Jackpotjoy CEO on the need for a single platform strategy

Last week JPJ Group announced the closure of its Vera&John and InterCasino sites to UK players as part of a “tidying up” of its UK brands ahead of the completion of its merger with Gamesys.

Ahead of its H1 2019 results tomorrow, EGR Intel caught up with Jackpotjoy CEO Simon Wykes to discuss the move, how the Gamesys deal has impacted strategic plans for the operator and how the business is pinning its success on a big brand strategy going forward.

EGR Intel: Where will the InterCasino and Vera&John brands primary focus be following their respective closure in the UK?

Simon Wykes (SW): This move is more about platforms and less about brands, and those brands are focused elsewhere. If you go back two years, we operated a multi-brand, multi-platform strategy, we had nearly fifty brands focused on the UK and we operated on more than three platforms. What we’ve seen in the two years since is an increase in regulation in the UK and in turn the regulatory pressures that have exerted on us as an operator. In addition, as the business moves on to the next stage of its maturity, bigger brands will win. What we decided to do is focus on one platform per market, as we’d already done in the Swedish market.

Last December, we were operating both on the Gamesys platform and the Enjoy platform, which is our proprietary platform in the Swedish market.  Following Swedish regulation and discussions with Gamesys we made the decision that there was no point in duplicating work, making each of our platforms comply with the regulations, so in the case of Sweden, we moved everything onto the Enjoy platform. In the UK we’ve decided to consolidate onto the Gamesys platform because it’s much bigger in that market. Vera&John and InterCasino were much smaller brands within that market and as I said, we expect big brands to win out in the UK market. We’ve taken the decision to close these brands to UK players, and unless there is a change in the market this will not return.

EGR Intel: What stage is the Gamesys deal at and when do you expect it to complete?

SW: In terms of the transaction, we’ve exchanged and are currently working through towards completion. There are some obvious things that we need to do before we can actually complete, such as getting approval from the Gambling Commission, and we’re currently working through those areas. Speaking in terms of timescale, we’d certainly be looking to complete within the next eight weeks.

EGR Intel: JPJ has said that it’s currently recruiting for a number of roles in both the UK and Malta. Can you confirm the number of roles and what positions you are currently looking to acquire staff?

SW: As a growing and dynamic business, we are always recruiting and adding to headcount. For me, success for the JPJ Group is all about getting bigger going forward. Online gaming is moving towards a scale play, which is why you are seeing increasing consolidation within the industry. As a business, we’re keen to grow both organically and through M&A, we see growth in both the Enjoy platform, which is predominantly internationally focused, and in the Gamesys platform, which is largely focused on the UK and Spain. The exact number of roles is changing all the time.

As we sit down with Gamesys to work out our future plans for the combined entity, it will be about adding further roles. For me, the Gamesys merger is unlike most M&A and consolidation in that we’re not trying to deliver cost savings by combining the two businesses. That’s not the aim with this merger. We’re largely in separate markets, but we did have overlap in Sweden, so we’ve moved away from that overlap in Sweden, before the merger had even taken place, and we’re going to move out of overlap in the UK. There are no other markets where we overlap.

The existing JPJ Group business model. Source:JPJ.com

EGR Intel: Do you anticipate making any further changes to your UK-facing brands in the near future?

SW: No not really. If you look at the Jackpotjoy brand it is the number one bingo brand in the UK and Virgin is one of the biggest online casino brands. All the brands we operate in the UK are dominant within the sector or have their own USP, such as Starspins where community jackpots make it a slightly different proposition to other sites.

EGR Intel: What about changing the non-UK brands, any plans to make any changes to your international portfolio?

SW: I don’t think we necessarily see ourselves going into countries with just one brand, and it’s always going to be ultimately a multi-brand strategy. What I will say is we don’t see a multi-platform strategy internationally. We also don’t see the traditional approach of multiple brands where you acquire lots of customers with big bonus offers then effectively create retention by getting customers to switch through brands, we don’t see that business model working in the longer term. For me it’s about a high-retention business model, attracting customers to your brand and capturing a greater share of wallet if they ever fancy a change.  We’d like our customers to have secondary brands within our portfolio, rather than going to one of our competitors. However, we still think customers tend to get used to one brand, but like to have another few brands that they like to play on for a change.

EGR Intel: Would the consolidation onto one platform have occurred regardless of the Gamesys deal?

SW: Ultimately, I believe the consolidation onto one platform would have happened regardless of whether we had proceeded with the Gamesys merger or not and it was already within the JPJ strategic plans. However, the acquisition of Gamesys has meant that rather than migrating the UK brands onto the Enjoy platform, we will leave them on the Gamesys platform. This has the effect of moving our strategic plans forward at a much faster pace than we were doing before. It’s still pretty much the same strategy, but we’ve moved it forward by about 18 months as rather than worrying about migrating when we can. We’re excited about the growth prospects of our portfolio of brands and we think we have a unique proposition with a very high retention customer-dynamic, something which we think will give us a competitive advantage in the future. As we add scale in terms of liquidity, but also in terms of pooling skills and learning across markets, we believe that will leave us ideally positioned to have continued success in the future.