In a groundbreaking 2023, Betsson achieved its highest-ever revenue and EBITDA in the company's history. With ambitious plans for further global expansion, Betsson CEO Pontus Lindvall discusses effective business strategies in an explosive interview with iGB.
During the 2023 financial year, Betsson witnessed a remarkable 22% growth in revenue, reaching a record €948.2 million (£811.3 million/$1 billion). Additionally, EBITDA surged by 52%, soaring from €172.4 million in 2022 to €262.7 million. The final quarter's results contributed significantly to this success, boasting a 14% increase in revenue. Lindvall expresses contentment with the team's performance, likening the operator to a well-oiled machine.
"We are very pleased with the 2023 results," Lindvall shares with iGB. "This is a record year for the group. It's satisfying to conclude it with the highest possible earnings. I believe our globalization strategy has paid off."
Expansion
Expansion remains a key factor in Betsson's 2024 international plans. Like many operators, the company views Latin America (LatAm) as an especially attractive market in the near future. Betsson is strategically positioned to capitalize on LatAm'spotential, having navigated the intricate regulatory process in Argentina and strengthened its foothold in Colombia. Lindvallidentifies Peru as another target for Betsson once regulations are established.
The recent legalization of sports betting and gambling in Brazil opens the door for Betsson to enter a market of 220 million people, expected to embrace legal gambling in the latter half of 2024. Lindvall expresses enthusiasm about operating in Brazil, highlighting the significance of the market's regulatory clarity, especially after gambling was reintroduced into Bill 3.626/2023, following its previous exclusion by the Senate.
"The regulatory process has been one step forward, two steps back," Lindvall remarks. "When we heard that gambling was not included, it had a very negative impact on regulation. We are glad that the bill has been revisited. Let's hope the regulatory process doesn't present too many negative surprises in the future. There is tremendous interest in the Brazilian market from all our competitors."
France: The Next Frontier for Betsson in 2024
France is poised to become another strategic market for Betssonin 2024. Following the recent launch of an online casino in neighboring Belgium with Betfirst, and the acquisitions of Holland Gaming Technology and Holland Power Gaming totaling €27.5 million, Betsson has significantly expanded its presence in the Netherlands.
Anticipating the potential legalization of online casinos in France, Betsson's CEO, Pontus Lindvall, envisions rapid growth in this new market, particularly with the support of their partnership with French casino operator Groupe Partouche. Lindvall expresses eagerness about the future, considering the company's acquisition of an online sports betting license in France in September 2023.
"I am very excited," Lindvall states, indicating that steps are being taken behind the scenes to establish a regulated online casino market in France. While he acknowledges the uncertainty, the CEO remains optimistic, reflecting on the country's rich history of land-based casinos.
"I hope it [will be legalized]," Lindvall shares. "I was at ICE a couple of weeks ago, and the main question was, 'Have you heard anything about France?' I don’t know for sure yet. Obviously, something is happening, and it is, of course, a matter of time. France has a large number of land-based casinos. Casinos have a long history in the country, so I think it's very natural to have regulated casinos in France."
Overcoming Expansion Hurdles: Betsson's Approach
While expansion poses challenges, especially concerning licensing, Betsson, drawing from its extensive experience, remains optimistic about navigating regulatory complexities. The company's successful venture in Argentina serves as a valuable precedent, demonstrating its adeptness in obtaining licenses amidst bureaucratic intricacies.
Pontus Lindvall, CEO of Betsson, emphasizes the significance of prior experience in obtaining licenses, stating, "We know how to do it." Having encountered similar challenges in Argentina, Betsson's proficiency in handling regulatory processes positions it well for success in new markets.
Securing a license is just the first step; the subsequent challenge lies in market development and competition for market share. In the highly competitive Brazilian landscape, with over 150 legal operators and significant black market interest, this presents a formidable task.
Nevertheless, Lindvall expresses confidence in Betsson's ability to thrive, attributing it to the company's policy of offering localized experiences. Rather than adopting a universal approach, Betsson tailors its offerings to suit the unique characteristics of each market.
