Break the mould: BetVictor's journey from traditional bookmaker to tech innovator

With more than seven decades of bookmaking experience to its name, few gambling brands can come close to matching the legacy of a business like BetVictor. The company, founded in 1946 by racetrack owner William Chandler, has unsurprisingly undergone its fair share of changes over the decades. Whether it’s the firm’s historic decision to move offshore in the late nineties or the numerous brand name changes it has made – BetVictor can’t be accused of being a business content to sit still.

However, the company today is arguably in the middle of one of the most substantial overhauls in its history. Over the course of the last three years, the Gibraltar-based operator decided to make one of the most profound breaks with its past – and in the process the very raison d’être of the business has been transformed into what is now a very different sports-betting beast.

The turning point came in May 2014 when major shareholder Michael Tabor acquired BetVictor for an undisclosed sum. Flamboyant former chairman and face of the brand, Victor Chandler, stepped down as part of the transaction, as did his business partner and CEO Michael Carlton. The latter was replaced nine months later by bwin.party’s chief commercial officer Andreas Meinrad – formerly of Red Bull and Nike.

Since taking charge, Meinrad has completely altered BetVictor’s core priorities, shifting the company’s focus to its IT roadmaps and overseeing a tech-first strategy for the firm to assimilate. And the results are there for everyone to see. What was once a traditional bookmaker is now a more focused, data-driven, and innovative business; one that has more in common with online-only firms like Sky Bet than those companies with comparable bookmaking roots.

“In the last 12 months, we have continued to grow in line with our challenging targets and focus on what is important for the customer – making the betting experience intuitive, personalised and relevant,” Meinrad reflects.

“We have set ourselves strong and challenging growth targets from day one, and I am delighted to say we have met and, indeed, exceeded those targets. We continue to grow and our target is to become a real alternative for consumers.”

Technology first

A key moment for BetVictor in its quest to put technology and the customer firmly at the heart of the business was an early decision by the chief exec to radically restructure its leadership team. This led Meinrad to, among other alterations, add c-level personnel to key roles within the management team, ensuring everyone in the company was singing from the same hymn sheet. “While implementing the changes, I had to make sure I was listening and learning from a management team who had done a great job in the period ahead of my appointment,” Meinrad explains.

“My task was to understand the BetVictor business model while driving change. Having taken time to get to know the management structure, I identified areas where we needed new faces with different skills and abilities to complement the existing senior management team. I’m very happy with how the new hires have integrated into the team.”

Under Meinrad’s watchful eye, his trusty leadership team has overseen a rapid technology revolution at the firm, culminating in the launch of some of the slickest betting products around. And it’s a strategy that already seems to have been paying off. In the space of just a couple of years, BetVictor has soared up the EGR Power 50 rankings from 26th in 2014 to 11th last year – leaving the betting firm on the brink of a prestigious top-10 position in 2017 for the first time.

Financial figures for the privately-owned company paint a picture of a business clearly in rude health too. In the 12 months to 30 June 2017, BetVictor continued to record a solid uptick in both revenue and operating profit, while an 18.2% rise in monthly active players during the same period would suggest there is still plenty of room left for top-line growth.

In what is an increasingly technology-led industry, Meinrad is vocal of his conclusion that companies need to be at the forefront of innovation if they are to have any chance of keeping up with the competition. Inherently driven by data, he believes the sector’s key battleground willcentre on which operators can most successfully crunch their data at real-time speeds to provide the best possible customer experience.

Those leading the way in sports betting and online gaming, he says, have already understood the importance of predictive data analytics to stay ahead of the curve. With this in mind, BetVictor has itself placed great importance in the integration of data, incorporating new technology to replace its old SAS systems. It has also deliberately created what it says is an “agnostic system”, one which allows the business to be flexible and to use its data environment effectively.

