Comeback kid: How Betclic's turnaround came about

“It was a crazy year,” Betclic Group CEO Nicolas Beraud tells EGR Intel when prompted to reflect on the French operator’s performance over the last 12 months. Beraud, who founded the online gambling company nearly 15 years ago, insists this “craziness” has been nothing but positive, and judging by the company’s ascent up last year’s Power 50 rankings, it’s unsurprising he’s in such high spirits.

Betclic Everest Group – which is the holding company for both Betclic Group and bet-at-home – soared nine places to 18th in EGR’s annual rankings following a stellar financial performance during the reporting period. This marks something of a return to form for a company which in the last few years had witnessed its fortunes dwindle somewhat although it remained a market leader in France.

Despite its French roots, Betclic was actually founded in London back in 2005 and quickly became one of the fast-growing companies at the time. And then in 2010, with the opening of France’s online gambling market, Beraud led the company as it became one of the biggest operators in his native country before leaving the business in 2011 to create a new startup. Little did he know at that time that five years later his services would once again be called upon. “In 2016, the shareholders of Betclic came back to me saying the business wasn’t growing anymore and was losing money, and asked me to return and change the company,” Beraud says. “As the founder, I looked at the business and I realised there was a great opportunity to do something. I came back in December 2016, and I immediately started to reinvent the company.”

But how did it feel returning to a business he’d worked so hard to create but thought he’d left behind? “Sometimes it’s not good to mix business with emotion, but I came back because we can do a lot in this industry – this is just the beginning. I saw with Betclic that if the company changed we could do amazing things in the future. I missed the industry too to be honest because it’s growing very fast, there are lots of things to do and develop, and I strongly think that having the user experience at the centre of our strategy can create a lot of value for our company.”

Upon replacing Isabelle Andrès as CEO, Beraud quickly recognised some of the issues he’d need to rectify if Betclic was to return to its former glories. Firstly, the company was too fragmented having been completely split across multiple offices, with the various teams not working together. Secondly, and likely even more alarming for Beraud, Betclic was still a desktop-oriented operation despite most of the industry having already long made the transition into mobile gaming.

Taken in combination, it’s clear Beraud had some big decisions to make, and it’s against this backdrop that the chief exec started to initiate one of the biggest shake-ups in Betclic’s history. Appealing to the masses Between the time he left Betclic in 2011 and upon his return in November 2016, Beraud launched a free-to-play mobile games developer called TripleFun which enabled him to accrue expert knowledge into how mobile games work. So when he came back to Betclic, he aimed to use this insight to help reinvent the company so it was more customer- and mobile-focused, while creating an atmosphere that allowed innovation to flourish and thus resulted in new features for the player.

Nicolas Beraud, founder and CEO at Betclic, discusses his return to the French operator

Customer feedback, as a result of this renewed focus, has been immensely positive. When Beraud arrived back at Betclic Group in 2016 after his five-year hiatus, the rating of the operator’s flagship mobile app in the French App Store stood at 1.2 stars. Given that apps with a score of lower than one star are omitted from the Store, this was shockingly low for an online-only business. However, at the time of writing, the company boasts a 4.6-star rating – one of the best-rated sports betting apps across Europe – which Beraud attributes to an improved user experience. Beraud adds: “The main goal was to redevelop all our mobile products and create new products with a much better user experience. We have been focused on that for two years, renovated our products completely and now our offer is a lot better than two years ago. We are now seeing the results of this and it has enabled Betclic Group to grow again. It’s been a long time since Betclic has had this kind of growth.”

But the Betclic Group can let the numbers speak for themselves. Like many private entities, the Bordeaux-headquartered operator is rather coy about divulging its financial figures to the wider public. However, Beraud is willing to reveal that gross gaming revenue increased 44% last year compared to 2017, and says that “the company is back to a normal profitability compared to the rest of the industry”. To achieve this, the operator has been busy heavily recruiting talent from the free-to-play (FTP) mobile gaming industry over the last couple of years. The idea here, according to Beraud, is that Betclic believes the FTP industry is far more advanced than the real-money gaming sector with regards to acquisition, product and technology.

The idea is to create a frictionless experience that can appeal to a mass market customer base – something Beraud believes Betclic had lost sight of in the years preceding his second stint as CEO. “That’s really been in the DNA of Betclic from the beginning,” he claims. “When I launched Betclic in 2005, it was already the ambition to offer a website that was user-friendly and easy to use for every sports fan. I remember going on our competitors’ websites at the time and, from my point of view, they were very complex for the customer.

“But although it was in the DNA of the company, I feel like that had left Betclic in the five years until I came back. Our goal is to provide the best user experience when it comes to betting for every sports fan, so you don’t need to be an expert in betting nor a technology expert. That’s what I want to build and it applies to all our products, including casino.”

