What issues are currently high on your agenda?
We are currently working on what we call the ‘back on track’ plan, an initiative we launched a year ago to make the company perform better. In the last few years, Betsson’s organic growth was lower than anticipated. We had acquired several companies, which resulted in quite a few duplicate positions. At the same time our organic growth slowed down, and we weren’t fast enough in bringing out new products. So we decided that we needed to take a step back and restructure our operations. Part of this plan was to stop acquiring companies and focus on the core platforms by making them stronger from a product point of view. We also started to implement a number of improvements on the marketing side. As part of our right-sizing exercise, we had to make a number of people redundant. While this was painful, it was unfortunately inevitable. Betsson is now in a much better position than it was a year ago. Beyond our restructuring exercise, as a Swedish company the new regulatory regime in Sweden is very high on our agenda. We are excited about this development, as we believe that an open, competitive and controlled gaming market is positive for customers, operators and shareholders.
How would you describe your strategy and business model now?
We aim to deliver the best customer experience in the industry. That’s our vision. Strategically we focus on three core areas to deliver on our vision. Those areas are Talented People, Quality Products and Operational Excellence. From a brand perspective we are leveraging a multiple brand model, which means we can focus on a larger number of client segments and localise our offering. While Betsson is the leading brand of the group, our smaller local brands are delivering good results by having a greater consumer attachment. Localisation, and local regulations, is very much the name of the game these days. Today, we have regional and country teams, which means we are very efficient in our marketing. We are a data-driven company, and we track our return on investment for different brands and markets. I would say that this hybrid business model brings a lot of new opportunities. Our research shows that the average customer plays on 2.5 gaming brands, so with several brands there are higher chances to attract customers. The mix of a strong flagship brand and smaller localised products offers a strong mix for us.
Consolidation has been a major industry trend to develop in the coming years, and are you planning to get back into the M&A game?
For the time being, Betsson has been putting acquiring more companies on hold, but I think consolidation will remain a major trend. Various operators are successfully launching more brands, so I don’t think we will see fewer brands. However, in markets where regulations are coming into force, it will become very expensive to build a brand. In those cases, we might see a reduction in the number of competing brands, which will likely lead to further consolidation. Sweden is a very good example of this development. Today there are hundreds of companies targeting Swedish players, but not all of them have applied for a licence with the Swedish regulator.
The Swedish gambling commission will not allow operators to give bonuses to players, other than on the first sign-up. What effect do you believe this will have on the market? Will bonuses disappear?
I don’t think they will; they will remain an important tool. However, in markets that limit the use of bonuses, operators need to make sure that their products stand out, which is a healthy development. I think we will see a lot more creativity from a product point of view in the future.
Are you looking at bringing new products to the market?
We control a large part of our technology ourselves, and we are constantly updating it and adding new features to enhance the customer experience. 2018 was also a great year for our sportsbook, which has seen significant growth on the back of the World Cup.
What’s your opinion on the growth of esports?
I think esports offer a great opportunity for the future. However, compared with traditional sports betting, it is still a relatively small, but fast growing market. I think it will be a very nice add-on for the industry, and I also think that the interest in mainstream sports will remain.
Betsson's office is located in Ta' Xbiex
The MGA is launching a sandbox for Distributed Ledger technologies. Are you looking at adopting blockchain technologies and virtual currencies?
We are operating under licences in Malta and ten other jurisdictions, with a new licence from Sweden to be added in 2019. While we are interested in it, and are looking at what the MGA is doing, unless the other regulators are open to DLT and virtual currencies, we can’t adopt them and use them across all markets.
Compliance – from player protection to marketing and AML – has become more important these days. how do you believe the industry should react to these developments?
International operators are complying with very diverse requirements, which adds to the operational complexities and costs they have to manage. We should obviously follow the regulations, but they should also be reasonable. We need to protect consumers, but we also need to protect the business. I don’t see these two as opposites, it is possible to combine them and grow the business in a sustainable way. We take responsible gaming very seriously and offer players a wide selection of responsible gaming tools. We were the first company to recruit a responsible gaming manager 10 years ago. As an industry, we have not always been good at communicating what we do, but we see these increased compliance requirements, including GDPR and AML obligations, as an opportunity to improve the industry’s perception.
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Malta is your main base; does it still remain attractive for you?
Malta is a great business location with a strong pro-business environment. We set up in Malta in 2004, and we intend to stay. However, the talent pool in Malta is quite limited in some areas. While it’s not currently much of an issue to find staff on the marketing or operations side, tech-related roles such as engineers and developers are much more difficult to fill. That’s why we have offices in more tech-friendly cities such as Stockholm, Budapest, Kiev and Tallinn. In addition, the reality is that Malta really needs to keep pace with its own economic growth. If not, we will have more overcrowded schools, congested roads and high housing costs. I believe this is the time for Malta to invest in these areas if it wants to attract the right talent and facilitate future growth.
Where do you see the industry in five years time?
I think we are going to continue to see a lot more consolidation in the future, but the success of operators will depend largely on their ability to offer high quality, innovative products. I am also expecting some disruption; after all, this is a digital industry and things can spread quickly when someone comes up with something new. For instance, last year we saw ‘no account’ casinos pop up everywhere, which allow customers to play instantly by linking payments and signups to a BankID. It goes to show that an improvement to your product can have a strong impact. I also believe that the industry will experience more regulation; so obviously, it will be challenging to continue to invest in new product development while absorbing additional tax and compliance costs. However, those who continue to innovate will have a better chance of success. We, at Betsson, are working hard to improve operations, efficiency and products. So we are entering this new phase with confidence.
Jesper Svensson has been in the gaming industry since the mid-2000s. Over the years, he worked in senior positions in several gaming companies in Europe and Asia. He joined Betsson in 2013 as themanaging director of its flagship brand, betsson.com. In 2015, he became Betsson’s Chief Commercial Officer and was then made acting CEO in September 2017. Just three months later, he was appointed CEO for Betsson Operations. Jesper holds a Master in International Business from EAE Business School (Barcelona) and a Bachelor in Marketing from BI Norwegian Business School (Oslo). Jesper is passionate about sports and gaming