A group of CEOs from some of the world’s largest gambling companies are targeting growth opportunities in a host of newly regulated and regulating markets, with India, Brazil and Africa seen as key.
Quirino Mancini, the president of the International Masters of Gaming Law (IMGL), said that at the SBC Leaders Summit on September 19 roundtables covering Africa and Brazil were “overcrowded”, which speaks volumes about where some operators are going next.
Mancini made the comments as the moderator of the “Leader's Panel” at SBC Barcelona on September 20, where he asked about the desire of operators to consolidate in existing markets or expand into “new green pastures”.
Jesper Svensson, CEO of operations for Betsson Group, predicts that within the next five years, the scale of unregulated versus regulated markets will start to shift in favour of the latter for the first time.
Svensson warned that operators only in a few markets are at risk of regulatory changes affecting their business and argued that spreading a business across multiple jurisdictions is important in order to “de-risk”.
Kindred Group CEO Nils Andén agreed, explaining that “the combined output of markets is becoming more important” as “diverse regulations can occur”.
“Netherlands was a big hit for us. Relying on multiple markets helps. The key success factor is the ability of companies to navigate regulatory complexity and manage regulations without impacting the bottom line," Andén said.
Gustaf Hagman, the CEO and co-founder of the LeoVegas Group, said that since the company became part of MGM, “clearly we are going into the more regulated part of the industry”, adding that the company is not looking at grey markets “at all”.
“You can do more in regulated markets,” Hagman said, listing Brazil, Finland and Africa as “some exciting jurisdictions” coming up that will see “a lot of land grabbing to be done”.
Daniel Taylor, CEO of Flutter International, said when his business looks at new markets it considers “how we will win”, stressing the “critical” importance of having local knowledge and relationships.
“We believe it is important to have leadership positions in the ones you are in. But of course, we are always looking to add new leadership markets to the portfolio. We are less interested in tertiary positions in numerous markets,” Taylor said.
There are a series of markets that Taylor sees as future opportunities, including India, Brazil and Africa, as well as Flutter’s Turkish lottery business.
“It is about accelerating growth and our market share. We need to understand the long-term potential of other markets as well as what markets we will never operate in,” Taylor said.
When questioned about the company's approach to Africa, Taylor said: “We are launching next year in Morocco, then Tunisia next year taking monopoly positions. We continue to look across sub-Saharan and South Africa. Ultimately we want to be in all of the attractive markets.”
When entering these new markets, the gambling executives listed payments, market saturation and understanding the local jurisdiction’s regulations and consumer needs as key.
Svensson said it “takes a year to build a position in new markets” with an initial “trial and fail phase” but “long-term ambitions require patience”.
“One thing that is changing in new markets like LatAm and Africa: If you go from Sweden to Denmark, you can figure things out without a strong local partner, [but] a joint venture in LatAm and Africa is much more important. Local connections and local businesses have proper incentives to make the business work. That is a model we are looking at a lot,” Svensson.
Hagman similarly said: “New markets like Brazil and African jurisdictions require a deep dive into those countries to understand the culture to be a good operator. Things like language, dialect and how you treat your customers are really important too.”
Maarja Pärt, the CEO of Yolo Group, said she prefers to enter new markets “organically” and will try and ensure the businesses have a unique proposition in the markets as most operators have “similar suppliers and loyalty programmes”.
Pärt said businesses can then “acquire additionally if it is needed” after the initial “exposure from a group's perspective to know local circumstances”, which “is critical to building up strategic long-term plan in any market.”
“Think globally, act locally,” Pärt stressed.