As Vigen Badalyan reflects on his career to date, he doesn’t offer up any overused clichés. When discussing his education, the BetConstruct and VBet Founder simply says: “I didn’t finish studying anywhere. I only learned in life.” It’s an honest statement when contrasted with executives who can list some of the world’s most prestigious universities on their CVs.
Among our six interviewees for this CEO Special of Gambling Insider, Badalyan is arguably the most entrepreneurial. That’s not to talk down the entrepreneurial acumen of anyone else we’ve interviewed, rather to highlight the journey of an Armenian betting company that has shaped an industry in its home country which “didn’t really exist” before. Both in terms of Badalyan’s hands-on route into business and BetConstruct’s overall journey to date, we are looking at your less-than-traditional road to success.
It has been a long and fruitful road for Badalyan, BetConstruct and VBet from those early days; days when there were no gambling specialists in the former Soviet nation. Now, for a sign of just how much things have changed, BetConstruct’s logo was emblazoned boldly across the ICE London showfloor last year and was the first thing you would have seen when arriving for gaming’s showpiece event of the year.
While Badalyan learned in life, so did his company, using trial and error and hiring advisors en masse to slowly bring gaming in Armenia to life. Like every entrepreneur, Badalyan started out with the ambition to create. “Before the collapse of the Soviet Union, there was a corporate movement where businesses were allowed to be formed,” he tells Gambling Insider. “I was around 13/14 and my brother was 20. We had the ambition to live well and create something. Back then, there wasn’t really any private business in the Soviet Union – before 1987/88, when [President Mikhail] Gorbachev allowed private companies to be formed. In 1992, we started a private business when the Soviet Union collapsed.”
Before venturing into gaming, Badalyan’s family business boasted a few different strings to its bow. In 1993, Badalyan founded finance company Fast Credit Capital, while he tells Gambling Insider the family also owned restaurants and hotels, and a few petrol stations (before these were sold). But, referencing BetConstruct’s development in a c’est la vie kind of fashion, he says: “What worked out, worked out.”
In 2003, it was actually Vivaro Betting (known more commonly as VBet) which took priority for Badalyan, a B2C operator we will hear more about further into this interview. It was in 2011 the bulk of BetConstruct began to develop, forming a substantial B2B arm for the business. “Whenever we wanted to buy something from the B2B market, there was a lack of understanding among providers,” Badalyan explains. “So we thought we should make something ourselves.”
Naturally, a lot has changed in such a technologically-driven sector, an industry now dominated by online and mobile play – and an acknowledgement this is the way of the future even where land-based giants still thrive. Much of this transformation is “thanks to Steve Jobs,” Badalyan remarks, the business magnate and Co-founder, Chairman and CEO of Apple.
We’ve taken the UK and France for direction as we are licensed there. We’re looking at Scandinavian licenses as well as Belgium. I understand this is a long game. We’re slowly moving forward
Before his passing in October 2011, Jobs would have been worthy of inclusion in any CEO Special in any industry. According to Badalyan, Apple’s iPads and iPhones quite literally “changed the world” and made an immediate impact within the world of gaming. He says: “Everything became quicker, more transparent and there is much more technology involved nowadays than in old-fashioned bookmaking. Betting is a technological business now: CRM, CMS; these are all fields in their own right.”
How BetConstruct and VBet dealt with these technological advancements, in Badalyan’s words, sums up the life force of any gaming business. “We took it upon ourselves to create,” he states. Using the aforementioned trial and error, BetConstruct began offering its products to other companies and the supplier’s global presence is now a huge contrast to its ground zero days. Badalyan says: “In our firm today, there are serious specialists in all fields – casino, sportsbook, live casino, CRM. We have plenty of young talent here who we trained ourselves.”
Borne out of this self-starter attitude and technological focus is a flexible market approach. In other words, when Gambling Insider asks what the current make-up of BetConstruct’s revenue is, both geographically and in terms of verticals, Badalyan says no “single revenue stream dominates from one specific direction.” That’s hardly surprising when the company offers B2C betting on top of its B2B revenue, which involves selling software to licensed companies in Malta, the UK and France. At the moment, Badalyan tells us the supplier is also building more live casino games for companies who want their own dedicated tables.
On the B2C side of things however, is where the executive is at his most candid, highlighting what he calls the “long game.” Like a Jenga tower, VBet is building block by block. Perhaps this is why, as the Gambling Insider editorial team recalls well, the operator’s brand ambassadors played a game of life-sized Jenga at a launch event at Arsenal’s Emirates Stadium last summer. Former Arsenal footballer Ray Parlour and World Cup winner Youri Djorkaeff (who represented France but whose mother is Armenian) entertained guests with the novel game, as VBet celebrated becoming an official partner of the English Premier League club.
