Paddy Power Retail CEO David Newton doesn’t believe in career plans. And if you review his particular career path, you can understand why. In an age of digitalisation, Newton transitioned away from a degree in computing to pursue a love of retail. To this day, he truly believes in what the high street has to offer; and while cynics will continually point to the dominance of online, Newton now leads a retail division he believes helps define Paddy Power’s overall brand. The yin to its yang, the operator would not be where it is today in the online world, without the presence of its betting shops.
From digital to retail
Enjoying a “relatively average” upbringing, Newton’s parents were both civil servants in the public sector. He left school aged 18, not knowing what to do but having a preference for technical subjects such as physics, maths and computing. A young Newton solved that conundrum by taking a gap year, though he admits he still “just didn’t do anything.” While his friends travelled to Australia, he himself ended up working for high street retailer Woolworths. In a “weird way,” though, it led him to where he is today.
At university, still undecided on which path to take, the now CEO followed “the cool thing to do in the early 2000s” – computing, as dot com bubbles began to emerge. It interested Newton “slightly” but not enough to embark upon a career in it. However, on the south coast of England, Newton did meet his now wife: “So it was a good thing in the end even though I was not interested in the subjects!”
Moving from digital to retail... in the modern world, Gambling Insider can't help but point out that’s the opposite to the norm. “I’d love to say people have career plans,” Newton responds. “When I meet people that join our business on graduate schemes, my colleagues talk a lot about career plans. I genuinely don’t think it’s something that exists – or maybe it exists for a few. I certainly didn’t have one at the age of 19.” He adds, with a laugh: “I’d love to say I left school saying ‘I really want to lead a high-street bookmaker, that’s what I want to do!’ But I hadn’t got a clue.”
The Woolworths experience
After graduating, Newton started a web design business with some friends. Yet he soon missed “the cut and thrust of retail.” “The pace, the people aspect, I missed all that and warmed towards doing something a bit more operational and in physical space,” he explains. “And that’s where, after a lot of soul searching and scratching my head, I ended up working for a high street retailer which I’d had a part time job with previously: Woolworths.”
At this point, Newton had had “very little exposure” to the gambling industry that he would grace some years later. He grew up in the Midlands watching Coventry City and held an interest in sport. But the very first bet he ever placed – in a shop – only came during the Rugby World Cup Final in 2003. “Obviously I bet a little bit more now,” he laughs, “and have more knowledge and interest nowadays.” Something else that amuses both Newton and Gambling Insider is the rugby connection; it has to be said Newton bears strong resemblance to a World Cup winner from 2003 – Matt Dawson. “Yes, I’ve had that before!” he remarks, recalling a time when a colleague super-imposed his face onto a bobblehead of the former rugby player in Paddy Power’s Dublin office.
Delving deeper into his career at Woolworths, the fallen UK retail giant that was founded in 1909 but ceased operations in 2015, Newton looks back “very fondly.” By the end, Woolworths possessed a business model that was “fraught with issues.” There are colleagues at Gambling Insider who have never even heard of it. Despite this, Newton enjoyed his time with the retailer and recalls it being a great place to work. Joining on a graduate scheme, he spent most of his time “at the coalface,” working in stores and then on regional management tasks.
In fact, some of the Paddy Power Retail CEO’s fondest memories are being a 22-year-old in charge of 150 people in 20,000 square-foot retail units. Woolworths was a good employer, Newton says, which was adept at pushing him into “bigger roles at pace.” He concludes: “There’s a lot I’ve learned there that’s absolutely gone on to form some of my views and ways of working in my current organisation, 14 years later. Whether it’s the importance of people, service, proposition and marketing – all those things I learned at the time and have been pretty valuable ever since. I’m still in touch with a good number of people I used to work with back then.”
Sadly there is no Woolworths WhatsApp group to Newton’s knowledge – but a couple of Facebook groups for ex-Woolworths employees ensure they can all keep in touch. Like many others, the now CEO was upset to see the brand disappear from the high street. But far from scarring his love of retail, his time at Woolworths only spurred it on – even leaving him “desperate” for his 10-year-old daughter to one day get a job in retail or hospitality. “That’s really when I think people learn and understand customers.”
It’s a small world
Newton’s next move took him into our industry, one he has made his own over the years. But, like many who have found their way into the sector, the executive entered it “completely by accident.” He was approached in 2008 by Ladbrokes; it was the same year as the launch of the iPhone, Newton points out, meaning digital revenue was still a very small part of the operator’s wider business. The brand had a “very clear need” for external retail expertise to help modernise. Despite the benefits of promoting from within – something Paddy Power is an advocate of too – there is always room for balance and external perspectives. At Ladbrokes, Newton provided just that.
