Catena Media CEO Manuel Stan has issued warnings around sweepstakes regulation and the growth of generative search as potential headwinds for the affiliate despite a 9% jump in revenue in Q3.

Speaking on the firm’s analyst call yesterday, 3 November, former Kindred Group head Stan said the growth needed to be sustained given the challenges around both areas.

Catena Media had praised the addition of sweepstakes operators in the US as a boost to their operations, but the regulatory headwinds the sector has faced this year has curtailed momentum.

Significantly, the outright ban in California, where online sports betting and igaming is not legal, represented a major blow to the sweepstakes sector.

On generative search powered by AI, which Stan highlighted as hurdle to manage at G2E in Las Vegas last month, the CEO again warned about its potential impact on affiliation.

He said: “This is only one quarter of improved results. We need to sustain this knowing that there are headwinds that are coming forward in the next quarter.

“We talked about the increased regulatory pressure on social sweepstakes casinos. We talked about the fact that generative search is definitely having an impact across affiliation, not specific to igaming. We need to make sure we can withstand those.

“We appreciate how the impact of the California ban will play in the short term [and] also throughout 2026, how that may have additional effects in other states and how that will impact our business.

“We appreciate the challenges coming from zero-click and generative search. We do have a reasonable amount of headwinds in front of us, and we have to be able to navigate that.”

One sector Stan was more bullish on was the prediction market opportunity.

He did note that CPAs for prediction markets are “substantially lower” than sports betting operators, so it would be a “play of volume” for the affiliate.

He added: “Our products are well-positioned to tap into this market, and as I said, I think it will be one vertical where we’ll continue to invest into the rest of 2025 and also 2026.”

On the financial front, Catena Media reported a 9% jump in Q3 revenue from €10.7m to €11.6m, with North American dominating the share.

In fact, 96% of group revenue came from North America, with the region reporting an 18% jump in revenue to €11.2m.

Casino accounted for €9.9m of group revenue, with the segment noting a 20% revenue spike.

Sports betting revenue was down 28%, with bosses citing higher sports betting taxes in US states and market consolidation.

Missouri is due to launch online sports betting in December, with Catena Media expecting the revenue uplift to be “moderate”.

Adjusted EBITDA rose 119% from €1.3m to €2.9m, with an adjusted EBITDA margin of 25%.

However, new depositing customers slipped 12% to 23,999.

The post Catena Media boss sounds sweepstakes and gen AI warning after positive Q3 first appeared on EGR Intel.