iGaming Daily

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Hi, my name is Victor Kayat and I'm a senior journalist at SBC. Today in this iGaming Daily Podcast episode, I'm joined by Pontus Lidwell, CEO of Bettson, to discuss the company's latest financial report. Now, before we get into the topic, it is probably an appropriate time to mention the lead supporter of the iGaming Daily Podcast, and that is

the number one CRM marketing solution in the iGaming market. For new companies wanting to claim a first free month of OptiMove, go to www .optimove .com slash SBC to claim said month. The link will also be put in the podcast episode description below. So, hi, Pontus, thank you for your time. Going straight into the questions, can you detail how...

You have diversified your portfolio and market mix since returning to leadership in 2022. Yeah, I think it's been in Betson's DNA all the time to be present on many different markets. So we have a very diversified market mix and we still work with that. Of course, it's a little bit more complex to handle a lot of markets at the same time, but it gives

some protection in the way that we are diversified. How long can Bettson out space its consecutive peak performance momentum? Yeah, that's a very good question. We've been on a very good run now for a couple of years, and this is due to decisions that we made four or five years ago. But now we have a good platform, we have a very good team in place.

I hope that we can continue to be strong in the market. And going a bit deeper into that from your recent report, you registered 25 % growth in active customers. What's your customer retention strategy going to be to capitalize on that? Yeah.

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Of course, look what we can do after the tournaments. It's quite natural that the number of actives goes up during these tournaments that are very popular, very broad interest for tournaments like the Euro and the Copa America. And now it's up to our team in the CRM division to continue to communicate with the clients and find.

good offerings for them to get them to continue to stay with us. And I wanted to expand a bit on that customer growth. Obviously, it comes with market expansion as well. So I'm going to direct you to Latam now. Can you tell us how are you incorporating your market visibility in Europe into your Latam growth strategy? Yeah, we're trying to be

global in what we do, we do more global initiatives. And one example of that is the Inter Milan sponsorship that we presented in the report, where we will be main sponsor for that team. Of course, it's an Italian team with a strong knowledge and presence in Italy, but it's a huge club. It's one of the best clubs in the world. They have a long history and they have

very large fan base also in Latin America as an example, but globally actually. So we tend to shift more to global initiatives like that than doing only local marketing in the different markets where we're active. And about Peru specifically, the country has become a key growth area.

And how important is the new platform integration of IncaBit already? It puts IncaBit in a better position in Peru. as you mentioned, have, Peru is important to us and we have great plans going forward to, for that, for the country of Peru. So we're happy to be on a new platform and be more competitive on with that brand in Peru.

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And is IncaBit a platform for more market launches in South America or is it just going to serve as a standalone brand in Peru? For the time being, it's the standalone brand in Peru, but you never know. We'll see what happens in the future. And speaking about the future, are you worried about a higher tax exposure for bits and brands in Eastern Europe and the Latin markets?

It's something that we have known about for a long time that when we are a global company, when markets regulate and we are licensed in more and more jurisdictions, the tax burden will go up. This is something that we have expected. And of course, as a company, we are cautious about costs and that also goes for tax. in the case of taxes,

It's a cost that we have expected and we're going to live with it. And as we see in this report, we managed to sustain a very healthy profit margin despite the higher taxes. saw Star Casino performed very well in terms of the Western European metrics. Will Betsan double down on Star Casino investment in Italy? Star Casino is doing really

I can say recently we also launched Batson .it, which is our flagship brand Batson in Italy. So they're gonna go in parallel there. And I think we expect to see some uptake also on Batson in Italy. So it's not gonna be only Star Casino that we put our efforts into. So we're looking to diversify in Italy specifically.

Yeah, in the way, Starr Casino is more of a casino brand where Betsson is more of a sports brand. So now I cover up for both verticals. Nice. Okay. And can you talk about how is Betsson advancing on its sportsbook vision across multiple markets? Do you want a better income earnings balance between casino and sportsbook performance?

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It's not something that we work very hard on to change that balance. Both products are growing and the products as such go hand in hand. We can see now that when we had the big sports tournaments, the Euros and the Copa, then we see increased activity also in the casinos. They go pretty much hand in hand and we will continue to

invest in both those products so that they can complete each other. Okay. And I wanted to also stay in Western Europe to ask you about Sweden, adjustments there continue in Sweden for bits. And do you see any growth potential in mature Western markets for the company? Yes.

