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CEO of Sportinbet PLC discusses Internet sports betting market share
CEO of Sportinbet PLC discusses Internet sports betting market share and growth opportunities
Nigel Payne, Sportingbet
NIGEL PAYNE is Group Chief Executive of
This interview is a small excerpt from a comprehensive interview published in The Wall Street Transcript as part of the Consumer Sector, available at (001-212-952-7433) or http://www.twst.com/sectors/consum.html
TWST: Can you give us a brief overview of Sportingbet (LSE:SBT.L), including the history behind the Company?
Nigel Payne: Sportingbet is an Internet sports betting company. It is purpose built and set up specifically to capitalize on the Internet, which we believe is an ideal distribution platform for sports betting throughout the world. It is not a commonly known fact, but there are only six or seven countries in the world where there are commercially available retail outlets to take bets on sport. In the U.K. for example there are betting shops and there are some other countries where there are shops, but generally speaking sports betting is a difficult thing for the customer to do in many parts of the world. Also, in many parts of the world the markets are served illegally. So, the Internet came along and Sportingbet is a regulated British public company with a legal distribution platform into those markets. We set the Company up deliberately to take advantage of that and we have seen growth in the two and a half years of the Company's history, which you would have to describe as explosive. So, turnover in our first year was 600,000 pounds, this wasn't a complete year, but the second year was 27 million pounds. The next year was 325 million and this year we will be very close to a billion. So, to go from 600,000 to a billion in just under two and a half years is some gain. That is a testimony to the size of the market that is out there and the fact that people tend to drop the word global into Internet businesses perhaps a little bit too readily, but for sports betting in our humble opinion it is truly a global betting opportunity. If I could give you one example, if Manchester United were playing Liverpool in U.K. Premiership football this weekend, typically speaking we will receive substantial bets from the U.K. and Europe. We will also receive substantial bets from Asia, Australia and some from Africa and South Africa because U.K. soccer is an international sport. So, the Internet provides us the opportunity of having to put that offer of placing a bet to anybody in the world and allowing people to do so through legal and regulated means.
TWST: What kind of growth can you see going forward?
Nigel Payne: There are two or three issues. Organically the market is still growing very strong and we do not think even at a billion Pounds a year our market share is not 1% yet, which just gives you the size of the market we are dealing in. So, with a market share of less than 1% there is no reason at all why our growth should stop. So, organically we would still expect a very high percentage of growth in the tens of percent at 20%-30% a year at least. With that said we are increasingly finding that there are in fact a large number of barriers to entry to people in this business who want to take advantage of sports betting on a global basis. For example, if you are a sports betting company concentrating on the American market and there are a number of them in the Caribbean for example, typically speaking those companies can accept U.S. dollars only. If they want to take their product and export it to Asia they need multi-currency online credit card processing or equivalent and it does not readily exist for American companies. If you are a British public company then you are able to get access to online multi-currency credit card processing and there are only three or four of us. But, we can take bets in all of the main currencies of the world. If you are most of our competitors around the world, you cannot. Furthermore, in many parts of the world the trust that you are going to get paid if you win, as you are actually placing a bet with a computer in a sense and trust is very important. So, actually having the British regulated license to stamp on your Web site to say that we are part of the London Stock Exchange, we are a British company, we have substantial assets behind us and you are going to paid if you win is a very important issue. What we are actually finding is not only does that help our organic growth, but as companies in the same industry try and expand outside of their own niche market they come up against some of these barriers. When they come up against the barriers they find it very difficult to overcome because if you do not have credit card processing in Hong Kong dollars and are in Australia and cannot get it, what can you do about it? The reality is that you actually try and partner yourself with somebody that has. So, what we find is that we are receiving a very large number of people knocking on the door saying we are very good in country X, but we can not break out of country X and offer to do some form of deal with ourselves to a mutual benefit to grow the business even further. This can range from companies that are available to buy, of which there are many, to some form of partnership type deals to what I call white label deals where they keep the brand, but we manage the functionality for them, there are a very wide range of opportunities. So, if you combine the natural organic growth with the growth that comes from the opportunities I have just outlined, there is no reason at all why things will slow down. We are certainly not seeing it anyway
Nigel Payne, Sportingbet
NIGEL PAYNE is Group Chief Executive of
This interview is a small excerpt from a comprehensive interview published in The Wall Street Transcript as part of the Consumer Sector, available at (001-212-952-7433) or http://www.twst.com/sectors/consum.html
TWST: Can you give us a brief overview of Sportingbet (LSE:SBT.L), including the history behind the Company?
