SportingWin is a household name in the sports betting industry embarking on several high-profile launches in 2021. While 2020 proved hard for many, SportingWin has found a successful formula to thrive and move forward, generating value for investors as well as partners and ordinary sports bettors.
This year marks the company’s expansion eastward in Romania and Bulgaria, where it has been working hand in hand with local regulators. SportingWin has been in communication with the National Revenue Agency, as it closes in on securing a license to enter the Bulgarian market. The company will become only the sixth licensed operator in what is a market with great potential but limited competition.
SportingWin is also looking to generate a 13x cash-to-cash return for its investors within three years, citing the pandemic as favorable for the development of its proprietary platform while also boosting results and engagement despite the lack of professional sporting events for most of 2020.
The company has established expertise in customer acquisition, and it is looking to leverage this in Bulgaria and across additional Eastern European markets this year and beyond. Here is our Q&A with SportingWin Head of Investment, Mark Chakravarti who offered insight into what the firm’s future plans are.
Q: SportingWin is barely a year old, and you are already setting out some ambitious goals for yourself. Is this a temporary development occasioned by a global lockdown or a prescient business plan?
A: SportingWin has been many years in the making and our plans for Eastern European markets span several years. The brand already has incredible equity and is highly recognised across the region, and this combined with our proprietary technology and smart marketing strategy is why we have been able to enjoy early success.
The pandemic and global lockdown came as much of a surprise to us as other business in the sector, but we have used the time to double down on development and executing our product roadmap and the result is that we have been able to finesse our technology and add additional features ahead of schedule.
Of course, a long-term consequence of the pandemic is that consumers are now betting online and via mobile more than ever before and SportingWin – thanks to our long-term strategy and ability to adapt quickly and efficiently – is in a position to capitalize.
Q: Why Bulgaria of all places as your next market opportunity this year? Do you fear competition from the long-time bidding players, including bet365?
A: Bulgaria is a relatively untapped market but one that promises tremendous growth over the coming years – we estimate 20% AGR for the next five years resulting in a market worth upwards of €500m per year. Of course, with just five licensed brands in the market – and many of those local operators – there is plenty of opportunity to capture a significant share.
Do we fear bet365? No, but we certainly respect them and their position as the clear market leader. That being said, we believe we have what it takes to compete with the betting giant and to become one of the two largest brands in the market over the next three years.
Q: You have had the opportunity to work around the pandemic and achieve significant growth despite it. What are the main takeaways from this period? Has sports betting changed?
A: We saw a slight drop in revenue from sports betting during the first international lockdown and the resulting blackout on live sports. That was offset by a spike in interest and activity around esports and esports betting. As soon as live sports started to return over the summer, we saw betting activity and revenues get back to normal.
In terms of takeaways, I think operators have learned that they need to have a broad offering and that in the unusual event that live sport is cancelled; they can offer other products that engage players and feed their appetite for wagering on sporting events, even if they are virtual.
The quick return to business as usual has caught the attention of investors who seem buoyed by the global gambling industry and that it seems to be not only recession-proof but also pandemic proof.
Q: With one year in the books, how do you imagine the future for SportingWin? Is the brand going to do something different comparing to other license holders owned by SB Europe?
A: SportingWin is our biggest brand asset and we have ambitious plans in a range of regulated markets around the world. We are focusing on regulated markets as we want to attract high caliber investors who want to back a reputable, licensed business with tremendous growth potential. After just one year, a recent Nielson Global market report valued the SportingWin brand at €1m+. However, it is not only the brand equity that will bring in further investment but our proprietary platform which is in the final stages of development.
Q: Speaking of Eastern Europe, a region we have boots-on-the-ground so to speak, have you been excited by the recent legalization of the Ukrainian sports betting market?
A: We have been following the progress being made in Ukraine, but it is not a market that we plan to target for the time being. To obtain a license from the regulator, foreign businesses must establish a subsidiary in the country. As Ukraine is not part of the EU this means a greater risk for a Malta-licensed company such as SportingWin.
Q: How do you imagine your business in 5 years? Where would you want to be in a perfect world?
A: The industry continues to consolidate, and we expect the pace of M&A activity to continue to increase over the next three to five years. For SportingWin, we plan to grow organically and through the investment so that we can undertake M&A in the Bulgarian market and others that we target, giving us a significant footprint across the region.
The long-term plan is then to position the business for acquisition by one of the top tier operators; when this happens, we will be able to return significant value to our investors and shareholders.
Q: Another market that has been recently sending signs of opening up in Poland. Do you have any focus on the Polish market?
A: Poland is part of the European Union which makes it a market of interest to us. At present, the high gaming tax levy makes it unattractive to foreign operators – including SportingWin – but if this tax is reviewed and amended Poland will become a viable option for us and others.
Q: How would you comment on the string of regulations taking place in Germany, the United Kingdom, and even Spain? Is it a good thing?
A: As a Malta-licensed operator, the only market changes that impact us are in Germany. I think the incoming changes will have a negative short-term impact on operator revenues, but those that adapt and innovate will be able to drive growth within the regulatory guidelines set. But this is why it is so important for operators to diversify and be active in a range of markets.
Q: What’s your one non-negotiable goal for 2021?
A: By far our number one priority this year is securing our Bulgaria Licence. We have gone to great lengths to ensure our application not only meets but exceeds the requirements set and believe we will become the first foreign operator to receive approval from the new regulator, the NRA.