We could grow in Sweden as well. It's just a matter of prior to recession where we right now prioritize other larger markets where we see better opportunities than we in Sweden. So, but we are going to continue in Sweden. We have a great offering and we're doing decently well here. So, we're going to continue, but we cannot rely on Sweden or the

to sustain our future growth, we have to be a global company and go for the larger markets. All right. And can you briefly share your perspectives for the rest of the year? What are your expectations? Now it's going to be a little bit more, a little bit lower activity for a month or so after the tournaments and

The big leagues, the big soccer leagues are on holiday. I expect things to pick up like mid -August and then it's going to be full speed ahead for the rest of the year. We have some product launches, we have marketing initiatives that we're going to bring out. So I'm looking forward to the bottom and I hope we can keep the momentum that we had in the first half of the year, also in the second half.

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Nice, well with 10 consecutive quarter growths, we're keeping an eye on Betsan as well and we're excited to see what's next for you guys. yeah, congratulations once again, Pontius on the latest results and yeah, thanks for the interview. Thank you very much. Bye bye. And that was SBC News' Senior Journalist, Victor Kayed.

speaking to Betson's CEO Pontus Linwall on the firm's latest Q2 financial results. And off the back of that, I'm joined by SPC's content director, Ted Memwe, to dissect what Linwall discussed while also looking into parts of the firm's financial report that wasn't mentioned. First off, Ted, hello, how you doing? You okay? Yeah, very well. Very well, James, how have you been? Yeah, I've been alright. I've been good. People can't see this now, but I've shaved my head. I hadn't noticed!

Yeah, I've gone for the absolute Heisenberg look. Well, I'll say Heisenberg maybe a Kratos from God of War. He's probably more accurate. But you know, I've gone bald. I took inspiration from John Bruford of the gambling, the gambling podcast files, whatever that podcast is called. okay. There's now two bald hosts in the gambling sector. All right. Okay. Just in time for Lisbon. That was the main reason. So I need to

get some sunburn on my head before Lisbon so I don't get absolutely burnt like I did in Barcelona a few years ago. Yeah, note to self, yeah. Off my bald head, we're going to talk about the interview that we've just listened to with Pontus Lundwald and also just talk about some things that we won't discuss. But first off, what were your thoughts on what Pontus mentioned? Yeah, interesting interview. And one thing that comes out

Pontus's kind of one to one is how confident he is of that strategy and of the brand makeup and the diversification of Betson as a group, its approach to market. And one of the things, I mean, we're to go on to review the numbers, but again, what is highlighted here is the active customer base. And I think what Betson is doing strategically very

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which other brands aren't in the same kind of category as gambling PLCs is that it's going, yes, first to market, but it's also applying a very good recreational approach to its products with high customer engagement, right? And that is kind of such a positive performing, you your platform in which to grow on a market by market basis. And it's doing so against

kind of a hardening in individual markets, especially if you had Eastwards, which we're going to talk about later on, that the headwinds are kind of coming. But I think Betson are diversified enough to tackle those challenges. Yeah, part of that interview, I... Goodbye, Victor, stuff. And you mentioned...

success in kind of like the South American markets and so forth. But what were your key highlights from Bettsons Financials and I've already mentioned kind of active customers. I'll start there. So active customer base is now kind of indexing at one point six million per month. And again, this comes solid diversification of the brands. And if you look at kind of the financials, kind of beta makeup, which at Q2 still had 78 million. Yes, you can argue

Bettson is still kind of very much casino leveraged. However, its sportsbook numbers are growing. I think that that part, it's one of the things that you're seeing from kind of diversification is that it can apply kind of sportsbook growth to South American markets and EE markets. So that means that there is kind of less, there's that less risk exposure on the casino alone.

Overall, there's so much to be positive there for the business. The other thing here is that the beta margin at 28%, that's really going to please investors. we're now, especially at this period in gaming where the investors are prioritizing kind of cost control and operational efficiency, that is a metric that they will be looking at, which is at 28 % is.

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you know, pretty much amongst the highest in the iGaming world. There was a lot of talk about kind of the positive trends that we've seen, the upward trends that we've seen from Betson's Q2s. Let's kind of take a shift in focus and let's look at some of the downward trends. And one of those is net income, which was down 5 % with operating cashflow dropping up by 15%. What do you think are the reasons behind this decline?

Okay, so as explained on accounts, look, high expenditure and this was anticipated, was expected from Copa America and Euro 2024 tournaments. And also the period kind of is adjusting to higher tax exposures in Eastern European markets that are kind of re -regulating or re -re -launching regimes, right? Bettson is also spending cash in new markets. It's got its upcoming

migration to a new platform with gaming, gaming innovation group, which is a big project. And also it is spending in markets such as Italy. So it's really doubling down on its investment in Star Casino and it's launched its Bettson .it sportsbook brand out there. One of the things to look at kind of that net income, it's like, yes, income is down 5 % overall. That is kind of marginal. However, what you're then seeing is Bettson again,

going back to its active customer base, that is increasing on a month -to -month basis. Now, if you were to be kind of concerned by that metric, what you've seen, or if I could take you back to like William Hill, for William Hill's interim results, it's that they were the opposite. They're spending cash, but they're not increasing their active customer base. And that kind of proves

their strategy is very much saturated within the UK and primary Western markets. think Betson is the opposite of that. You can look at that net income coming down, but saying, heck, they are getting something out of it. And longer term, once that recreational strategy comes into play, the net income should expand or get back to indexing on that month -on -month record basis that they're seeing.

