Q&A: Betsson AB CEO on market exits and learning how to be local

Being a CEO of a listed company wouldn’t be classed as an easy job, but Betsson AB CEO Pontus Lindwall makes it look more comfortable than most. A 12^th consecutive quarter of growth for the Rizk parent company in Q4 led to 2024 being hailed as the business’ best-ever year.

Previous records came tumbling down, with all-time highs recorded across several financial metrics. Revenue rose 17% year on year (YoY) to €1.1bn, while EBITDA jumped 20% to €316m. The Stockholm-listed company’s shares spiked in trading yesterday, 6 February, and are up almost 40% over the past year.

The key battlegrounds of Latam and Central and Eastern Europe and Central Asia (CEECA) have become core revenue drivers for Betsson, with Lindwall noting an ability to become truly localised, despite being a foreign business, gives the group an edge.

Here, Lindwall explains how the operator went about achieving the record 12 months, what is next on the agenda for the business, and how trimming the fat and being disciplined remains a key part of the strategy.

EGR: Congrats on the record year, Pontus. At the start of 2024, did you think Betsson would be able to reach these levels?

Pontus Lindwall (PL): I didn’t think like that at the time. When we went into 2024, I was already happy with the performance we’d had. I knew we were in a strong position, but to be able to continue to grow quarter by quarter, I couldn’t really pencil that in, but now we are here. We’ve had 12 quarters of growth and it’s amazing.

I take it quarter by quarter. I dig where I stand, and I work a lot in real time. I usually compare it to like a large football team of great players and, when you have a good team of really good players, then you are hard to beat.

I think that’s the most important strength that we have. And it’s not only me saying that. It’s people who start working here, they say: ‘wow, what a team you have here’. I think we are well positioned to continue going forward.

EGR: All-time high revenue for CEECA and Latam too. Do you think Betsson, as a non-local operator in those regions, has found a secret sauce?

PL: There are other operators in these regions that are very competitive as well, and what you say about us not being local is true. But on the other hand, we take it really seriously to make sure we are local in the markets where we operate.

It’s impossible for anyone from elsewhere, from Sweden or Malta, to understand how to do business in these regions. And we have managed to build up great local teams with great people and become local. And that is a part of the secret sauce of what we do.

EGR: Sportsbook revenue and margin were up during the quarter. Is it a case of operator-friendly results or are bet builders taking up more of the bet mix?

PL: I think it’s a little bit of both. Definitely, we’ve had favourable outcomes that have contributed to the higher margin and as bet builder becomes a bigger share of the total revenue, I believe it will have an impact on the margin.

Over time, I would then expect the other part of our business to balance out. We believe, in line with our idea to have the best customer experience, that we don’t want to drive the margin higher than our rolling average. We are not out there to take our customers’ money. We’re there to supply them with a service they can enjoy and which they find is worth the price. So that’s why I don’t believe in, and we don’t strive to, raising the margin over time.

EGR: Casino’s share of total group revenue dipped three percentage points to 69%. Can you give any colour on the fluctuations in the split?

PL: It happens by itself when it’s supposed to happen and it happens naturally on the site in most cases. If we were to have a quarter with lower sportsbook margins, which means the players have more money on their accounts, then it tends to spill over to casino and the other way around. So, now we had a little bit of higher margin in the sportsbook, so the casino is not growing as strong naturally. There is quite a bit of communication between the two products.

EGR: Regulated revenue as a share of total is ticking up, too. Does this feel like a significant change for the business?

PL: It’s a change. But when we started a long time ago, there were no local regulations. We could already guess that these markets would become regulated and authorities would be attracted by this industry and the tax revenue it brings.

If we look globally, we are on a way towards local regulations. That’s the mainstream. I think we’ve pointed out many times that we believe more or less every market will go into local regulation at some point.

EGR: To follow up, there’s been a lot more active push back against the black market in recent months. How does the industry solve a problem like this? Is it licences for every company?

PL: I think the measures you said are going to help a bit, such as licences for suppliers and things like that, but the main thing is we have to work and collaborate to make the licensed products attractive enough for the end users, because that’s where the decision is taken.

It doesn’t matter what the regulator says or what we as operators say, what matters is what the customer thinks. And, if the customer has such a bad offering – because we are not allowed to give a bonus, or we are not allowed to have this game and you have to wait 30 seconds between every spin – then the customer will want to go to the unregulated market because they have a better offering. We have to be able to have the attractive offerings everywhere. That’s the way to combat the unlicensed market.

EGR: You received the provisional licence in Brazil and are planning to submit all the relevant documents for a full licence by the end of the month. What are your thoughts on the market?

PL: We’re not up and running there yet. As we said before, we’re going to try to do a little bit of a slow start and learning on that market. It’s a new market. It’s very competitive, with a lot of licences going live at the same time. And we have learned from experience that it’s easy to spend a lot of money in such cases and in marketing without getting any traction. So, we need to learn, start slowly and build up from there.

EGR: The 2024 report mentioned that total registered customers were down 1.1% in the quarter due to leaving some markets. Can you expand on that?

PL: We exited some markets where we don’t see a clear path to local regulation in the near future. [We also left] some others where we have not been as successful as we had hoped. So, it’s a little bit of a reprioritisation that has had an impact on the number of customers. There are some European markets where we stopped accepting customers from and some African countries where we no longer operate.

EGR: Is there any progress on the B2C and B2B acquisitions in the Netherlands that were announced in February 2024?

PL: It’s in progress but it’s very hard to have a firm opinion on the timeline. If you would have asked me nine months ago, I would have expected that we would already be done. But at least I hope we are in the end stage of the process. [The Netherlands] has a tough [regulatory] framework. We are operational in some other markets with tough frameworks as well.

EGR: The report also alluded to having a strong pipeline for continued geographic expansion. Is this likely to come in the form of M&A?

PL: We’re going to continue to do M&A [after] the strong success we’ve had now for several years, and we have a very strong balance sheet. We have our cash boxes in a good shape. We will continue to evaluate M&A targets all the time, but we’re going to continue to be cautious and careful when we do M&A.