Sportnco CEO Hervé Schlosser tells iGB how the rapid entry of sportsbooks into the new global market and how the recent acquisition with Gaming Innovation Group (GiG) was a “perfect match”.
Hervé Schlosser has worked in the sports betting industry for the past 15 years. He founded and launched Sportnco and was its CEO and major shareholder from 2008 to 2022...
We started as a B2C business for sports betting in the newly regulated French market. Obtained one of the first sports betting licenses in 2010. Since then, he has started B2B business under Sportnco in France, Europe and South America.
Schlosser negotiated the sale of Sportnco to the Gaming Innovation Group (GiG), which was signed in December 2021 and closed on April 1, 2022. He is currently the Managing Director of Sportnco.
Gaming Innovation Group (GiG) completed the acquisition of acclaimed sportsbook and platform provider Sportnco for € 51.3 million in April this year.
But Sportnco CEO Hervé Schlosser says joining forces with GiG wasn’t a natural step in their evolution. In fact, Sportnco wasn’t originally for sale.
According to Schlosser, it quickly became clear that the combination of geographic areas, product portfolios, and PAM products created a very strong integration force. So this combination makes strategic sense.
Companies, on the other hand, have a strong presence in different groups of regulated markets, but only in Argentina. Sportnco was very famous in France, Spain, Greece, Belgium, Portugal and South America, while GiG had a big presence in Northern Europe, Eastern Europe and North America.
Schlosser states that this is why companies are “perfectly matched and have little duplication.”
Sportnco launched B2B services in 2010, first for regulated markets in Europe and then in South America. After combining with GiG, the pair now has more than 610 employees from headquarters in Malta, Denmark, Latvia, France and other offices in Barcelona and Madrid, Spain, and sportsbooks in 36 different jurisdictions. And offers PAM solutions.
Dive into the deep end
Everything started for Schlosser 13 years ago when the French game market was open to competition. Schlosser acknowledges that the current success of his business began in such complex and highly taxable jurisdictions.
High tax required a high margin domestically, sales tax was 9.3%. This meant that operators had to work with a margin of 15% to 20% to maintain profits.
“We started as a B2C company and were one of the first eight companies to obtain a sports betting license in 2010 when the French market was regulated. Very much because we were building software for the sportsbook platform in France. I had the opportunity to do a B2B business quickly. “
The success of B2B operations, which started as an operator under the France Pari brand, ultimately generated similar levels of revenue on the supply side, surpassing the customer service business.
“A few years after the start of B2C activity, we made a clear decision from a strategic perspective,” Schlosser explains. “I felt the world was regulated, so I focused on B2B operations.”
In the future, with such a high tax market start, Sportnco will be similarly highly regulated, such as Portugal, which has already been signed by three clients, including the transition of Betway’s local operations in the second half of this year. We are good at entering the area.
Sportnco’s and GiG’s expansion efforts in North America further reflect its focus on gaining strategic position in high-potential markets while building a strong foundation across Europe. Lessons learned early on set them up for future success.
“Our understanding of regulated areas is where we can bring value to North America. We have a strong competitive advantage in our ability to offer attractive odds and good margins. There are two. It seems impossible to mix, but this is part of it. Our know-how. “
Common point
Both GiG and Sportnco started in Europe and had grown into a similar type of B2B business at the time of the acquisition. SaaS mode software for regulated markets, Schlosser believes it helped integrate early on. “In terms of culture, the ability to mix in-house has created a very strong team. Everything is going well.”
He says this effort focuses on combining the solutions of the two entities to develop a unified process for a growing company.
“As a business, we made our first deal [Full Games in] Angola was able to put together Sportnco’s books and platforms and combine them with GiG’s managed services, “he explains.
“GiG provides clients with unique licenses but no operational experience with the ability to enter the market and be successful immediately, providing marketing, CRM, and business operations to do so seamlessly. We can support this through the KYC process and pavement management. “
Sportnco and GiG subsequently headed the terms and conditions agreement with Crab Sports in early June. The Maryland-focused deal was the first US deal since GiG acquired Sportnco in April. Under the agreement, Sportnco and GiG can provide a complete solution including technology platform, CMS and sportsbook.
“It was amazing to be able to complete this transaction quickly in the United States. It was really impressive.”
When it comes to the process, Schlosser sees this as a combination of learning and education. “By using GiG, we were able to strengthen the process in terms of responding quickly to new regulations,” he says. “”[This enables] We act swiftly when expanding into new markets. Both companies are learning a lot from each other. “
Company dynamics
Going forward, Schlosser will select three priorities to ensure successful integration and successful expanded business. People, clients, and finance.
“In terms of people, we’re doing well. We held a seminar in Madrid two weeks ago and it was a huge success. There are so many reasons behind the merger of the companies and everyone I feel happy with its success. “
Schlosser acknowledged that the GiG team had prepared for the merger in advance, performed preparatory work before the transaction was completed, and confirmed that everything was scheduled and prepared before the transaction was completed. ..
As far as clients are concerned, the vast new network and product additions have increased and become even more powerful, as evidenced by the succession of full-game and club sports transactions since the acquisition was completed. I am. “We are now benefiting from sportsbooks with tools to accelerate player acquisition, and clients benefit from better products, developed tools and more access to various regulations. I am. “
He adds that there are signs that growth is accelerating when it comes to financial performance.
“So far, the integration has been successful and we want to maintain this excellent dynamics between Sportnco and GiG.”
And it sets up a business for a strong push to North America. “We look forward to continuing to expand our existing client base with the help of GiG, allowing our clients to hire more players and compete in multiple markets,” Schlosser says. “We also want to bring existing clients to the new country.
“We have Europe and we have added LatAm. Next we will add North America and Africa.”
With the FIFA World Cup taking place, this year’s success will continue only at GiG and Sportnco, with an extensive roadmap set for November.
“Our sports calendar drives our business. We are very excited about all future opportunities in 2022.”
