oh my God, this is great. Sell for a big number. described it as one of the most stressful periods of like super stressful going through it.

Why is that moment of winning often the hardest part of the journey? 

Charles: because it's such a big thing it's so binary It's not like anything else you do in a business career because it doesn't happen slowly over time it's a transaction that's either gonna happen or not happen 

Leo Judkins: Hmm. 

Charles: and that you never know until it's actually done whether it's gonna go ahead and you know again that process is a lot like the listing process [00:35:00] where it's very iterative It doesn't matter who started the discussion You've you know we had an we had two or three people potential acquirers as well in the process It got quite complex You have multiple advisors so there's lots of people in the middle of it And then when you get down to the legal issues 

Leo Judkins: Yeah. 

Charles: we had the whole thing nearly went south because we had a partnership in China where we were going to be working with the Hong Kong entity to supply mobile instant win games to one of the Chinese state lotteries 

Leo Judkins: Mm-hmm. 

Charles: And it turned out that there was a potential conflict between that deal and one that GTECH had 

Leo Judkins: Hmm. 

Charles: the whole thing really didn't go ahead for that but it if it wasn't for the really clear thinking of our lawyer and also a counterparty in GTECH that go the no this is really not a problem it's not a material issue the whole thing could have quite easily fallen over And so you've got the combination of great uncertainty Equally if it does happen you know that everything is [00:36:00]going to change not just personally and professionally but also for all the people 

Leo Judkins: Yeah. 

Charles: I didn't realise this at the time and I kind of laughed about this with Fabio Shelldon who was the m and a guy on the GTeX Either their main concern apparently was that I wouldn't stay with the business 

my main concern was that they wouldn't want me so that goes to show right How the communication is really really difficult 

Leo Judkins: Yeah. 

Charles: I actually kind of came out of that process with a great deal of respect for the people that do these transactions on the inside of the two businesses that are involved And of course the all the advisors and everybody in between cause it's a really really complicated thing to

Leo Judkins: once it was finally done, then Charles, how did that moment feel? Take me back to that moment when you knew when it was actually all done. Like was that celebration, what was it? I. 

Charles: I remember being just so tired cause it had been you know we were in a pretty much all night with the the paperwork and the lawyers and everybody and the advisors getting the deal done And we had to get shareholder [00:37:00]approval So everything was subject to subject to subject but because it was a listed company the the process of the announcement Was set out in the regulations And so there was you know as soon as we had all agreed that that was this was gonna happen and and the the document was finalised I remember going into the office in the morning and telling Pete who was our CTO Peter Russell what had happened And I was like yeah there you go what's happening You know like let's just get on with our jobs did take a short holiday with the family but then you know really as soon as it closed which was you know it took a few months to close cause of all of the approvals that were needed you know we we were then part of of of gtech 

Leo Judkins: Yeah. 

Charles: they were great actually They were really welcoming and you know there were obviously some people who whose lives were gonna be disrupted by this group coming in and you know others who were just really thrilled and excited that we were there

Leo Judkins: Yeah.

And you, you stayed on for seven years as, now in the corporate machine right. Of, of

GTec

IGT and, as a [00:38:00] vp, how was that going from kind of that founder CEO level to being in that environment? 

Charles: somebody I think actually opened a book informally on how long I would last because I wouldn't have I would not have bet very long Not because of the gtech themselves right cause I mean who knews But I just couldn't imagine myself working in a corporate environment 

Leo Judkins: Yeah, exactly. I can totally imagine that. 

Charles: there is this mythology isn't there that the entrepreneurs can't work in corporate and vice versa It's not true at all I dunno whether I just got extremely lucky but we had a great time Most of the people that you know came across stayed for quite some time a lot of them sort of naturally I suppose over time moved on to other things But what's really great is that a lot of them have all stayed together 

Leo Judkins: Mm. 

Charles: are all working in the same company now which is fantastic You know I love that I feel really I'm feel really proud of that so how did it feel to go into corporate Well we I I was lucky because I had great managers 

And because what we were doing was strategically important and we were [00:39:00] enthusiastic to help Support and GTECH was like everybody else at that time going through the same transitional process where the techno we were in an era new era of technology was emerging and in the gaming sector it was mobile or die 

And we were the mobile people So that was how that worked and yeah I had a couple of great managers Mateo Monteverde first and then Enrico And Enrico was like the best chairman you've ever had right cause just his personal style and you had Ian Freeman I think on the podcast before So we but we met when we were working for Enrico and his team He was running a business within a business you know we had the support of this big Corporate entity which had tremendous infrastructure and a global footprint and you know incredible depth of resource and talent but we were effectively a startup business within that business 

Leo Judkins: Hmm. 