“They were very clearly going to market looking for people who’d had relatively big jobs in high street retail, and could bring some of that expertise around service and omni-channel,” he explains. “That was the brief. It took a while, I must say, to sell me the opportunity. I remember spending what must have been a good two to three weekends just hanging out around betting shops. The thing that really struck me and got my interest was ‘these are very people-led businesses.’ We see our customers daily – the first-name relationships between staff and customers are really interesting. I think the way employees are truly part of the betting proposition for customers is equally interesting.”
Much of the knowledge Newton picked up at Ladbrokes still applies today. Overall, it was a “really safe environment” for him to learn the industry – an important takeaway point during his years at the organisation. “I met some great people,” he adds. “It is a relatively small world and there are a large number of people from Ladbrokes I still talk to and deal with. There are a lot of familiar faces around the sector – including current colleagues or suppliers.” Almost as if to illustrate that point, Gambling Insider met with former Ladbrokes exec John Pettit at an event two days after this interview... He’d had lunch with Newton earlier that day.
The road to Paddy Power
One element of retail betting that immediately struck Newton was its competitive nature. The CEO believes that, as with restaurants and coffee shops, demand creates busy geographical areas. “The way I would go about opening a unit is we go where customers want us,” he states. “And we won’t if they don’t. I think London in particular but it’s also true of other cities with big populations. London is a very vibrant city – you’ve got lots of football and customers milling around.”
That competition applies at employee level, too, with so many strong brands vying for market share within the UK retail betting space. As such, that ‘small world’ adage came to the fore again while Newton was progressing at Ladbrokes. At Cheltenham and an industry awards show – Newton was at both through work – he met the Paddy Power management team and got talking to them on a “casual” basis. But that casual acquaintance soon led to a formal job offer. Newton recalls: “I think the pull factor for me was I’d just met some super ambitious, super smart people – ambition in a way I’d not heard before.”
This really was the key word for Paddy Power at that time, one that would define its journey from a “tiny” business to being part of industry giant Flutter Entertainment today. As Newton explains, the UK arm had less than 100 retail units at that time; Ladbrokes, by comparison, would have had around 2,000. Switching from the bigger company, Newton was encouraged by the goal of growing Paddy Power’s portfolio by 50 shops a year. “It doesn’t sound like a lot – but at that point in time it would have been the same as Ladbrokes opening 1,000,” he adds.
Alongside that appetite for growth, however, Paddy Power was experiencing “some very clear growing pains.” A small organisation, with minimal resources, aiming for new markets was at risk of becoming “messy” operationally. This was by no means off-putting for Newton, though, who read the job description – someone with experience at a high-street retailer and ‘bonus’ experience of retail betting – and thought ‘that’s me.’ “I was excited to work with some challenging, smart individuals. There was a lot to be done in the operations of the business at the time.”
A highly valued asset
For all his excitement, Newton did suffer a “bit of a shock” when he joined. Accustomed to “relatively flash” London office locations, the now CEO had to adapt to smaller facilities “a million miles away” from what he was used to. “Iremember going to our Dublin office, on an industrial estate, even more cramped!” he says. “Paddy Power had just acquired Sportsbet in Australia and was first to market with an iPhone betting app, so there was a lot of digital growth. I worked in operations for a while and then at some point switched to running the UK retail business. A few years later in 2017, I took up responsibility for our UK and Irish businesses – as we tried to centrally bring them together.”
In 2015, Paddy Power merged with Betfair, one of a series of deals that led to the creation of today’s industry titan that is Flutter – culminating in a mega-merger with The Stars Group. For Newton, this meant spending plenty of time bringing a number of digital-only colleagues up to speed on retail. “There were some urban myths there that needed to be dispelled,” he remarks. “I think we went from a place of new colleagues being intrigued and not really knowing how to think about retail to where we are today, which is understanding a highly valued asset; the Paddy Power brand wouldn't exist without retail."
Backing Newton’s last point up, he was afforded the opportunity to spend time with FanDuel in late 2019, whose CEO has also been interviewed in this edition – see page 38. There, Newton didn’t directly run anything, rather offering strategic advice and expertise. “One of the benefits Flutter has of having Paddy Power Retail, and by proxy me and my team, is there’s lots of international markets where you need retail to do business.” He continues: “The US is a great example because there are some states in the US you just cannot get into without a retail presence. And therefore it’s much harder for purely digital domestic operators to enter, because they don’t have the expertise, the knowledge or the technology. So I offered advice, joined people up and technological solutions; I was very fortunate to spend a bit of time out there.”
Sportsbook-led sustainability
Coming onto his time as Paddy Power Retail CEO, Newton reflects with pride on two main areas. Given the nature of regulation and market consolidation within this industry, it makes sense for an operator to prioritise sustainability. At Paddy Power, Newton believes the firm has done exactly that. “It was really clear four, five years ago – but maybe further back – that having a sports betting-led proposition is, long term, how you make things sustainable,” he comments. “A lot of changes have happened to gaming – the reduction to the £2 ($2.66) maximum stake on fixed-odds betting terminals in the UK, for example. But I think the reason I can very proudly say we’re the only operator that hasn’t closed any shops because of those changes, is because we focused on building a long-term sustainable business that’s focused on sportsbook.”
