Q&A: Internet Vikings CEO Rickard Vikström on opening the company’s second West Virginia data centre
iGN: What is redundant hosting and how does it work?
RV: Redundant hosting basically means having two or more servers or server racks so that you can avoid any downtime if something goes wrong with one of the servers.
And in the iGaming industry, you don’t want any downtime. In West Virginia, for example, GGR is just over $100m per month, so that’s more than $100,000 lost per hour if the industry doesn’t work.
In order to protect its revenue and reputation, the regulator here has rules in place that say you have to have two data centres to provide redundancy in web hosting.
iGN: Is that why you’ve chosen to open a second data centre in West Virginia?
RV: Yes, until now the regulator hasn’t been able to enforce its rule on redundancy because there haven’t been any other data centres.
The reason this all started was that a big operator came to us last spring saying they had taken a board decision that they needed to have redundancy in each state where they operate. West Virginia is a crucial state for them and nobody else was able to provide what they needed.
That’s why we then spoke to the regulator, found the data centre and started building. This project has been in the works for a year and a half, so it’s a massive thing for us and for the state of West Virginia.
iGN: What was the process of building the new data centre like?
RV: Of course, whenever you undertake a massive project like this, everything that can go wrong usually does, and then you have to find a solution for it.
We worked together with the lottery and with CityNet (the owner of the building and data centre) to make sure that everything fell into place.
Then we had to build up everything in terms of security, to follow all the requirements that the regulator had. They put all of their requirements into a long list and said: ‘these are all the things you need to solve before we can approve it.’ And we finally got the letter of approval last week.
iGN: How did you settle on CityNet as your partner for setting up the data centre?
RV: I was in West Virginia a year ago scouting out data centres, looking at different facilities and evaluating their security, because I knew what I needed to build to meet the requirements of the regulator.
We are really happy with the choice of CityNet, they have been a great partner in this. It was a lot of work to figure out from here in Sweden how to build a data centre in Charleston, West Virginia. It’s tricky!
iGN: How big is your team in the US and are you continuing to expand there?
So we don’t necessarily need someone on the ground in the US, and it’s only an eight hour flight from Stockholm to the East Coast.
We set up our first US customer in Q2 2021, and since then we’ve been scaling from nothing to where we are now, with 70% of our business currently coming from the US. Today, more than 90% of our new customers are coming from the US.
iGN: What advantage does Internet Vikings have over its competition?
RV: As with any up-and-coming company, we’re quicker, smaller and more agile than our competition.
Our main competitor is also scattered across the globe and focused on other areas, whereas we are able to focus more closely on the US and the gaming industry.
iGN: Who are your main clients in the US market?
RV: We target a lot of industry suppliers such as online slot developers – because there’s a lot of them, and a lot are going into the US right now.
There’s just so many of them, and the reason they need us is that if you look at Europe, it’s so easy to set up a slots supplier under a UKGC or an MGA licence, and as a result there are 10x the amount of games available in Europe compared to the US.
In the US, the states are much more protective of their state revenue and taxes, whereas in Europe, for example the regulator in Sweden doesn’t care whether your servers are hosted in the Netherlands or Malta because we have free trade across the EU.
iGN: How long does it take for you to generate a return on your investments in the US?
RV: Usually, it takes years. With this data centre in West Virginia, it will take us some years to turn to profit.
But the reason we’ve done it is that one of the big operators asked us to. Otherwise, we wouldn’t have started because it has cost us several hundred thousand euros.
I think that’s also the reason there are so few competitors in this space, because you need to be so organised in the US with all the licensing and documentation, and that’s a big challenge compared to the European market.
iGN: Do you think we will see further iGaming rollouts into new states in the near future?
RV: Right now, it’s like a lottery. There has been a lot of talk about New Hampshire, where iGaming legislation almost passed, but I would say today with the election coming up next year, I don’t think that much will happen.
It will probably come in 2025, if at all. Because also, there’s a lot of states that have sports betting, and over the next 12 months there will likely be a handful of new sports betting states.
When they get used to the tax revenue from sports betting in a few years time, they will look towards iGaming. So, it will take time, but I think we’ll see a bigger push in 2025 than in 2024.