“From storage to the ability to have a huge data set that doesn’t impact performance, we have data at the heart of the business,” Meinrad adds. “What is essential is that we use the data at our disposal to maximise the commercial value from harnessing data and machine-learning techniques. We have bet big on predictive data analytics and the results generated from putting data at the heart of our business have been great.”

Going it alone

The question of whether to focus primarily on in-house tech or utilise the strengths of third-party suppliers is a debate that continues to rumble on in the egaming sector. Operators increasingly seem to be sold on the benefits of controlling at least the front-end of the tech stack as a means for developing inventive solutions for customers. And it’s clear which side of the argument BetVictor falls into.

The operator says that opting to fully control all its technology in-house has placed it in an extremely strong position to differentiate compared to its competitors. While many operators might now be following a similar train of thought, only a handful are as far down the line as BetVictor. This means it is in charge of its own destiny regarding product development and has the ability to respond much quicker to both changing player behaviour and customer demand.

“Relying on third-party sports product providers does not allow you a similar level of agility,” Meinrad claims. “You are now seeing other firms in the industry move to take greater control of their platforms and front-end user experience but there is a huge amount of pain and development needed to do that. We have been through that transitional period and are now reaping the benefits.

Left to right: Andreas Meinrad, CEO; Jonathan De La Rosa, CTO; Germon Knoop, CFO; and Paul Louis, COO

“By keeping the development of our products in-house, we can often get to market ahead of other operators and in this industry, speed to market has never been more important to drive growth as it is at present,” the chief exec continues.

This early adoption of an in-house approach has culminated in the launch of a number of revenue-enhancing products for the operator. In 2015, for example, it released one of the first custom-built cash out features; this was later followed by its Quick Cash Out function, which BetVictor claimed at the time was the fastest way in the industry to cash out a bet. The product put the option to cash out in a customer’s iPhone Notifications area, enabling them to cash out their bet within two seconds and cutting approximately six seconds off the old process.

Meinrad claims BetVictor’s commitment to proprietary technology has now made it an “industry-leader” in mobile applications, and that by developing robust and quality products in-house, the firm has also witnessed robust B2B growth. “Our apps are quick and intuitive, our Cash Out product is slick and innovative, our in-play product continues to develop, we are innovators within horseracing and continue to modernise our product and keep it intuitive, personalised and relevant,” the CEO says.

“We have a first-class product, and cater for the overwhelming majority of demand,” the CEO continues. “We believe that innovation and personalisation within this product will be the future battleground, and we have some exciting initiatives lined up over the next 12 months in those areas.”

https://www.youtube.com/watch?v=PKLw8MDXntw

Cut through the noise

Beyond the more overt product overhaul at BetVictor, the firm has also instigated a discreet shift in emphasis with a digital marketing strategy now aimed at delivering some of the sector’s lowest cost per acquisition. A key reason for setting this target, Meinrad explains, was due to what he perceives is “prohibitive pricing of sports TV packages” and his desire to move away from the industry norms of a “race to the bottom of the barrel” through cheap promotional offers.

“We are not going to enter a competition on loss-leading concessions such as eight or 10 places on the recent Open Championship,” he says in a nod to some of its rivals. “Our aim is to offer genuine value to BetVictor’s customers. The mistake is in interpreting value as merely the cheapest price when it actually represents so much more.

“Reliable customer service, brand values, new and innovative offerings, a safe and secure environment, and the availability of all products – whenever and wherever the customer wants – is the key. Nowadays, customers are inundated with clutter – in-your-face TV ads and campaigns designed to lure them in, rather than give them genuine value. Our view is that louder is not necessarily better.”

BetVictor won best sportsbook marketing campaign at the EGR Awards earlier this year

One of the operator’s most successful acquisition campaigns recently was the launch of its Million Pound Goal initiative during Euro 2016. The promotion – winner of the best sportsbook marketing campaign at this year’s EGR Marketing & Innovation Awards – vastly boosted customer engagement levels and was followed up by the launch of its weekly free-to-play Golden Goal competition.

