Is Unibet the best kept secret in egaming?

It’s hard to think of many multi-billon firms in the online gambling sector who could post a 61% revenue rise to ?122.4m in Q1 and cause barely a ripple in the financial media. But Unibet continues to be the quiet man of the sector that increasingly poses a huge threat to the big names.

GVC posted a Q1 group revenue of ?167.7m (?130.5m) and made all the headlines, but with 94% of the revenue, and a lot less debt, Unibet managed just a brief mention in City AM in the UK. It’s the type of low profile many of the firms in the egaming industry would kill for, but it belies the strength of one of Europe’s most impressive operators.

Perhaps it’s because, either by accident or design, Unibet tends to go against major market trends. Much of the growth has come through acquisitions, but the nature of the Unibet deals are a world apart from the mega-mergers that have dictated the news agenda in online gambling media.

Value Acquisitions

The ?79m paid for iGame and the ?19m paid for Stan James is less than the group’s Q1 revenue, but has nonetheless been hugely impactful to the business. Growth in Western Europe, partly down to Stan James, was 63% while perhaps the most striking aspect was the 58% growth in revenues from the Nordic region, with the firm feeling the benefit from the acquisition of the iGame Group in September 2015.

The addition of the Nordic-facing group’s seven brands has reinvigorated a part of the business that had grown just 4% in 2014 and dropped 7% and 1% in Q1 and Q2 in 2015 respectively. Stripping out FX, the year-on-year growth was 39% and its importance to Unibet shouldn’t be underestimated. While the focus is on regulated market growth the Nordics remains hugely important region for Unibet with 44% of group revenues in Q1 2016.

With regulation looming on the mid-term horizon it’s vital the operator doesn’t lose its grip on the region and, with the likes of relative newcomers Leo Vegas, Vera&John and the Betit Group continuing to try and steal market share, that is no easy task. The addition of iGame, and the ability to make almost immediate improvements by moving the brands onto the Unibet platform, now looks very smart business indeed.

But it’s not just a tale of bolt-on growth, with continued investment in in-house technology continuing to drive organic growth in the business. Mobile is a key part of the Unibet growth story and the firm posted a stunning 101% growth in mobile revenues in Q1 2016. This wasn’t due to Unibet being behind the curve either, with a strong existing portfolio of mobile products.

Innovate or Die

What is key is the continual innovation, and the launch of an iOS native casino app in February is just one of a number of new initiatives aimed at boosting growth. In a year when mobile casino is set to grow rapidly, it’s a must-have for any operator with big ambitions in the vertical. But it’s far from the last mobile launch we’ll see this year.

Sportsbook is also seeing a host of new launches with the most recent being the BetUp game, aimed at appealing to a more recreational audience in the sports betting sector. There is also voice activated betting, aimed at appealing to the “live streaming” punter and bet recommendations targeting the holy grail of personalisation.

It was interesting to see the investment in poker finally beginning to pay off with 45% year-on-year growth after two quarters of decline. Unibet has completely revamped its poker offering, using its own platform and attempting to reinvent poker for new recreational audience. And it appears to be working, although it should be noted the growth was from a very low base of ?2.2m in Q1 2015.

It’s just another sign of the relentless innovation within the business with a focus on mobile and product. Revenues and active customers were at an all-time high in Q1, but there is a sense Unibet is only just getting started. It’s rarely viewed as one of the big power hitters in the egaming sector, but with its broad European reach it’s a firm nobody can afford to ignore anymore. No matter how hard they try.