TEAMING UP GAMING MARKET MOBILE CREATIVITY - Betsson AB

– THE ONLINE GAMING MAGAZINE – The Investment CaseGrowing MORETHAN THE MARKET— an investment caseBY Tomas Johanssonthe online gaming market is becoming increasingly attractiveas the popularity of gambling and online entertainmentcontinues to grow. Coupled with the huge potential of theopening up of major markets like Asia and the U.S., theonline gaming industry has the potential of being one ofthe fastest-growing industries overall. The gaming industrywill continue to migrate online, which favors innovativeand flexible operators such as Betsson over monopolies.Current market developments such as licensing, growingcompetition and higher demands on gaming companiesfavor large established operators. With the exception ofB2B start ups, the barrier to a successful entry into theindustry is high and rising, given that:• Strong growth in number of customers makes firstclassrobust technology a key differentiator and a keyrequirement in order to handle multiple transactionsevery second with no room for mistakes.• High demands from regulators in terms of security, operationalquality and proven levels of continuous reinvestmentfavors established operators.• The considerable investment spent on being able topresent a best in class product offering under well knownand trusted brands can only come from years of successfulCRM activities and faultless operations.Betsson has grown faster than the market in recentyears and we see no reason why the company shouldn’tcontinue to do so in the years to come. Since Betssononly has a fraction of the total market, we have agreat position in view of i) the overall underlying marketgrowth and ii) the ability to take market share from thecompetitors, mainly state-owned monopolies.In line with our strategy, we have created featuresthat will favor Betsson in the coming market development.Through the dual B2C and B2B strategy, and withthe Nordic market as a foundation with its B2C offering,Betsson is able to move towards new emerging markets.With Betsson Business Solutions, Betsson is at the forefrontby offering the best B2B product currently availableon the market. This facilitates Betsson’s entry into marketsthat otherwise would have been very costly or evenimpossible to enter due to legal restrictions.EBITGrowth, %EBITmargin, %Dividend,yield, %Share priceincrease, %2007 905 29.3 8.8 127.62008 46 26.7 7.7 15.92009 15 24.4 9.5 43.92010 20 23.7 6.4 15.52011 47 32.2 6.9 24.4Betsson´s B2B effort has already paid off in terms of muchfirst-class collaboration throughout the world. Given thebenefits of scale in B2B, Betsson can quickly enter a newmarket at a low cost and reap the benefits of local expertisethrough its partner.five year share priceSEK1501005002007 2008200920102011Betsson ABWilliam HillLadbrokesUnibet Groupbwin.Partybwin.Interact.888 HoldingsSportingbetOPAP S.A.Paddy PowerOnline gaming remains an under-penetrated industrywith high growth potential. Betsson is keeping up thehard work and is well positioned to meet this continuedgrowth. Betsson believes it has only scratched the surfaceof online gaming. High customer deposits and asoaring level of activity at Betsson sites indicate that weare on the right track.– 36 –