In the latest edition of Breakfast with NEXT, Sonja Lindenberg had the pleasure of sitting down with former Pinnacle CEO Paris Smith.

Smith delves into her rapid ascent through the ranks at Pinnacle, to her pivotal role in finding the perfect investor for the company. She also talks about her recent decision to step down as CEO and her exciting plans for the future.

Let me in  

When Paris Smith arrived at Curaçao-based bookmaker Pinnacle on her first day in August 2006, she encountered an unforeseen challenge.

As she walked through the entrance, ready to introduce herself and embark on this new journey, she was met with a surprising response: “Who are you here to see? We need to speak to the manager before we let you in.”

“In that moment, I realised that the people who had hired me hadn’t notified the office of my arrival and I waited in the lobby for what felt like an eternity,” she recalls.

After what seemed like an interminable wait, she managed to reach the person who had recruited her and finally received permission to enter.

“However, the experience left a lasting impression on me. The lack of a streamlined onboarding process was palpable, and I vowed to ensure that no one else would have to endure what I had gone through from an onboarding perspective.”

Smith decided that revamping the onboarding process would be one of her first actions at the sportsbook.

However, this marked just the beginning of Smith’s transformative journey at Pinnacle. Over the next 17 years, she would lead a series of influential initiatives that would shape the company’s very core.  

From intern to CEO

Smith’s entry into the industry was far from planned. From the US, she initially moved to Antigua for an internship, but afterwards she struggled to find work on the Caribbean island due to employment restrictions for foreigners.

“I took on really odd jobs to survive, including working in a Dive shop,” she says. 

Despite facing obstacles, in July 1995 she landed a role answering phones in sports betting, after meeting someone who recommended her to Bill Scott, who at that time ran Worldwide Telesports. 

Her career soared as she swiftly climbed the ranks from clerk to marketing director, and then to vice president and eventually running the entire company. 

Following a decade of growth, Worldwide Telesports was sold, and as part of the deal, Smith agreed to remain with the company for an additional two years. 

However, during that period, she faced legal trouble in the US, where authorities were investigating the industry operating out of Antigua. Smith was eventually convicted of an online gambling-related crime committed offshore and received probation.  

A fresh start at Pinnacle 

In 2006, Smith left Woldwide Telesports and moved to Curaçao.

Upon her arrival in Curaçao she decided to adopt the alias Paris Smith, as that was common in the industry at the time. However, she made no real effort to conceal her identity change. 

Subsequently, she joined Pinnacle, which turned out to be a rollercoaster ride for her.

“When I joined, we were 85 people, but the operation was already thriving. However, in 2007, we decided to exit the US market, which meant we really went from hero to zero,” she says.

“We then had to rebuild the business,” Smith says, highlighting that throughout the years Pinnacle changed “from a family type environment to a high-performing culture”. 

Being a woman in the industry hasn’t always been easy for her. At iGaming NEXT Valletta 23, Smith shared that as a female leader in the male-dominated iGaming industry, she’s had to work harder. 

“I had to be more diplomatic because some people perceived me as having a strong personality. I had to oversell what I knew was obvious just to gain buy-in from everybody. That was one of the biggest challenges,” she said on stage. 

“I was frequently accused of being too powerful and intimidating,” she reiterates, acknowledging that such feedback might not be given to a male CEO.  

Finding a new investor 

Looking back on her years at Pinnacle, Smith reveals that her most significant career highlight was finding Magnus Hedman as a new owner in 2015. 

However, this achievement was no walk in the park, as Smith had a very clear idea of the qualities she wanted the new investor to possess. 

“I envisioned someone who embraced risks, understood the intricacies of a B2B model, which was the path I intended to pursue, and had a keen understanding of both the global and Asian markets, where we aimed to rebound after departing from the US. 

“Additionally, a background in financial trading was crucial, as it aligned perfectly with our high-frequency transaction concept. 

“Above all, it was essential that this person wholeheartedly supported and believed in our dedicated R&D team, a team that I deeply cherished and was determined not to lose.” 

