In the 21st century, gambling is more likely to be an IT business, and the winners of the biggest market shares are the regional companies. Europe is today the largest market for online gambling worldwide: of the €34.6bn of online gaming gross win (stakes minus winnings) generated globally in 2015, more than 47.6% per cent was attributable to the EU market. The online gambling sector in Europe is still developing, albeit slower due to the increasing regulatory pressure. But online gambling’s Gross Gaming Revenue (GGR – stakes minus winnings) is expected to rise from €16.5 billion in 2015 to €24.9 billion in 2020. Betting is the most popular product at 37% of the market, whilst online poker and casinos make up respectively 24% and 12%.
In this context, OZB talked to Vlad Ardeleanu, CEO of Superbet Romania, about the past and the future of the company, but also about the ambition of becoming a European player and the strategic steps done in this direction.
What is Superbet Holding Romania today, after 9 years of activity?
Superbet is currently one of the largest gambling operators in Romania, with a retail network of almost 1,000 agencies across the country and with a turnover that doubles at least yearly.
The national business is now consolidated under Superbet Holding Romania, which operates four retail brands – Superbet, with 630 agencies, BetArena, with over 200 agencies, GoBet, our franchise arm with 120 agencies, and Magic Jackpot, the slots brand. If Superbet is the premium brand, already consolidated on the local sports betting market, BetArena is a start-up built around a totally different concept from what is now on the Romanian market – and I especially think of those entertainment areas where we put focus on live sports events. At the same time, we created BetArena applications for live draws at the most important lotteries.
Moving the discussion to online operations, the picture looks like this: superbet.ro is the locomotive of the business at the moment, with the most accelerated growth and competing with the volumes made by the over 600 retail agencies under the Superbet brand. It is also a massive investment effect that we have directed to the online platform, and we will continue to drive much of our future investment. I want to tell you that, at the current technological level, an online sports betting business is today rather an IT business than a service business.
Built on a different platform concept, which we still work on and which we want to launch in the coming months, betarena.ro will be the mirror of BetArena retail business, a start-up that already is rising over expectations in the 200 operating locations.
Currently, the Superbet Group employs more than 2,500 people in Romanian offices, with 1,800 of them working for the Superbet brand.
I want to emphasize that Superbet group is the largest tax payer in our industry and among the largest contributors to the national budget with over 35 million euros paid this year, and 26 million euros last year.
Which are the main directions of development ?
The first one is regional. Since the beginning of the year we have started to build teams for regional expansion. We have recruited leading global gambling industry managers both to strengthen the team in Romania, and to prepare the next steps for development. We just launched the retail operations in Poland, where Superbet already got its offline license earlier this month. The main cities where the Romanian brand will be present are Varșovia, Katowice, Cracovia, Wroclaw, Poznan și Gdansk. The ambassador of Superbet brand in Poland is the football player Jerzy Dudek, ex-star of the English championship (goal-keeper of Liverpool team) and ex-member of the Polish national football team.
We hope to open about 50 agencies by the end of the year, and we’ll have 100 locations opened by 2018 World Championship. In the first part of 2018, we will most surely get the license for going online and we will launch superbet.pl. The Polish market has a huge potential– is the biggest from Central and Eastern Europe – and that’s why it is very important for us. And regional ambitions of Superbet do not stop in Poland. All next year, we will enter the market in Slovakia and Serbia, which I announce for the first time in the pages of your magazine.
To sum up, the goal of Superbet, my goal, is to export to Central and Eastern Europe this Romanian entrepreneurial success.
Your development ambitions are regional or global ?
I think that for this kind of business, if it’s a well-built and financially sound business, the goal of turning Superbet into a global company is as legitimate and realistic as possible. The company is in advanced discussions to get the online gambling license in Gibraltar. With this license, Superbet will become the first business in Central and Eastern Europe to enter the select club of the licensed Gibraltar operators, alongside renown names such as Bet365, William Hill or Ladbrokes. I have to tell you that Gibraltar market operators are subject to the most stringent online gambling legislation in the world and that is why we are talking about an extremely select club in this industry. In this context, Superbet has already opened an office in Gibraltar, and the next step will be to increase the team there from 20 people this year, to 50 by the end of 2018.
At the same time, we have opened an office this year in Leeds, UK, which is already working in tandem with the one in Gibraltar.
What will be targeted for budgeted investments on medium term ?
As you have learned from the press, we’ve decided to attract capital through a listing on listed on the AeRO stock exchange, an alternative trading system. The bonds which are non-guaranteed, RON denominated, issued in January 2017, maturing in 2020, with a fixed interest rate of 12% per annum, have a total value of approximately RON 9.7 million. Superbet succeeds by this second placement to attract money from Romanian investors, money that will remain in Romania because they will be used to develop operations in Romania.
The money will be invested both in expanding the retail business – new betting agencies -, and in boosting the online business that has just begun. In the online environment, the money are being directed as I have already told you first and foremost to develop advanced technology.
What is the evolution of turnover in recent years ?
For 2017, I estimate that we’ll have again a solid growth in terms of turnover. Since its inception, Superbet Holding Romania has been growing steadily and we can say that our turnover has doubled at least from one year to another. For 2018, I wish we keep up the pace, even if it’s getting harder, given the growing business size and the volumes.
What are the main obstacles to the company’s development?
I think the biggest brake at this moment is the shortage of labour force. All the sectors face it, but for us it’s even harder. Young people are not always attracted to work in a sports betting agency because of the still poor image of this type of activity in Romania. But we try to attract them by being more flexible and offering them better opportunities comparing to the other sectors.
What is the profile of sports betting consumers ?
Referring to the behaviour of players, most of them bet in both retail and online agencies. From the figures I have, about 15% of the players use both channels, while the others use either online, or retail.
From the whole gambling industry level, sports betting segment has the most dynamic and growing potential. Soccer and tennis are the sports with the biggest number of bets. Speaking of development, the Romanian betting market is still below the ones in Spain, Italy or the UK.
On mature markets, betting or gambling is one of the main opportunities of entertainment. Obviously, we can talk more about responsible gambling. Superbet, together with other members of the Rombet Association and other professional associations, insists to explain that betting should be seen as a way of spending time and having fun and not as a source of money.
As in any industry, there is a minority of consumers who make excesses and to whom we need to be careful and provide support.
What do you think about the legal environment of the industry ?
Compared to other economic sectors, the gambling industry is one of the most regulated and transparent in Romania. In this moment we have strict and fair regulations which have eliminated those operators who tried to avoid the rules of the game. There have been three important contributions to this, and I am referring to the adoption of OUG 77/2009, the first important milestone for the regulation of the field, the creation of the National Gambling Office (ONJN) in 2013, and finally the summer of 2015, when ONJN regulated the online betting market. A leverage that ensures the full transparency of the sports betting business is that each betting company must establish a terminal at the ONJN headquarters. This terminal is basically a mirror of the bookmaker’s betting server, so absolutely all the financial transactions related to betting can be monitored by ONJN.
From this point of view we are proud that Romania is a good example of fair, functional and attractive gambling, and I don’t know if we can feel the same when we talk about other industries.