The attention-grabbing promotion has now been revamped for the new season after punters praised the initiative but demanded more rollovers, fewer winners and bigger pay-outs. BetVictor is now committed to giving away over £1m this season on the new Golden Goal competition, with a £75,000 prize shared by 12 customers after the recent Tottenham vs Chelsea Premier League clash following a rollover from the opening weekend.

“With products like Million Pound Goal, Golden Goal and Price Promise, we are also ensuring that our headline promotions and campaigns are industry-leading and in many cases ground breaking, adding to the customer experience and increasing engagement levels,” Meinrad says. “This is certainly helping our brand to resonate in what is a saturated and highly competitive market.”

One-track mind

The “saturated” UK sector Meinrad alludes to continues to remain BetVictor’s core focus. But it’s a market he admits is now throwing up more than its fair share of challenges to overcome, including increased taxation, changes in regulations and heightened competition. This is the driving force, he says, for why many of the leading operators have been happy to accept loss-making propositions to get players through the door – an area BetVictor clearly has little desire to compete in.

Such regulations are putting increased pressure on margins across the sector too and Meinrad believes growth in the UK is inevitably slowing down. But despite these pressures, BetVictor still claims to be achieving double-digit growth in what is unequivocally the world’s most competitive regulated market.

As a result, the chief exec calmly shrugs off William Hill’s recent boast that the bookie is once again recording levels of growth at or above UK market levels. And as an online-only operator, BetVictor may also stand to benefit should its rivals with a significant UK retail presence, including Hills, face a significant clampdown on FOBTs – an outcome which now almost seems inevitable.

“If 4% really means outgrowing the market, then we should be delighted as this means we are taking considerable market share given our double-digit growth,” Meinrad says. “The market remains aggressive with a number of newcomers trying to break into what is an already saturated market.”

Coupled with its tech investment to ensure UK market growth continues is what appears to be a greater emphasis on horseracing. As sponsor of the Gold Cup at Cheltenham’s November meeting, BetVictor clearly sees a long-term future for the sport and it has continued to roll out a number of products such as horseracing cash out and Betfinder to help the brand resonate with racing punters.

Its Lengthen The Odds product – which enables customers to back their judgement at a different price with the odds going up in line with the winning distance – has also won plaudits, including a second EGR award for innovation. Meanwhile, BetVictor claimed another “industry-first” earlier this year after settling Grand National bets two minutes after the race had finished.

No distractions

To help sow the seeds for future growth in the UK and beyond, BetVictor earlier this year relocated into Gibraltar’s newly opened 254,000 sq ft World Trade Center building – soon home to a number of other gaming firms including Kindred Group and Playtech.

The move into its new digs on the Rock, according to the operator, has already led to a significant increase in staff retention and better overall company performance. And in all the current Brexit noise, BetVictor is also one of the very few gaming companies to confirm its long-term future to Gibraltar and to give its staffers peace of mind.

The operator’s success and transformation into a tech-first business has unsurprisingly given rise to rumours it is now one of the industry’s prime acquisition targets. But Meinrad, who gained a unique insight into the intricate complexities of such mergers at bwin.party, dismisses such speculation. He seems more than content for the firm to go it alone and continue with its current game plan – even as most of its UK rivals scramble to build scale amid increasing regulatory pressures.

“I have yet to witness a merger that has the benefit of the consumer in mind – most are about costs and synergies,” Meinrad says. “For the major players this should lead to a better bottom line but it forces them to focus more on internal issues than what is best for players. This gives operators like BetVictor an opportunity to grab market share by continuing to focus on what is best for the customer.”

With few distractions, BetVictor seems uniquely placed to cement its position as one of the UK’s leading players indefinitely. And Meinrad has a very simple message for its rivals. “We are lean, privately-owned and not part of the current series of M&A,” he concludes. “Many firms in the industry are busy dealing with internal issues while we focus on what is best for our customers.”