Then, an acquaintance stepped forward, exclaiming, “I know somebody!” That somebody turned out to be none other than Hedman. 

“Within ten minutes, we had a meeting set up. We met in Amsterdam because I was there for a conference, and he flew in to meet with me for three hours. I knew instantly that he was perfect for the role.” 

However, convincing everyone else of Hedman’s suitability proved to be a formidable challenge. It took an entire year to sway the skeptics and demonstrate that he was indeed the perfect fit.  

“Looking back now, I can’t help but reflect on the frustrations of that time,” Smith says. 

“However, Magnus and I were very aligned with the strategy moving forward, and I was very convinced I found the right person.”  

Calling it a day 

Despite the successes she enjoyed, Smith decided to resign from her CEO role earlier this year and work as an independent adviser.

Originally planning to stay in the industry for 30 years, which would have been two more years, she had a conversation with Hedman that led to a change in her perspective. 

“I am super intrigued on the investment side as this is an area that I never had the luxury to focus on before. And there is so much happening at the moment,” she says. 

Smith mentions that she will continue to collaborate with Hedman while also exploring other opportunities in the advisory and consultancy field. 

“I also believe that someone new, with a fresh perspective, will be incredibly beneficial for Pinnacle and able to take the company to the next level. Though we’ve made progress, we are currently experiencing slow growth,” she says.  

Home in Curaçao 

For the past 17 years, Smith has called Curaçao her home, and now the island is also on the brink of a fresh start with the upcoming enactment of a new gambling regime. 

Excited about the overhaul of Curaçao’s gaming regulations, Smith sees significant progress being made by the government. 

“If Curaçao can strike the right balance in regulations – prioritising safety for players and citizens while avoiding overregulation and understanding the market they’re governing – it could lead to phenomenal results for the country’s revenue and growth,” she says. 

However, Smith wants to clear up any misconceptions: “The system of master licences actually established a robust infrastructure. It was just not connected to the government. 

“We must also not forget that when the system was introduced, many companies left Curaçao to relocate to Costa Rica and Panama.” 

With the new regime on the horizon, Smith holds an optimistic view of the industry, expecting it to turn over a fresh leaf towards brighter horizons. 

As she embarks on her own fresh start, Smith is filled with confidence that the industry, influenced by the new regime, is destined for change “only for the better”.  

Former Pinnacle CEO Paris Smith says she had to adjust her behaviour throughout a long and established career as a female leader in the male-dominated iGaming industry.

Smith – who served as the chief executive of the Curaçao-based bookmaker for more than 17 years – revealed that stepping down from the top job had given her space to reflect.

“Being in the industry, I was really oblivious to the challenges I was having,” said Smith. “Within the last month, after stepping back, I can see that I did have to work harder.”

Smith was speaking on the CEO Hot Seat panel at iGaming NEXT Valletta 23.

She was asked directly by Betsson CEO Pontus Lindwall about the obstacles she had faced in a corporate operating environment because of her gender.

“I had to explain [myself] more,” she replied. “I had to be more diplomatic because people have told me I have a bit of a strong personality.

“I had to oversell what I knew was obvious just to get the buy in from everybody, so that was one of the biggest challenges,” she added.

The topic of gender diversity in iGaming was a hot topic that ran throughout the discussion.

“I had to be more diplomatic because people have told me I have a bit of a strong personality.”
Paris Smith

Later on in the panel, PressEnter executive chairman and session moderator Lahcene Merzoug asked WKND CEO Jennie Strandberg how we can attract more women into the iGaming industry.

Strandberg began her career as a customer service agent in 2010 before climbing the ranks at Casumo for more than seven years.

She then landed her first C-level position as COO of in 2020 before becoming CEO for the first time in January 2022 at B2B service provider WKND.

Strandberg is something of an outlier in the iGaming industry as a young female chief executive, with a disproportionate majority of senior management positions still dominated by men.  

Echoing Smith’s comments that there is a sub-conscious bias at senior level that men might not be aware of, Strandberg said: “As long as senior management is male dominated, there will be a bias interview process.”

