EGR Power 50 2023: 10-6

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10. Tipico

Financials: The accounts shared privately with BDO show the group recorded a solid trailing 12 months to the end of June.

Strategy & impact: Has leveraged its brand, high-profile football sponsorships and in-house-built products to carve out and maintain a leading position in Germany. Is at the forefront of ESG, including player protection.      

Geographic reach: While Germany and Austria remain the group’s heartlands, Tipico continues to plug away in the US, albeit achieving negligible market share across the four states where its products  are available.  

Influence & leadership: The business, which turns 20 next year, is headed up by the experienced Joachim Baca as CEO, while Tipico’s senior management team has been in place since at least 2017. 

It’d be fair to say that Tipico is one of those operators that tends to fly under the industry’s radar most of the time – and that probably suits this privately held business perfectly. However, its scale and impact on the sector shouldn’t be underestimated by any means. Supported by a retail network of 1,100 owned and franchised retail outlets for omnichannel and branding benefits, Tipico has long been Germany’s largest sports betting operator. It’s a position that’s been solidified, with the operator describing itself as the “undisputed” leader, despite the country’s controversial online regulations causing significant black-market leakage.    

Tipico, which is 60% owned by Luxembourg-based private equity firm CVC Capital Partners, is a household name in Europe’s largest economy, reinforced by its high-profile partnerships with football giants Bayern Munich – a deal that runs until 2025 – and Germany’s top two divisions, Bundesliga and 2. Bundesliga. Headquartered at ‘Tipico Tower’ in St Julian’s, Malta, the group is also very much a champion of sustainability, a cornerstone of which is gambling-harm prevention. Naturally, efforts around RG extend to the US where, in March, Tipico unleashed safer gambling campaign ‘The Better Bettor’ to educate sports bettors about responsible play.

On the subject of the US, Tipico’s mobile and desktop product arrived in Ohio in January when the starting pistol was fired on legal online sports wagering. Management stressed having first-mover advantage in Ohio was “paramount”, although once the dust settled, Tipico only managed to take an insignificant 1% of the market based on handle. While this overseas brand has struggled to compete with homegrown names in its other states of Colorado, Iowa and New Jersey (sports and casino), its product – built and run on a proprietary tech stack – deserves plenty of recognition.

In fact, Tipico upset the odds by coming out top in Eilers & Krejcik Gaming’s September 2023 casino app testing report, beating the likes of BetMGM, DraftKings and FanDuel. In what was a real feather in the group’s cap, Tipico scored in the top 10 across every category and was first for ‘gaming interface’ and ‘core’ (account management). Tipico has since rolled out an overhauled casino app with a ‘Netflix-style’ redesign and 50% faster processing speeds and seven-times quicker withdrawals. 

9. Bally’s Interactive

Financials: International Interactive revenue to the end of September totalled $738m. North America Interactive revenue was $79m. EBITDA for both arms amounted to $249m and -$47m, respectively.    

Strategy & impact: Gamesys Group was an accomplished online casino and bingo operator long before the merger with Bally’s. The North America game plan is to prioritise igaming over betting.   

Geographic reach: The UK accounted for 65% of International Interactive revenue in Q3, followed by Asia (30%), Europe (4%) and RoW (1%). 

Influence & leadership: Boasts teams with bags of experience. CEO Robeson Reeves has worked his way up through Gamesys and Bally’s Interactive since joining as a graduate back in 2005.

It was all change at the top of Bally’s Corporation in March when Lee Fenton headed for the exit door barely 18 months after being promoted to CEO. His replacement, Bally’s Interactive president Robeson Reeves, acknowledged and bore responsibility during an earnings call in February for the North America digital arm’s “unacceptable” performance, and so stemming the cash burn and turning around the division’s fortunes was top of his in-tray.

With online sportsbook Bally Bet failing to make much of an impression, the decision was taken to ditch the in-house product, built from the $125m acquisition of Bet.Works in 2021. “The Bet.Works platform didn’t give us what we required in the competitive market we’re in,” Reeves admitted to EGR in May.     

So, the reset button was hit as Kambi was drafted in to provide its sportsbook solution and White Hat Gaming to supply the PAM. While this meant the plug was pulled on Bally Bet for several months, the overhauled product was live in four states at the end of Q3: Ohio, Virginia, Arizona and Colorado. The target is to increase the count to at least seven jurisdictions by the end of 2023. On the igaming front, the Bally’s Casino is on an upward trajectory in New Jersey in terms of NGR and average monthly deposits.

