IN-DEPTH 16 January 2017
SBTech CEO Richard Carter: "Regulated markets are the future for us"
SBTech CEO Richard Carter sits down with Gambling Insider to talk about his first six months in the gaming industry, and what the future has in-store for the sports-betting supplier
By Gambling Insider
You came to gaming from outside the gaming industry, why did you decide to take the role at SBTech?
I greatly enjoyed my time at Deutsche Bank, and was very fortunate to work on many of the major gaming IPOs and M&A deals. However, working directly with gaming operators and providers whetted my appetite for more operational focus. I had been acquainted with SBTech for several years, and had observed its escalating success year upon year. SBTech is a unique sports-betting provider, and is becoming an increasingly dominant player in what remains a challenging area of the industry. I thought SBTech was such a fascinating and exciting company that I couldn’t turn down the opportunity to work with it.
What were you expecting from your first six months in the industry? Has it matched your expectations?
Previously working with the gaming sector from an analytical perspective, I knew that it was a very fast-paced industry. However, my expectations of how fast-moving the industry would be were definitely exceeded. Here at SBTech, we have an extremely expeditious culture and a dedicated work ethic – nothing is neglected or left until the next day. We currently have 70 clients, and we are adding three or four new clients every quarter. We are also significantly investing in various product verticals. Unsurprisingly, things move at a thousand miles an hour here. Nevertheless, my first six months at SBTech have been extremely fruitful. We have won “best in-play provider” and “best sportsbook supplier at the Nordics” industry awards. We have also expanded the business into more regulated markets during the past twelve months by entering Romania and Portugal, and powering the biggest operators in those two markets. SBTech has also won the prestige contract of supplying Czech lottery operator SAZKA with its sportsbook. Overall, we have ultimately achieved a great deal and it has been enormously enjoyable period.
You’ve talked about some new partners and dominating a number of markets. What did you identify as SBTech’s USP when you took over the role?
SBTech have an exceptionally good product offering. We have a vast breadth and depth of in-play products on the market, and this is vital when most sportsbooks are now 70%+ activity in-play over pre-match betting. As equally important is how we manage our sports engine, our risk management and pricing tools which in my view is industry-leading, with most of our competitors unable to match our flexibility and margin levels. Once again this demonstrates how bespoke our products truly are. Most of our competitors are very repetitive, whereas here at SBTech we really try to be innovative and strive to offer our operators unique and distinctive products.
From my perspective, player protection is also extremely important. SBTech takes this responsibility very seriously, and I will definitely strive to maintain our notable reputation in this area. We also have the advantage of being one of the biggest sportsbook providers in the market, with approximately 600 people working for us. All of these things make SBTech unique and have contributed to our outstanding success.
Now you’ve been at SBTech for six months, and have a greater sense of how the company operates, are you considering making any drastic changes?
I’m definitely not planning any major overhauls. We are trying to make small marginal gains, which should over time develop into significant changes. My mission is, quite simply, for SBTech to create the most relevant and engaging sportsbook offering in the industry. However, this must be supported by data analytics, complex event management tools which in turn drives our push for more personalisation and CRM. To achieve this, we have hired leading industry professionals and we expect to continue to strengthen our teams. In addition, we’re significantly increasing our investment into new technologies and are also actively looking at M&A. We are also strongly investing in the retail vertical because, specifically in regulated markets, a lot of the land-based retail operators who want to go online want to have an omni-channel product. As such, we have been investing in this for the last twelve months, and I am certain we truly have an industry leading product and I am very optimistic for future growth with thisvertical.
What does the entry into Romania and Portugal mean for SBTech? Will you be targeting any new markets in 2017?
In my opinion, the future of this industry lies in regulated markets. Our work with Romania and Portugal demonstrates that we have the ability and in-house knowledge to be able to tackle complex regulated markets and to be able to deliver solutions more efficiently than our competitors. This can be evidenced in Portugal, where bet.pt has a market leading position. Our partner in Romania, NetBet, also has a number one market share. I think this demonstrates to the rest of the industry not only the power of our software and the worth of our partners, but also the importance and significance of SBTech in those regulated markets. We will be entering many regulated markets in the near future, such as Czech, Holland, Poland, Colombia, and Denmark. We really believe that regulated markets are the future of SBTech.
What is your opinion on the active M&A market? Is that something that SBTech has got any interest in moving forward?
I think any company in this industry that’s not looking at what’s going on from an M&A perspective is making a huge mistake and could potentially get left behind. So yes, in the last few months we have discussed some possibilities with major players in the industry. I am certain that M&A will continue in this sector because when you’ve got governments looking to tax online revenues and there are significant cost inflations, it makes sense from a financial and operational perspective. In terms of SBTech, I would be surprised if we haven’t done a number of deals over the next few years. It is inevitable that anyone who wants to be a market leader in this industry will have to do some M&A, and we certainly want to be a market leader.
SBTech is not traditionally known as a retail-first provider, how will you educate clients about those retail products?
Four or five significant players in the retail market have expressed their interest in trialling our machines. We have confidence in our retail products because we have taken the best features of our sportsbook and replicated them onto a self-service betting terminal, but changed the UI and the UX to replicate the retail nuances. No other major operator has so far been able to use online sportsbook software that has been so thoroughly trialled and tested, and transform it into a retail terminal. SBTech has brought retail experience in-house, and we’re very confident that the quality of our product offering will satisfy the most demanding retail customer and will match our online products. Often when operators have tried to do this is in reverse, it has been unsuccessful. We are currently working on our retail products in Mexico, and we are positive that over the next twelve months we will expand into the European market. I am confident that we will be able to make a significant impression on the retail sectorin the coming months.
What’s the best piece of business advice you’ve ever been given, and how are you applying that advice specifically to SBTech?
I think the best pieces of advice I’ve been given are: “You only run out of cash once, so always follow the dollar through and make sure you end up with cash at the end of the day”.
However, on a different note somebody told me once that “the rules are there to be broken”, and I think at SBTech we really do use this mantra. Whilst designing and developing new products and features, I really want all SBTech employees to think outside of the box. Indeed, for the next twelve months, we should be aiming to bend and break the industry’s common conventions. I want to focus on how we can do things differently, and how we can create a really intuitive and cutting-edge sportsbook and platform.