An Optimistic Outlook
Although 2019 presented difficulties, especially in the Swedish and Dutch sectors, Betsson AB Chief Executive Jesper Svensson informs Tim Poole that the gaming sector is in much healthier condition than many insiders would suggest.
Individuals considering abandoning the gaming industry might benefit from a conversation with Jesper Svensson. In a sector saturated with pessimism, the Betsson CEO emerges as a symbol of optimism.
Conversing with Gambling Insider regarding the obstacles confronting operators like Betsson in the current market, the Swedish executive offers a practical perspective. However, it’s a practicality that never allows Svensson to overlook the advantages of working in a role he considers himself “fortunate” to hold.
“We must keep in mind that this is a fantastic industry to be a part of,” he states. “It’s experiencing structural growth and will continue to do so for many years to come. Both online and offline are expanding; online is growing at a faster pace, making it a favorable space to be in. The industry has been expanding at positive rates for numerous years. Occasionally, it experiences a slight slowdown, requiring the industry to adapt. Throughout all of this, it’s crucial to remember that the industry is robust and expanding.”
Naturally, Svensson’s words stem from a place of expertise, having initially ventured into the world of gambling back in 2006. The executive is currently in his sixth year with Betsson, having previously held roles at Ladbrokes, InterCasino, and Bodog.
Betssons Chief Executive, Pontus Lindwall, has witnessed substantial shifts in both the company and the sector throughout his tenure residing in Malta, a prominent center for online gambling. Assuming leadership in 2017, a tumultuous period for the organization, he guided them through a comprehensive reorganization to tackle internal obstacles. This culminated in a considerably more hopeful 2018, marked by a 15% surge in income and a prosperous recovery.
Nevertheless, 2019 ushered in fresh difficulties, primarily originating from external sources. Regulatory adjustments, particularly in Sweden and the Netherlands, affected the entire industry. Lindwall recognizes these hurdles, observing that regulatory burdens have grown significantly more pronounced compared to merely six years prior.
Despite this, Lindwall maintains his emphasis on the favorable aspects. Malta’s position as a primary hub for the sector signifies that Betsson is amidst a concentration of competitors and vendors. The island practically thrives on iGaming, with workplaces clustered together and industry experts a frequent encounter.
Certain individuals discover the bustling ambiance here somewhat suffocating. Others remark that the absence of variety is unappealing. Not Jesper Svensson, however.
“I relish residing on the island,” he states. “I believe it’s a fantastic way of life; you possess the Mediterranean Sea, you possess the sunshine, which is consistently a plus, particularly originating from Sweden. I also believe Malta is fertile territory for online gaming. It’s highly significant for Malta; it’s a top priority for the nation.
“That in itself generates a favorable setting. It’s one of the most robust sectors on the island.” And if circumstances ever become excessive, Svensson adds: “It’s a compact country, but it’s remarkably simple to journey from, so you can always venture elsewhere for the weekend. I also travel extensively to our various branches globally.”
Svensson’s daily routine in Malta centers around the operations of Betsson. Now, certain perusers may require elucidation on that; if you happen to be one of them, you might be pondering: “Wait a moment, isn’t Pontus Lindwall the Chief Executive Officer of Betsson Group?”
Svensson affirms that indeed, Lindwall is the CEO of Betsson. However, the executive is pleased to elaborate, acknowledging *Gambling Insider* is not the initial publication to inquire about how his position functions in conjunction with Lindwall’s.
“It’s an exceptionally well-defined structure where Pontus serves as the CEO of Betsson AB, which is publicly traded on the Stockholm Nasdaq,” the Swedish national clarifies.
The overarching organization, Better Collective, concentrates its resources on the dynamic realm of wagering. In my capacity as COO, I function as the operational linchpin, ensuring seamless coordination across our subsidiary entities. To illustrate, while our CEO steers the financial course, I’m immersed in the daily mechanics, guaranteeing that our marketing and technology divisions are operating at peak efficiency.
The symbiotic partnership between the CEO and COO is readily apparent, characterized by well-defined parameters that preclude any workplace comedy-esque clashes. “Each day presents a novel obstacle,” remarks the COO, underscoring the intricacies of functioning with regulatory approvals spanning twelve distinct territories. Every market poses its own set of unique impediments, necessitating a nimble and responsive strategy.
The progressively stringent regulatory landscape presents an ongoing challenge, exemplified by Sweden’s 2019 gaming reforms. Despite initial projections of becoming a cornerstone within the newly liberalized Swedish market, the actual experience has been more intricate, a tapestry of both triumphs and disappointments.
The Swedish gaming giant, Betsson, is navigating a turbulent period in its domestic market. Although the Scandinavian region offers both prospects and obstacles, the firm’s latest results underscore the existing difficulties.
Their six-month financial statement reveals a meager 2% rise in income, totaling 26 billion Swedish Krona (approximately $2.8 billion). More worrisome is the 5% decrease in income for the April-June period, falling to 12.7 billion Swedish Krona. Profits also experienced a downturn, with operational earnings shrinking by 12% in the first six months of the year. The second quarter proved particularly challenging, as operational earnings tumbled from 3.007 billion to 1.969 billion Swedish Krona. Their primary wagering operations were hit hardest, witnessing a 10% contraction in the April-June quarter.
The difficulties extend beyond mere figures. In 2019, penalties were levied against several firms, including a Betsson branch, for breaching newly implemented gaming regulations in Sweden. These regulations have sparked some tension between the sector and regulatory bodies. However, specialists predict this will improve with time, a sentiment echoed by Betsson’s Chief Executive, Pontus Lindwall. He acknowledges the initial roadblocks but maintains a positive outlook on the long-term advantages of a regulated market.