Elaborating on her answer, Strandberg said the issue of male versus female distribution was not limited to the gaming industry but was instead a global challenge.

“In iGaming specifically, in junior levels there is not that much of a gap between male and female,” said Strandberg.

“That only becomes more apparent when you go to manager level, and then the gap increases the further up you go,” she added.

The gambling industry is about to witness a wave of leadership changes, according to Pinnacle gaming and sports betting adviser Paris Smith.

Smith shared her insights during the “pardon the disruption” panel at iGaming NEXT Valletta 23.

The panel, moderated by Bill Pascrell, III, partner at Princeton Public Affairs Group, Inc., also featured Max Meltzer, CEO and co-founder of platform solution business Strive Gaming.

Meltzer highlighted the significant turnover of senior leadership at publicly listed companies in 2023, including 888 and Kindred Group.

Former 888 CEO Itai Pazner left the business in January of this year following an internal compliance investigation into practices relating to VIP customers in the Middle East.

Last month, Henrik Tjärnström resigned from his position as the CEO of Kindred Group.

Meltzer emphasised that organisations within the industry are currently experiencing a multitude of transformations.

These include shifts in business models, mounting pressures on profitability, and a surge in shareholder activism that drives the momentum towards mergers and acquisitions.

These dynamics also pave the way for potential leadership changes, according to Meltzer.

CEO expiration date?

Smith added that she herself serves as a prime example of these ongoing leadership changes.

After nearly 17 years as the CEO of Pinnacle, she recently stepped down from her position at the Curaçao-based bookmaker.

Reflecting on the evolution of the industry over the years, Smith emphasised the profound changes it has undergone.

She acknowledged that the landscape is vastly different now compared to when she started out, highlighting that at that time “there was no internet”.

“It’s a different time, it’s a different industry,” she said. “Compliance and regulation are now on the top of everyone’s priority list,” she added.

Smith said she often contemplated whether there was an expiration date on her own leadership and expressed her curiosity about the potential of a new generation of leaders.

She firmly believes that fresh perspectives and new ideas will be advantageous for the industry.

“I also believe that we are going to see additional leadership changes in the near future,” she added.

Several recruitment agencies have confirmed to iGaming NEXT that they have been entrusted with the responsibility of sourcing positions for senior executives within the industry.

This marks a departure from the industry norm, as typically, senior talent is not readily available and often requires extensive headhunting efforts.

Paris Smith is to step back from her “intense” day-to-day requirements as CEO of Pinnacle after nearly 17 years in charge of the Curaçao-based company.

The search for a new CEO is underway at the online low-margin bookmaker Pinnacle after Smith confirmed her departure today (15 May) in a LinkedIn post.

After leading the business since August 2006, Smith will now transition into an advisory role with the operator.

Smith said she is “excited for this new challenge,” which will allow her to explore new opportunities and strategic projects alongside Pinnacle’s majority shareholder Magnus Hedman.

She will remain close to the strategy and support of Pinnacle’s team, she added.

According to the post, Smith’s focus will now shift to longer-term strategic and business opportunities, while she will continue to promote the business, network and create business connections to continue the company’s success.

“Many thanks to everyone who has made not only the last 17 years at Pinnacle but the previous 11 years in this fabulous industry such a special part of my life. I’m forever grateful and humbled.”

– Outgoing Pinnacle CEO Paris Smith

Smith will continue to represent the company externally through appearances at industry conferences and more.

“This is an exciting time and I’m so grateful for the team at Pinnacle which have become friends and family,” Smith wrote.

“The culture of Pinnacle is unique and one of the many attributes that makes it such a special company. 

“Many thanks to everyone who has made not only the last 17 years at Pinnacle but the previous 11 years in this fabulous industry such a special part of my life. I’m forever grateful and humbled.”

Pinnacle was originally founded in 1998 and is based in Curaçao.

The brand was established to offer a “unique gimmick-free alternative to other bookmakers,” according to its website, and has long been highly regarded among sports bettors across the globe.

