12 minute read
WORLD CUP SPECIAL - BETSSON GROUP
World Cup 2022: A betting boost for the long term
Betsson Group CEO Jesper Svensson speaks with Tim Poole about the prospects of sportsbook success at the 2022 World Cup
Jesper Svensson
Betsson Group CEO Jesper Svensson has been around the block, seeing major tournaments come and go with the operator. Each time, however, there has been one key trend: tournament-on-tournament growth from the last event. And in the first of our World Cup feature interviews, the CEO speaks openly about the operator side of things. What is Betsson expecting during this unique November tournament? How will the change in time and place affect betting? How will different markets the world across respond?
Svensson offers insight into cross-continental differences between bettor behaviour, and speaks of the necessary nuances put in place when marketing to South American and European players. As we get into the day-to-day operations of trading a World Cup, meanwhile, there's a clear focus for Svensson on customer acquistion.
When it comes to club football, as a Liverpool fan, the CEO is currently on cloud nine. But how will the sports betting sector respond to a sudden shift to international football in the middle of the domestic season?
Great to speak to you again, Jesper! The World Cup 2022 will be slightly different this time, coming at the end of the year. What are your expectations for betting volumes, and will it match previous major tournaments?
I think a World Cup is still a World Cup regardless of when it is. There is currently a lot of talk surrounding this tournament; similar to the talk circulating before the World Cup in Russia. In the end, it’s still the biggest sporting event and everyone will watch their national teams, as well as other national teams in big games. So, I expect a lot of betting volume, all-time highs, and I believe that is what we’ll see; definitely.
What do you make of the fact the tournament starts in November? I’ve spoken to people who believe betting volume will be significantly higher than usual because November is typically an active month. Is that what you and the rest of Betsson are expecting?
I think you’re right in that November is always good. This is usually because it is during the peak of the football season and other sports. All the football leagues are running, all the various tournaments – like domestic cups, European football – they are all underway. So I think November is usually busier due to the frequency of events and tournaments that are running concurrently. However, I don’t think it matters where you put a World Cup, the month is irrelevant; the tournament will still be massive from a betting point of view.
When we spoke before the Euros, you hoped the final would end 0-0 and go to penalties. It wasn’t quite 0-0 but it was a draw – and it did go to penalties! So I’m assuming that was a win for sportsbooks. How do you think the upcoming World Cup will compare to the Euros we’ve just had more directly?
Yes, the Euros was a win for sportsbooks. However, the World Cup is still a much bigger event than the Euros is in terms of betting. Don’t get me wrong, the Euros is big in terms of betting volumes, but the World Cup is just massive.
From a bookmaker’s point of view, we love low-scoring draws. That’s what we celebrate more than anything else. And when it comes to the final, I suppose to some degree it doesn’t matter too much which teams are in the final, as long as we get a low-scoring draw!
What’s it like trading at Betsson? When we last spoke, our GI Huddle roundtable centred on both the Euros and the Copa America. How does trading work when you’re dealing with multiple time zones?
Well, for the trading team, moments like this are like Christmas; it’s the best time to be a trader in these moments. It’s a hugely exciting time in which everyone is following every step of their teams’ progression in the tournament. These moments provide the biggest betting volumes, the biggest liabilities as well. And, given that a major tournament doesn’t cover too many games compared to club football, because it is such a one-off, what happens is sportsbooks price up so many events on fewer matches. This means that, from the point of view of a betting company, you’re so dependent on the result of the game. A major tournament represents an incredible journey of ups and downs. It is a special time, an emotional time.
In Betsson we are roughly 60 different nationalities, and we operate in more than 20 countries; so you can imagine how excited we are when bets for major tournament come in from across all of these different countries.. It’s incredibly exciting, and I’m already looking forward to the next World Cup and the opportunities for profit that brings.
So, to just follow up on that, you said there will be ups and downs. When I worked at Ladbrokes previously, I remember sitting at my desk one day and this scream erupted behind me. I soon realised it was a trader during a tennis match. Do you think there will be moments like that at Betsson during the next World Cup?
Oh, for sure, for sure! I mean, things like that happen at Betsson all the time in some shape or form. But, to go to the trading floor during a World Cup, that’s intense. And of course, when it goes the way of the sportsbook, there are a lot of celebrations as a result. So it’s intense, but also super exciting.
On a similar note, you mention that you’re very dependent on results because there are so few large sporting events.
So, with that in mind, do you think there is a genuine possibility that the World Cup could be, depending on results, a bad tournament for the bookies?
Yes, there is a possibility. But it depends on how you define bad, really. One of the best things from a betting company’s point of view is that World Cups and other major
tournaments are times when you usually get loads of new customers. So, aside from results, there is a lot of focus on customer acquisition during these times. Regardless of short-term success, the boost to customer numbers is really, really positive in the long term.