“We have a strong organization and we are very local in all the countries where we operate,” Lindvall notes. "If we can look at each individual market, understand its behavior, assess the competition, and meet customer expectations, we'll be in a great position to continue growing in the markets." This localized strategy is a key factor that Betsson believes will contribute to its success in overcoming the challenges of expansion.
Casino Triumph in the Fourth Quarter
In the fourth quarter of 2023, Betsson experienced remarkable success, with the casino sector emerging as a prominent catalyst for the company's record performance.
Casino revenue surged by 25.1% year-on-year, reaching €182.8 million, constituting a substantial 72% of the total group revenue. This marked a notable increase from the 66% contribution observed in the same quarter of 2022. Mobile devices played a pivotal role, contributing €157.8 million to casino revenue, making up an impressive 86% of the overall casino revenue.
Pontus Lindvall, Betsson's CEO, credited the casino results to the company's adaptability across diverse markets. He emphasized the importance of focusing on a mix of local offerings tailored to meet the unique circumstances of each country.
Lindvall stated, "We've been able to showcase the games that people prefer in local markets, and that may have helped a little bit. Every market is different. We have training that shows the games that are most popular." This strategy of aligning offerings with local preferences has played a crucial role in Betsson'ssuccess in the dynamic and ever-evolving casino sector.
Navigating the Black Market Challenge
In addition to grappling with regulatory hurdles, the surge in the black market's influence in certain regions poses a significant challenge for legitimate operators. These operators find it increasingly difficult to compete due to over-regulation, manifested in stringent marketing, product, and tax restrictions.
Betsson CEO Pontus Lindvall points to Germany as a pertinent example of excessive regulation leading to an influx of players into the unlicensed black market. A study conducted in November revealed that nearly half of all online gambling activities in Germany are conducted through unlicensed operators. Lindvall emphasizes the impact of stringent betting restrictions and easy access to unregulated gambling as factors driving players towards the black market.
Lindvall questions the effectiveness of regulation in countries like Germany, where a vast majority of the population opts for unregulated options. He draws an analogy, stating, "If we were talking about speed regulation, would it be acceptable if 90% of drivers didn't obey the rules? There needs to be a better balance."
He identifies Germany as just one among many European countries that are burdened with excessive regulations, resulting in diminished competitiveness for legal operators and undermining channelization efforts across the continent. Striking a better balance between regulation and competitiveness is essential to address the challenges posed by the growing prominence of the black market.
Bright Prospects for Betsson
Despite the prevailing challenges, Betsson has ample reasons for optimism, owing to its remarkable performance in 2023 and the promising future shaped by the bustling sporting calendar of 2024.
The upcoming 2024 European Championship, commencing in June, holds particular significance for Lindvall, who deems it the grandest event of the year, poised to elevate activity across various verticals, extending beyond mere sports betting.
Lindvall anticipates a surge in overall activity within Myera, expecting an influx of new customers. While sports betting will dominate, he acknowledges the diverse interests of customers in other products. Furthermore, Lindvall notes that the industry itself will bask in the spotlight during the year's major sporting tournaments, a prospect he finds highly gratifying.
The robust financial performance in 2023 provides Betsson with a strong foundation to sustain its mergers and acquisitions (M&A) strategy. Recent activities in Belgium and the Netherlands reflect Betsson's commitment to this approach.
Lindvall remains steadfast in maintaining the winning formula, expressing the intention to persist with the strategy of small, purpose-aligned acquisitions. These strategic moves include venturing into new markets, exemplified by the acquisition of Betfirst in Belgium. Additionally, Betsson has strategically acquired payment companies in Latin America, showcasing a resilient balance sheet, a robust financial position, and a continued commitment to pursue mergers and acquisitions in the future.
Outlook for Betsson in 2024
In retrospect, 2023 stands out as an exceptional year for Betsson. With a robust balance sheet, the company is poised to embark on a promising journey in 2024, surpassing many of its competitors in the exploration of new markets.