The firm hailed a “robust” online casino launch in Pennsylvania in June, with key metrics tracking above New Jersey. For instance, deposit volumes were three times greater in Pennsylvania after 100 days compared with its neighbouring state over the same period. 

On this side of the pond, there have been noteworthy gains made in the UK, a market which sits under the umbrella of Bally’s International Interactive and includes brands such as Jackpotjoy, Rainbow Riches Casino and Monopoly Casino. Bally’s Casino arrived in the UK this year, too, replacing Megaways Casino. Bally’s, which claims to hold around a 15% share of the UK igaming space, says its formula of increasing actives and average revenue per customer of first-time depositors (FTDs) while reducing acquisition costs “continues to yield positive results”. Q3 UK revenue was up 5% YoY in cc (+13.1% in US dollars) as actives hit an all-time high. Zooming out, the International Interactive segment posted 3% YoY growth for the first nine months of 2023. Despite all this, Bally’s shares have slumped 35% this year. 

8.Betsson

Financials: Revenue for the first nine months of 2023 hit €696.3m, of which about €518m was from B2C, and EBITDA surged 57% to €190.8m. 

Strategy & impact: Operates more than 20 brands, with casino dominating the revenue mix (72% in Q3). A combination of organic and M&A growth has been the bedrock  over the years.    

Geographic reach: CEECA now accounts for 41% of group revenue, followed by Latam (22%) and the Nordics (19%). Locally regulated markets make up just 44.6% of group revenue, however.    

Influence & leadership: A power player in the Nordics, particularly Sweden where its legacy stretches back to 1963. Has a reputation for spotting shrewd sports sponsorship opportunities for brand exposure.

To mark turning 60 this year, the Swedish operator released its first-ever global ad campaign, ‘A bet makes the difference’, emphasising the excitement of placing a bet rather than the chances of winning. Yet you could say Betsson itself has been winning of late, with impressive financial and operational performance lifting it up the EGR Power 50. To illustrate the point, the three months to the end of September delivered new record numbers for the Stockholm-listed business and the seventh quarter in a row with sequential revenue and earnings growth. Investor confidence is high, too, reflected in its shares climbing 30% this year.     

Much of this is down to Betsson venturing into under-exploited territories – not all of them regulated, however. By far the largest region in terms of revenue, CEECA (Central and Eastern Europe and Central Asia) posted a 23% YoY increase in Q3. On top of this, Latam remains fertile ground as revenue for the same period jumped 33% compared to last year. From its regional hub of Bogotá, Colombia, the company has built a solid position and was granted its third online gaming licence in Argentina (Cordoba province) earlier this year.

And arguably its biggest Latam sponsorship deal to date was struck in June when Betsson became the new front-of-shirt sponsor of Argentina’s most famous football club, Boca Juniors. Elsewhere, there have been struggles in the Nordics (mainly Sweden and Finland), where revenue tumbled 14% YoY in Q3, and in Germany, due mainly to regulatory headwinds, but positive momentum in Italy, Croatia, Greece and the Baltics. “Significant delays” to the licensing process was why Betsson withdrew its Dutch licence applications. 

Staying in Europe, Betsson completed the acquisition of Belgian sports betting operator betFIRST for up to €123m in July. Towards the end of August, the Betsson brand was introduced to Denmark – a market where sister sportsbook NordicBet is firmly established – as Casino.dk was shelved. In September, online casino Rizk was rolled out in Serbia, a locally regulated market, and, later that month, a sports betting licence was obtained in France, with an imminent launch earmarked. Finally, Betsson’s strong balance sheet means acquisitions in 2024 are a distinct possibility. “M&A is part of our growth strategy,” CEO Pontus Lindwall reiterated to investors on the Q3 earnings call.

7. Kindred Group

Financials: Gross winnings revenue for the first nine months of 2023 increased 18% YoY to €897.6m, although this includes B2B. Underlying EBITDA jumped 64% YoY to €147.7m.   

Strategy & impact: A gaming-led operator (57% casino vs 39% sports betting) that has relied on organic growth of late rather than the previous playbook of acquiring local brands. 

Geographic reach: Key regions by percentage of revenue are Western Europe (60%), the Nordics (24%) and Central, Eastern and Southern Europe (11%).

Influence & leadership: As a pan-European brand, Unibet is the company’s main asset. Putting sustainability and safer gambling strategies at the heart of its operations was a smart decision.