Bordeaux’s got talent

With numerous brands in its portfolio and a reach into different European markets, Betclic’s organisational structure was unsurprisingly rather fragmented. Up until recently, the French operator had teams spread across a variety of European locations, with its head office for many years based in Paris.

But this was another area Beraud quickly identified as being in drastic need of a change. He took the bold decision to close both its main offices in London and the French capital city, and some smaller European offices, and instead open up a new hub in Bordeaux – the port city in the heart of France’s famous wine-growing region.

As a result, Betclic now has two main offices in Malta and Bordeaux, home to some 250 and 200 employees respectively, as well as two small local offices in Portugal and Sweden. On paper, it would appear to be a rather strange decision for a French operator to choose to vacate Paris for a much smaller city like Bordeaux, but the logic does seem sound and there are obviously similar precedents in this sector.

For example, two of the UK’s largest online betting operators, Sky Betting & Gaming (SBG) and bet365, have both shown that working out of much smaller cities like Leeds and Stoke can prove to be a very successful model with a number of advantages. In fact, Beraud is particularly conscious of these examples and is aiming to become as important for employment and as much a part of the fabric of Bordeaux as SBG and bet365 have been for their respective cities.

SBG, in particular, worked hard to create a company culture that appeals to a younger, tech-savvy demographic, and the operator has reaped the benefits of tapping into its local graduate talent pool. This seems to be something Betclic is keen to replicate in Bordeaux which has a growing digital economy, is home to some major technology firms, and has one of France’s top universities.

As a result, Betclic will move into a new office building in February and has recently kickstarted a major recruitment drive for a minimum of 50 new positions in 2019 to add to the 115 it had already hired following its move from Paris. Indeed, online gaming is an industry where the best talent can often make the difference between success and failure. And Beraud believes to attract the right talent requires a number of things. “Firstly, you need to be in an attractive location. It’s probably not well known in the UK or outside of France, but Bordeaux is now one of the most attractive cities in France by far and is a place where a lot of people want to come to work. It’s a good size, not too big or too small, it’s close to the sea and being south of the country makes it a very nice place to live. “We also want to have a lot of space to work in and the office costs are much cheaper, while in a city like Bordeaux a company such as Betclic is far more visible and you can attract the best talent.

On the other hand, in a city like Paris you are constantly in competition with all the big companies, as well as a lot of start-ups, and you have to fight to attract people. “Since arriving in Bordeaux, we have been successful in attracting people outside of France from places like the UK, Sweden and Italy, and they are very happy in Bordeaux in terms of quality of life and working at Betclic. It was an interesting challenge but it is working even better than my expectations.”

Vive la France

This combination of recruiting the best talent and ramping up its technology focus has clearly paid dividends for Betclic which posted some of the strongest growth in the industry last year. However, it also seems to be benefitting from what is now a much healthier French online gambling market, where it continues to be one of the biggest players.

This change in France’s fortunes is a major shift compared to just a few years ago when the market was deemed to be one of the least attractive in Europe. According to the latest figures from the country’s gambling regulator ARJEL, sports betting revenues, buoyed by the inclusion of the World Cup, increased 40% year-on-year to €149m in Q3 2018, which in turn helped the overall online grow 21%.

In addition, online sports betting licensees took wagers totalling €995m in the three-month period – an 81% year-on-year increase on Q3 2017. This was some of the biggest growth recorded by the market in years and followed what was an equally impressive Q2 performance. However, the French market is not without its problems. Beraud describes it as both “complex” and “very difficult” for operators to make money, particularly when taking into account its 9.3% turnover tax on sports betting. “Some weekends you lose a fair bit of money as you pay tax on top of your losses,” he says. “But at the same time, we believe things will only get better in the future and that the regulation will be balanced, and the good news is that despite all of this it is a growing market.”

But until the French government and regulator do indeed work together to create a more attractive market, Betclic Group will need to continue to look across the continent if it is to achieve its current growth. Portugal, where it has already obtained a healthy chunk of the market, could help here, as could its new two-year licence in Poland where it will launch imminently. However, it is arguably the newly regulated Swedish market where the greatest opportunity lies for Betclic Group.

The operator was one of a number of companies to enter the market on 1 January and, although Beraud admits his firm will find it a difficult market, Betclic Group does already have a brand in Expekt, which has recognition across the Nordic region. “Sweden is probably the most competitive and difficult market for sure, but it’s my belief we will get strong market share. Because the Betclic Group has ambitions to build the best experience for mobile gambling, we felt it was really important to be in this competitive market.”

So, with Betclic Group entering two new markets in 2019 and moving into a new headquarters, it’s set to be yet another busy 12 months for the French operator. Whether it can replicate the achievements it made in 2018 will be a tough ask, but the company can at the very least be confident in the fact it has turned a major corner financially and has laid the foundations to achieve even more going forward. Just much further the company can go will be intriguing to watch.