Paris Smith will be speaking at iGaming NEXT Valletta 2023.

Esports betting operator Rivalry is set to receive up to C$10m in strategic financing via a non-brokered private placement of some 6.7 million subordinate shares in the company.

The funding will be led by global low-margin bookmaker Pinnacle, alongside technology and payments stakeholders, and is intended to allow Rivalry to accelerate its operational objectives and pursue strategic growth opportunities.

The company announced the funding today (26 April) alongside the release of its full-year 2022 and preliminary Q1 2023 financial results.

Topline numbers

In 2022 the business generated C$26.6m in revenue, up 140% year-on-year, from betting handle totalling C$232.8m an increase of 198% over 2021.

Gross profit came to C$9.8m, up more than fourfold from just C$2.2m in 2021.

Still, the business declared a net loss of C$31.1m for the year, including share-based compensation expenses of C$8.2m, compared to a C$24.3m net loss in 2021.

As of 31 December 2022, the business held C$16.4m in cash and no debt.

As for Q1 2023, preliminary results suggest that betting handle for the quarter totalled C$120.2m, an almost threefold increase from the C$40.2m wagered with the operator in Q1 2022.

Revenue for the quarter came to C$12m, up 151% year-on-year, while gross profit came to C$5.4m, compared to just C$0.7m in the prior-year period.

Net loss for the quarter was C$3.5m, down from a C$6.6m loss in the prior year.

The business said it achieved those results alongside a 10% year-on-year reduction in marketing spend.

News nugget

The firm’s new financing is undoubtedly the biggest news of the day.

The capital injection builds on an existing relationship between Rivalry and Pinnacle, which sees the former leverage Pinnacle’s “market-leading esports and risk management solution to provide a best-in-class offering for our users,” according to Rivalry CEO Steven Salz.

“Pinnacle’s commitment in our financing round adds a valuable layer of expertise to our organisation and credibility in our distinct market approach, and we look forward to expanding our relationship with them in this next chapter of the company,” Salz added.

Pinnacle CEO Paris Smith said: “As a leader and innovator in online betting, Pinnacle is constantly looking for like-minded partners to help further grow the industry and our global footprint.

“That is what led us to Rivalry, and it is impressive how in a short period of time, they have carved out a powerfully unique position in the field of online betting. 

“The company’s long-time focus on product innovation, brand equity, and next generation consumers is disrupting traditional ways of thinking in the industry and blazing a trail for industry economics that were previously not thought possible.”

The private placement financing will see Rivalry issue 6,666,666 subordinate voting shares in the capital of the company at a price of C$1.50 per share.

It is expected to close in one or more tranches beginning on or around 5 May, subject to receipt of the necessary corporate and regulatory approvals including from the TSX Venture Exchange.

In other news, Rivalry included a list of its operational highlights from 2022 and Q1 2023 in its annual report.

Those included entering the Ontario and Australian markets in April and May respectively, entering the casino sector with its first third-party game, and the launch of its proprietary Casino.exe platform in Q3 2022. 

The operator also registered more than 1.5 million customers by the end of Q1 2023, and maintained a brand-leading position among millennials and Gen-Z customers, who accounted for 97% of its active users in 2022.

Best quote

“Ultimately, this is a race to the bottom with the erosion of margin profiles and any inherent operating leverage going with it. In this environment, product and brand has remained stagnant, where outside of marginally better bonuses, customers see an uninventive experience with little difference between one sports betting product to the next.”

– Rivalry CEO Steven Salz criticises the bonus-driven marketing strategies of other operators in the market.

Best question

The best question on today’s earnings call came from Brian Kinstlinger, head of technology research at Alliance Global Partners.

He asked CEO Salz how Pinnacle can act as a strategic partner and help elevate Rivalry’s business, rather than acting as a competitor.

Salz responded that there is a “natural tension” in leveraging Pinnacle’s esports offering for its own product, as both operators are active in some of the same global markets.

He added, however, that: “We don’t really have an issue with it for the same reason we don’t have an issue with anyone else we compete with, because of how we approach the market and the demographic we go after, and the approach we have has been super successful in that regard.”