“Right now, we’ve taken the UK and France as directions as we are licensed there,” the CEO explains. “We’re also licensed in Malta and, soon, we’ll have an Italian license, despite the advertising problems there currently. We’re looking at Scandinavian licenses as well as Belgium. I understand this is a long game. We’re slowly moving forward.”
The mention of Italy is well-timed: the next question we put to Badalyan is how BetConstruct and VBet are coping with stricter regulation across global markets. Italy’s gambling advertising ban, implemented on 1 January 2019, is just one example of European advertising restrictions, of which Belgium’s operators have equally suffered. There is talk of growing advertising regulation in Spain, while gambling adverts in the UK are under similar scrutiny.
But that’s just advertising. Wider gaming regulation in itself has spread across Europe, not least in Sweden, where operators have thus far struggled to get to grips with the demands of the Swedish Gambling Authority. Though debated at length, the merits of this increase in regulation aren’t the immediate priority once regulatory frameworks are formed – nor is the effectiveness of the rules put in place. First and foremost, the biggest issue for gaming firms is ensuring customers are protected and adapting to any new requirements.
We’re applying for licenses in several states. These are processes which take a year to a year-and-a-half. We have BC Technologies, which has received a license in Nevada. But work there will start in a year as there are several approvals to go through
“Of course, it’s very hard,” admits Badalyan, who once again comes across candidly. “We’re still understanding how to operate in every region, localising platforms to follow different sets of regulation. It’s a day-to-day job. Sometimes, there are mistakes. We strive to correct them and that’s how you build a business.”
While the impact of heavier regulation takes hold in Europe, it is another side of the same coin in the US. Since the overturning of PASPA in May 2018, the phrase ‘new regulation’ has taken on completely the reverse meaning across the Atlantic. On top of Washington DC, 20 states in the US now have regulated sports wagering at the time of writing. This opens up a spectrum of new opportunities for both established US firms and European companies looking to plant their flag in this enticing new marketplace. It’s the American Dream all over again and it has been dubbed this industry’s gold rush.
BetConstruct falls perfectly within the latter category, and at G2E Las Vegas announced a ramping up of its US plans – both for sports betting and fantasy sports. Badalyan has already featured in Gambling Insider expressing his excitement for the US market. But, asked whether BetConstruct can really challenge the big US suppliers, the CEO goes into more depth.
“Technologically, I think we are ready for everything, in terms of sportsbook,” he responds. “We’re applying for licenses in several states. These are processes which take a year to a year-and-a-half. We have BC Technologies, which has received a license in Nevada. But work there will start in a year as there are several approvals to go through.” Once again, it's about the long game.
In the fantasy sports category, which includes the daily fantasy sports (DFS) market so famously led by operators DraftKings and FanDuel, Badalyan says BetConstruct has agreements in place with some “big companies.” One of the provider’s partnerships sees it work with the Pro Football Hall of Fame, where famous NFL players advise fantasy players on how to potentially improve their picks. The provider is keen to prepare educated DFS players for sports wagering, as there is a high conversion rate between fantasy players and sports bettors. In short, like the rest of its US plans, BetConstruct’s DFS ventures are worth keeping a close eye on.
The supplier is looking to increase its presence in Latin America. With two offices already in Uruguay, BetConstruct is now monitoring Brazil and Argentina with laser-like precision. Badalyan’s earlier emphasis on the organisation’s wide range of revenue sources becomes further apparent when you consider it is also targeting different lottery associations within Latin America. From a B2B perspective, Badalyan says BetConstruct’s overall plans are “evolving at a very good pace.”
Of course, keeping a long-term focus in mind, the dawn of a new decade brings with it a certain level of unpredictability. With technological and regulatory change not showing any signs of slowing down, it would take a crystal ball to predict precisely how the industry will shape up in say, 2030. The gaming sector is already so unthinkably different at the start of this new decade to when Badalyan entered it.
The Armenian has various fields to concentrate on as much through necessity as choice. While one market opens up today, a completely different one may be the focus of tomorrow. While the same verticals continue to perform year in, year out, a whole new vertical may become gaming’s best bet some years down the line.
Until then, Badalyan has several firm aims in mind, ensuring a streamlined ethos drives both BetConstruct and VBet. “We place a greater accentuation on technology and innovation,” he explains. “We want to make our players’ lives easier, so they can spend less time on things: an improved interface, better software. We want our players to enjoy our product.”
Badalyan’s concluding phrase is a simple one, yet one of hope for anyone who fears for the future of our industry. While the make-up of gaming may well change emphatically in five to 10 years from now, there is one undeniable truth about the sector at its core. “You know,” the BetConstruct CEO says, “people love to gamble – and that will never change.”