Nigel Payne: Sportingbet is an Internet sports betting company. It is purpose built and set up specifically to capitalize on the Internet, which we believe is an ideal distribution platform for sports betting throughout the world. It is not a commonly known fact, but there are only six or seven countries in the world where there are commercially available retail outlets to take bets on sport. In the U.K. for example there are betting shops and there are some other countries where there are shops, but generally speaking sports betting is a difficult thing for the customer to do in many parts of the world. Also, in many parts of the world the markets are served illegally. So, the Internet came along and Sportingbet is a regulated British public company with a legal distribution platform into those markets. We set the Company up deliberately to take advantage of that and we have seen growth in the two and a half years of the Company's history, which you would have to describe as explosive. So, turnover in our first year was 600,000 pounds, this wasn't a complete year, but the second year was 27 million pounds. The next year was 325 million and this year we will be very close to a billion. So, to go from 600,000 to a billion in just under two and a half years is some gain. That is a testimony to the size of the market that is out there and the fact that people tend to drop the word global into Internet businesses perhaps a little bit too readily, but for sports betting in our humble opinion it is truly a global betting opportunity. If I could give you one example, if Manchester United were playing Liverpool in U.K. Premiership football this weekend, typically speaking we will receive substantial bets from the U.K. and Europe. We will also receive substantial bets from Asia, Australia and some from Africa and South Africa because U.K. soccer is an international sport. So, the Internet provides us the opportunity of having to put that offer of placing a bet to anybody in the world and allowing people to do so through legal and regulated means.
TWST: What kind of growth can you see going forward?
Nigel Payne: There are two or three issues. Organically the market is still growing very strong and we do not think even at a billion Pounds a year our market share is not 1% yet, which just gives you the size of the market we are dealing in. So, with a market share of less than 1% there is no reason at all why our growth should stop. So, organically we would still expect a very high percentage of growth in the tens of percent at 20%-30% a year at least. With that said we are increasingly finding that there are in fact a large number of barriers to entry to people in this business who want to take advantage of sports betting on a global basis. For example, if you are a sports betting company concentrating on the American market and there are a number of them in the Caribbean for example, typically speaking those companies can accept U.S. dollars only. If they want to take their product and export it to Asia they need multi-currency online credit card processing or equivalent and it does not readily exist for American companies. If you are a British public company then you are able to get access to online multi-currency credit card processing and there are only three or four of us. But, we can take bets in all of the main currencies of the world. If you are most of our competitors around the world, you cannot. Furthermore, in many parts of the world the trust that you are going to get paid if you win, as you are actually placing a bet with a computer in a sense and trust is very important. So, actually having the British regulated license to stamp on your Web site to say that we are part of the London Stock Exchange, we are a British company, we have substantial assets behind us and you are going to paid if you win is a very important issue. What we are actually finding is not only does that help our organic growth, but as companies in the same industry try and expand outside of their own niche market they come up against some of these barriers. When they come up against the barriers they find it very difficult to overcome because if you do not have credit card processing in Hong Kong dollars and are in Australia and cannot get it, what can you do about it? The reality is that you actually try and partner yourself with somebody that has. So, what we find is that we are receiving a very large number of people knocking on the door saying we are very good in country X, but we can not break out of country X and offer to do some form of deal with ourselves to a mutual benefit to grow the business even further. This can range from companies that are available to buy, of which there are many, to some form of partnership type deals to what I call white label deals where they keep the brand, but we manage the functionality for them, there are a very wide range of opportunities. So, if you combine the natural organic growth with the growth that comes from the opportunities I have just outlined, there is no reason at all why things will slow down. We are certainly not seeing it anyway