However, given that sportsbooks are dependent on the outcome of the game, the volatility of the workplace can go up and down like crazy. So yes, you can have a bad tournament so to speak. There have been times in the past where the bigger sporting tournaments have been really tough for the industry; companies have had to try and recoup revenue at the end of financial years. What would hurt the industry is if all the favourites, the big teams, go very far having scored many goals, with the likely top scorers scoring. That would be a wound for the industry for sure. But when it comes down to it, as a sportsbook, you have to have a long-term look at things; you have to think of long-term positives and potential. Because a lot of new customers will be coming in; if they win it’s a great experience for the customer and they are likely to come back.
On that basis, if a financial report were to come out based on the World Cup, where a sports betting company makes X number of losses based on results, while concurrently recruiting X amount of depositing customers, would shareholders and investors look at that favourably; or would it still be a negative?
I believe they would see it favourably. I think all companies have certain expectations when it comes to thresholds for profit margins in a given quarter. But it’s all about how sportsbooks interpret, explain and come to terms with results. If companies can show that they’ve had great turnover, a lot of new customers, but the margin was poor, it’s easy for most investors and shareholders to understand that these are notable dynamics to expect in the end. Personally, I’m not too worried about that side of things. But of course, if there is a high volume and a high margin recouped from a World Cup, that will also have a very positive and strong impact.
We all remember the fate of England at Euro 2020... But how much of expected revenue comes from people betting on their home nations? Does profit depend on English people betting on England, Italians betting on Italy, or is it more nuanced than that?
Well, what you see typically is more people betting on their home nations during big tournaments like the World Cup and the Euros. The betting volumes draw in irregular punters who bet recreationally as a one-off, compared to more regular bettors. Lots of people sign up and bet on their national team. But we see a difference in betting between different countries. I would say that Europe, which is a more mature market – people here do tend to bet on the favourites and they place bets in the goals market. However, in Latin America, which is actually a big market for Betsson, here we see a lot of nationalistic betting; fans will, to a much higher degree, bet on their own country. They bet with their hearts.
It’s interesting to hear there’s such a continental divide. Speaking of different continents, what was betting like for AFCON? Did punters take interest in the tournament?
For Europeans it was not a particularly big event to bet on. Betting volume rates didn’t really grow much in Europe throughout the tournament either. Also, I think in general there weren’t a lot of goals scored during the tournament; I think there was an average of two goals per match overall. So not as high as in other major tournaments. It was not a particularly big event for us at Betsson either. I mean, it was okay internationally; there was interest in the tournament.
However, for us at Betsson, with our current market differentiation, we are not currently active at scale in the African market. At Betsson, we’re more focused towards Latin America. For example, when the Copa America is being played, it’s massive for us at Betsson. So, it does depend on the company you speak to; as others have a bigger presence in Africa and less of one in South America, for example.
Do you think the continuation of Europe’s domestic leagues could have distracted from AFCON? These competitions were being played at the same time, of course.
For sure, I agree. If there had been a break in domestic competition, like there is for the Euros, then I think the situation would have been different. I think betting volumes would have been up significantly at AFCON had there been a break. During this time, I would say that domestic leagues, the Premier League in particular, had more volume than AFCON had.
A Betsson-specific question now. Does Betsson have any specific marketing plans or any big initiatives in the pipeline? Or is it more of the same, delivering the best product to attract customers?
Yes, we do have plans. We’re doing a lot of things leading up to the World Cup. One such initiative is doing a lot of work with CONMEBOL, for example, and we’re building a lot of traction there. But when it comes to the actual tournament – what we at Betsson really want, and we want to stand out with it – is having a really strong offering. Both pre-match and in live play. A lot of effort is going into making this a reality. We’re creating a range of markets and, when you compare us with the competition, we’re standing out quite strongly at the moment.
So we’re approaching the World Cup with confidence. Success is based a lot on what you do before the tournament. That gives you a positive effect during the tournament.
Is it a wider breadth of markets that you’re targeting, or are you targeting promotions and boosts? In the Euros, for example, there were plenty of tournament-long promotional offers on goalscorers. Will Betsson be doing similar things?
Yes, absolutely. I think the key is to find the right balance and the right mix between those things. You need, as a company, a few things that make you stand out during the tournament. But when it comes to the match itself it’s all about the markets and the availability of those. That is where you want to be pretty strong.
And, lastly, who do you think is going to win the World Cup?
Oh, I don’t know. Tough one! I’m not sure yet but I would maybe say Argentina. I think with Messi playing his last World Cup, they will have the opportunity to go all the way. Brazil has been doing well, too, but I have a little feeling for Argentina. They’re an outsider, so if they win, I will win some good money as well.
