Besson’s chief executive, Pontus Lindwall, was, in his own words, “more or less fired” last year before his term was extended due to a shareholder uprising. He tells Daniel O’Boyle that he hopes to work on things like opening new markets in Latin America and the impact of tighter regulations in Europe, thanks to his reprieve.
In September 2021, in a brief press release, it was announced that one of the industry’s most prominent figures had stepped down.
Officially, Besson has announced that Pontus Lindwall is stepping down as CEO, but he doesn’t appear to be playing down what happened. he says bluntly.
Given what happened next, Lindwall might be prone to being outspoken. The announcement sparked an uproar from shareholders, prompting a vote of no confidence in chairman Patrick Svensk and prompting the election of a new board of directors to keep Lindwall in his post.
“I didn’t even leave the office. It was a very quick response,” he says.
The reasons that kept him in that position were likely closely related to the reasons given by the board of directors for his resignation.
Lindwall returned to Besson’s top leadership role in 2017, six years after his initial retirement to implement a recovery program after a series of difficult quarterly results.
In the second quarter of 2021, the business reported record pre-interest and tax earnings. Svensk said this meant the business was “back on track” and that Lindwall had completed its mission, but for shareholders it would be unwise to deviate from the formula for success. It may have seemed like no.
“Obviously they’ve been shareholders for a very long time, and I think they’ve been very happy shareholders for a long time,” says Lindwall. “And they seem to have had a different view than the majority of the board.”
So, with Besson and Lindwall given new life as CEOs, do you have any big goals?
“There is a lot of work to be done in these industries. Yes, there is unfinished business.”
land of opportunity
That business could include many new markets, including Latin America, which has received particular attention recently.
Betsson has made a number of strategic acquisitions focused on the region, including Colbet, facing Colombia, and Inkabet, Peru. At the same time, he launched a core brand in the city of Buenos Aires, Argentina.
“This is a big opportunity,” Lindwall says of Latin America. “It’s a huge market. It’s a few years behind the European market in terms of development, both technically and legally, but the interest in sports is very high.
The ultimate prize in Latin America, however, has to be Brazil and its soccer-obsessed population of over 200 million. Betsson is poised to launch his fixed-odds sports betting in Brazil in 2018, acquiring his 75% stake in local operator Suaposta. At the time, legal fixed-odds his betting seemed imminent.
Four years later, the market has yet to launch due to numerous delays. A major breakthrough was made in May when the government released draft regulations for the sector. With the 2022 World Cup giving a clear target date for the launch, Lindwall said Besson will do what it takes to have a product for Brazilians by that date.
“If the regulations are approved in time, it’s up to us to prioritize and see if we can get the system up and running for the World Cup,” he said.
The operator’s focus in Latin America is clear, but the strategy in another new market to stimulate the industry may appear more modest. Business is expanding in the US, but primarily a B2B proposition . The company’s B2C product launched in March only in Colorado.
According to Lindwall, the launch is not a move towards a B2C-first approach to the US. Instead, consumer-facing brands exist to complement technology offerings.
“This is not a change of strategy,” he explains. “The U.S. is a huge market and it would be very expensive to have a full-fledged B2C rollout there. I think it fits well.
“But we also recognize that in order to be able to present our B2B products to the US market, we need to go to market and validate our products. So we started our own B2C operations in Colorado. There, we will continue to acquire market knowledge of the product while also using it as a showcase for our sportsbook and technology.”
As a business with its own sportsbook technology currently on display in the US, Betsson is involved in its share of M&A rumors. However, when it comes to potential deals, Lindwall views his business as a buyer rather than a seller.
“We are in an acquirer position and made several acquisitions last year,” he says. “So we will continue to be on the buyer side. Doing M&A is part of our growth strategy.”
European challenges
These new markets offer new opportunities, but the operating environment in Europe is becoming more complex.
In the Netherlands, Besson was part of a wave of international operators who passively accepted Dutch bets before remote gambling laws came into force, blocking all Dutch customers when the market opened. .
Whatever the intent of these rules, Lindwall said it was clear that state-owned companies such as Nederlandse Loterij and Holland Casino would be the beneficiaries.
“We had a good deal of revenue from the Netherlands before 2021 because we bought a company that was accepting Dutch customers when the Dutch authorities said they were going to regulate the market,” Lindwall said of the 2014 deal. mentioned with reference. Acquire Orange and Kroon. “Obviously, this process was much longer, followed by this cooling-off period.
“We were not very happy about it because we had to sit on the sidelines as the state-owned company gained market share. We look forward to entering the market.”
He notes that if Besson is allowed to launch, it may be difficult to gain market share from incumbents as the industry faces new advertising restrictions.
“Of course it’s a challenge for us to do,” he says. “We would have been in a better position if we could have started at the same time as the national business, but we have to deal with the situation and run a very good business and see where it can lead us. I have.”
Germany was not so good. The country’s new online gambling regime, which allows online slots and table games nationwide, came into effect last July. Although he is the only operator licensed under the new system, Besson is part of a larger group playing to the new rules as part of the transition regime.
However, these new rules are one of the strictest in a fully regulated market, with slots stakes capped at just €1 and deposit limits imposed on all operators, with limited exceptions. Applies.
Besson says these rules are paying off in recent results. Lindwall said much of the lost revenue went to the black market.
“I think regulators need to reassess the whole situation because no regulator is happy with a situation where the majority of revenue ends up outside the regulated market,” he says.
Lindwall believes that something needs to change to make the market viable, not just in terms of black market enforcement, but these rules as well.
“I don’t think targeting the black market alone will solve the problem,” he says. “We need to enable operators to have competitive products.
“It doesn’t mean that we have to start all over again, but we definitely need to have a product that is sufficiently compelling for our customers.”
Start of change?
An event in Besson’s home country of Sweden hasn’t been very friendly to the industry, but optimists may be able to spot some buds in 2022.
In January, the government decided not to make the 5,000 SEK deposit limit for online casinos a permanent feature. In May, we chose not to pursue a ban on gambling ads between 6am and 9pm, instead focusing on licensing B2B suppliers.
Despite the challenges, Lindwall recognizes that regulator Spelinspektionen now has an opportunity to reduce the level of political interference somewhat and focus on addressing the issue of country channelization.
“Regarding these measures [such as the deposit cap] It was a bit problematic because it was done so quickly without a lot of research and work behind the proposal,” he says. I think we can.
“Obviously, the regulator’s aim is to deal with fairly low channelization. People are playing outside of regulation and this is a problem for all regulated markets. We need to come to the conclusion that we need to be able to offer a suitable product with
But even if regulatory challenges across Europe are resolved and the most anticipated new markets are successfully launched, Lindwall will never truly meet all of his goals in the role. I don’t think so.
“There is always work to be done and work to be completed.”