With reference to Pinnacle’s investment in Rivalry, Salz added: “We prefer people that have skin in the game, it creates a lot more alignment. That skin in the game in terms of oddsmaking makes the product and risk management so robust, and that’s been really good for us.

“They support us in a really good way with producing bespoke markets for events that we run, that are tied to really unique marketing that we do. Them investing in Rivalry and having that further alignment just brings that whole piece even closer together.”

Current trading and outlook

In 2023, Rivalry said it expects to drive continued growth by expanding its esports offering to deepen its core product, attract new customers, and establish the most comprehensive esports offering globally.

It will also continue to evolve its Casino.exe platform and release additional proprietary and third-party games, as well as launching a mobile app in its regulated markets.

The firm also intends to expand into new geographies to increase its total addressable market and customer base while aiming to grow its investor base through proactive capital markets outreach.

Two operators that previously thrived in Ontario’s grey gambling market have now secured licences to offer regulated online gambling within the Canadian province.

Pinnacle received internet gaming licence approval from the Alcohol and Gaming Commission of Ontario (AGCO) on 7 September, although its website is still under maintenance.

Pinnacle has long been a popular choice for sports bettors in Ontario, even before the market was regulated, primarily due to its favourable odds and large stake limits.

This will mark the first time Pinnacle – which is based in Curacao – has gone up against major sports betting operators from the US, such as DraftKings and FanDuel.

And the moment it is live in Ontario, Pinnacle will have more legal Ontario customers than all of those operators combined, including the 'dot-dot-dot'.

— SNBET (@SNBET_ca) September 7, 2022

Elsewhere, Entain announced today (9 September) that its Sports Interaction brand has also sealed a gaming licence to operate in Ontario.

The brand is the fourth to go live in the province under the Entain corporate umbrella, alongside bwin, Party and BetMGM.

London-listed Entain acquired Canadian sports betting operator Avid Gaming – the owner of Sports Interaction – in February for around C$300m to get a foothold in the market.

According to Entain, Sports Interaction is one of the biggest and best-known brands in Canada, alongside the aforementioned Pinnacle and also Super Group, which is now live in Ontario with its Betway brand for sports betting and Spin brand for online casino.

Robert Hoskin, chief governance officer at Entain, said: “We’re really pleased with our performance so far across our stable of brands in Ontario, and in particular to have secured a licence for our Sports Interaction brand in this highly competitive market.

“Since we acquired Sports Interaction earlier this year, we have bolstered our team on the ground as part of the integration to really capture the exciting growth opportunity ahead.

“It has the potential to be a significant market with a large, engaged and passionate sports fan base. As a global leader in sports betting, gaming, and interactive entertainment, this aligns with our strategy to be a leader across our regulated markets,” he added.

Ontario did things slightly differently when it decided to regulate online gambling. Instead of punishing formerly grey market operators, they have been allowed to remain active in the province on the condition that they have put the wheels in motion to apply for a licence.

Canadian Gaming Association CEO Paul Burns: “The reality is that Canadians have had access to online gaming and online sports betting from offshore operators for 10, 15, and in some cases 20 years.”

This has been enforced alongside a transition period for local operators, which expires on 31 October 2022. As a result, we should expect more licence recipients in the coming weeks.

The first official financial figures from Ontario’s regulated online sports betting and iGaming market – which first went live on 4 April – were released last week.

The quarterly numbers garnered a mixed bag of reviews from industry commentators as total wagers exceeded C$4bn, resulting in overall gaming revenue of C$162m.

While many were quick to dismiss the results as disappointing when compared to US states with smaller populations, Canadian Gaming Association president Paul Burns believes the Q2 results simply reflect the reality of the province’s soon-to-end transition phase.

“The reality is that Canadians have had access to online gaming and online sports betting from offshore operators for 10, 15, and in some cases 20 years,” he explained.

“I think that’s why comparisons [with other markets] may be fairer around the end of 2022 or Q1 2023, because of the way the transition phase has gone,” Burns added.