Navigating the Shifting Sands of the Gaming Industry: An Interview with Betsson CEO Jesper Svensson
An Optimistic Outlook
Although encountering obstacles in Sweden and the Netherlands during 2019, Betsson’s Chief Executive Officer, Jesper Svensson, desires to convey a clear message: the gaming sector is in a much healthier state than many perceive.
Individuals hesitant to enter the gambling realm might benefit from a conversation with Svensson. The Betsson Group head remains remarkably positive amidst a climate of industry pessimism.
In a discussion with Gambling Insider regarding the hurdles confronting operators like Betsson in the present market, the Swedish executive demonstrates practicality. However, this practicality also acts as a consistent reminder for Svensson to never overlook the advantages of operating in such a “highly favorable” position.
“We must keep in mind that this is a fantastic sector,” he states. “It is structurally expanding and will persist in expanding for numerous years to come. Both online and offline are experiencing growth; online is expanding at a faster rate, making it a very advantageous position to be in. This industry has been developing very positively for many years. Occasionally, there are periods of slight deceleration, requiring the industry to adapt. What’s crucial, amidst all these transformations, is to remember that this is a robust, growing industry.”
Naturally, Svensson’s remarks stem from a place of expertise, having initially ventured into the industry back in 2006. The executive has now been with Betsson for six years, following tenures with companies such as Ladbrokes, InterCasino, and Bodog.
Betsson, headquartered in the island nation of Malta, has witnessed significant shifts in the iGaming sector. CEO Pontus Lindwall guided the firm through a substantial reorganization, enabling them to surmount internal obstacles. This culminated in a robust performance in 2018, marked by a 15% surge in revenue, which reached 54.1 billion Swedish kronor. They concluded the year on a highly optimistic trajectory.
Nevertheless, 2019 presented fresh difficulties, this time stemming from external elements such as regulatory adjustments in jurisdictions like Sweden and the Netherlands. These modifications affected the entire sector, not solely Betsson.
Despite these impediments, the sentiment in Malta, a center for gaming enterprises, persists in being upbeat. This is evident in the density of gaming operators and vendors. Stroll down any thoroughfare, and you’re likely to encounter someone affiliated with the industry!
For certain individuals, the throngs of people in Malta can be overwhelming. Some may perceive the limited cultural variety as somewhat restrictive. However, Jesper Svensson holds a different perspective.
“I genuinely relish residing on this island,” he remarks. “I believe it offers a fantastic way of life, with the Mediterranean Sea and abundant sunshine, which are significant advantages, particularly for someone originating from Sweden. Moreover, I find Malta to be exceptionally receptive to the gaming sector. The gaming industry holds immense importance in Malta, occupying a prominent position on the national agenda.”
“This, in itself, fosters a positive environment. It stands as one of the most robust industries in Malta.” He further notes that if one desires a change of surroundings, “Malta, despite its small size, provides convenient travel options, allowing for easy weekend getaways. I, myself, travel extensively to our various global offices.”
Svensson’s daily responsibilities in Malta revolve around the operational aspects of Betsson. At this point, some readers might be puzzled: if you happen to be among them, you likely assumed Pontus Lindwall to be the CEO of Betsson Group. Svensson confirms that Lindwall is indeed the CEO of Betsson. However, the executive, always eager to elaborate, acknowledges that *Gaming Insider* is not the first publication to seek clarification on how his role and Lindwall’s operate in conjunction.
“The structure is unambiguous, with Pontus serving as the CEO of Betsson AB, the publicly listed entity on Nasdaq Stockholm,” the Swedish national elucidates.
Betsson AB primarily functions as a holding company, strategically investing in ventures within the gaming sector. My position as COO entails overseeing the entirety of the companies operating under the Betsson AB umbrella. While our CEO concentrates on the financial aspects, my responsibilities are more operational, encompassing the daily management of the business, including areas such as marketing and technological advancements.”
Svensson stresses that his professional dynamic with Lindwall is seamless, characterized by well-defined parameters. Envision less of a Michael Scott and Jim Halpert scenario from “The Office” and more of a clearly delineated collaboration.
In addition to managing this partnership, Svensson derives satisfaction from addressing novel obstacles that arise on a daily basis. He underscores the intricate nature of navigating regulatory frameworks across 12 distinct licenses, with each market presenting its unique set of challenges.
This leads us to the unavoidable topic: the escalating regulatory landscape within the gambling industry. Svensson cites the Swedish market in 2019 as a pertinent illustration. When Sweden liberalized its gambling sector, allowing private gaming companies to operate, Betsson’s CEO boldly projected that they would ascend to a position of market dominance. However, the actual outcome has been more intricate, a narrative for another occasion.
The Swedish landscape presents a complex picture, especially for gaming entities such as Betsson. Their latest fiscal statement wasn’t particularly impressive. Income remained relatively stagnant, experiencing a meager 2% rise year-on-year, while the second quarter even witnessed a 5% decline. Profits also suffered, decreasing by 12% in total, with the second quarter appearing especially challenging. The primary factor? A substantial slump in their wagering activities.
Further complicating matters, Sweden has been taking a stricter stance against businesses that haven’t adhered to the updated regulatory framework implemented in 2019. Betsson faced penalties as a result, and they weren’t the sole target. There’s an expectation that relations between authorities and the sector will eventually stabilize, but the initial transition has been turbulent. It’s a delicate equilibrium, indeed. Regulators must uphold responsible gaming practices without entirely suppressing the companies functioning within the legal boundaries.
