- Swedish sports betting powerhouse Betsson is looking at the second half of 2021 for their Colorado launch.
- It appears that Betsson will be launching in Colorado under their established ‘BetSafe’ brand.
- Betsson is partnering with the Dostal Alley Casino in Central City.
The US subsidiary of Stockholm based Betsson announced a deal to offer online betting in Colorado partnering with Dostal Alley Casino in Central City in July 2020. Betsson AB is the holding company behind the brand and they hold gaming licenses in 12 jurisdictions and employ 1,600 people in 10 offices around the world. That will soon be 11 offices–they’re planning to open an office in Denver to spearhead their entry into the US market. This is an ancillary benefit of actually doing sports betting right–and Colorado has arguably done it better than any state in the US. When you do it right companies move into the state bringing jobs, investment, etc and actually benefit the broader economy. That’s a much better plan than just making sports betting a gimmick game for the lottery as a number of states have done.
Betsson’s most recent earnings call revealed some more information about their plans in Colorado. Keep in mind that the quotes below are from an ‘edited transcript’ and one presumably translated from Swedish to English. That being said, everything pretty much makes sense. The first quote is from Pontus Lindwall, Betsson AB – CEO & President talking about some of the company’s plans for 2021:
I can go into the U.S. market. We have a 10-year agreement with Dostal Alley Casino in Colorado, and we obtained the license to operate in Colorado in December 2020. So now we are developing our offering. We’re adapting the Sportsbook, and we have signed an agreement with TG Lab as a system supplier for the platform, which is usually referred to as PAM, player account management system. And they’re developing a U.S.-focused, very modern platform, which we’re going to enter the Colorado market with. So the ambition is to launch in the second half of 2021, looking much forward to that. And of course, the Colorado B2C operation that we will operate there, will help us to reach our goals in the B2B market. So we get a nice showcase for our performance in the U.S.
Most of this was already known–Betsson has a deal with Central City’s Dostal Alley Casino and they received their licensing in Colorado in December 2020. I don’t know much about TG Lab other than based on their website–which features a Roy Lichtenstein-esque image front and center–they’re licensed in Malta. The original launch date for Colorado was Q1 2021 but the slippage to the second half of the year is no big deal. From a timing standpoint, getting everything right and launching before the 2021 NFL season is much more important than rushing everything just to go live.
The next quote is also from CEO Pontus Lindwall, responding to an analyst question about the launch date in Europe.
And regarding the U.S., we aim to open up our Betsafe brand in Colorado during the second half of this year.
This is the first time I’ve heard that Betsson will launch their BetSafe brand in Colorado as opposed to their self branded sportsbook which operates in Sweden. I guess it really doesn’t matter one way or another since neither is established in the US market. BetSafe might be easier to promote than Betsson just due to the connotations of that name versus the more abstract company name. BetSafe already operates in international markets including Africa:
This next exchange is between CEO Lindwall and Oscar Erixon, Carnegie Investment Bank AB, Research Division – Financial Analyst. It’s not really clear what Erixon is asking and it’s not really clear what Lindwall is answering. This exchange might have been ‘lost in translation’. The best I can figure is that Betsson thinks that the best market niche is somewhere else than the ‘recreational/casual’ player that many US sportsbooks target. Assuming that this strategy is what he’s talking about it’s a good one–there’s plenty of room for market differentiation in sports betting but so far most US facing companies are going after what you might call the ‘Barstool demographic’ of passionate ‘regular Joe’ sports fans. There’s nothing wrong with this, of course, but there’s so many other potential niches that could be targeted.
Oscar Erixon, Carnegie Investment Bank AB, Research Division – Financial Analyst [38] ——————————————————————————– Okay. Great. Very good. And just 2 more questions for me. First, on the B2B opportunity, which you seem very positive on. Going forward, is the U.S. the main opportunity from your — in your view? And also what is the — what types of customers, would you say, is a key focus ahead? ——————————————————————————– Pontus Lindwall, Betsson AB – CEO & President [39] ——————————————————————————– I think the U.S. is a great opportunity, but also other markets as well, and we are going for both the U.S. and other markets. I can’t point out what kind of customers that we will go for in the U.S., but having looked at the landscape in the U.S., there’s definitely room for a high-quality Sportsbook. It lacks a little bit of competition in that market. So we see a nice spot for our product to come in there.
Finally, CEO Lindwall gives a ‘non-answer’ to a question about what is in the company’s B2B pipeline and other deals going in the US:
Olle Qvarnström, [75] ——————————————————————————– Perfect. And could you also — I’m not sure who this is for, but could you elaborate on your expectations of the B2B offering and pipeline of potential deals in the U.S. during 2021? ——————————————————————————– Pontus Lindwall, Betsson AB – CEO & President [76] ——————————————————————————– I can do that, but on a higher level without commenting on figures or when to close deals. I believe that the U.S. market is still in early days, if you look at the full market. And it’s such a huge market with a great interest in sports. We see that our product that we now kind of rebuild for the U.S. market will become a very competitive product. So I’m very optimistic on that one.
Like he’s going to spill the companies strategic plans for the next few years in an earning call. Nice try.
Betsson will be a great addition to the Colorado and US marketplace. They’re probably wise to ‘bide their time’ before a US launch. What you’re going to start to see post COVID-19 is that the separation between the states that are ‘doing it right’ (eg: Colorado, Iowa, New Jersey, etc.) and the states that are ‘doing it wrong’ (eg: Tennessee, District of Columbia, etc.) in terms of financial performance will start to increase. You’re already seeing that in Oregon, where Governor Kate Brown has already suggested revamping the state’s sports betting ecosystem to allow for private sector competition.