Charles: it was great And I don't I think at the time I realised quite how lucky I was to have had that But the day that passport was repealed I [00:40:00] could actually was probably more exciting than pretty much any day in my career where it was so obvious that wow this was an enormous change and an opportunity but I was in absolutely the right place at the right time rather than being two years ahead and having no cash

Leo Judkins: You were in a business where you could make a change. So tell me about that. I'm, I don't wanna fill it in for you. So tell me about that. Why, why was that, why did that feel like being exactly the right place at the right time? And what did you do? 

Charles: so one of the things that probability had done was we had a deal with MGM in Nevada 

which we'd done through the relationship that I had with David Briggs and Anna Sainsbury who were out in Nevada walking around looking for takers for geolocation services And one of the opportunities was to do mobile gaming in Nevada So 

when IGT was acquired by gtech and everything was oriented towards the states a conversation happened with the team at MGM who ran their [00:41:00] sports book They had a really really really old system I mean because you know remember that sports betting was legal only in Nevada pretty much at that time 

we suddenly because of the IUT relationship with MGM and because of the probability relationship suddenly had this opportunity to take the sports betting platform that GTECH owned which in itself had been acquired years before and bring it into Nevada 

And this has started pretty much straight away after the acquisition So long time before passport was repealed 

And it was ex I mean it was the toughest thing you can imagine right Because you're talking about a series of regulations that were written probably in a sort of mainframe era right and trying to bring in a new technology and sort of all the crazy stuff that I'm sure will bored the hell out of people but things like parlays and all this kind of stuff And anyway so what had happened was is that the timing was brilliant because we brought this platform into the US where we had a a great mobile offering a great desktop offering and a gate land-based offering And we had a a [00:42:00] risk management system which was fully localised for the US sports betting market And you know I'm sure you'll have other people on who were around in that period but if you take a European sports focused platform and try to run it in the US you quickly find that it's just not gonna work Right And for one very very simple reason which is that American sports don't have draws 

right And so your whole bookmaking algorithms need to change Everything is different So we'd already done that work when PASPA was repealed we'd been having conversations with the guys at FanDuel cause obviously that's the Paddy power lot had come over and they were already doing stuff in California and they were looking at the possibility that this might happen And so we did a deal with them and very quickly the the IGT platform became their platform for their market entry because it was a I'm not I'm gonna say Gold Rush but it was really a it was a land grab situation right The gold comes [00:43:00] later 

we were just ready and just At the moment that it happened And of course it had been building up and building up cause we knew that the Supreme Court was gonna be hearing this and no one knew it could have gone either way I mean it really could have gone either way or worse than that as it could have been half and half Right It could have said this but that Right But it didn't they came down and it wasn't a decision about sports betting Right It was a decision about state's rights 

Leo Judkins: Yep. 

Charles: And so sports betting just kind of came with that And that was the firing gun literally And then it was okay run run run Rather than being a cash strapped startup I was working in this big organisation that had the resources that had the footprint that had people in every state which had a government relations and I had the support of a great Boss who who had a line to the top and we just went for it And it was tremendous It was a really really exciting kind of 12 

Leo Judkins: bet. 

Charles: to 18 months And we had a team of developers in [00:44:00] Belgrade in Serbia who had built this platform and they knew every line of code And we'd been Dr Driving the mad for over a year trying to get it Americanised Nobody could understand why we were doing this And then all of a sudden we had like 30 of the sports bets in America are going through this platform It was fantastic 

Leo Judkins: and then after that experience, Charles, you're choosing to do it again back in the trenches. Right? tell me a little bit about that. So, with these exits behind you, why are you choosing the stress of, being back in that trench and maybe, being in another startup 

Charles: I left IGT at the beginning of COVID because not through choice actually I I couldn't get back into the country 

Leo Judkins: Oh, 

Charles: eventually they rescinded all the visas and so I was basically stuck in the UK and agreed with Enrico that it wasn't feasible to carry on They needed to run the business 

Leo Judkins: Yeah. 

