Q&A: Pontus Lindwall on what the acquisition of KickerTech means for Betsson’s existing B2B sportsbook platform
Betsson revealed the €14m acquisition of an 80% stake in Lithuanian sportsbook supplier KickerTech last week.
The announcement coincided with the Stockholm-listed operator’s Q3 results, where revenue reached a record high of €200.3m.Since then, investors have been trying to assess Betsson’s acquisition of KickerTech and what the purchase could mean for its existing proprietary Betsson sportsbook software.
Below, iGaming NEXT sat down with Betsson CEO Pontus Lindwall to discuss the rationale behind the acquisition and the prospect of securing a top-tier operator client for its sportsbook in the US.
iGaming NEXT: Were you on the hunt for an additional sports betting business and how did you come across KickerTech?
Pontus Lindwall: We have been looking to have complementary products for our sportsbook, because it’s not that one-size-fits-all in terms of markets. There are very different demands in different markets and each sportsbook has its own strengths. We didn’t just stumble across this one. We have operations based on this one already; we know how it performs and we are impressed by it. After some discussions, we decided to go together by acquiring 80%. I think it’s a strategic good fit so that we can have two products. Our sportsbook – the Betsson sportsbook – fits certain customers, and this one suits other customers. It will definitely help our B2B business.
iGN: Could you elaborate on the difference between the two sets of sportsbook customers?
PL: We have quite a big demand for our own sportsbook and every integration takes time because there needs to be market adaptions. But now we have another sportsbook as well which we can use in certain markets. The Betsson sportsbook is probably tested for larger volumes than the other one, so we keep that in mind when looking at which one fits best. The acquired company also has a customer list. Maybe there is interest from some of their clients to switch over to our sportsbook for certain reasons. We will see, but I’m sure we are going to have good cooperation between those two legs of the B2B organisation.
iGN: When do you expect the acquired business to be value accretive?
PL: You will see it already in the fourth quarter, I believe. It’s not that it will double the size of revenues for the group; It’s not that size of acquisition and it’s more strategic in nature. Over time, however, it will definitely become sizeable.
iGN: It sounds like you want to run them as two separate businesses. Will there be much of an integration?PL: We don’t want to integrate the organisations too much at this point because they are already two functional organisations. We will integrate technically, of course, and we are integrated already to the Betsson platform with the other sportsbook.
iGN: Do you plan to buy 100% of the business eventually?
PL: Not for the time being. We want to make sure that we have the old founders and management on board so that they still have good skin in the game. They have done a tremendous job so far. We want to have an insurance that they keep on being interested in the success of the business. They have been suppliers to us for a long time. We know this organisation and we work really well together.
iGN: The acquired business has 50 staff. Will there be a rationalisation process due to the duplication of roles?
PL: That is not going to happen. We are going to keep on employing in both legs of the sportsbook development business.
iGN: How many operator clients have you gained access to through this deal?
PL: One or two handfuls of clients. We can be more specific about that later on, but it’s a bunch and some of the companies are ones that we know from before.
iGN: The share price dropped despite record numbers in Q3. Some investors might perceive the acquisition of KickerTech as a lack of faith in your own proprietary sportsbook. What would you say to reassure those investors?
PL: I can tell them that I have so much faith in our sportsbook. I would not want to be on any other sportsbook in the world as we come up to the World Cup. If you read our report, and you look at the performance of the sportsbook quarter-by-quarter, then how could you not have faith? It’s one of the absolute best in the world. So, I don’t think that has anything to do with it. Our share price has been doing really well for the year and especially for the last couple of weeks since the trading update. In this market, there are funds that have an outflow of money and there are different things going on in a nervous market. If you have a share that has performed well, maybe you need to take home some money. I don’t see it as a sign of disappointment with the report at all, because I’ve been talking to several investors and they are all overwhelmed by the report.
iGN: The Betsson sportsbook is live in Colorado to showcase its B2B potential. Can you say when we are likely to see a major operator client on the Betsson sportsbook in the US?
PL: No I can’t, but I understand that timelines are pretty long. Deciding which sportsbook platform you are going to go on is a big decision to make because you commit for a certain amount of time. It’s very important to make the right choice, so I understand that the lead times are long, but I really hope to see some breakthroughs in the future.