Sportnco is some way off breaking into the upper tier of the sports betting supplier market, but its chief executive Hervé Schlosser (pictured) argues that he can see a route to the top.
Key to Sportnco’s growth is Spain – the Toulouse-based business has performed strongly in France’s European neighbour, and expects the market to become the company’s largest by the end of 2019.
It currently works with six partners in Spain, perhaps most notably Italian operator Sisal, preparing to make the first move outside its native market, which Schlosser notes means it powers around a fifth of the sports betting brands in the country.
Among its Spanish clients are Casino Gran Madrid, Golden Park and Casino Barcelona, a trio of land-based operators that have entrusted the supplier to facilitate their moves online.
There are three key reasons behind Sportnco’s Spanish growth, Schlosser explains.
“First, we are able to offer a solution tailor-made to each of our clients’ needs,” he says. “Other providers tend to offer a very commoditised solution, but we tailor the offering for each client so, for example, the Casino Gran Madrid sportsbook looks very different from that of Casino Barcelona.”
Boots on the ground
He also cites boots on the ground as a key driver of Spanish growth. Sportnco has around a third of its employees, covering marketing, trading and IT, based in Barcelona, and Schlosser believes having native Spanish speakers, as well as being in close proximity to clients, helped build trust.
Finally, he says, gaming shows have been key. By having a presence at such events, he says companies have become aware of Sportnco, what it does and what it can provide. This, in turn, helped seal the Sisal deal.
“It’s a massive deal and we’re very excited by it,” Schlosser says of the partnership. “It was the result of attending a gaming show in Madrid in November [last year], which is where we met for the first time.”
The partnership was agreed before the end of 2019 – “it was among the quickest deal Sportnco has ever signed,” Schlosser notes – and he is quick to note that customer satisfaction also played a key role.
“Sisal selected [Spanish iGaming platform provider Tecnalis] to provide its player account management solution, who we already work with, and they were very positive about us,” he says. “Our existing Spanish clients including Casino Gran Madrid and Golden Park were also very positive about working with us.”
Customer satisfaction, he says, has been key to Sportnco’s growth.
“I’m very proud that we have never lost a client since we launched Sportnco as a B2B operation in 2010 – and that’s something I want to maintain,” Schlosser says. “Our first two clients were NetBet and JOA, and they’re still here.
“The level of trust and the perception of your business in this industry is very important, and we’ve always aimed to maintain a high level of customer satisfaction,” he continues. “We don’t want to sign 50 deals a year. Instead we want to grow steadily, maintain the focus on sports betting, the satisfaction of both existing and new clients.”
This is underpinned by robust technology, something that he says allows Sportnco to develop bespoke products for clients without limiting scalability.
“While we have built our solution so as to maintain bespoke offerings, this is supported by a centralised system, which means we can power an unlimited number of partners,” Schlosser says. “It is built with APIs for the front end and content, and everything is modular.”
This goes as far as the odds and data, using feeds from providers such as Sportradar and Sporting Solutions, then customising them for clients. This, Schlosser says, will allow it to grow far beyond its current twenty-strong client base; he aims to have more than 100 customers in the next three years.
Yet it’s important to note that Sportnco is still relatively small in terms of revenue; it is private, but publishes limited financial numbers. For 2018 it reported revenue of €5.4m, a sum that represents a 35% year-on-year increase, but one that is dwarfed by rivals in the vertical.
The supplier has already earmarked the US and Latin America as target markets, but is not yet finished with Europe. Licence applications are underway in Sweden and Portugal, with territories such as Switzerland and Italy also being considered.
Sportnco has a three-pronged strategy for expanding into new markets, Schlosser says. First and foremost is launching existing clients in new territories, such as ZEBet, which is targeting Portugal.
Then there are deals struck through its network of industry contacts and from direct requests from companies seeking out a sportsbook solution – this has seen companies in Argentina and Colombia get in touch – and finally, there are the shows.
This will be supported by the launch of a land-based sportsbook solution.
“This is a very important step for us, our clients, and our portfolio of services,” Schlosser says. “We were very much focused on mobile and desktop, but from the autumn we will roll out the land-based component with our Spanish casino partners.
“Land-based is still very important in growing markets,” he continues. “In these countries the channel still generates the majority of revenue, and while online is growing faster, retail still has to be addressed.”
There are two reasons behind this, he says: “First, land-based is a very easy way to play; it’s simple, and no registration requirements. Second, it can deliver margins almost double those of online. In newer markets, when a player is in a betting shop, they’re a captive audience – they’re not going to compare your odds to other sites.”
With a deal ready to go in Portugal, pending the necessary regulatory approvals, he also wants to go live in Sweden, and sign up at least one client in both the US and Latin America in 2019.
This, he says, would take Schlosser and Sportnco a step closer to his ultimate goal for the business – he wants it to become one of the leading sportsbook technology suppliers worldwide.
This is a bold statement, but it’s one that he stands by, pointing out that his declaration a few years ago of wanting to sign up top-tier operators as clients may have seemed equally provocative.
Fast forward to 2019, and it’s working with one of Italy’s leading operators. Sportnco is also competing in a tender process to power sports betting for what Schlosser says is “a very big” European operator – one of two final bidders in the process.
As ambitious as his proclamations are, he’s done a good job of making sure they come to pass previously. It remains to be seen whether his latest will come to fruition.