A perfect harmony between rules and fresh thinking remains elusive across all regions. Governing bodies should collaborate with businesses, offering support within well-defined boundaries, rather than simply enforcing regulations and hindering novel concepts.”
The head of Betsson Group commended the Malta Gaming Authority. “Considering their extensive background, I believe the MGA is among the most capable regulatory bodies, perhaps even *the* most capable,” he stated. “They possess valuable insights for other regulators. Undoubtedly, they are stringent – a fact that has become increasingly evident – and they have implemented decisive measures over time.”
When questioned by *Gaming Insider* about how the MGA might address comparable re-regulation challenges, Mr. Svensson noted that Sweden is “still in its infancy.” He expanded, “The communication between operators and the regulatory body is not as advanced as in other areas. I anticipate this will progress in the coming years. It boils down to receiving appropriate direction. If operators require clarification on the updated regulations, the regulatory body should furnish it, not merely direct them to the legal language. There’s still room for improvement.”
Tobias Fagerlund, leading Global Gaming, would undoubtedly concur with Svensson’s evaluation.
In the month of June, the Swedish Gaming Commission withdrew the Swedish permit of SafeEnt, a branch of Global Gaming. Chief Executive Officer Fagerlund vehemently disagreed with this ruling, labeling it “unlawful” and contending that the governing body had misconstrued an ambiguous regulation. He disclosed that he was only informed a mere eight minutes prior to the decision’s announcement, at 8:00 am on the first day of the workweek.
The Betsson Group Chief Executive Officer proceeded to state that these circumstances frequently become more evident with time, highlighting the multiple penalties levied on businesses in Sweden that year. He posits that this doesn’t inherently signify that companies are deliberately flouting the regulations, but rather that more explicit directives from regulatory bodies could avert such occurrences.
As previously stated, the Netherlands presents yet another regulatory obstacle for Betsson. The eagerly anticipated Remote Gaming Act was ultimately ratified in 2019, signifying a pivotal year for the Dutch internet gambling sector. Market expert Willem van Oort characterized the sensation of witnessing the Act’s enactment as “unbelievable,” following thirty months of anticipation for its approval by the House of Representatives. The licensing procedure is scheduled to commence in the middle of 2020, with a projected launch date of the first of January, 2021. Critically, there exists a two-year “grace period” during which enterprises that functioned without a permit in the Dutch market within the preceding two years are disqualified from applying.
We are certain that we will be able to penetrate the open Netherlands market eventually,” stated Svensson. “We needed to implement modifications to the product to satisfy the Netherlands’ criteria, which is now complete, and that places us in a favorable spot to submit an application for a permit. Therefore, we had to make these alterations to be compliant with Dutch regulations.”
The final jurisdiction is the United Kingdom, which readers may find peculiar, being another heavily regulated and fiercely competitive market that both ComeOn and EveryMatrix have departed in recent months (refer to page 32 for an article on Maltese firms leaving the UK). Betsson revealed the shutdown of its office there in December 2018, with its Netplay brand slated to not extend its agreement with the UK broadcaster. Many interpreted this as an indication that the operator was downsizing its UK operations, potentially with the goal of withdrawing entirely. However, Svensson informed
_Gambling Insider_
that the organization is not departing the UK market, nor are there any plans to do so.
“We maintain a presence in the UK market, so we have not left,” the Swedish national remarked. “However, we are not as engaged as we were a few years ago. We are presently transitioning a business that we acquired a couple of years ago – the Netplay brand – onto our proprietary platform, which will be concluded this year. We are still active in the UK, but we are not investing at the same level as we did a few years ago.”
Incorporating these trademarks within the NetPlay portfolio prioritizes product enhancement above all else, after which we can contemplate additional allocations. Our current concentration remains fixed on this objective.”
Svensson proceeded to underscore that a plethora of fresh prospects await operators beyond established markets. He emphasized Betsson’s command over the user journey through their proprietary development of the sports betting interface, gaming framework, and transaction system. Nevertheless, as Betsson commemorates its 57th anniversary and sustains its pursuit of expansion and market dominance, it’s unsurprising that Svensson revisited a subject evidently significant to him as our conversation neared its end.
He restated his optimistic outlook to his counterparts in the gaming sector, concluding: “For the industry in its entirety, it’s imperative that we engage in heightened communication and cooperation, aim for greater alignment in our objectives, and steer the industry’s trajectory towards a favorable course. This has historically been the industry’s critical vulnerability. However, I remain optimistic that certain transformations will incentivize the industry to unite with a shared impetus and purpose.
“Occasionally, when reviewing coverage from both mainstream and industry publications over the preceding six to nine months, there’s been a disproportionate emphasis on unfavorable news, while in actuality, this industry is undergoing a process of maturation, becoming more resilient and professional. Concurrently, remarkably positive advancements are transpiring, and I believe we should accord them greater recognition than we have previously.”
Its undeniable: should other gaming industry leaders embrace Svensson’s perspective, the year 2020 could be even more luminous for gaming. The Betsson Group CEO stated, “Each year presents its share of hurdles and prospects.” However, he believes the possibilities within gaming consistently eclipse the obstacles.
