Betfred US CEO: We want to be the "last man standing" of smaller US operators

Betfred US CEO Kresimir Spajic has said the firm is aiming to be “the last man standing” among the smaller operators in the market.

Speaking at NEXT: New York on March 7, Spajic detailed the brand’s aspirations in a fireside chat, with the CEO explaining the difficulties that smaller operators face in the US.

Spajic said there were four key capabilities in order to be successful in the shape of brand recognition, suitable tax rates, distribution channels, and technology.

The CEO added that against a tough backdrop of intense competition from market leaders means that Betfred, which holds less than 1% of US market share, faces a “big challenge.”

However, Spajic pointed to a slate of market exits in recent months from operators as an acquisition and growth opportunity.

He said: “It’s being resilient and to persevere. The idea is the less competition in the market, hopefully you can pick up some of that market share.

“The key for smaller operators is to look at every market. Every state is a specific state. We have to see what the competitive landscape is and try to find certain assets and advantages that allow you to be competitive.”

Betfred US is currently licensed in Arizona, Colorado, Iowa, Maryland, Louisiana, Pennsylvania, Virginia, Washington, Ohio, and Nevada.

Spajic added that the expectations for Betfred, and the core reasons as to why the brand remains in the US, is different to the likes of DraftKings and FanDuel.

He continued: “You need to persevere and you need the balance sheet to do that. Secondly, is this market really interesting to you? Even if we have 1% of the market?

“Betfred is a very successful company in the UK. We make billions in revenue and a sizable amount in profits as well. So, the success for us here is ultimately to breakeven and become profitable, even if this is single digit EBITDA.

“Everybody has different goals. Some of them is to say that they have a participation in the US. You have to understand what your objectives are and why you’re actually participating in this market.”

Spajic revealed the operator is profitable in three unnamed states, which he said was as a result of “unique strategies” in relation to partnerships and player acquisition.

The CEO added that Betfred’s advantage over similar-sized firms, in terms of market share, was its ability to lean back on non-US operations while attempting to breakeven in the States.

He said: “Three years ago everyone was flying high. Capital was very cheap. Suddenly, nobody is investing anymore and everybody is waiting for a return.

“For us, we have a very successful business in the UK and South Africa. These are our cash cows. We can use some of this cash to develop in the US and we are less stressed in terms of the cash flow.

“Our owner has always considered himself an underdog. He believes in persevering and making sure that he’s the last man standing. 

“That’s his kind of voice in the US as well. Can we be the last man standing of the smaller guys? Can we carve out a certain market niche that will be valuable enough for us to maintain? That is the decision the company needs to make.”

With Kindred Group set to exit the US by the end of Q2, and 888 communicating this week it was reviewing its US operations, as well as mutually terminating its licensing deal with Sports Illustrated, Spajic said he expected the trend of smaller operator exits to continue.

He commented: “I think on a national level, you will definitely see less than 10 . I think that you are going to see some of what I call regional and local superstars who have a strong brand in one state. These operators will have a significant database in one state and will carve out a low single-digit percent of the overall market share. 

“These databases will be related to brick-and-mortar databases and the creation of omnichannel will help create these localized superstars.”