After a turbulent 2022, which triggered a slide down the rankings, Kindred Group has managed to reverse the declines – particularly when it comes to profit – so far in 2023. However, the ride has still been far from smooth, the most significant development being the board’s decision in April to initiate a review to explore “strategic alternatives for the company”. Options still under consideration are a merger or sale of the business (in whole or in part) or “other possible strategic transactions”.    

A few weeks later, there was another bombshell with the departure of Henrik Tjärnström, who had served as CEO since 2010 and who had been a steady hand on the tiller. The Swede was replaced by compatriot Nils Andén on an interim basis – and the 43-year-old remains in the post at the time of writing. While investors reacted positively to news of the review, resulting in a bump in Kindred’s shares, they were seemingly indifferent to Tjärnström’s exit, and there has been selloff since the summer, wiping out the gains from late 2022 and early 2023.

From a business performance perspective, things have been heading in the right direction as Q1 and Q2 revenue rose 24% and 29% YoY, respectively. Kindred, which operates brands such as Unibet, 32Red and Maria Casino, also recorded an average jump of 17.5% in active customers for the first two quarters. A big part of this growth is down to the Netherlands; the Swedish operator returned in July 2022 with Unibet.nl and has since wrestled back its leadership position. Dutch actives reached roughly 218,000 and gross winnings revenue (GWR) hit £63.6m in Q2, the firm said.

Shortly before the EGR Power 50 issue went to press, Kindred announced, as part of the aforementioned strategic review, that there would be a “controlled exit” from North America. The withdrawal should be completed by the end of Q2 2024. As part of a cost-cutting drive to focus on core markets, the business will also lay off 300 employees and consultants (including in North America), a move expected to achieve annualised cost savings of roughly £40m.

As a torchbearer for safer gambling, Kindred deserves credit for sticking with publishing revenue derived from high-risk players as part of its ‘Journey towards zero’ despite the results stubbornly hovering above 3% every quarter. An all-time low was reached in Q2 (3.1%), although Q3 rebounded to 3.3%.

6. Super Group

Financials: Revenue for the first nine months of 2023, excluding the US, rose 9% YoY to just over €1bn, while EBITDA hit €201m compared to €167m for the same period last year.     

Strategy & impact: With Betway on the global stage as the ‘face’ of the business, it might seem logical that bookmaking is the core operation. Yet casino accounts  for over 80% of net revenue.    

Geographic reach: The Americas, Africa and the Middle East combined are responsible for more than two-thirds of group NGR. Asia-Pacific and Europe account for most of the remaining share.     

Influence & leadership: Has maximised sports sponsorships to drive eyeballs to Betway, helping to create a global heavyweight. The contribution of Spin shouldn’t be underestimated, though.

Consisting of global giant Betway and Spin, a multi-brand casino offering, Super Group comfortably retains its place in the top 10 after making its debut among the industry’s elite in last year’s edition of the EGR Power 50. Although this is a business reliant on a sizeable portion of its revenue coming from grey markets, Super Group hit a new high for revenue in a third quarter: €349m, excluding US operations. On top of this, there were an average of four million monthly active customers, along with a new daily high of 1.7 million players on its platform. Just for good measure, the three months to the end of September contained the highest depositing day and highest depositing month.  

“These records demonstrate our success in attracting and retaining high-quality customers with sustainable deposit values over the long term,” CEO Neal Menashe said on the earnings call in November when highlighting top-line growth. In terms of what’s driving this increase in KPIs, the Americas (excluding US operations) is the largest contributor to group net revenue. A total of 39% was down to this part of the world, or predominantly Canada, in the third quarter. That slice had shrunk from 43% in the same period the year prior as bosses seek greater geographic diversification. Africa was responsible for 29% of net revenue – up from 23% – such is the untapped potential and growth the firm has enjoyed on the continent, including seven regulated countries as the African customer base increased 55% YoY in Q3.

Europe and ‘Rest of World’ (RoW) each accounted for 16% of net revenue. It’s worth noting the RoW segment is likely to contract after Super Group recently took the “difficult decision”, as Menashe described it, to cease all activities in India due to changes to the Indian Goods and Services Tax. As one of only a handful of operators whose brands resonate globally, Betway accounted for around 56% of group revenue in Q3.

Furthermore, its formidable portfolio of partnerships struck with teams across a multitude of sports round the globe continues to put Betway in the shop window surrounding live sport. This strategy was reinforced in September when Betway became the official global betting partner of Premier League side Arsenal. You can guarantee this won’t be the last deal of its kind involving Super Group’s premier brand.