Lindwall contends that striking the right equilibrium is crucial – regulations should be sufficiently stringent to safeguard players and ensure fairness, but not overly restrictive to the extent that businesses and players are pushed towards unregulated options.
This equilibrium hasn’t been completely achieved in all territories currently, as I believe it’s crucial from a supervisory standpoint that overseers cultivate and bolster businesses within the structure, and don’t allow for prospects outside of those structures.”
The Chief Executive of Betsson Group commended the Malta Gaming Authority. “I perceive them as one of the most capable regulatory bodies, perhaps even the most capable, considering the experience and proficiency they possess within the [Maltese] regulatory body,” he remarked. “They have much to offer other regulators. Certainly, they are a strict regulator; this has grown increasingly evident, and they have implemented decisive measures over time.”
When questioned by Gaming Insider about how the Maltese regulatory body might have addressed a comparable re-regulation, Svensson pointed out that Sweden is “still in the initial stages.” “The discourse between the operators and the regulator isn’t as established as it is in other jurisdictions, so I anticipate that will progress moving forward,” he commented. “It’s also about receiving appropriate direction. If you require some guidance within the new regulation, it’s vital that the regulator furnishes that to the operators, and doesn’t simply direct them to the legal text. I believe the Swedish regulator has some tasks to address in that domain.”
Tobias Fagerlund of Global Gaming would probably concur with Svensson’s evaluation.
In the month of June, the Swedish gaming regulator rescinded the Swedish permit held by SafeEnt, a branch of Global Gaming. Chief Executive Tobias Fagerlund vehemently opposed the ruling, labeling it “unlawful” and asserting that the regulatory body had misconstrued an ambiguous statute. He further disclosed that he was only notified of the determination a mere eight minutes prior to its public announcement, at 8:00 am on the first day of the workweek.
Fagerlund continued by stating that these circumstances often gain clarity with the passage of time, referencing the multitude of penalties levied upon operators in Sweden during that year. He posits that this is not due to companies intentionally attempting to operate improperly, but rather a deficiency in unambiguous direction from the regulatory authority.
The Netherlands presents an additional regulatory obstacle, as previously emphasized by Pontus Lindwall, the head of Betsson. The year 2019 marked a pivotal moment for Dutch internet gambling, with the eagerly anticipated Remote Gambling Act finally receiving approval. Industry expert Willem van Oort characterized it as an “unbelievable occurrence” to witness the Act become law after two and a half years. This action set the stage for license applications to commence in the middle of 2020, with the market formally opening on the first of January, 2021. Significantly, there existed a 24-month “grace period” during which businesses were ineligible to apply for a license if they had conducted operations in the Netherlands without one within the preceding two years.
Svensson stated, ‘We are confident that we will ultimately penetrate the Netherlands market as it becomes increasingly receptive. To align with their requirements, we needed to implement certain modifications to our offering, which we have now accomplished, placing us favorably to pursue a permit. Therefore, we have undertaken these alterations to enable our engagement within the Dutch regulatory framework.’
The concluding jurisdiction might spark intrigue among readers: the United Kingdom, another rigorously regulated and fiercely competitive market that both ComeOn and EveryMatrix have withdrawn from in recent times (for an in-depth look at Maltese enterprises departing the UK, refer to page 32). In December 2018, Betsson declared the closure of its office there, and its Netplay label will not be extending its agreement with the BBC. Numerous observers interpreted this as an indication that the operator was downsizing its UK operations and potentially contemplating a complete exit. However, Svensson informed _Gaming Insider_ that the company has not abandoned the UK market and has no intention of doing so.
‘We maintain a presence in the UK market; we have not departed,’ the Swedish executive affirmed. ‘However, our activity level is not as pronounced as it was a couple of years ago. Presently, we are in the process of transitioning a business we acquired a couple of years ago – the NetPlay brand – onto our proprietary platform, a process slated for completion by the end of the current year. We remain engaged in the UK, but our investment level is not at the same scale as it was a couple of years ago.”
Integrating these labels into the NetPlay portfolio signifies prioritizing product refinement before contemplating additional ventures. This constitutes our primary focus currently.”
Svensson highlights that beyond established markets, a vast realm of possibilities beckons. Betsson, he stresses, commands the entire user journey through their proprietary sports betting, gaming, and transaction platforms. As Betsson commemorates its 57th anniversary, the appetite for expansion and market dominance remains undiminished.
As our discussion approaches its conclusion, Svensson returns to a subject evidently close to his heart. He restates his conviction in a cooperative strategy within the gaming sector. “It’s imperative that we, as a sector, engage and collaborate more efficiently. We must aim for collective objectives that benefit all parties. This hasn’t consistently been our strength.” He appends, with a glimmer of optimism, “Nevertheless, I perceive favorable shifts emerging. Shifts that can unite the industry and foster a shared sense of direction.”
“Reflecting on the media narrative over the preceding year, I sense an excessive emphasis on negativity. The truth is, this sector is evolving. We’re becoming more resilient, more adept. Remarkably positive advancements are transpiring, and those merit greater recognition.”
The realm of interactive entertainment in 2020 could have been considerably more captivating if other organizations had followed Svensson’s lead. The head of Betsson Group remarked, “Each year presents its share of obstacles, but also prospects.” He posits that the possibilities within the gaming sector consistently eclipse the difficulties.
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