For Newton and his team, it’s been quality not quantity – and not in a clichéd sense. At points in time when Paddy Power could have aimed to expand shop numbers to 1,000-1,500 shops, the brand has instead focused on in-shop offerings. For Newton, competing with Entain, Betfred or William Hill on the number of total shops represents a false economy. The strategy instead prioritises premium-quality locations with high footfall, via the company’s sportsbook-led model. This has helped weather fixed odds-betting terminal-related storms – as well as the Covid-19 pandemic. The CEO adds: “Because of those things, we have some of the best employees in the sector. I’m proud that we pay them more and bonus them more, and we’ve created lots of secure jobs off the back of those things.”
Open for business
Inevitably, the Covid-19 pandemic is our next major discussion point. While online gambling has flourished during Covid, land-based betting – and the retail sector more broadly – took huge hits. Forced closures cost companies billions, deprived employees of their jobs (temporarily or permanently) and generally ground life as we knew it to a halt. Initially for Paddy Power, this simply meant closing shops in line with government guidelines. The next question, though, was how to reopen when customers and employees were allowed back into properties. The company’s response was so emphatic that Paddy Power won Betting Shop Operator of the Year at the Global Gaming Awards London 2021.
“At the very core, we had to do two main things,” Newton recalls. “Making sure we delivered on the customer health and safety side: even just basics like ensuring hand sanitizer, signing really well and employees wearing masks. We wanted to be clear to customers that they should not be fearful of coming into one of our environments.
On the product side, we had to focus on what customers want and historically the things we’ve been good at. We spend a lot of time reminding customers of some of the core values we have, offering them generosity to come in and try new products.”
Newton beams with pride as he “categorically” states Paddy Power has not closed a single shop due to Covid-19. The brand is also committed to ensuring all colleagues were paid in full without recourse to the Government's furlough scheme, and donated the full £4.79m of business rates relief Paddy Power shops received in 20/21 to Made by Sport, a grassroots community sports charity. It’s a claim the CEO is confident no other retailer can make. This all ties in to that focus on sustainability. The plan for Newton and his staff is to only serve customers who can afford to gamble, on products that are here for the long term. “If we can do all those things and, at the same time, give customers some money to win back and enjoy their product, then we’ll be here for the long term, too.”
Not open all hours
Naturally, there is plenty of crossover when it comes to sustainability and responsibility. Problem gambling is an issue at the heart of the industry; there can be no safe gambling without the correct intervention when it is vitally needed. The difficulties lie in ascertaining exactly when those interventions are required. As Newton puts it, this is a difficult process regardless of channels – i.e it is no easier online or in retail. But he does highlight some differences brought about by the people-friendly side of on-property betting and gaming.
“It is very different in retail,” Newton tells Gambling Insider. “The approach we take gives customers a lot of extra protection – we’re only open at certain times during the day; we have shop colleagues present all the time, who are trained and certified to be able to intervene and supervise, in ways that online and digital customers can’t see. We don’t allow alcohol on premises; we have some centralised monitoring on CCTV to pick up on problem behaviour to support shops. It’s hard for employees but, ultimately, we have to have a sustainable business. We were first out on the gaming side and during the fixed-odds betting terminals review we publicly supported stake limits.”
The future
As Newton looks ahead with Gambling Insider, he outlines goals both for the business and himself. For Paddy Power, focus will go into self-service betting terminals and, perhaps more so, its omni-channel offering. The operator wants to keep providing reasons for customers to wager both retail and online. There is “significant overlap” here, according to Newton; he believes the importance of Paddy Power’s retail business to its online arm is “really well recognised” – both internally and by our customers.
On a personal level, however, Newton has his eyes on something very attainable in the short term. “After 18 months of working from home, which has a finite limit to it, I’m looking forward to bringing people together again,” he says. Having been asked recently by an employee what he was doing for self-development, it got the executive thinking. “One of the things I’ve missed is I haven’t been to a proper retail, betting or tech conference in a while. So while some of those things I have mixed views on whether it’s worth attending, in terms of balancing your own time, they are quite good at stimulating thought, networking with people and seeing what’s out there.”
With new shops also opening in Oxford, Mansfield and Bury St Edmunds recently, Newton’s concluding words are dedicated to what is already a large part of his job: being on the road viewing potential new sites. “Nothing gets me more excited than a bit of ribbon cutting and getting some old retired footballer to come down and open a shop for us!” he jokes. “But that stuff is really exciting, because you’re going to new locations where there isn’t a Paddy Power. I’ve been amazed: probably about three times a year, someone will send an email saying I wish you’d open up a shop in our local town. It reminds me how much customer advocacy we have for the brand.” Indeed, despite ever-growing digitalisation, it all goes back to Newton’s love for the cut and thrust of retail. It seems it's one the players share, too.