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So, know, Betson also witnessed success in various markets like we've mentioned previously. They've had records in Croatia, Lithuania and Estonia, and they continue an upward trend in Latvia and Greece. However, I just kind of want to focus on one market and that's Georgia. We've recently just had a Tbilisi event there as well. We saw revenues here fall due to lower sportsbook margin and lower activity in the casino product. And just with kind of everything that's been going on in Tbilisi for the past few months.

I just want to get your thoughts on the drop here and should there be a long -term concern for this in the Georgia market? mean, by long -term concern, think look, Bettenell committed to the Georgia market and being there. And yes, you're right. The primary kind of revenue source has been casino. And I think they're trying to extend that to the sports book that they have there. Georgia on the whole is going through a period of a long -term adjustment.

with the government bringing kind of new regulations and especially they're to be very restringent on who can play in who can participate in gambling. So effectively, if you are a, think it's much stricter on under 25s, but also they're putting strict policies of anyone who has a government or public service job being able to gamble. I think every operator in that market will be undertaking

some significant adjustments. But looking at Betson, I think that it has sufficiently diversified its business across those markets. So it can kind of take an impact for the remainder of the year on Georgia and hopefully come back to growth in 2025. It would be expecting a rebound in that market.

Again, let's shift to, I'm going to shift to two other markets, so it's going to be a two prong question just because we are limited on time. With Investments Report, the witness to drop in the Nordics revenue, which was down 8 .5 % to 47 .3 million euros, accounting for 17 % of the Q2 total. They've already mentioned this is mainly down to lower customer activity. We also look at the rest of the world revenue, that slipped.

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6 .6 % to 3 .9 million euros or 2 % of the quarterly total. They've mentioned this is mainly driven by weaker performances in Nigeria. Just want to get your thoughts on those two markets. Maybe start with the Nordics and then we'll finish with rest of the world. Okay. I'm going to have to balance off the rest of the world stuff, but on Nordics, I believe that this is being replicated. This, this just mirrors.

trends primarily in Sweden in how kind of that market has been kind of rectified in the past 12 months serious adjustments for KPIs the cost of servicing the player has increased tenfold Pontus has been very honest about his approach to to the Nordics and Saying that actually as of last year He the Nordics has been overtaken by

market performance in EE in Latin America. Where he sees kind of growth in Western European markets, it's in the likes of Italy where they believe that they can still take market share in the online game, especially from players transferring from land -based gambling to online. Does Betts need to kind of re -strategize for Sweden? We'll see in the coming months. How

It's prepared to kind of invest in that market in its home market to really kind of maintain position as stands. There is no kind of positive outlook in the Nordics for the majority of operators and that will be replicated by the likes of Kindred, Leo Vegas. It is a much, much tougher market now. Okay. And then kind of just to round off, know, Batson haven't actually provided

kind of much into the H1 performance. You could probably dissect it through the Q1 reports and the Q2s, but as a whole, they've not mentioned too much. How do you think the company's performed and what do you expect from them kind of moving forward into the second half of the year? I think you have to stand back and analyze where bets and are compared to its competitors. One thing that is in Betson's favor is that they're not a PLC under reorganization. They're not under that tag.

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Refreshingly, you know, we're speaking to CEO who backs his strategy. That isn't talking about a realignment of brands, really likes the portfolio and really likes the approach to how they go from market to market. Going into H2, and a lot of this is dependent on whether the Brazilian market will launch in time. I

I think if you're an analyst, you're of looking at that and saying, what is Betson's commitment going to be to Brazilian market? And how will it navigate the first phase of launch for its brand proposition out there, knowing that there's going to be a wave of significant marketing expenditure? And again, this comes back to your concerns about kind of net income. It's can Betson end actually.

For lot of gambling PLCs out there, it's who's going to be kind of the first brand to really get kind of recreational metrics out in Brazil. And that is kind of going to be a big, big multimillion pound, multimillion pound a dollar question. Perfect. Like with everything, with the second half of the year reports, Ted, you'll be covering it on SBC when they break for the Q3s and Q4s. So for listeners out there, do keep your eye on SBC News.

Ted's team will also be covering the Q2s as and when they break. So again, keep your eyes peeled on SPC news. Apart from that, I've been James Ross. This has been Ted Menway and in the first half of the show we had Victor Kayed and Betson CEO Pontus Glennbault and this has been iGaming Daily. Thank you.