Pontus Lindwall: Positioning Betsson as a leading technology company
The gambling industry has changed substantially over the last few years, most notably with the growing influence of the online sphere on how we consume information and entertainment.
Speaking in the latest SBC Leaders magazine, Betsson Group CEO Pontus Lindwall explained that when he first entered the online gambling industry in 1996, the sector was very much in its infancy. But fast forward 26 years and the internet has become an integral part of our daily lives.
Reflecting on his time in the industry, Lindwall discussed on the ups and downs of his career, building Betsson into a global technology brand and how the growing influence of the internet has revolutionised the gambling sector.
He began: “I first entered the online gambling industry in 1996 but there wasn’t really an industry to speak of at that time. That is why I founded Net Entertainment – which ultimately became NetEnt – so that I could establish a business that offered internet gaming.
“I could see huge potential for this, but we had to do everything from the ground up. This meant building a team, developing the software and creating the games.
“A couple of years into doing this, I realised we could resell our platform and games to other operators and that is when we established a B2B division and we eventually distributed Net Entertainment to our shareholders. Although Betsson Group’s origins started in 1963, the company started operating online in 2000.”
In the early to mid-nineties, Lindwall continued, very few internet-based companies – if any – were operating in the black.
But by drawing upon his background in technology, and his strong knowledge of the gambling industry, the CEO believed that this was a sector which had huge potential.
“In the early to mid-nineties, the internet was not that well established and penetration was low. There were a few companies that were based on the internet but hardly any – if any – were profitable.
“But having a technical background, I knew that this would change and that the internet had the potential to revolutionise the way we purchased products and accessed entertainment. I had some knowledge of the gambling industry and truly felt that online gambling would become a significant industry as the internet became more widely available and used.
“The main difference between now and then is that there is an industry today. When I was starting out, there was no such thing as operators and suppliers. Most companies built their own software and developed their own games. Since then, the industry has matured and out of that maturity specialist suppliers emerged and the landscape became what it is today.”
In tandem with ongoing technological developments, the regulatory landscape has also experienced constant change. Anticipating such shifts, Betsson ensured that it was one step ahead by gaining a Malta Gaming Authority (MGA) licence.
“In addition, back in the early days there was little to no regulation. We could see that this would likely change and in the early noughties that is exactly what happened,” Lindwall said.
“We secured our Malta licence in 2004. After this, the topic of regulation started being discussed on a European level and progress started to be made in other countries – although the next one (Italy) only came in 2011. This trend has continued over the last decade and now we are seeing more and more jurisdictions embrace regulation and licensing.
“The industry has obviously grown over the years, and this has led to a shift from companies being small and entrepreneurial to established and publicly listed. This, in turn, has been a driver of local regulations.
“Over the years, politicians and lawmakers have come to understand that the industry is substantial and continues to grow, and that it is big enough for them to have to care about it. This is not only from the perspective of protecting consumers but also unlocking the tremendous tax revenues the sector generates on an annual basis.”
In 2022, Betsson now holds licences in 20 markets – a considerable jump from the two that it had secured in 2011. Lindwall believes that this growth will continue long into the future.
He explained: “Betsson started from zero, but today it is a sizable organisation with licences in 20 jurisdictions. The business continues to grow, and we remain profitable, but the market is more challenging today than it has ever been. This is certainly the case when it comes to having to meet different regulations in each of the markets we target and, in particular, the local taxes that we have to pay.
“One of the biggest changes I have seen is that Betsson now considers itself as a technology company above all else. The technology required to power online and mobile sportsbooks and casinos is at the cutting edge and we are constantly having to develop new tools and features to meet regulations and to deliver the best possible player experience.
“Another area where we have seen change is responsible gambling. We have been developing our understanding, skills and capabilities in this area for many years and we were the first organisation to employ someone with the sole focus of responsible gambling back in 2005.
“Today, we have a full department for this and train each and every member of the company to ensure they understand responsible gambling and the need to protect players.
“This is an area where we need to continue to push the boundaries. Regulators put high demands on operators and we need to be able to meet them. This is a requirement and a challenge we are determined to not only meet but exceed.
“We recently launched a new version of our AI prediction tool that enables us to identify potentially risky behaviour early on and make the necessary interventions to ensure the player remains in control of their play.”
Discussions soon turned towards Lindwall’s leadership style as well as the highs and lows of his career.
Beginning with the most difficult moments, the Betsson CEO shared some experiences from the early days of Net Entertainment – a time which was filled with the trials and tribulations of any start up.
“My toughest time in the industry was undoubtedly in the early days of Net Entertainment. We were committed to building our platform and system but, as a company, we were losing money.
“While this is normal for a start-up, it can be tough to keep pushing ahead with your ambitions and goals for the business. But once we launched and we could see the early numbers coming in, I knew we were on the right path to success and profitability.
“Ultimately, we could see that the cost of acquiring a customer was less than what they were spending over a few months, so we just needed to scale and drive volume in order to have a substantial business on our hands.
“The challenges that I faced in the early days taught me to be careful with money and not to spend more than I had. I remain an advocate of cautious spending and ensuring that any investment within the business – launching a brand, developing a product, entering a new market – is effective and ultimately leads to growth and profitability.”
Despite the challenges, Lindwall also pointed out that his time at Net Entertainment ranks among some of the highlights of his career. His 26-year long tenure within the gambling industry is testament to the fact that there have been a number of milestones for the Betsson CEO.
“The fact that I am still in the industry after all of this time shows that there have been a lot of good moments for me. I’d say one of the best was at Net Entertainment when we launched after spending a few years building our technology and systems. When the first customer deposited and played, it was such a great feeling that it has stayed with me throughout my career.
“Another highlight came a few years later when we hit profitability for the first time. That lifted an incredible weight that I had felt on my shoulders for quite some time. We were actually attending a conference in Europe when this occurred, so it was great to be able to celebrate with the entire team.
“Achieving profitability has also given me and the businesses I have worked for the confidence to take on investment and to push boundaries. Without having the ability to do this, Betsson would not have become the power player that it is today.”
The gambling industry has undergone tremendous changes over the last 10 years, and when discussing what lies ahead in the next decade, Lindwall made some bold predictions as to where we might see Betsson and the gaming sector as a whole.
It is likely, he said, that we will see more countries undergo further regulatory changes as more markets mature. Meanwhile technological advances will become more prevalent as VR, AR and the Metaverse take leading roles in gambling’s development.
Lindwall concluded: “More countries will have regulated online gambling and this will certainly lead to further consolidation. It is incredibly tough for smaller entities to compete with tier one organisations – they need to have good products and a team of talented staff while ensuring compliance.
“This is an expensive undertaking and is making it increasingly difficult for smaller organisations – some of which are doing incredible things – to achieve profitability.
“In terms of technology, the roles of VR, AR and the Metaverse will be more prevalent in the online gambling sector. While they might not be at the point of entering the mainstream, these technologies absolutely have a place in the worlds of gaming and gambling and I for one am excited to see how they will impact and improve the experiences we offer to players.”