Sky Betting & Gaming CEO talks UK regulation and international diversification

Sky Betting & Gaming this week revealed a robust set of full-year financial results, with 2016-17 revenues and EBITDA up a lofty 38% year-on-year to £516m and £146m respectively.

The 12-month figures for the Leeds-headquartered firm clearly cemented – if there was still any doubt – its position as one of the top-tier operators in the UK. However, SB&G’s home turf is on the verge of regulatory revisions with the triennial review, new social responsibility measures and the implementation of a multi-vertical self-exclusion next year.

SB&G boss, Richard Flint, also took to the national newspapers yesterday ahead of the impending budget to make the case against increasing the online gambling tax burden.

And although Flint remains broadly optimistic by the outlook of the UK market, SB&G’s recent expansion into Italy and Germany now seems particularly timely. EGR Intel spoke to the CEO to discuss the future of regulated online gambling in the UK and the operator’s plans further afield.

EGR Intel: SB&G continues to perform strongly in the UK, but what do you think are the long-term prospects for growth based on the current regulatory outlook?

Richard Flint (RF): The UK has been robust and it is growing relatively well. There is still a chunky offline market that will migrate to online over time but there is plenty of growth left in the UK. It will of course slow down at some point but we haven’t really seen that yet. I personally think that regulation will increase in online and that will slow some of the growth, but it depends on what form that takes as it is more likely to be in gaming than on the betting side.

EGR Intel: Can you explain a bit more about your recent comments on the UK budget in the national press?

RF: We pay VAT on our marketing, which most companies don’t do, and that might be something that’s looked at in the future. We are investing in growing strongly and already paying a lot in tax and with the budget coming up we don’t want things to change as the investment we make in the UK and the job creation we’ve done in the north of England is based on current tax arrangements. An increase in PoC, for example, would hit everyone and would mean our overall burden is even higher, so unsurprisingly we don’t want to see an increase. There is no direct reason to think we will get that but there is always a possibility.

Sky Betting & Gaming CEO, Richard Flint

EGR Intel: Looking at your growth in the UK, how important were new features like RequestABet and Crowd Boosted Accumulators to the growth of the business?

RF: I don’t think those products have driven revenue growth in and of themselves, it’s more that they’ve improved customer loyalty and decreased churn. Our customer numbers have grown, which has been the main driver behind the growth, but customers are also spending more of their betting wallet with us.

EGR Intel: Are you now seeing your momentum build in Italy?

RF: There are good signs of progress from what was a low base and we’re confident that in time it will be a great market for us. It took us more than 10 years to get the UK right – it won’t take as long in Italy but we believe in building strong foundations and an efficient business to grow from rather than spending all of our marketing money right at the beginning. Super 6, for example, is live but it’s not integrated with the broadcaster yet in the same way and that is something we are looking at.

EGR Intel: What will be your approach in Germany?

RF: It is very similar to what we’ve done in the UK and what we are trying to do in Italy. It’s about a mass-market customer base, easy-to-use interface and working with Sky where we can. We do have Super 6 in Germany, which is integrated into Sky’s offerings, and we see it following the same path as we have in the UK.