Particularly a gaming company operating via the Internet and, furthermore, within a number of different geographical markets. Our industry is developing at an incredible speed and, as a leading provider, we must constantly adapt the operations on the basis of the changes taking place. 2010 has been characterised by discussions regarding the industry’s transformation from what was called .com to the new term .country.
To date, gaming companies such as Betsson have been able to offer their services from a European geographic market, typically from an EU member country such as Malta, to all other member states and have, then, been able to offer local statutory regulations, for example Malta’s, in their offerings. All member states have not responded positively to this competition from other countries, which has been expressed in a variety of ways. However, a number of countries have now passed local legislation, aproved by EU, regulating the manner in which Internet gaming is to be undertaken vis á vis the consumers in those local markets. This is what is referred to as .country within our industry. Examples of countries that have passed such laws are Italy and France. Denmark and other countries are also underway in implementing new local legislation in this area.
For a long time, Betsson has been in favour of the establishment of these new, national regulations, as we believe that it is good for the countries, gaming companies and customers. But in order for a system with local legislation to function, the new regulations must be competitive and non-discriminating. Competitive advantage has primarily to do with allowing the offering of a sufficiently broad scope of gaming to meet the customers’ varying interests and wishes regarding gaming and in which the tax rates are at a level which allows gaming companies to compete with other gaming activities offered on the Internet from other jurisdictions. If the gaming offering is excessively limited, the customers will choose to play on other sites as gaming via the Internet is very difficult to stop through technological restrictions. If taxes are excessively high, then the licensed gaming companies will be forced to reduce the payouts to customers in order to achieve profitability and, in such a case, the customers will, at any rate and in the same way, turn to other gaming sites and the legislation will, consequently, be meaningless. Furthermore, the local regulations must be non-discriminating, which implies that the companies choosing to apply for licensing in the market are offered the same possibilities in all aspects as the existing, former monopoly gaming companies.
In France, taxes are high, the offering is very limited and the monopoly gaming companies have been favoured by being granted sole right to operating gaming in shops. This is no positive starting point and Betsson has, therefore, chosen to refrain from entering the French market. In Italy, the regulations are more favourable and Betsson has entered into an agreement with the aim of Betsson entering the Italian market together with a local partner. The new .country environment which will probably be gradually implemented in Europe, creates, of course, certain challenges as regards local adaptations and other aspects, but, all in all, this is positive for our industry as an industry; via improved premises for marketing, new possibilities for growth will arise. The new regulations which are not sufficiently positive now in the beginning will, with little doubt, be re-assessed with time as the customers, similar to customs within other operations on the Internet, will always favour the more attractive, competitive alternative.
Betsson’s new business area, Betsson Business Solutions, has had a hectic first year. Europe is, still, the world leader within Internet gaming but now new, major markets will probably be very interesting in the not too distant future. For Betsson, it is now essential for us to try to commercialise our system and our competencies also outside Europe and we will preferably do this together with local partners. During the end of 2010 and the beginning of 2011, Betsson could present a number of cooperation agreements, amongst others, regarding China, which, hopefully, will contribute to future growth. It is, of course, a bit nerve racking to contemplate the manner in which, for example China, could develop within Internet gaming and it will also be interesting to see which way the US will choose to go in this context. My view of the future possibilities is unchanged, that is, that Internet gaming is here to stay and that Internet gaming will comprise a dominating form of gaming in the majority of markets. Consequently, it is important that Betsson continues to monitor and follow-up on what is happening also outside Europe.
On a number of occasions, I have addressed Betsson’s key values in my comments. Dynamic, Fun, Fair, Passion and Innovation are the values on which our work is based and these values permeate our entire company and our approach and perspective. These values are not just words on a piece of paper but represent an overall image of our personnel and how we work and deal with our customers and partners. These values provide us with the strength we need when we initiate cooperation with new partners and in new markets.
Betsson has worked hard in strengthening its position within sports gaming during recent years. Here, we have clearly seen a strong trend within live betting and, consequently, the company has invested a great deal in innovation and product development in this area. The results of this have not been slow in coming to the fore and live betting now accounts for more than sixty percent of sports gaming. It is not just within sports that live gaming is growing. During 2010, live gaming was also launched within casino, which implies that the players can play with real dealers and croupiers whereby the progress of the game is sent through streaming video. This is an interesting application which has now become commercially available via a refining of the technology concerned and due to the fact that the Internet’s broadband has reached entirely other levels than was the case a few years ago. Another area in which technological developments are speeding forward is within the mobile network and mobile terminals. Here, I believe that we will see major development within the next few years as regards Betsson’s products and this will, of course, benefit us, as the customers will have an increased accessibility to our products.
This current year will be at least as interesting as the last year. Technological developments continually provide us with new possibilities which must be taken advantage of. In the markets around the world, the consumers are discovering how positive it is to play via the Internet. Betsson is well-positioned. We have all of the production factors in place and in order. Our finances are strong, our technical system is world-leading and, most importantly, our personnel are, amongst other things, dynamic, innovative and passionate. It should be fun to go to work
Stockholm in March 2011
Pontus Lindwall