Charles: and I couldn't do it from London so that all came to an end And I certainly I knew what I didn't want to do and I'm sure lots of people have had this experience where you know what you don't want [00:45:00] you don't want to repeat rinse and repeat 

but then I knew the gaming sector and as a friend said to me when I was thinking about trying to pick up into a completely new industry he said why would you do that when you know you already know your way to the center of that maze 

there must be more things you can do within that sector that may are different to what you've done before And that was when I started to get interested in some of the challenges around player safety responsible gambling And I'd had some exposure to it in probability when we had our own B2C business 

Where you know and in those in that environment it was very very difficult for somebody to spend a lot either time or money on these games cause they were so simple and slow And but but there were a couple of occasions where it was clear that there was a prob person with a problem but I didn't really understand it And I think like the rest of the industry I don't think we really appreciated that the the the migration to mass digital [00:46:00] gaming does come with a set of externalities that do need to be addressed and I I I get I mean the industry gets this reputation for being almost deliberately pursuing vulnerable customers I don't I've met a couple of people in the gaming industry who who do have those sorts of attitudes but actually they are very much like a past generation right That there's nobody that I've come across currently running or in a senior position in any of these businesses who thinks that it's a good thing to harm your own customers 

the problem is how do you address it without at the same time either destroying your business or worse than that now which is this problem of the black market 

you make legal gaming so unattractive that the people with the problems move somewhere where you can't even see them And that's actually the worst of all possible worlds I got really interested in it because during COVID the gambling commission in the UK put in place some emergency regulations that led to a lot of [00:47:00] operators coming up with really draconian risk management policies 

you know just created huge amounts of problems without realising it And you know you had a couple of things where people were hitting limits being asked to send in months of bank statements 

And you could see it on the discussion boards You know you would need to disclose more information to place a bet than you did to get a mortgage 

And I think to some extent the operators in some circumstances they overreacted but I think in some cases they actually were caught unawares or unprepared and it was inevitable that there were gonna be some teething issues But it was a big cultural shift huge cultural shift because a bit like in financial services you now have to put the interest of the customer before yourself 

that requires changes of behavior as much as changes in technology 

you know, you see whole new departments popping up, right? New C levels, joining the board, right? 

Leo Judkins: I mean my the joke that I always repeat is that compliance is the department where automation goes to die Yep. 

Charles: and the reason that it happens [00:48:00] is that the the business This is true for a lot of gaming businesses and there's not a criticism it's just an observation the compliance problems you tend to try to solve them by just throwing more people at them and you end up with a situation where even the senior leadership of these businesses aren't really conscious of the way that these policies are being designed and implemented they are aware of the cost the direct cost but they're not aware of the indirect cost 

Leo Judkins: Opportunity costs. Yeah.

the thing is also, people feel like when you do things manually, it feels like control. I always think, the other area of that is that you are in a compliance role, there is no upward potential to keep an account open and there's a lot of downward potential if you do make the mistake there.

Right? So there, you see what I mean? 

Charles: It's completely imbalanced that way 

right you can be certain if you turn the customer off that you are losing some revenue right 

Leo Judkins: Yeah. 

Charles: But if you leave them on you are opening yourself yourself up to significant fines reputational damage so on [00:49:00] Actually it's if you if you look at the judgments the problem is not the decisions that are made but the decisions that are not made right And it's actually when a customer is allowed to play And the processes aren't being followed 

or 

the person's somehow fallen outside of the process And that is a system failure that is not a failure of the people The people in these departments are almost universally overworked overburdened by very complex procedures And under equipped

Leo Judkins: With rules that are not even clear, so

Charles: I don't think the rules are ever gonna be crystal clear you do need to have a risk-based approach you need to have judgment involved but in order to do that effectively at scale you need really good systems and data And that's what I decided to try to do with Department of Trust

[00:50:00]  

Charles: I dunno that I would do anything differently maybe on a kind of a day by day basis there are some things you would do differently but that's called learning right somebody asked me once you know what's the secret I don't like to think of myself as successful or unsuccessful I think cause you know it's not done We're not done yet and and you know who successful What is that What is that What you know according to whom I think the answer to the question is you should always have more questions than answers And if you've got more if you've got the right the right balance there then you you stand the best chance of succeeding But no one no one can guarantee success And you know as we were saying earlier the problem is with the guaranteed successes it's not real You know and I I don't know what lessons people would take out of their own experiences or other people's or [00:51:00] you know including including mine They're just good stories and there's a what will I do in that situation type thing And we all you know when you look back on these things there's always gonna be some degree of mythologising it and editing it to make yourself look good or bad whichever whichever way you go But it's great because We all get to everybody gets to form their own judgment about other people's stories which is what I love about what you're doing And it's so I don't think it's a question of if I went back what what would I do differently I'm sure I'd do a lot of things differently But you you you act in the way that you the circumstances require if you are honest and you make the right decisions and you've asked the right questions then the outcome is what it is is what it is But I definitely would still not have built a desktop version of Lady Ducks

not even on that. You're welcome. Thank you very much I'm on LinkedIn If anybody wants to commiserate talk ask questions

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